RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2023

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 3. RELATED PARTY TRANSACTIONS

CrossingBridge Advisors, LLC

RiverPark Strategic Income Fund Asset Acquisition

On November 18, 2022, CBA entered into a Purchase and Assignment and Assumption Agreement, as amended on December 28, 2022 (as amended, the “RiverPark Agreement”), with RiverPark Advisors, LLC and Cohanzick, the Company’s majority stockholder and historical sole member of CBA that is majority owned by the Company’s CEO and director, David Sherman, pursuant to which RiverPark Advisors, LLC intended to sell to CBA certain assets and CBA intended to assume certain liabilities, including certain rights and responsibilities under the RiverPark Advisory Agreement (as defined herein) and the RiverPark Expense Limitation Agreement (as defined herein) relating to the provision of investment advisory services for the mutual fund known as RiverPark Strategic Income Fund (the “RiverPark Fund”), subject to certain terms and conditions set forth in the agreement.

Pursuant to the RiverPark Agreement, no consideration was paid upon closing; however, CBA shall pay an amount approximately equal to 50% of RiverPark Fund’s management fees (as set forth in RiverPark Fund’s prospectus) to RiverPark (the prior adviser) and Cohanzick (the prior sub-adviser) for a period of three years after closing, and pay an amount approximately equal to 20% of the RiverPark Fund’s management fees in the fourth and fifth years after closing as set forth in the RiverPark Agreement. Notwithstanding the foregoing, certain of the amounts payable based on the RiverPark Fund’s management fees pursuant to the RiverPark Agreement during the first three years after the closing shall be capped such that they are less than $1.3 million in the aggregate.

In connection with the RiverPark Agreement, Cohanzick and CBA entered into an agreement which prohibits Cohanzick from competing with a substantially similar strategic income strategy as the RiverPark Fund as an adviser or sub-adviser to a fund registered under the 1940 Act or any Undertakings for the Collective Investment in Transferable Securities (“UCITS”) products.

During the year ended December 31, 2023, payments made by CBA to Cohanzick in accordance with the RiverPark Agreement totaled $219,972. There were no comparable payments made during the year ended December 31, 2022.

Historical Shared Expenses Prior to Consummation of the Mergers

The Company, through CrossingBridge, and Cohanzick, shared certain staff, office facilities, and administrative services. The parties involved had agreed to allocate these expenses based on the AUM of each party for activity occurring prior to the consummation of the Mergers. These allocated expenses are reported under the CrossingBridge operations segment in the accompanying consolidated statements of operations in the categories for which the utilization of services relates. A summary of the expenses allocated from Cohanzick to CBA for the year ended December 31, 2022 is noted below. There is no comparable activity for the year ended December 31, 2023, because Post-Merger there were no CBA expenses allocated in this manner.

	Year Ended December 31,
Cohanzick Management Expense Allocation	2023		2022
Employee compensation and benefit expenses allocated	$	-	$	284,850
Owner compensation and benefit expenses allocated		-		612,387
Other allocated expenses		-		269,830
Total allocated expenses	$	-	$	1,167,067

There was no due to affiliate balance between CBA and Cohanzick reported on the Company’s consolidated balance sheets as of the years ended December 31, 2023 and 2022. Any due to affiliate balance is due 13 months after the calendar year-end upon 60 days’ written notice. If no notice is given, the date payment is due would extend for another 12 months with 0% interest. Repayments made during the year ended December 31, 2022 by CBA to Cohanzick, for allocated expenses recorded during the year ended December 31, 2021, totaled $3,646,038.

Services Agreement with Cohanzick

In connection with the closing of the Mergers, CrossingBridge entered into a Services Agreement (the “Services Agreement”) with Cohanzick pursuant to which CrossingBridge will make available to Cohanzick certain of its employees to provide investment advisory, portfolio management and other services to Cohanzick and, through Cohanzick, to Cohanzick’s clients. Any such individuals will be subject to the oversight and control of Cohanzick, and any services so provided to Cohanzick or a client of Cohanzick will be provided by such CBA employees in the capacity of a supervised person of Cohanzick. Cohanzick additionally may use the systems of CBA or its affiliates for its daily operations; provided that appropriate policies, procedures, and other safeguards are established to assure that (a) the books and records of each of CBA and Cohanzick are created and maintained in a manner so as to be clearly separate and distinct from those of the other person and the clients of such person, and (b) confidential client and/or other material non-public information relating to the investment advisory activities of CBA or Cohanzick, as applicable, or other proprietary information regarding either such person or its clients, is safeguarded and maintained for the benefit of such person. As consideration for its services, Cohanzick will pay CBA a quarterly fee equal to 0.05% per annum of the monthly weighted average AUM during such quarter with respect to all clients for which Cohanzick has full investment discretion. Cohanzick and CrossingBridge will also split the payment of certain costs of other systems which use is shared between Cohanzick and CrossingBridge. The initial term of the agreement was one year from the Closing Date. The Services Agreement shall continue until terminated pursuant to its terms. Specifically, after August 11, 2023, either party may terminate the Services Agreement upon at least 120 days’ prior written notice to the other party. Notwithstanding the foregoing, either party may terminate the Services Agreement at any time upon written notice following a material breach of the Services Agreement by other party that remains uncured for at least 30 days after the other party receives notice of, or otherwise reasonably should have been aware of, the material breach.

During the years ended December 31, 2023 and 2022, CBA reported $205,074 and $61,791 of operating expenses pursuant to the Services Agreement with Cohanzick, respectively.

During the years ended December 31, 2023 and 2022, CBA earned $503,467 and $246,743 of revenue from the Services Agreement with Cohanzick, respectively. As of December 31, 2023 and 2022, receivables of $109,659 and $160,330, respectively, related to the Services Agreement revenue are included in accounts receivable on the accompanying consolidated balance sheets. The Services Agreement receivable amounts recorded as of the year ended December 31, 2023 and 2022, were both collected in full during the subsequent calendar year.

License Agreement between CBA and Cohanzick

Pursuant to the Merger Agreement, the Company, through CBA, and Cohanzick entered into a license agreement. The license agreement provides CBA with the right to use and occupy certain office space originally leased by Cohanzick from a third-party landlord pursuant to a lease agreement dated November 23, 2018. The initial term of the license agreement runs through the first anniversary of the commencement date of the license agreement and will automatically renew for subsequent one-year terms unless otherwise earlier terminated pursuant to the terms thereof. Pursuant to the license agreement, CBA shall pay Cohanzick a fee equal to Licensee’s Share (as defined herein) of the following charges: a monthly base rental and increases in certain taxes and operating expenses. “Licensee’s Share” means for a calendar month that occurs in whole or in part during the term, the fraction, expressed as a percentage, the numerator of which is the number of CBA employees that occupied the licensed premises as of the first business day of such calendar month, and the denominator of which is the number of Cohanzick and CBA employees that occupied the premises as of the first business day of such calendar month, as reasonably determined by Cohanzick.

During the years ended December 31, 2023 and 2022, CBA paid $68,755 and $25,533, respectively, of rental expenses, including utilities, per the license agreement with Cohanzick.

Subsequent Event

On March 9, 2024, CBA replaced its affiliate Cohanzick as the Sub-Adviser to the RiverPark Short Term High Yield Fund (the “RiverPark Fund”). RiverPark Advisors, LLC (“RiverPark”) remains the advisor to the RiverPark Fund.

The RiverPark Fund, which has been advised by RiverPark and sub-advised by Cohanzick since its inception on September 30, 2010, currently has in excess of $780 million in AUM. Current Portfolio Manager, David Sherman, will continue to manage the RiverPark Fund in his capacity as President and Portfolio Manager of CBA, thereby consolidating all investment strategies under the CBA fund family.

Additionally, on March 8, 2024, Cohanzick entered into an agreement with CBA to assign all other investment advisory contracts and additional assets, and CBA assumed certain liabilities arising from such advisory contracts. Cohanzick will deregister as a registered investment advisor. CBA paid Cohanzick $10,000,000 for the advisory contracts by way of a promissory note. CBA will pay Cohanzick quarterly interest payments beginning on June 30, 2024 until the note is paid in full. The note matures on March 8, 2031. CBA cannot prepay all or any portion of the principal amount of the note prior to March 8, 2027. After March 8, 2027, CBA may prepay the note without any penalty or premium. The note is solely an obligation of CBA and is non-recourse to ENDI. There has been no change in ownership among Cohanzick, CBA and ENDI.

Enterprise Diversified, Inc.

Due from Affiliate

Pursuant to the Merger Agreement, Enterprise Diversified agreed to reimburse Cohanzick for certain fees and expenses, comprising primarily of legal and accounting fees incurred as part of the share registration process. These fees were initially recorded and reimbursed for a total of $594,152 during the year ended December 31, 2022. Upon further analysis by both parties, it was determined that only $470,329 of these fees were subject to reimbursement in accordance with the Merger Agreement. The initial overpayment of these fees, totaling $123,823, has been included within the due from affiliate amount on the accompanying consolidated balance sheets as of December 31, 2022. During the year ended December 31, 2023, this overpayment was repaid in full and the corresponding due from affiliate amount was settled.

Willow Oak Asset Management, LLC

Services Agreement with Arquitos

The Company, through Willow Oak, was party to a service-based contract with Arquitos Investment Manager, LP, Arquitos Capital Management, LLC, Arquitos Epicus, LP, and Arquitos Capital Offshore Master, Ltd. (collectively “Arquitos”), which are managed by Steven Kiel, the Company’s director, and earned revenue for certain services provided to Arquitos. In exchange for these services, Steven Kiel, through Arquitos, was contracted to perform certain ongoing consulting services for the benefit of Willow Oak. In addition to the foregoing exchange of services, Willow Oak also earned an annual performance revenue fee share through its contract with Arquitos. As of December 31, 2022, this service contract and revenue fee share have expired. During the year ended December 31, 2022, the Company earned $24,451 of revenue through this fund management services arrangement. No comparable activity exists for the year ended December 31, 2023.