10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2017

or

o 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: 1-14310

GLASSBRIDGE ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)

Delaware	41-1838504
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1099 Helmo Avenue N, Suite 250 Oakdale, Minnesota	55128
(Address of principal executive offices)	(Zip Code)

(651) 704-4000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

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. þ Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). þ Yes o No

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 o Accelerated filer o Non-accelerated filer (Do not check if a smaller reporting company) o Smaller reporting company þ Emerging growth company o

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. o

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 4,977,307 shares of Common Stock, par value $0.01 per share, were outstanding as of November 10, 2017.

GLASSBRIDGE ENTERPRISES, INC.

TABLE OF CONTENTS

	PAGE
PART I. FINANCIAL INFORMATION	3
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2017 and 2016	3
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2017 and 2016	4
Condensed Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016	5
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2017 and 2016	7
Notes to Condensed Consolidated Financial Statements	8
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	27
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	38
ITEM 4. CONTROLS AND PROCEDURES	38
PART II. OTHER INFORMATION	39
ITEM 1. LEGAL PROCEEDINGS	39
ITEM 1A. RISK FACTORS	39
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	39
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	39
ITEM 4. MINE SAFETY DISCLOSURES	39
ITEM 5. OTHER INFORMATION	40
ITEM 6. EXHIBITS	40
SIGNATURE	41
EXHIBIT INDEX	42
EX-31.1
EX-31.2
EX-32.1
EX-32.2

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

GLASSBRIDGE ENTERPRISES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except for per share amounts)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Net revenue	$	9.3		$	11.5		$	27.7		$	32.8
Cost of goods sold	5.3			6.3			15.2			18.5
Gross profit	4.0			5.2			12.5			14.3
Operating expenses:
Selling, general and administrative	7.0			8.7			23.4			27.6
Research and development	1.8			2.9			6.5			9.5
GBAM Fund expenses	0.3			—			0.3			—
Restructuring and other	1.2			1.3			1.1			7.1
Total operating expenses	10.3			12.9			31.3			44.2
Operating loss from continuing operations	(6.3		)	(7.7		)	(18.8		)	(29.9		)
Other income (expense):
Interest income	—			—			—			0.2
Net gains from GBAM Fund activities	1.0			—			1.0			—
Other income (expense), net	0.1			0.2			(0.6		)	(0.8		)
Total other income (expense)	1.1			0.2			0.4			(0.6		)
Loss from continuing operations before income taxes	(5.2		)	(7.5		)	(18.4		)	(30.5		)
Income tax benefit	3.5			0.2			3.5			2.3
Loss from continuing operations	(1.7		)	(7.3		)	(14.9		)	(28.2		)
Discontinued operations:
Gain on sale of discontinued businesses, net of income taxes	—			—			—			2.4
Income (loss) from discontinued operations, net of income taxes	7.7			0.2			4.5			(2.2		)
Reclassification of cumulative translation adjustment	—			—			—			(75.8		)
Income (loss) from discontinued operations, net of income taxes	7.7			0.2			4.5			(75.6		)
Net income (loss) including noncontrolling interest	6.0			(7.1		)	(10.4		)	(103.8		)
Less: Net loss attributable to noncontrolling interest	(2.0		)	—			(5.5		)	—
Net income (loss) attributable to GlassBridge Enterprises, Inc.	$	8.0		$	(7.1	)	$	(4.9	)	$	(103.8	)
Income(loss) per common share attributable to GlassBridge common shareholders — basic and diluted:
Continuing operations	$	0.06		$	(1.97	)	$	(2.04	)	$	(7.62	)
Discontinued operations	1.54			0.05			0.98			(20.43		)
Net income (loss)	$	1.60		$	(1.92	)	$	(1.06	)	$	(28.05	)
Weighted average common shares outstanding:
Basic and diluted	5.0			3.7			4.6			3.7

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

3

GLASSBRIDGE ENTERPRISES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (INCOME) LOSS

(In millions)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017			2016
Net income (loss) including noncontrolling interest	$	6.0		$	(7.1	)	$	(10.4	)	$	(103.8	)
Other comprehensive income, net of tax:
Net pension adjustments, net of tax:
Liability adjustments for defined benefit pension plans	(0.8		)	0.3			(0.8		)	(1.8		)
Reclassification of adjustment for defined benefit plans recorded in net income (loss)	0.9			0.5			1.1			3.0
Total net pension adjustments	0.1			0.8			0.3			1.2
Net foreign currency translation:
Unrealized foreign currency translation gains (losses)	0.1			—			0.1			(0.8		)
Realized cumulative translation adjustments from disposal of businesses	—			—			—			75.8
Total net foreign currency translation	0.1			—			0.1			75.0
Total other comprehensive income, net of tax	0.2			0.8			0.4			76.2
Comprehensive income (loss) including noncontrolling interest	6.2			(6.3		)	(10.0		)	(27.6		)
Less: Comprehensive loss attributable to noncontrolling interest	(2.0		)	—			(5.5		)	—
Comprehensive income (loss) attributable to GlassBridge Enterprises, Inc.	$	8.2		$	(6.3	)	$	(4.5	)	$	(27.6	)

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

4

GLASSBRIDGE ENTERPRISES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except per share amounts)

	September 30,			December 31,
	2017			2016
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	15.7		$	10.0
Short term investments	2.7			22.0
Accounts receivable, net	6.0			7.7
Inventories	5.5			4.1
Other current assets	3.8			3.2
Current assets of discontinued operations	10.3			10.5
Total current assets	44.0			57.5
Property, plant and equipment, net	1.3			2.8
Intangible assets, net	11.6			3.4
Goodwill	3.8			3.8
Other assets	4.9			1.0
Non-current assets of discontinued operations	2.8			2.8
Total assets	$	68.4		$	71.3
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	8.1		$	7.1
Other current liabilities	17.6			16.0
Current liabilities of discontinued operations	22.4			39.7
Total current liabilities	48.1			62.8
Other liabilities	30.6			29.4
Other liabilities of discontinued operations	9.2			4.4
Total liabilities	87.9			96.6
Shareholders’ deficit:
Preferred stock, $.01 par value, authorized 25 million shares, none issued and outstanding	—			—
Common stock, $.01 par value, authorized 10 million shares, 5.7 million issued	0.1			—
Additional paid-in capital	1,053.0			1,042.8
Accumulated deficit	(1,023.8		)	(1,019.1		)
Accumulated other comprehensive loss	(20.3		)	(20.6		)
Treasury stock, at cost: 0.8 million shares at September 30, 2017; 0.7 million shares at December 31, 2016	(28.6		)	(28.4		)
Total GlassBridge Enterprises, Inc. shareholders’ deficit	(19.6		)	(25.3		)
Noncontrolling interest	0.1			—
Total shareholders’ deficit	(19.5		)	(25.3		)
Total liabilities and shareholders’ deficit	$	68.4		$	71.3

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

5

GLASSBRIDGE ENTERPRISES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

The assets of NXSN Acquisition Corp., which GlassBridge Enterprises, Inc. identifies as a consolidated variable interest entity ("VIE") that can be used only to settle obligations of the VIE and the liabilities of the VIE for which creditors (or beneficial interest holders) do not have recourse to the general credit of GlassBridge Enterprises, Inc. were as follows. See Note 1 - Basis of Presentation for further information.

	September 30,
	2017
	(unaudited)
Assets
Cash and cash equivalents	$	0.9
Accounts receivable, net	$	6.0
Inventories	$	5.5
Intangible assets, net and Goodwill	$	6.7
Other assets	$	3.3
Liabilities
Accounts payable	$	7.2
Other current liabilities	$	8.5
Other liabilities	$	4.7

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

6

GLASSBRIDGE ENTERPRISES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

	Nine Months Ended
	September 30,
	2017			2016
Cash Flows from Operating Activities:
Net loss including noncontrolling interest	$	(10.4	)	$	(103.8	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	3.2			1.9
Stock-based compensation	0.2			—
Loss on abandonment of unused property, plant and equipment	1.1			—
Realized cumulative translation adjustment	—			75.8
Gain on sale of asset	(1.0		)	—
Short term investment	19.3			(37.7		)
Other, net	(0.2		)	1.7
Changes in operating assets and liabilities	(7.6		)	(21.0		)
Net cash provided by (used in) operating activities	4.6			(83.1		)
Cash Flows from Investing Activities:
Capital expenditures	(0.9		)	(0.6		)
Purchase of equity securities	(4.0		)	—
Proceeds from sale of assets and business	0.5			25.5
Net cash provided by (used in) investing activities	(4.4		)	24.9
Cash Flows from Financing Activities:
Purchase of treasury stock	(0.1		)	(0.2		)
Debt repayments	—			(0.2		)
Capital contributions from noncontrolling interest	5.6			—
Net cash provided by (used in) financing activities	5.5			(0.4		)
Effect of exchange rate changes on cash and cash equivalents	—			0.1
Net change in cash and cash equivalents	5.7			(58.5		)
Cash and cash equivalents — beginning of period	10.0			70.4
Cash and cash equivalents — end of period	$	15.7		$	11.9
Supplemental disclosures of non-cash investing and financing activities:
Non-cash transaction with Clinton Group, Inc.	$	10.1		$	—

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

7

GLASSBRIDGE ENTERPRISES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 — Basis of Presentation

GlassBridge Enterprises, Inc. (“GlassBridge”, the “Company”, “we”, “us” or “our”) is a holding company. We actively explore a diverse range of new, strategic asset management business opportunities for our portfolio. The company’s wholly-owned subsidiary GlassBridge Asset Management, LLC (“GBAM”) is an investment advisor focused on technology-driven quantitative strategies and other alternative investment strategies. Our partially-owned subsidiary NXSN Acquisition Corp. (together with its subsidiaries, “NXSN”) operates a global enterprise data storage business through its subsidiaries.

The interim Condensed Consolidated Financial Statements of GlassBridge are unaudited but, in the opinion of management, reflect all adjustments necessary for a fair statement of financial position, results of operations, comprehensive loss and cash flows for the periods presented. Except as otherwise disclosed herein, these adjustments consist of normal and recurring items. The results of operations for any interim period are not necessarily indicative of full year results. The Condensed Consolidated Financial Statements and Notes are presented in accordance with the requirements for Quarterly Reports on Form 10-Q and do not contain certain information included in our annual Consolidated Financial Statements and Notes presented in accordance with the requirements of Annual Reports on Form 10-K.

The unaudited Condensed Consolidated Financial Statements include the accounts of the Company, its wholly-owned subsidiaries, and entities in which the Company owns or controls fifty percent or more of the voting shares and has the right to control. The results of entities disposed of are included in the unaudited Condensed Consolidated Financial Statements up to the date of the disposal and, where appropriate, these operations have been reflected as discontinued operations. All inter-company balances and transactions have been eliminated in consolidation and, in the opinion of management, all normal recurring adjustments necessary for a fair presentation have been included in the interim results reported.

The preparation of the interim Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim Condensed Consolidated Financial Statements and the reported amounts of revenue and expenses for the reporting periods. Despite our intention to establish accurate estimates and use reasonable assumptions, actual results may differ from our estimates.

The December 31, 2016 Condensed Consolidated Balance Sheet data was derived from the audited Consolidated Financial Statements but does not include all disclosures required by GAAP. This Form 10-Q should be read in conjunction with our Consolidated Financial Statements and Notes included in our Annual Report on Form 10-K for the year ended December 31, 2016 as filed with the U.S. Securities and Exchange Commission on March 24, 2017.

The operating results of our legacy business segments, Consumer Storage and Accessories and Tiered Storage and Security Solutions (the “Legacy Businesses”), are presented in our Condensed Consolidated Statements of Operations as discontinued operations for all periods presented. Our continuing operations in each period presented represents our global enterprise data storage business with an emerging enterprise-class, private cloud sync and share product line (the “Nexsan Business”, which consists of the products of NXSN’s subsidiaries Nexsan Corporation (together with its subsidiaries other than Connected Data, Inc. ("CDI"), “Nexsan”) and CDI), and our “Asset Management Business,” which consists of our investment advisory business conducted through GBAM, as well as corporate expenses and activities not directly attributable to our Legacy Businesses. Assets and liabilities directly associated with our Legacy Businesses and that are not part of our ongoing operations have been separately presented on the face of our Condensed Consolidated Balance Sheet as of both September 30, 2017 and December 31, 2016. See Note 4 - Discontinued Operations for further information.

On January 23, 2017, we closed a transaction (the “NXSN Transaction”) with NXSN, pursuant to which all of the issued and outstanding common stock of Nexsan and CDI was transferred to NXSN in exchange for 50% of the issued and outstanding common stock of NXSN and a $25 million senior secured convertible promissory note (the “NXSN Note”). Spear Point Private Equity LP (“SPPE”), an affiliate of Spear Point Capital Management, LLC (“Spear Point”), owns the remaining 50% issued and outstanding shares of NXSN common stock and shares of NXSN non-voting preferred stock.

The terms of the NXSN Transaction provided that NXSN had the right to raise up to $10 million from the sale of NXSN non-voting preferred stock. As of September 30, 2017, NXSN had sold $5.6 million of NXSN non-voting preferred stock. Although the time period during which NXSN was permitted to sell NXSN non-voting preferred stock has lapsed under the terms of the NXSN Transaction, we are continuing to work with SPPE to find capital solutions to sufficiently fund the continuing operations of the Nexsan Business. In the event NXSN does not raise sufficient capital to fund its continuing operations, we will continue to explore options to preserve the enterprise value of the Nexsan Business.

8

As a result of the NXSN Transaction, we identified NXSN as a variable interest entity (“VIE”). We consolidate a VIE in our financial statements if we are deemed to be the primary beneficiary of the VIE. The primary beneficiary of a VIE is the party that has the power to direct activities that most significantly impact the activities of the VIE and has the obligation to absorb losses or the right to benefits from the VIE that could potentially be significant to the VIE. Following January 23, 2017, NXSN’s financial results are included in our Condensed Consolidated Financial Statements since we made the determination that we are the primary beneficiary of such VIE. Until January 23, 2017, as we owned 100% of the equity interest of Nexsan and CDI, the financial results of Nexsan and CDI were included in our Condensed Consolidated Financial Statements as wholly-owned subsidiaries. See Note 14 - Segment Information for additional information.

On February 2, 2017, we closed a transaction with Clinton Group, Inc. (“Clinton”) which has facilitated the launch of our Asset Management Business, that consists of our investment advisory business conducted through GBAM (the “Capacity and Services Transaction”). See Note 6 - Intangible Assets and Goodwill and Note 16 - Related Party Transactions for further information.

On February 21, 2017, we effected a 1:10 reverse split of our common stock, without any change in the par value per share (the “Reverse Stock Split”), and decreased the number of authorized shares of our common stock from 100,000,000 to 10,000,000. All share and per share values of our common stock for all periods presented are retroactively restated for the effect of the Reverse Stock Split.

In June 2017, we launched our first GBAM-managed investment fund (the “GBAM Fund”) which focuses on technology-driven quantitative strategies and other alternative investment strategies. As of September 30, 2017, we had invested certain of our cash as proprietary capital in the GBAM Fund. We have made the determination to consolidate the GBAM Fund and, accordingly, its financial results were included in our Condensed Consolidated Financial Statements as part of the Asset Management Business. Our cash and cash equivalents balance as of September 30, 2017 included the proprietary capital invested in the GBAM Fund. See Note 14 - Segment Information for additional information.

The Company’s continued operations and ultimate ability to continue as a going concern will depend on its ability to enhance revenue and operating results, enter into strategic relationships or raise additional capital. The Company can provide no assurances that such plans will occur and if the Company is unable to return to profitability or otherwise raise sufficient capital, there would be a material adverse effect on its business.

Note 2 — Recently Issued or Adopted Accounting Pronouncements

In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-11, Simplifying the Measurement of Inventory, which modifies existing requirements regarding measuring inventory at the lower of cost or market. Under existing standards, the market amount requires consideration of replacement cost, net realizable value (“NRV”), and NRV less an approximately normal profit margin. The new ASU replaces market with NRV, defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This eliminates the need to determine and consider replacement cost or NRV less an approximately normal profit margin when measuring inventory. For GlassBridge, this standard was effective prospectively beginning January 1, 2017, with early adoption permitted. This standard did not have a material impact on the Company’s consolidated results of operations or financial condition.

In March 2016, the FASB issued ASU No. 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which amends ASU No. 2014-09, Revenue from Contracts with Customers, to clarify principal versus agent guidance in situations in which a revenue transaction involves a third party in providing goods or services to a customer. In such circumstances, an entity must determine whether the nature of its promise to the customer is to provide the underlying goods or services (i.e., the entity is the principal in the transaction) or to arrange for the third party to provide the underlying goods or services (i.e., the entity is the agent in the transaction). To determine the nature of its promise to the customer, the entity must first identify each specified good or service to be provided to the customer and then (before transferring it) assess whether it controls each specified good or service. The new ASU clarifies how an entity should identify the unit of accounting (the specified good or service) for the principal versus agent evaluation, and how it should apply the control principle to certain types of arrangements, such as service transactions, by explaining what a principal controls before the specified good or service is transferred to the customer. ASU No. 2016-08 will be effective for fiscal years beginning after December 15, 2017, including interim periods within that year, concurrent with ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The Company is evaluating the impact this standard will have on the Company’s consolidated results of operations and financial condition.

In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718), which simplified certain aspects of the accounting for share-based payment transactions, including income taxes, classification of awards and classification in the statement of cash flows. ASU No. 2016-09 was effective for the Company beginning in its first quarter of 2017. This standard did not have a material impact on the Company’s consolidated results of operations or financial condition.

9

In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing, which amends ASU No. 2014-09, Revenue from Contracts with Customers. In terms of identifying performance obligations in a revenue arrangement, the amendments clarify how entities would determine whether promised goods or services are separately identifiable from other promises in a contract and, therefore, would be accounted for separately. The guidance would also allow entities to disregard goods or services that are immaterial in the context of a contract and provides an accounting policy election to account for shipping and handling activities as fulfillment costs rather than as additional promised services. With regard to the licensing, the amendments clarify how an entity would evaluate the nature of its promise in granting a license of intellectual property, which determines whether the entity recognizes revenue over time or at a point in time. The standard also clarifies certain other aspects relative to licensing. ASU No. 2016-10 will be effective for fiscal years beginning after December 15, 2017, including interim periods within that year, concurrent with ASU No. 2014-09. The Company is evaluating the impact this standard will have on the Company’s consolidated results of operations and financial condition.

In October 2016, the FASB issued ASU No. 2016-17, Interests Held through Related Parties That Are under Common Control, which modifies existing guidance with respect to how a decision maker that holds an indirect interest in a VIE through a common control party determines whether it is the primary beneficiary of the VIE as part of the analysis of whether the VIE would need to be consolidated. Under the ASU, a decision maker would need to consider only its proportionate indirect interest in the VIE held through a common control party. Previous guidance had required the decision maker to treat the common control party’s interest in the VIE as if the decision maker held the interest itself. As a result of the ASU, in certain cases, previous consolidation conclusions may change. The standard was effective January 1, 2017 with retrospective application to January 1, 2016. This standard did not have a material impact on the Company’s consolidated results of operations or financial condition.

In February 2017, the FASB issued ASU No. 2017-06, Employee Benefit Plan Master Trust Reporting. This ASU provides guidance for reporting by an employee benefit plan for its interest in a master trust. The amendment is effective for fiscal years beginning after December 15, 2018. The amendment should be applied retrospectively with earlier adoption permitted. The Company is in the process of determining the effect of adopting this standard on the Company’s consolidated results of operations and financial condition.

In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which amends the requirements related to the presentation of the components of net periodic benefit cost for an entity’s sponsored defined benefit pension and other postretirement plans. This ASU requires entities to (1) disaggregate the current-service-cost component from the other components of net benefit cost (the “other components”) and present it with other current compensation costs for related employees in the income statement and (2) present the other components elsewhere in the income statement and outside of income from operations if such a subtotal is presented. In addition, only service costs are eligible for capitalization. The standard will be effective in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the impact of adopting this standard on the Company’s consolidated results of operations and financial condition.

In May 2017, the FASB issued ASU No. 2017-09, Scope of Modification Accounting. This ASU provides clarification on when modification accounting should be used for changes to the terms and conditions of a share-based payment award. This ASU does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. The standard will be effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The amendment should be applied prospectively to an award modified on or after the adoption date. The Company is currently assessing the impact of adopting this standard on the Company’s consolidated results of operations and financial condition.

Note 3 — Income (Loss) per Common Share

Basic income (loss) per common share is calculated using the weighted average number of shares outstanding for the period. Unvested restricted stock and treasury shares are excluded from the calculation of basic weighted average number of common shares outstanding. Once restricted stock vests, it is included in our common shares outstanding.

Diluted income (loss) per common share is computed on the basis of the weighted average shares outstanding plus the dilutive effect of our stock-based compensation plans using the “treasury stock” method. Since the exercise price of our stock options is greater than the average market price of the Company’s common stock for the period, we did not include dilutive common equivalent shares for these instruments in the computation of diluted net income (loss) per share because the effect would have been anti-dilutive.

10

The following table sets forth the computation of the weighted average basic and diluted income (loss) per share:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In millions, except for per share amounts)	2017			2016			2017			2016
Numerator:
Loss from continuing operations	$	(1.7	)	$	(7.3	)	$	(14.9	)	$	(28.2	)
Less: loss attributable to noncontrolling interest	(2.0		)	—			(5.5		)	—
Net income (loss) from continuing operations attributable to GlassBridge Enterprises, Inc.	0.3			(7.3		)	(9.4		)	(28.2		)
Income (loss) from discontinued operations, net of income taxes	7.7			0.2			4.5			(75.6		)
Net income (loss) attributable to GlassBridge Enterprises, Inc.	$	8.0		$	(7.1	)	$	(4.9	)	$	(103.8	)
Denominator:
Weighted average number of common shares outstanding during the period - basic and diluted	5.0			3.7			4.6			3.7
Income (loss) per common share attributable to GlassBridge common shareholders — basic and diluted:
Continuing operations	$	0.06		$	(1.97	)	$	(2.04	)	$	(7.62	)
Discontinued operations	1.54			0.05			0.98			(20.43		)
Net income (loss)	$	1.60		$	(1.92	)	$	(1.06	)	$	(28.05	)
Anti-dilutive shares excluded from calculation	0.3			0.4			0.3			0.4

Note 4 — Discontinued Operations

The operating results for the Legacy Businesses are presented in our Condensed Consolidated Statements of Operations as discontinued operations for all periods presented and reflect revenues and expenses that are directly attributable to these businesses that were eliminated from our ongoing operations.

GAAP requires accumulated foreign currency translation balances to be reclassified into the Consolidated Statement of Operations once the liquidation of the net assets of a foreign entity is substantially complete. As of March 31, 2016, because we had ceased operations in all of our international legal entities other than those associated with the Nexsan Business, we had determined that the liquidations of our international entities associated with our Legacy Businesses are substantially complete. All remaining activities associated with these entities, including the final disposition of remaining balance sheet amounts and formal dissolution of these entities are being managed and controlled by the Company’s U.S. corporate function. Accordingly, the Company reclassified into discontinued operations $75.7 million and $75.8 million of foreign currency translation losses associated with our Legacy Businesses for the three months ended March 31, 2016 and for the nine months ended September 30, 2016, respectively.

Additionally, in February 2016 the Company sold its IronKey mobile security solutions business to Kingston Digital, Inc. (“Kingston”) and DataLocker Inc. (“DataLocker”) pursuant to two asset purchase agreements which qualified as the sale of a business. The Company recorded a pre-tax gain on the IronKey sale of $3.8 million during the first quarter of 2016.

In September 2017, we entered into an agreement with a Dutch counterparty with respect to certain potential transactions (the “French Levy Monetization Transactions”) intended to monetize our claims against the French levy collecting society in furtherance of our efforts to position for winddown the European subsidiary holding such claims. The French Levy Monetization Transactions are structured as “back-to-back” sales of certain leviable products to French purchasers designed to utilize the Dutch company’s French distribution channel to recover a portion of overpaid levies via setoff. See Note 15 - Litigation, Commitments and Contingencies for additional information on these overpaid levies.

For the three and nine months ended September 30, 2017, we recorded less than $0.1 million of services fee revenue and as of September 30, 2017, our European subsidiary recorded less than $0.1 million of services fee due to the Dutch counterparty. For the three months and nine months ended September 30, 2017, our European subsidiary recorded revenue of $0.3 million due from a French purchaser and cost of goods sold of $0.2 million due to the Dutch counterparty.

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The key components of the results of discontinued operations were as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In millions)	2017			2016			2017			2016
Net revenue	$	0.3		$	—		$	0.3		$	2.0
Cost of goods sold	0.2			—			0.2			0.6
Gross profit	0.1			—			0.1			1.4
Selling, general and administrative	1.3			0.8			4.2			3.6
Research and development	—			—			—			0.5
Restructuring and other	(13.2		)	(0.7		)	(13.6		)	(0.4		)
Reclassification of cumulative translation adjustment	—			—			—			75.8
Other (income) expense	0.8			(0.4		)	1.7			(0.6		)
Income (loss) from discontinued operations, before income taxes	11.2			0.3			7.8			(77.5		)
Gain on sale of discontinued businesses, before income taxes	—			—			—			3.8
Income tax provision	(3.5		)	(0.1		)	(3.3		)	(1.9		)
Income (loss) from discontinued operations, net of income taxes	$	7.7		$	0.2		$	4.5		$	(75.6	)

For the three months ended September 30, 2017, “restructuring and other” predominantly reflects a $7.3 million net gain attributable to the settlement of the lawsuits brought against us by CMC Magnetic Corp. (“CMC”), a $3.3 million net gain attributable to the settlement of the lawsuit brought against us by IOENGINE, LLC (“IOENGINE”), a $2.4 million gain on resolution of customer and vendor balances related to the Legacy Businesses, and a $0.6 million gain on asset claim recovery. See Note 15 - Litigation, Commitments and Contingencies for additional information on the CMC and IOENGINE settlements.

Current assets of discontinued operations of $10.3 million as of September 30, 2017 principally include approximately $9.0 million of restricted cash, primarily associated with disputed CMC trade payables. Current assets of discontinued operations of $10.5 million as of December 31, 2016 principally included approximately $9.4 million of restricted cash, primarily associated with disputed trade payables. The change in the restricted cash was due to currency translation. Pursuant to the settlement agreement with CMC, we undertook certain obligations to release restricted cash associated with the CMC trade payables. See Note 15 - Litigation, Commitments and Contingencies for additional information.

Current liabilities of discontinued operations of $22.4 million as of September 30, 2017 included $1.1 million of accounts payable, $1.0 million of customer credit and rebate accruals, $11.1 million due to CMC (includes $9.0 million of restricted cash to be released to CMC), $3.8 million due to IOENGINE, $1.8 million of legal accruals and $3.6 million of other current liability amounts. Current liabilities of discontinued operations of $39.7 million as of December 31, 2016 included $22.8 million of accounts payable, $3.2 million of customer credit and rebate accruals, $11.0 million of legal accruals and $2.7 million of other current liability amounts. The change in accounts payable and legal accruals were primarily attributable to the settlement of our CMC and IOENGINE lawsuits. See Note 15 - Litigation, Commitments and Contingencies for additional information.

Other liabilities of discontinued operations of $9.2 million as of September 30, 2017 included $1.0 million due to CMC, $4.0 million due to IOENGINE, and $4.2 million of other liability amounts. Other liabilities of discontinued operations of $4.4 million as of December 31, 2016 included $4.4 million of other liability amounts. See Note 15 - Litigation, Commitments and Contingencies for additional information on the CMC and IOENGINE settlements.

Note 5 — Supplemental Balance Sheet Information

Additional supplemental balance sheet information is provided as follows:

The Company’s accounts receivable are solely related to the Nexsan Business and reported on the Condensed Consolidated Balance Sheet net of reserves and allowances. The reserves and allowances were $0.3 million and $0.2 million for the periods ended September 30, 2017 and December 31, 2016, respectively. Reserves and allowances include estimated amounts for customer returns, discounts on payment terms and uncollectible accounts.

In the third quarter of 2017, Nexsan sold $1.2 million of its accounts receivable to affiliates of Spear Point for a discounted purchase price of $1.1 million, subject to a right to repurchase within five months of the original sale at the original sales price

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plus 2% interest per month. The accounts receivable sale was recorded as a sale of financial assets under ASC860. The purchase price discounts associated with the sales of Nexsan Business accounts receivable are recorded in Other income (expense), net in our Condensed Consolidated Statement of Operations. The amount of the accounts receivable sold was excluded from our Condensed Consolidated Balance Sheet.

Other assets include a $4.0 million strategic investment in equity securities, which is consistent with our stated strategy of exploring a diverse range of new strategic asset management business opportunities for our portfolio. We will account for such investments under the cost method of accounting.

Other current liabilities primarily includes deferred revenue of $7.0 million and $6.7 million related to the Nexsan Business, levy accruals of $5.5 million and $4.9 million and accrued payroll of $2.0 million and $2.6 million as of September 30, 2017 and December 31, 2016, respectively.

Other liabilities include pension liabilities of $25.3 million and $24.1 million as of September 30, 2017 and December 31, 2016, respectively. 

Note 6 — Intangible Assets and Goodwill

Intangible Assets

Intangible assets consist of developed technology recorded as a result of the acquisition of CDI on October 14, 2015 and intangible assets acquired when we closed the Capacity and Services Transaction with Clinton on February 2, 2017. The Capacity and Services Transaction allows for GBAM to place up to $1 billion of investment capacity under Clinton’s management within Clinton’s quantitative equity strategy for an initial term of five years, for which the Company issued to Clinton’s affiliate Madison Avenue Capital Holdings, Inc. 1,250,000 shares of its common stock as consideration. We recorded the 1,250,000 shares of common stock issued as an intangible asset and calculated a fair value of $10.1 million using our closing stock price on February 2, 2017. We are amortizing the $10.1 million on a straight-line basis over the five year term. See Note 16 - Related Party Transactions for additional information.

(In millions)	Capacity Agreement			Developed Technology			Total
September 30, 2017
Cost	$	10.1		$	4.3		$	14.4
Accumulated amortization	(1.4		)	(1.4		)	(2.8		)
Intangible assets, net	$	8.7		$	2.9		$	11.6
December 31, 2016
Cost	$	—		$	4.3		$	4.3
Accumulated amortization	—			(0.9		)	(0.9		)
Intangible assets, net	$	—		$	3.4		$	3.4

Amortization expense for intangible assets consisted of the following:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2017		2016		2017		2016
Amortization expense	$	0.7	$	0.2	$	1.9	$	0.6

Estimated amortization expense for the remainder of 2017 and each of the next four years is as follows:

(In millions)	2017 (Remainder)		2018		2019		2020		2021
Amortization expense	$	0.7	$	2.7	$	2.7	$	2.7	$	2.6

Goodwill

The goodwill balance was $3.8 million as of September 30, 2017 and December 31, 2016. The goodwill is solely contained within the Nexsan Business. There are no impairment indicators based on management’s assessment. We monitor our results and expected cash flows in the future to access whether consideration of an impairment of goodwill may be necessary.

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Note 7 — Restructuring and Other Expense

The components of our restructuring and other expense included in the Condensed Consolidated Statements of Operations were as follows:

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(In millions)	2017			2016		2017			2016
Restructuring Expense:
Severance and related	$	0.1		$	0.4	$	1.0		$	0.4
Loss on abandonment of unused property, plant and equipment	1.1			—		1.1			—
Other(1)	(0.8		)	—		(1.7		)	—
Total Restructuring	$	0.4		$	0.4	$	0.4		$	0.4
Other Expense:
Pension settlement/curtailment (Note 9)	$	0.8		$	0.3	0.8			2.6
Asset disposals / write down	—			—		—			0.1
Other(2)	—			0.6		(0.1		)	4.0
Total Other	$	0.8		$	0.9	$	0.7		$	6.7
Total Restructuring and Other	$	1.2		$	1.3	$	1.1		$	7.1

⁽¹⁾ For the three months ended September 30, 2017, other includes $0.8 million net gain from an asset sale. For the nine months ended September 30, 2017, other includes $1.0 million net gain from an asset sale, $0.3 million reversal of contingent consideration obligations related to the CDI acquisition (see Note 15 - Litigation, Commitments and Contingencies for additional information), and $0.4 million reversal of other employee costs. We have considered these costs to be attributable to our corporate activities and, therefore, they are not part of our discontinued operations.

⁽²⁾ For the three months ended September 30, 2016, other includes consulting expenses of $0.3 million and $0.2 million for Realization Services, Inc. (See Note 16 - Related Party Transactions for additional information) and Otterbourg P.C., respectively and $0.1 million for other consulting fees. For the nine months ended September 30, 2016, other includes consulting expenses of $2.4 million and $1.4 million for Realization Services, Inc. and Otterbourg P.C., respectively, a net credit of $1.9 million for property tax refund for the former Oakdale site, as well as $2.1 million for other employee costs and consulting fees directly attributable to our Restructuring Plan. We have considered these costs to be attributable to our corporate activities and, therefore, they are not part of our discontinued operations.

Activity related restructuring accruals was as follows:

(In millions)	Severance and Related
Accrued balance at December 31, 2016	$	—
Charges	0.6
Usage and payments	(0.4		)
Accrued balance at March 31, 2017	$	0.2
Charges	0.3
Usage and payments	(0.2		)
Accrued balance at June 30, 2017	$	0.3
Usage and payments	(0.3		)
Accrued balance at September 30, 2017	$	—

Note 8 — Stock-Based Compensation

Stock-based compensation for continuing operations consisted of the following:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2017		2016		2017		2016
Stock-based compensation expense	$	0.2	$	0.2	$	0.3	$	0.6

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We have stock-based compensation awards consisting of stock options, restricted stock and stock appreciation rights under four plans (collectively, the “Stock Plans”) which are described in detail in our Annual Report on Form 10-K for the year ended December 31, 2016. As of September 30, 2017, there were 186,225 shares available for grant under the 2011 Incentive Plan. No further shares were available for grant under any other stock incentive plan.

Stock Options

The following table summarizes our stock option activity:

	Stock Options		Weighted Average Exercise Price
Outstanding December 31, 2016	286,707		$	77.50
Granted	—		—
Exercised	—		—
Canceled	(40,213	)	128.72
Forfeited	(6,602	)	23.46
Outstanding September 30, 2017	239,892		$	70.41
Exercisable as of September 30, 2017	210,943		$	78.15

The outstanding options are non-qualified and generally have a term of ten years. The following table summarizes our weighted average assumptions used in the Black-Scholes valuation of stock options:

	Nine Months Ended
	September 30,
	2017		2016
Volatility	44.3	%	41.0	%
Risk-free interest rate	1.6	%	1.8	%
Expected life (months)	72		72
Dividend yield	—		—

As of September 30, 2017, there was $0.2 million of total unrecognized compensation expense related to non-vested stock options granted under our Stock Plans. That expense is expected to be recognized over a weighted average period of 1.3 years.

Restricted Stock

The following table summarizes our restricted stock activity:

	Restricted Stock		Weighted Average Grant Date Fair Value Per Share
Nonvested as of December 31, 2016	79,926		$	20.63
Granted	86,000		5.85
Grant adjustments	(324	)	38.00
Vested	(2,071	)	17.57
Forfeited	(67,206	)	22.84
Nonvested as of September 30, 2017	96,325		$	5.91

The cost of the awards is determined using the fair market value of the Company’s common stock on the date of the grant, and compensation is recognized on a straight-line basis over the requisite vesting period.

As of September 30, 2017, there was $0.4 million of total unrecognized compensation expense related to non-vested restricted stock granted under our Stock Plans. That expense is expected to be recognized over a weighted average period of 2.4 years.

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Stock Appreciation Rights

During the nine months ended September 30, 2017 we did not grant any Stock Appreciation Rights (“SARs”). Outstanding SARs only vest when both stock price and revenue performance conditions specified by the terms of the SARs are met by December 31, 2017. As of September 30, 2017 and December 31, 2016, we had less than 0.1 million and 0.2 million SARs outstanding, respectively. We have not recorded any related compensation expense based on the applicable accounting rules. We will continue to assess these SARs each quarter to determine if any expense should be recorded.

Note 9 — Retirement Plans

Pension Plans

During the three and nine months ended September 30, 2017, consistent with the funding requirements of our worldwide pension plans we made a contribution of $0.4 million to such plans. Effective January 1, 2010, the U.S. plan was amended to exclude new hires and rehires from participating in the plan. In addition, we eliminated benefit accruals under the U.S. plan as of January 1, 2011, thus “freezing” the defined benefit pension plan. Under the plan freeze, no pay credits were made to a participant’s account balance after December 31, 2010. However, interest credits will continue in accordance with the annual update process. We presently anticipate contributing between $0.3 million and $0.5 million to fund our worldwide pension plans in the next six months.

Components of net periodic pension (credit) cost included the following:

	United States						United States
	Three Months Ended September 30,						Nine Months Ended September 30,
(In millions)	2017			2016			2017			2016
Interest cost	$	0.7		$	0.7		$	1.9		$	2.2
Expected return on plan assets	(0.9		)	(0.9		)	(2.5		)	(2.8		)
Amortization of net actuarial loss	0.1			0.1			0.3			0.3
Net periodic pension credit	(0.1		)	(0.1		)	(0.3		)	(0.3		)
Settlement loss	0.8			0.3			0.8			2.6
Total pension (credit) cost	$	0.7		$	0.2		$	0.5		$	2.3

Germany is the Company’s only remaining international plan and the components of net periodic pension (credit) cost for this plan were immaterial for the three and nine months ended September 30, 2017 and 2016.

Note 10 — Income Taxes

For interim income tax reporting, we are required to estimate our annual effective tax rate and apply it to year-to-date pre-tax income/loss excluding unusual or infrequently occurring discrete items. Tax jurisdictions with losses for which tax benefits cannot be realized are excluded.

For the three and nine months ended September 30, 2017, we recorded income tax benefit from continuing operations of $3.5 million. For the three and nine months ended September 30, 2016, we recorded income tax benefit of $0.2 million and $2.3 million. Similar to the same period last year, this is primarily related to the intraperiod allocation of total tax expense between continuing operations and discontinued operations. The effective income tax rate for the three and nine months ended September 30, 2017 differs from the U.S. federal statutory rate of 35% primarily due to a valuation allowance on various deferred tax assets and the intraperiod allocation between continuing and discontinued operations.

We file income tax returns in multiple jurisdictions and are subject to review by various U.S and foreign taxing authorities. Our U.S. federal income tax returns for 2014 through 2016 are subject to examination by the Internal Revenue Service. With few exceptions, we are no longer subject to examination by foreign tax jurisdictions or state and local tax jurisdictions for years before 2010. In the event that we have determined not to file tax returns with a particular state or city, all years remain subject to examination by the tax jurisdiction.

We accrue for the effects of uncertain tax positions and the related potential penalties and interest. Our liability related to uncertain tax positions, which is presented in other liabilities on our Condensed Consolidated Balance Sheets and which includes interest and penalties and excludes certain unrecognized tax benefits that have been netted against deferred tax assets, was $1.0 million and $1.3 million as of September 30, 2017 and December 31, 2016, respectively. These liabilities are associated with our Legacy Businesses and have been included with the separately presented other liabilities of discontinued operations on the face of our Condensed Consolidated Balance Sheet. It is reasonably possible that the amount of the

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unrecognized tax benefit with respect to certain of our unrecognized tax positions will increase or decrease during the next 12 months; however, it is not possible to reasonably estimate the effect at this time.

Note 11 — Major Customers and Accounts Receivable

Major customers are those customers that account for more than 10% of revenues or accounts receivable. For the three and nine months ended September 30, 2017, 19% and 22% of revenues, respectively, were derived from one major Nexsan Business customer. The loss of this customer could have a material adverse effect on the Company’s operations. As of September 30, 2017, there were no customers that accounted for more than 10% of accounts receivable.

For the three months ended September 30, 2016, 17% of revenues were derived from one major Nexsan Business customer and for the nine months ended September 30, 2016, 21% of revenues were derived from one major Nexsan Business customer. The accounts receivable from this customer represented 10% of total accounts receivable as of December 31, 2016.

Note 12 — Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, or the exit price in an orderly transaction between market participants on the measurement date. A three-level hierarchy is used for fair value measurements based upon the observability of the inputs to the valuation of an asset or liability as of the measurement date. Level 1 measurements consist of unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 measurements include quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 3 measurements include significant unobservable inputs. A financial instrument’s level within the hierarchy is based on the highest level of any input that is significant to the fair value measurement. Following is a description of our valuation methodologies used to estimate the fair value for our assets and liabilities.

Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis

The Company’s non-financial assets such as goodwill, intangible assets and property, plant and equipment are recorded at fair value when an impairment is recognized or at the time acquired in a business combination. The determination of the estimated fair value of such assets required the use of significant unobservable inputs which would be considered Level 3 fair value measurements. As of September 30, 2017, there were no indicators that would require an impairment of goodwill, intangible assets or property, plant and equipment.

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Assets and Liabilities that are Measured at Fair Value on a Recurring Basis

The Company measures certain assets and liabilities at their estimated fair value on a recurring basis, including cash and cash equivalents, our contingent consideration obligations associated with the acquisition of CDI and investments in trading securities (described further below under the “Trading Equity Securities” heading). See Note 15 - Litigation, Commitments and Contingencies for additional information on the CDI contingent consideration. The following table provides information by level for assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016:

	September 30, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Assets:
Trading securities	$	0.3	$	0.3			$	—
	December 31, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Assets:
Trading securities	$	2.5	$	2.5			$	—
Liabilities:
Contingent consideration associated with CDI acquisition	$	0.3	$	—	$	—	$	0.3

Trading Equity Securities

On February 8, 2016, the Company entered into a subscription agreement with Clinton Lighthouse Equity Strategies Fund (Offshore) Ltd. (“Clinton Lighthouse”). Clinton Lighthouse is a market neutral fund which provides daily liquidity to its investors. The short term investment was classified as a trading security as we expect to be actively managing this investment at all times with the intention of maximizing our investment returns. Income or loss including unrealized gains and losses associated with this trading security is recorded as a component of “Other income (expense), net” in our Condensed Consolidated Statements of Operations and purchases or sales of this security are reflected as operating activities in our Condensed Consolidated Statements of Cash Flows. As of September 30, 2017, the short term investment balance in Clinton Lighthouse was $2.2 million compared to $19.5 million as of December 31, 2016. The decrease of $17.3 million mainly relates to $16.9 million of redemptions and approximately $0.4 million of unrealized loss for the nine months ended September 30, 2017. Unrealized loss for the nine months ended September 30, 2016 was approximately $0.7 million, which includes $0.5 million accrued performance fees. See Note 16 - Related Party Transactions for more information.

In June 2017, we launched the GBAM Fund which focuses on technology-driven quantitative strategies and other alternative investment strategies. The short term investments within the GBAM Fund were classified as trading securities as we expect to be actively managing the GBAM Fund at all times with the intention of maximizing our investment returns. Income or loss associated with these trading securities is recorded as a component of “Net gains from GBAM Fund activities” in our Condensed Consolidated Statements of Operations and purchases or sales of these securities are reflected as operating activities in our Condensed Consolidated Statements of Cash Flows. As of September 30, 2017, the short term investment balance for the GBAM Fund was $0.2 million. See Note 14 - Segment Information for additional information.

In connection with the adoption of ASU No. 2015-07, Fair Value Measurement (Topic 820), FASB Accounting Standards Codification 820 - Fair Value Measurement and Disclosures no longer requires investments for which fair value is determined based on practical expedient reliance to be reported utilizing the fair value hierarchy. As of September 30, 2017 and December 31, 2016, our short term investments in Clinton Lighthouse and the GBAM Fund were fair valued using the NAV as practical expedient and has been removed from the fair value hierarchy table above.

Other Assets and Liabilities

The carrying value of accounts receivable and accounts payable approximate their fair values due to the short term duration of these items.

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Note 13 — Shareholders’ Equity

Common Stock

In connection with the Capacity and Services Transaction with Clinton, we issued to Clinton’s affiliate Madison Avenue Capital Holdings, Inc. 1,250,000 shares of our common stock as consideration for the capacity and services provided by Clinton. We recorded the 1,250,000 shares of common stock issued as an intangible asset and calculated a fair value of $10.1 million using our closing stock price on February 2, 2017. We recorded par value of the shares as common stock and amount in excess of the par value as additional paid-in capital. See Note 16 - Related Party Transactions for additional information.

Treasury Stock

On May 2, 2012, the Company's Board of Directors (the “Board”) authorized a share repurchase program that allowed for the repurchase of 500,000 shares of common stock. On November 14, 2016, our Board authorized a new share repurchase program under which we may repurchase up to 500,000 shares of common stock. This authorization replaces the Board’s prior May 2, 2012 share repurchase authorization. Under the share repurchase program, we may repurchase shares from time to time using a variety of methods, which may include open market transactions and privately negotiated transactions.

We purchased 27,950 shares during the three and nine months ended September 30, 2017. Since the inception of the November 14, 2016 authorization, we have repurchased 52,036 shares of common stock for $0.3 million and, as of September 30, 2017, we had remaining authorization to repurchase 447,964 additional shares. The treasury stock held as of September 30, 2017 was acquired at an average price of $37.82 per share.

Following is a summary of treasury share activity:

	Treasury Shares
Balance as of December 31, 2016	744,091
Purchases	27,950
Restricted stock grants	(86,000	)
Forfeitures and other	67,767
Balance as of September 30, 2017	753,808

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss and related activity consisted of the following:

(In millions)	Defined Benefit Plans			Foreign Currency Translation			Total
Balance as of December 31, 2016	$	(19.6	)	$	(1.0	)	$	(20.6	)
Other comprehensive income (loss) before reclassifications, net of tax	(0.8		)	0.1			(0.7		)
Amounts reclassified from accumulated other comprehensive income, net of tax	1.1			—			1.1
Reclassification	(0.1		)	—			(0.1		)
Net current period other comprehensive income	0.2			0.1			0.3
Balance as of September 30, 2017	$	(19.4	)	$	(0.9	)	$	(20.3	)

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Details of amounts reclassified from accumulated other comprehensive loss and the line item in the Condensed Consolidated Statements of Operations are as follows:

	Amounts Reclassified from Accumulated Other Comprehensive Loss										Affected Line Item in the Condensed Consolidated Statements of Operations Where (Gain) Loss is Presented
	Three Months Ended September 30,					Nine Months Ended September 30,
(In millions)	2017			2016		2017			2016
Amortization of net actuarial loss	$	0.9		$	0.2	$	1.1		$	0.4	Selling, general and administrative
Pension curtailment / settlement loss	(0.8		)	0.3		(0.8		)	2.6		Restructuring and other
Subtotal	0.1			0.5		0.3			3.0
Cumulative translation adjustment	0.1			—		0.1			75.8		Discontinued operations
Total reclassifications for the period	$	0.2		$	0.5	$	0.4		$	78.8

Income taxes are not provided for cumulative translation adjustment relating to permanent investments in international subsidiaries. Reclassification adjustments are made to avoid double counting in comprehensive income (loss) items that are also recorded as part of net income (loss) and are presented net of taxes in the Consolidated Statements of Comprehensive Income (Loss).

Note 14 — Segment Information

Beginning in the fourth quarter of 2015, in conjunction with our accelerated wind-down of the Company’s Legacy Businesses, the Company changed the manner in which it evaluates the operations of the Company and makes decisions with respect to the allocation of resources. The Company operated in three reportable segments as of December 31, 2015: Storage Media and Accessories; IronKey (which, together with Storage Media and Accessories, we now refer to as our Legacy Businesses); and the Nexsan Business. We sold our IronKey business in February 2016 and have substantially completed the wind-down of the Legacy Businesses as of March 31, 2016. The Legacy Businesses are presented in our Condensed Consolidated Statements of Operations as discontinued operations and are not included in segment results for all periods presented. See Note 4 - Discontinued Operations for further information about these divestitures.

In connection with the NXSN Transaction (See Note 1 - Basis of Presentation for further information about the NXSN Transaction), all of the issued and outstanding common stock of Nexsan and CDI was transferred to NXSN in exchange for 50% of the issued and outstanding common stock of NXSN and the $25 million NXSN Note. SPPE, an affiliate of Spear Point, owns the remaining 50% issued and outstanding shares of NXSN common stock and shares of NXSN non-voting preferred stock. We entered into a stockholders agreement (the “NXSN Stockholders Agreement”) with SPPE and NXSN providing for certain oversight, management and veto rights with respect to NXSN. As a result, we have the right to designate, individually, two of the five directors serving on the NXSN board of directors (the “NXSN Board”), and to designate jointly, with SPPE, an additional independent director to serve on the NXSN Board, until the NXSN Note is paid in full. We also have approval rights with respect to certain actions proposed to be taken by NXSN, including the issuance of additional amendments to its organizational documents and issuances of additional capital stock.

As a result of the terms and conditions of the NXSN Transaction (including the NXSN Stockholders Agreement and NXSN Note), we identified NXSN as a VIE. We consolidate a VIE in our financial statements if we are deemed to be the primary beneficiary of the VIE. The primary beneficiary is the party that has the power to direct activities that most significantly impact the activities of the VIE and has the obligation to absorb losses or the right to benefits from the VIE that could potentially be significant to the VIE. Although we and SPPE share the power to direct NXSN’s activities until the NXSN Note is paid in full, we have approval rights under the NXSN Note and NXSN Stockholders Agreement with respect to certain actions proposed to be taken by NXSN. Therefore, we are determined to be the primary beneficiary and following January 23, 2017, NXSN’s financial results are included in our Condensed Consolidated Financial Statements. Until January 23, 2017, we owned 100% of the equity interests of Nexsan and CDI. Their financial results were included in our Condensed Consolidated Financial Statements as wholly-owned subsidiaries.

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Pursuant to the terms of the NXSN Transaction, if, on the six month anniversary of the Closing Date, the aggregate Funded Equity Commitments are less than $10 million, then the aggregate principal amount of the NXSN Note shall be increased by an amount equal to $10 million, minus the aggregate Funded Equity Commitments. On May 1, 2017, we amended the terms of the NXSN Transaction to extend the Funded Equity Commitments to August 15, 2017. As of August 15, 2017, NXSN had sold $5.3 million of NXSN non-voting preferred stock and as a result, the aggregate principal amount of the NXSN Note was increased by $4.7 million and remains subject to further working capital adjustments pursuant to the terms of the NXSN Note. Although the time period during which NXSN was permitted to sell NXSN non-voting preferred stock has lapsed under the terms of the NXSN Transaction, we are continuing to work with SPPE to find capital solutions to sufficiently fund the continuing operations of the Nexsan Business. In the event NXSN does not raise sufficient capital to fund its continuing operations, we will continue to explore options to preserve the enterprise value of the Nexsan Business.

On February 2, 2017, we closed the Capacity and Services Transaction with Clinton. The Capacity and Services Transaction allows GBAM to access investment capacity within Clinton’s quantitative equity strategy. In addition, we have recently taken steps to build our own independent organizational foundation while leveraging Clinton’s capabilities and infrastructure. While our intention is to primarily engage in the management of third-party assets, we may make opportunistic proprietary investments from time to time that comply with applicable laws and regulations. Going forward, we will focus on our Asset Management Business as our primary operating business segment. See Note 16 - Related Party Transactions for additional information.

In June 2017, we launched the GBAM Fund which focuses on technology-driven quantitative strategies and other alternative investment strategies. As of September 30, 2017, we invested $10.0 million in the GBAM Fund. We have made the determination to consolidate the GBAM Fund and, accordingly, its financial results were included in our Condensed Consolidated Financial Statements as part of the Asset Management Business shown below.

As of September 30, 2017, the Nexsan Business and Asset Management Business are our reportable segments.

We evaluate segment performance based on revenue and operating loss. The operating loss reported in our segments excludes corporate and other unallocated amounts. Although such amounts are excluded from the business segment results, they are included in reported consolidated results. The corporate and unallocated operating loss includes costs which are not allocated to the business segments in management’s evaluation of segment performance such as litigation settlement expense, corporate expense and other expenses.

For our Asset Management Business, we include net gains from GBAM Fund activities in our performance evaluation. Net gains from GBAM Fund activities represent realized and unrealized gains and losses for the GBAM Fund.

Net revenue and operating loss from continuing operations by segment were as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2017		2016		2017		2016
Net revenue
Nexsan Business	$	9.3	$	11.5	$	27.7	$	32.8
Asset Management Business	—		—		—		—
Total net revenue	$	9.3	$	11.5	27.7		$	32.8

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	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In millions)	2017			2016			2017			2016
Operating loss from continuing operations
Nexsan Business	$	(2.5	)	$	(4.3	)	$	(10.4	)	$	(14.3	)
Asset Management Business	(1.2		)	—			(2.9		)	—
Total segment operating loss	(3.7		)	(4.3		)	(13.3		)	(14.3		)
Corporate and unallocated	(1.4		)	(2.1		)	(4.4		)	(8.5		)
Restructuring and other	(1.2		)	(1.3		)	(1.1		)	(7.1		)
Total operating loss	(6.3		)	(7.7		)	(18.8		)	(29.9		)
Interest income	—			—			—			0.2
Net gains from GBAM Fund activities	1.0			—			1.0			—
Other income (expense), net	0.1			0.2			(0.6		)	(0.8		)
Loss from continuing operations before income taxes	$	(5.2	)	$	(7.5	)	$	(18.4	)	$	(30.5	)

Note 15 — Litigation, Commitments and Contingencies

The Company is subject to various lawsuits, claims and other legal matters that arise in the ordinary course of conducting business (including litigation relating to our Legacy Businesses and discontinued operations). All such matters involve uncertainty and accordingly, outcomes that cannot be predicted with assurance. As of September 30, 2017, we are unable to estimate with certainty the ultimate aggregate amount of monetary liability or financial impact that we may incur with respect to these matters. It is reasonably possible that the ultimate resolution of these matters, individually or in the aggregate, could materially affect our financial condition, results of the operations and cash flows.

Intellectual Property Litigation

The Company is subject to allegations of patent infringement by our competitors as well as non-practicing entities (“NPEs”) — sometimes referred to as “patent trolls” — who may seek monetary settlements from us, our competitors, suppliers and resellers. The nature of such litigation is complex and unpredictable and, consequently, as of September 30, 2017, the Company is not able to reasonably estimate the amount of any monetary liability or financial impact that may be incurred with respect to these matters. It is reasonably possible that the ultimate resolution of these matters could materially affect our financial condition, results of operations and cash flows.

On December 31, 2014, IOENGINE, an NPE, filed suit in the District Court for the District of Delaware alleging infringement of United States Patent No. 8,539,047 by certain products we formerly sold under the IronKey brand. On February 17, 2017, following a trial, the jury returned a verdict against us in the patent infringement case brought by IOENGINE against the Company in the United States District Court for the District of Delaware. The jury awarded the IOENGINE $11.0 million in damages. As previously disclosed in the Current Report on Form 8-K we filed with the SEC on September 28, 2017, we entered into a settlement agreement with IOENGINE on September 28, 2017 resolving all claims relating to the IOENGINE lawsuit. Pursuant to the settlement agreement, (i) we paid IOENGINE $3.75 million in cash on October 3, 2017, (ii) issued to IOENGINE a promissory note (the "IOENGINE Note") in the principal amount of $4 million under which no payments are due until June 30, 2019 (except in connection with acceleration upon an event of default), and (iii) we pledged certain of our assets to secure our obligations under the IOENGINE Note.

On May 6, 2016 Nexsan Technologies Incorporated, a subsidiary of NXSN (“NTI”), filed a complaint in United States District Court for the District of Massachusetts seeking a declaratory judgment against EMC Corporation (“EMC”). NTI alleges that NTI has a priority of right to use certain of its UNITY trademarks and that NTI’s prosecution of its trademark applications with the respect to, and to use of, such trademarks does not infringe upon EMC’s trademarks. In addition, NTI seeks and injunctive relief to prevent EMC from threatening NTI with legal action related to use of UNITY trademarks, or making any public statements or statements to potential customers calling into question NTI’s right to use UNITY trademarks. EMC has answered and counterclaimed alleging that NTI’s use of the UNITY trademark, infringes EMC’s common law rights in the UNITY and EMC UNITY trademarks. On April 14, 2017, the court in the EMC UNITY matter ruled that NTI has priority over EMC to the UNITY trademark in relation to computer data storage and associated technologies. NTI intends to continue to assert its rights to the UNITY trademark in further proceedings.

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Trade Payables

On January 26, 2016, CMC, a supplier of our Legacy Businesses, filed a suit in the District Court of Ramsey County Minnesota, seeking damages from the Company and the Company’s wholly-owned subsidiary Imation Latin America Corp. (“ILAC”) for alleged breach of contract. CMC also brought similar claims in Japan and the Netherlands against other of our subsidiaries. As previously disclosed in the Current Report on Form 8-K we filed with the SEC on September 18, 2017, we entered into a settlement agreement with CMC on September 15, 2017 resolving all claims relating to the CMC lawsuits. Pursuant to the settlement, (i) we agreed that our subsidiary Imation Corporation Japan ("ICJ") will cause the release and payment to CMC of approximately $9.2 million in attached assets, (ii) ICJ made a payment to CMC of $1.5 million on October 10, 2017, (iii) our subsidiary Imation Europe B.V. will cause the release and payment to CMC of approximately$825,000in attached assets, (iv) ICJ issued to CMC an unsecured promissory note (the "CMC Note") in the amount of$1.5 million, and (v) we guaranteed CMC ICJ’s obligations under the CMC Note.

Employee Matters

We received correspondence from former employees of our Legacy Businesses asserting their alleged eligibility to receive severance benefits.  Employee restructuring costs are accrued when a probable liability has been determined and the amount of such liability has been reasonably estimated. We did not have any employee restructuring accruals as of September 30, 2017.  On March 29, 2017, three former Legacy Business employees filed a lawsuit (the “Severance Action”) in the Minnesota State District Court of Ramsey County asserting state law claims for non-payment of allegedly promised severance benefits.  On April 28, 2017, we removed the Severance Action to the U.S. District Court for the District of Minnesota, based on our position that the Severance Action should properly be litigated in federal court because the alleged severance claims are, in essence, based on alleged rights under the Company’s ERISA severance plan.  On May 5, 2017, the Company also moved that the U.S. District Court dismiss the Severance Action based on our position that the plaintiffs’ state law claims are preempted by ERISA and the plaintiffs failed to follow the plan’s appeal procedures as required by ERISA. On July 21, 2017, the U.S. District Court remanded the Severance Action to Minnesota State District Court for further proceedings on the basis that plaintiffs plausibly alleged certain state law claims that may not arise under ERISA. We believe these state law claims are entirely without merit and intend to vigorously defend our position.

Copyright Levies

In many European Union (EU) member countries, the sale of certain of our Legacy Business products is subject to a private copyright levy. The levies are intended to compensate copyright holders with “fair compensation” for the harm caused by private copies made by natural persons of protected works under the European Copyright Directive, which became effective in 2002 (the “Directive”). Levies are generally charged directly to the importer of the product upon the sale of the products. Payers of levies remit levy payments to collecting societies which, in turn, are expected to distribute funds to copyright holders. Levy systems of EU member countries must comply with the Directive, but individual member countries are responsible for administering their own systems. Since implementation, the levy systems have been the subject of numerous litigation and law-making activities. On October 21, 2010, the Court of Justice of the European Union (the “CJEU”) ruled that fair compensation is an autonomous European law concept that was introduced by the Directive and must be uniformly applied in all EU member states. The CJEU stated that fair compensation must be calculated based on the harm caused to the authors of protected works by private copying. The CJEU ruling made clear that copyright holders are only entitled to fair compensation payments (funded by levy payments made by importers of applicable products, including the Company) when sales of optical media are made to natural persons presumed to be making private copies. Within this disclosure, we use the term “commercial channel sales” when referring to products intended for uses other than private copying and “consumer channel sales” when referring to products intended for uses including private copying.

Since the Directive was implemented in 2002, we estimate that we have paid in excess of $100 million in levies to various ongoing collecting societies related to commercial channel sales. Based on the CJEU’s October 2010 ruling and subsequent litigation and law-making activities, we believe that these payments were not consistent with the Directive and should not have been paid to the various collecting societies. Accordingly, subsequent to the October 21, 2010 CJEU ruling, we began withholding levy payments to the various collecting societies and, in 2011, we reversed our existing accruals for unpaid levies related to commercial channel sales. However, we continued to accrue, but not pay, a liability for levies arising from consumer channel sales, in all applicable jurisdictions except Italy and France due to certain court rulings in those jurisdictions. As of September 30, 2017 and December 31, 2016, we had accrued liabilities of $5.5 million and $4.9 million, respectively, associated with levies related to consumer channel sales for which we are withholding payment. These accruals are recorded as “Other current liabilities” on the Company’s Consolidated Balance Sheets (and not within discontinued operations). The Company’s management oversees copyright levy matters and continues to explore options to resolve these matters.

Since the October 2010 CJEU ruling, we evaluate quarterly on a country-by-country basis whether (i) levies should be accrued on current period commercial and/or consumer channel sales; and, (ii) whether accrued, but unpaid, copyright levies on prior period consumer channel sales should be reversed. Our evaluation is made on a jurisdiction-by-jurisdiction basis and

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considers ongoing and cumulative developments related to levy litigation and law-making activities within each jurisdiction as well as throughout the EU.

The Company is subject to several pending or threatened legal actions by the individual European national levy collecting societies in relation to private copyright levies under the Directive. Those actions generally seek payment of the commercial and consumer optical levies withheld by GlassBridge. GlassBridge has corresponding claims in those actions seeking reimbursement of levies improperly collected by those collecting societies. We are subject to threatened actions by certain customers of GlassBridge seeking reimbursement of funds they allege related to commercial levies that they claim they should not have paid. Although these actions are subject to the uncertainties inherent in the litigation process, based on the information presently available to us, management does not expect the ultimate resolution of these actions will have a material adverse effect on our financial condition, results of operations or cash flows. We anticipate that additional court decisions may be rendered that may directly or indirectly impact our levy exposure in specific European countries which could cause us to review our levy exposure in those countries.

France. We have overpaid levies related to sales into the Company’s commercial channel in an amount of $55.1 million. We adopted a practice of offsetting ongoing levy liability with the French collecting society for GlassBridge’s sales in the consumer channel against the $55.1 million we have overpaid for copyright levies in France (due to us paying levies on commercial channels sales prior to the October 21, 2010 CJEU ruling). During the fourth quarter of 2013, GlassBridge reversed $9.5 million of French copyright levies (existing at the time of a 2013 French court decision) that arose from consumer channel sales that had been accrued but not paid to cost of sales. As of September 30, 2017 the Company had offset approximately $14.4 million. We believe that we have utilized a methodology, and have sufficient documentation and evidence, to fully support our estimates that we have overpaid $55.1 million to the French collection society of levies on commercial channel sales and that we have incurred (but not paid) $14.4 million of levies on consumer channel sales in France. However, such amounts are currently subject to challenge in court and there is no certainty that our estimates would be upheld and supported. In December 2012, GlassBridge filed a complaint against the French collection society, Copie France, for reimbursement of the $55.1 million in commercial channel levies that GlassBridge had paid prior to October 2010. A hearing occurred on December 8, 2015, in the High Court of Justice (Tribunal de Grande Instance de Paris) on GlassBridge Europe’s claim and Copie France’s counterclaim. On April 8, 2016, the Paris District Court rejected all of GlassBridge Europe’s claims finding that the European Union law arguments raised by GlassBridge were inapplicable and relied solely on French law to grant Copie France’s counterclaims. GlassBridge Europe has filed a notice of appeal which suspends enforcement of the ruling and we anticipate that an appellate hearing and decision could occur during 2018. GlassBridge believes Copie France’s counterclaims are without merit and intends to defend its position vigorously. Despite the April 2016 ruling of the Paris District Court, the Company does not believe it to be probable that it will have to make any copyright levy payments in the future to Copie France and, accordingly, has not recorded an accrual for this matter.

Germany. During the first quarter of 2015, GlassBridge reversed $2.8 million accrual for German copyright levies on optical products as the result of a favorable German court decision retroactively setting levy rates at a level much lower than the rates sought by the German collecting society. The reversal was recorded as a reduction of cost of sales. At September 30, 2017, the further recovery of some or all of the copyright levies previously paid on commercial sales in EU jurisdictions represents a gain contingency that has not yet met the required criteria for recognition in our financial statements. There is no assurance that we will realize any of this gain contingency.

Italy. In December 2015, we settled our claim for reimbursement of the levies that the Company had paid for sales into its commercial channel with the Italian collecting society, S.I.A.E. The settlement was for $1.0 million and is recorded as a reduction in cost of sales. There are no ongoing levy disputes with respect to Italy.

Canada. The Canadian Private Copying Collective (“CPCC”) filed suit in the Ontario Superior Court against our subsidiary Imation Enterprises Corp. (“IEC”) seeking damages of approximated CAD 1 million and penalties and interest of approximately CAD 5 million. On September 29, 2017, after we provided discovery materials to the CPCC which we believe demonstrated that the CPCC’s claims were entirely without merit, the CPCC declined to pursue the lawsuit further, issued to IEC a full and final release of the claims underlying the lawsuit and the lawsuit was dismissed on October 4, 2017.

Indemnification Obligations

In the normal course of business, we periodically enter into agreements that incorporate general indemnification language. Performance under these indemnities would generally be triggered by a breach of terms of the contract or by a supportable third-party claim. There have historically been no material losses related to such indemnifications. As of September 30, 2017 and 2016, estimated liability amounts associated with such indemnifications were not material.

Environmental Matters

Our Legacy Business operations and indemnification obligations resulting from our spinoff from 3M subject us liabilities arising from a wide range of federal, state and local environmental laws. For example, from time to time we have received

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correspondence from 3M notifying us that we may have a duty to defend and indemnify 3M with respect to certain environmental claims such as remediation costs. Environmental remediation costs are accrued when a probable liability has been determined and the amount of such liability has been reasonably estimated. These accruals are reviewed periodically as remediation and investigatory activities proceed and are adjusted accordingly. We did not have any environmental accruals as of September 30, 2017. Compliance with environmental regulations has not had a material adverse effect on our financial results.

Contingencies

On October 14, 2015, the Company acquired 100% of the stock of CDI for a total purchase price of $6.7 million. The purchase price included future contingent consideration totaling up to $5 million (considered to have an estimated fair value of $0.8 million at the time of acquisition). We used the real option valuation technique for calculating the estimated fair value of contingent consideration with a 15% discount rate. The contingent consideration arrangement included the potential for three separate payments of cash and unregistered shares of GlassBridge common stock to the extent that certain defined revenue targets were achieved for the three consecutive six-month periods commencing January 1, 2016. The period of measurement for the third and final payment was January 1, 2017 to June 30, 2017, and the revenue target was not met for this or any other period. Accordingly, we have not made any contingent purchase price payments for CDI as of September 30, 2017. The Company reversed the remaining accruals for $0.3 million and the 57,482 shares for issuance. Upon the acquisition of CDI, we integrated CDI with the Nexsan Business, both operationally and with respect to its management team. In addition, the Company contributed all of the issued and outstanding stock of CDI to Nexsan prior to the consummation of the NXSN Transaction which closed on January 23, 2017. See Note 14 - Segment Information for more information.

Note 16 — Related Party Transactions

Mr. Kasoff serves as president of RSI, a management consulting firm specializing in assisting companies and capital stakeholders in troubled business environments. Pursuant to a consulting agreement between the Company and RSI dated August 17, 2015 and subsequent amendments, RSI performed consulting services for the Company for the period from August 8, 2015 to March 30, 2016, including assisting the Company with a review and assessment of the Company’s business and the formulation of a business plan to enhance shareholder value going forward. On July 15, 2016, the Company entered into a consulting agreement with RSI to perform consulting services from July 18, 2016 through August 14, 2016 with an option for a three week extended term. Under the consulting agreement, RSI could receive consulting fees of up to $125,000 per week during the initial term. Consulting fees for the extended term, if elected by the Company, could not exceed $500,000. RSI received consulting fees of$0.3 millionand$2.4 million for the three and nine months ended September 30, 2016, respectively. These fees are recorded in restructuring and other charges. Mr. Kasoff resigned from his position as the Company’s Chief Restructuring Officer on September 8, 2016 and from the Company’s Board on February 2, 2017.

In connection with the CMC settlement, RSI received consulting fees of $0.6 million for the three and nine months ended September 30, 2017. These fees are recorded in restructuring and other charges. See Note 15 - Litigation, Commitments and Contingencies for additional information.

On October 14, 2015, the Company acquired substantially all of the equity of CDI for approximately $6.7 million in cash, shares of the Company’s common stock and repayment of debt. Mr. Barrall is the founder and, at the time of acquisition, was also the Chief Executive Officer of CDI. In consideration for his CDI common shares and options to purchase CDI common shares, Mr. Barrall received approximately $184,000 at the time of the acquisition and he was eligible to receive up to an additional $260,000 to the extent certain CDI revenue targets are achieved for the 3 consecutive six-month periods commencing January 1, 2016. As of September 30, 2017, none of the revenue targets were met and no such additional payments had been made to Mr. Barrall.

On February 8, 2016, the Company entered into a subscription agreement to invest up to $20 million of its excess cash from various Company subsidiaries in Clinton Lighthouse. Clinton Lighthouse is a market neutral fund which provides daily liquidity to its investors. Clinton Lighthouse is managed by Clinton. Pursuant to the arrangement, Clinton agreed to waive its customary management fee and agreed to the receipt of any consideration pursuant to incentive compensation in the form of the Company’s common stock at a value of $10.00 per share (as adjusted to reflect the Reverse Stock Split). The closing price of the Company’s common stock on February 8, 2016 was $6.50 (as adjusted to reflect the Reverse Stock Split). The Board, in conjunction with management, reviewed various funds and voted to approve this investment, with Mr. De Perio abstaining from the vote and recusing himself from all related discussions and deliberations. Mr. De Perio is the Chairman of the Board and a Senior Portfolio Manager at Clinton. On March 17, 2016, the Board approved the elimination of the 25% limitation on the amount of the Company’s excess cash that may be invested, such that the Company may now invest up to $35 million of its excess cash in Clinton Lighthouse. On April 29, 2016, the Company and Clinton entered into an amended and restated letter agreement in order to adjust the price at which the Company’s stock would be valued for purposes of paying the incentive fee thereunder from $10.00 to $18.00 (each as adjusted to reflect the Reverse Stock Split) beginning May 1, 2016, subject to

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adjustment based on the volume weighted average price of the Company’s common stock. As of September 30, 2017, the Company paid Clinton $0.5 million associated with the performance fees earned in 2016.

On January 31, 2017, the Company held a special meeting of the stockholders of the Company at which the stockholders approved the issuance of up to 1,500,000 shares (the “Capacity Shares”) of the Company’s common stock (as adjusted to reflect the Reverse Stock Split), par value $0.01 per share (“Common Stock”), pursuant to the Subscription Agreement, dated as of November 22, 2016, by and between the Company and Clinton, as amended by Amendment No. 1 to the Subscription Agreement, dated as of January 9, 2017 (as so amended, the “Subscription Agreement”). Pursuant to the terms of the Subscription Agreement, on February 2, 2017 (the “Initial Closing Date”), the Company entered into the Capacity and Services Transaction with Clinton Group and GBAM. As consideration for the capacity and services Clinton has agreed to provide under the Capacity and Services Transaction and pursuant to the terms of the Subscription Agreement, the Company issued 1,250,000 shares of the Company’s common stock (as adjusted to reflect the Reverse Stock Split) to Madison Avenue Capital Holdings, Inc. (“Madison”), an affiliate of Clinton, on the Initial Closing Date. The closing price of the Company’s common stock on the Initial Closing Date was $8.10. The Company also entered into a Registration Rights Agreement with Madison on the Initial Closing Date, relating to the registration of the resale of the Capacity Shares as well as a letter agreement with Madison pursuant to which Madison has agreed to a three-year lockup with respect to any Capacity Shares issued to it.

As of September 30, 2017, the short term investment balance in Clinton Lighthouse was $2.2 million compared to $19.5 million as of December 31, 2016. The decrease of $17.3 million mainly relates to $16.9 million of redemptions and approximately $0.4 million of unrealized loss for the nine months ended September 30, 2017. Unrealized loss for the nine months ended September 30, 2016 was approximately $0.7 million, which includes $0.5 million accrued performance fees. We recorded the unrealized losses within “Other income (expense), net” in the Condensed Consolidated Statements of Operations. Pursuant to the Capacity and Services Agreement, the Company will no longer incur management or performance fees related to our investment in Clinton Lighthouse.

Mr. Strauss serves as our Chief Operating Officer pursuant to the terms of a Services Agreement we entered into with Clinton on March 2, 2017 (the “Services Agreement”). The Services Agreement provides that Clinton will make available one of its employees to serve as Chief Operating Officer of the Company, and any subsidiary of the Company we may designate from time to time, as well as provide to GBAM, our investment adviser subsidiary, certain additional services. Pursuant to the terms of the Services Agreement, we may request that Clinton designate a mutually agreeable replacement employee to serve as Chief Operating Officer or terminate Clinton’s provision of an employee to us for such role. Under the Services Agreement, we have agreed to pay Clinton $125,000 for an initial term concluding on May 31, 2017, which term will automatically renew unless terminated for successive three-month terms at a rate of $125,000 per renewal term. If the Services Agreement is terminated prior to the conclusion of a term, we will be reimbursed for the portion of the prepaid fee attributable to the unused portion of such term. Clinton will continue to pay Mr. Strauss’s compensation and benefits and we have agreed to pay or reimburse Mr. Strauss for his reasonable expenses. Pursuant to the terms of the Services Agreement, we have also agreed to indemnify Mr. Strauss, Clinton, any substitute Chief Operating Officer and certain of their affiliates for certain losses. As of September 30, 2017, the Company paid Clinton $375,000 under this Services Agreement, of which $291,668 is recorded within “Selling, general and administrative” in our Condensed Consolidated Statements of Operations.

Note 17 — Subsequent Events

Our cash and cash equivalents balance as of September 30, 2017 included $10.0 million we invested in the GBAM fund. On October 1, 2017, we redeemed $5.0 million from the GBAM Fund. The proceeds from the redemption were used in part to satisfy payment obligations to IOENGINE, CMC and RSI related to the settlement of our lawsuits. See Note 14 - Segment Information for additional information on the GBAM Fund. See also Note 15 - Litigation, Commitments and Contingencies for additional information on the CMC and IOENGINE settlements and Note 16 - Related Party Transactions for additional information on the RSI payment obligation.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements and Risk Factors

We may from time to time make written or oral forward-looking statements with respect to our future goals, including statements contained in this Form 10-Q, in our other filings with the SEC and in our reports to shareholders.

Certain information which does not relate to historical financial information may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include information concerning the launch of our asset management business and related investment vehicles, strategic initiatives and potential acquisitions, the results of operations of our existing business lines, the impact of legal or regulatory matters on our business, as well as other actions, strategies and expectations, and are identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “plans,” “seeks,” “estimates,” “projects,” “may,” “will,” “could,” “might,” or “continues” or similar expressions. Such statements are subject to a wide range of risks and uncertainties that could cause our actual results in the future to differ materially from our historical results and those presently anticipated or projected. We wish to caution investors not to place undue reliance on any such forward-looking statements. Any forward-looking statements speak only as of the date on which such statements are made, and we undertake no obligation to update such statements to reflect events or circumstances arising after such date. Risk factors include various factors set forth from time to time in our filings with the SEC including the following: our need for substantial additional capital in order to fund our business; our ability to realize the anticipated benefits of our restructuring plan and other recent significant changes; the negative impacts of our delisting from the NYSE, including reduced liquidity and market price of our common stock and the number of investors willing to hold or acquire our common stock; significant costs relating to pending and future litigation; our ability to attract and retain talented personnel; the structure or success of our participation in any joint investments; risks associated with any future acquisition or business opportunities; our need to consume resources in researching acquisitions, business opportunities or financings and capital market transactions; our ability to integrate additional businesses or technologies; the impact of our reverse stock split on the market trading liquidity of our common stock; the market price volatility of our common stock; our need to incur asset impairment charges for intangible assets and goodwill; significant changes in discount rates, rates of return on pension assets and mortality tables; our reliance on aging information systems and our ability to protect those systems against security breaches; our ability to integrate accounting systems; changes in European law or practice related to the imposition or collectability of optical levies; changes in tax guidance and related interpretations and inspections by tax authorities; our ability to raise capital from third party investors for our asset management business; the efforts of Clinton’s key personnel and the performance of its overall business; our ability to comply with extensive regulations relating to the launch and operation of our asset management business; our ability to compete in the intensely competitive asset management business; the performance of any investment funds we sponsor or accounts we manage, including any fund or account managed by Clinton; difficult market and economic conditions, including changes in interest rates and volatile equity and credit markets; our ability to achieve steady earnings growth on a quarterly basis in our asset management business; the significant demands placed on our resources and employees, and associated increases in expenses, risks and regulatory oversight, resulting from the potential growth of our asset management business; our ability to establish a favorable reputation for our asset management business; the lack of operating history of our asset manager subsidiary and any funds that we may sponsor; our ability to realize the anticipated benefits of the third-party investment in our partially-owned data storage business; decreasing revenues and greater losses attributable to our partially-owned data storage products; our ability to quickly develop, source and deliver differentiated and innovative products; our dependence on third parties for new product introductions or technologies; our dependence on third-party contract manufacturing services and supplier-provided parts, components and sub-systems; our dependence on key customers, partners and resellers; foreign currency fluctuations and negative or uncertain global or regional economic conditions as well as various factors set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2016, and from time to time in our filings with the SEC.

Overview

GlassBridge Enterprises, Inc. (“GlassBridge”, the “Company”, “we”, “us” or “our”) is a holding company. We actively explore a diverse range of new, strategic asset management business opportunities for our portfolio. The company’s wholly-owned subsidiary GlassBridge Asset Management, LLC (“GBAM”) is an investment advisor focused on technology-driven quantitative strategies and other alternative investment strategies. Our partially-owned subsidiary NXSN Acquisition Corp. (together with its subsidiaries, “NXSN”) operates a global enterprise data storage business through its subsidiaries.

We closed a transaction (the “NXSN Transaction”) in January 2017 with NXSN Acquisition Corp. (together with its subsidiaries, “NXSN”), pursuant to which all of the issued and outstanding common stock of Connected Data, Inc. (“CDI”) and Nexsan Corporation (together with its subsidiaries other than CDI, “Nexsan”) was transferred to NXSN in exchange for 50% of the issued and outstanding common stock of NXSN and a $25 million senior secured convertible promissory note (the “NXSN Note”). The remaining 50% of the issued and outstanding common stock of NXSN along with shares of NXSN non-voting

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preferred stock are owned by Spear Point Private Equity LP (“SPPE”), an affiliate of Spear Point Capital Management LLC (“Spear Point”). Prior to the consummation of the NXSN Transaction, we contributed all of the issued and outstanding stock of CDI to Nexsan. The NXSN Transaction provides for third-party investment in NXSN to enhance the growth of the NXSN Business (as defined below) and support its recent product developments, eliminates our need to make this investment in the Nexsan Business ourselves and preserves the potential for equity value upside from the Nexsan Business’ ongoing development and market penetration.

Pursuant to the terms of the NXSN Transaction, if, on the six month anniversary of the Closing Date, the aggregate Funded Equity Commitments are less than $10 million, then the aggregate principal amount of the NXSN Note shall be increased by an amount equal to $10 million, minus the aggregate Funded Equity Commitments. On May 1, 2017, we amended the terms of the NXSN Transaction to extend the Funded Equity Commitments to August 15, 2017. As of August 15, 2017, NXSN had sold $5.3 million of NXSN non-voting preferred stock and as a result, the aggregate principal amount of the NXSN Note was increased by $4.7 million and remains subject to further working capital adjustments pursuant to the terms of the NXSN Note. Although the time period during which NXSN was permitted to sell NXSN non-voting preferred stock has lapsed under the terms of the NXSN Transaction, we are continuing to work with SPPE to find capital solutions to sufficiently fund the continuing operations of the Nexsan Business. In the event NXSN does not raise sufficient capital to fund its continuing operations, we will continue to explore options to preserve the enterprise value of the Nexsan Business.

In February 2017, we closed a transaction with Clinton Group Inc. (“Clinton”) which has facilitated the launch of our “Asset Management Business”, which consists of our investment advisory business conducted through GBAM (the “Capacity and Services Transaction”). The Capacity and Services Transaction allows for GBAM to access investment capacity within Clinton’s quantitative equity strategy. The Capacity and Services Transaction was structured to provide for the quick and efficient scaling of an asset management business and designed to provide investors with access to quantitative equity strategies. By partnering with Clinton and leveraging Clinton’s proven technology-driven strategy, we intend for GBAM to bypass traditional seeding models, which typically include a lengthy roll out and substantial costs. We intend to use algorithms and other quantitative strategies with the goal of achieving consistent, competitive risk-adjusted returns for GBAM’s investors. In addition, we have recently taken steps to build our own independent organizational foundation while leveraging Clinton’s capabilities and infrastructure. While our intention is to primarily engage in the management of third-party assets, we may make opportunistic proprietary investments from time to time that comply with applicable laws and regulations.

In February 2017, the Company effected a 1:10 reverse split of our common stock, without any change in the par value per share, and decreased the number of authorized shares of our common stock from 100,000,000 to 10,000,000.

With the wind down of our legacy businesses segments, Consumer Storage and Accessories and Tiered Storage an Security Solutions (the “Legacy Businesses”) substantially completed by the start of 2016 and the sale of our IronKey business in February 2016, we had one operating business segment in 2016: the “Nexsan Business,” through which is operated a global enterprise data storage business with an emerging enterprise-class, private cloud sync and share product line. Following the launch of GBAM, we have transitioned to become a publicly-traded alternative asset manager. Going forward, we will focus on our Asset Management Business as our primary operating business segment. In February 2017 we changed our name to GlassBridge Enterprises, Inc. to reflect our new primary focus on asset management.

In June 2017, we launched our first GBAM-managed investment fund (the "GBAM Fund") which focuses on technology-driven quantitative strategies and other alternative investment strategies. As of September 30, 2017, we invested $10.0 million in the GBAM Fund. Our cash and cash equivalents balance as of September 30, 2017 included the $10.0 million invested in the GBAM Fund.

On July 20, 2017, the Company notified the New York Stock Exchange (the "NYSE") of its intention to voluntarily delist its common stock from the NYSE. After much careful discussion and deliberation, our Board of Directors approved resolutions authorizing the Company to initiate voluntarily delisting from the NYSE. The Board weighed several material factors in reaching this decision, including avoiding the risks that involuntary suspension of trading could cause and the importance of a controlled transition to OTCQX to ensure the continuing availability of a market for trading our common stock. The last trading day on the NYSE was August 1, 2017. Our common stock began trading on the OTCQX Market under the symbol "GLAE" on August 2, 2017.

Important Notices and Disclaimers

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This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to be read in conjunction with our Condensed Consolidated Financial Statements and related Notes that appear elsewhere in this Quarterly Report on Form 10-Q. This MD&A contains forward-looking statements that involve risks and uncertainties. The Company’s actual results could differ materially from those anticipated due to various factors discussed in this MD&A under the caption “Forward-Looking Statements and Risk Factors” and the information contained in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on March 24, 2017, including in Part 1 Item 1A. Risk Factors of such Annual Report.

Nothing contained in this Quarterly Report on Form 10-Q constitutes an offer to sell or a solicitation to buy any securities or otherwise invest in any investment vehicle managed, advised or coordinated by GBAM (collectively, the “GlassBridge Vehicle”), and may not be relied upon in connection with any investment or offer or sale of securities. Any such offer or solicitation may only be made pursuant to the current Confidential Private Offering Memorandum (or similar document) for any such GlassBridge Vehicle, which is provided only to qualified offerees and which should be carefully reviewed prior to investing. GBAM is a newly formed entity and the GlassBridge Vehicles are currently either in formation state or have recently launched. GBAM is not currently registered with the SEC as an investment adviser under the U.S. Investment Advisers Act of 1940, as amended, or under similar state laws, and nothing in this Quarterly Report on Form 10-Q constitutes investment advice with respect to securities.

This Quarterly Report on Form 10-Q includes tradenames and trademarks owned by us or that we have the right to use. Solely for convenience, the trademarks or tradenames referred to in this Quarterly Report on Form 10-Q may appear without the ® or ™ symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights to these trademarks and tradenames.

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Executive Summary

Consolidated Results of Operations for the Three Months Ended September 30, 2017

• Net revenue from continuing operations (solely related to the Nexsan Business) of $9.3 million for the three months ended September 30, 2017 was down 19.1% compared with $11.5 million in the same period last year. The decrease was primarily due to market decline in the block hard drive disk and hybrid flash storage arrays market sectors, which affected sales of certain of the products sold by our partially-owned data storage business, partially offset by increased sales of enterprise save, share and sync cloud products.

• Operating loss from continuing operations was $6.3 million for the three months ended September 30, 2017 compared with an operating loss of $7.7 million in the same period last year, an improvement of $1.4 million, primarily due to a decrease in Nexsan Business operating expenses and corporate general and administrative expenses, offset by start-up expenses related to our Asset Management Business.

• Basic and diluted income per share from continuing operations was $0.06 for the three months ended September 30, 2017 compared with a basic and diluted loss per share of $1.97 for the same period last year.

Consolidated Results of Operations for the Nine Months EndedSeptember 30, 2017

• Net revenue from continuing operations (solely related to the Nexsan Business) of $27.7 million for the nine months ended September 30, 2017 was down 15.5% compared with $32.8 million in the same period last year. The decreasewas primarily due to market decline in the block hard drive disk and hybrid flash storage arrays market sectors, which affected sales of certain of the products sold by our partially-owned data storage business, partially offset by increased sales of enterprise save, share and sync cloud products.

• Operating loss from continuing operations was $18.8 million for the nine months ended September 30, 2017 compared with an operating loss of $29.9 million in the same period last year, an improvement of $11.1 million, primarily due to a decrease in Nexsan Business operating expenses and corporate restructuring and other expenses, slightly offset by the start-up expenses related to our Asset Management Business.

• Basic and diluted loss per share from continuing operations was $2.04 for the nine months ended September 30, 2017 compared with a basic and diluted loss per share of $7.62 for the same period last year.

Cash Flow/Financial Condition for the Nine Months EndedSeptember 30, 2017

• Cash and cash equivalents totaled $15.7 million at September 30, 2017 compared with $10.0 million at December 31, 2016. The increase in the cash balance of $5.7 million was primarily due to $17.6 million redemptions of our investment in the Clinton Lighthouse Equity Strategies Fund (Offshore) Ltd. (“Clinton Lighthouse”) and other short term investments and a $5.6 million capital contribution to NXSN Acquisition Corp from SPPE, offset by operating loss and our strategic investment in equity securities. See Note 12 - Fair Value Measurements in our Notes to Condensed Consolidated Financial Statements in Item 1 for further information on the Clinton Lighthouse investment.

Results of Operations

The following discussion relates to continuing operations unless indicated otherwise. The operating results of our former Legacy Businesses are presented in our Condensed Consolidated Statements of Operations as discontinued operations and are not included in segment results for all periods presented. See Note 4 - Discontinued Operations in our Notes to Condensed Consolidated Financial Statements in Item 1 for further information on these divestitures.

As a result of the terms and conditions of the NXSN Transaction, we identified NXSN as a variable interest entity (a “VIE”). We consolidate a VIE in our financial statements if we are deemed to be the primary beneficiary of the VIE. The primary beneficiary of a VIE is the party that has the power to direct activities that most significantly impact the activities of the VIE and has the obligation to absorb losses or the right to benefits from the VIE that could potentially be significant to the VIE. Although we and SPPE share the power to direct NXSN’s activities until the NXSN Note is paid in full, we have approval rights with respect to certain actions proposed to be taken by NXSN. Following January 23, 2017, NXSN’s financial results are included in our Condensed Consolidated Financial Statements since we made the determination that we are the primary beneficiary of such VIE. Until January 23, 2017, as we owned 100% of the equity interests of Nexsan and CDI, the financial results of Nexsan and CDI were included in our Condensed Consolidated Financial Statements as wholly-owned subsidiaries.

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Net Revenue

	Three Months Ended						Nine Months Ended
	September 30,				Percent Change		September 30,				Percent Change
(Dollars in millions)	2017		2016				2017		2016
Net revenue	$	9.3	$	11.5	(19.1	)%	$	27.7	$	32.8	(15.5	)%

Net revenue for the three months ended September 30, 2017 decreased 19.1% compared with the same period last year due to market decline in the block hard drive disk and hybrid flash storage arrays market sectors, which affected sales of certain of the products sold by our partially-owned data storage business, partially offset by increased sales of enterprise save, share and sync cloud products.

Net revenue for the nine months ended September 30, 2017 decreased 15.5% compared with the same period last year due to market decline in the block hard drive disk and hybrid flash storage arrays market sectors, which affected sales of certain of the products sold by our partially-owned data storage business, partially offset by increased sales of enterprise save, share and sync cloud products.

See Segment Results for further discussion of our reporting segments and products.

Gross Profit

	Three Months Ended								Nine Months Ended
	September 30,						Percent Change		September 30,						Percent Change
(Dollars in millions)	2017			2016					2017			2016
Gross profit	$	4.0		$	5.2		(23.1	)%	$	12.5		$	14.3		(12.6	)%
Gross margin	43.0		%	45.2		%			45.1		%	43.6		%

Gross profit for the three months ended September 30, 2017 decreased $1.2 million as a result of declines in revenue. Gross margin percentage decreased by 2.2% compared with the same period last year due to price discounts and product mix changes.

Gross profit for the nine months ended September 30, 2017 decreased $1.8 million as a result of declines in revenue. Gross margin percentage increased by 1.5% compared with the same period last year due to reductions in production costs and product mix changes.

Selling, General and Administrative (“SG&A”)

	Three Months Ended								Nine Months Ended
	September 30,						Percent Change		September 30,						Percent Change
(Dollars in millions)	2017			2016					2017			2016
Selling, general and administrative	$	7.0		$	8.7		(19.5	)%	$	23.4		$	27.6		(15.2	)%
As a percent of revenue	75.3		%	75.7		%			84.5		%	84.1		%

SG&A expense decreased for the three months ended September 30, 2017by$1.7 million(or19.5%) compared with the same period last year primarily due to Nexsan Business cost reductions of $1.9 million and corporate cost reductions of $0.7 million, partially offset by the addition of $0.9 million of start-up expenses related to our Asset Management Business. Nexsan Business cost reductions primarily relate to headcount reductions. The corporate cost decrease primarily relates to reductions in corporate headcount, information technology spending and legal costs. The Company now maintains a small team at its headquarters in Oakdale, Minnesota.

SG&A expense decreased for the nine months ended September 30, 2017 by $4.2 million (or 15.2%) compared with the same period last year primarily due to Nexsan Business cost reductions of $2.8 million and corporate cost reductions of $4.0 million, partially offset by the addition of $2.6 million of start-up expenses related to our Asset Management Business. Nexsan Business cost reductions primarily relate to headcount reductions. The corporate cost decrease primarily relates to reductions in corporate headcount, information technology spending and legal costs.

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Research and Development (“R&D”)

	Three Months Ended								Nine Months Ended
	September 30,						Percent Change		September 30,						Percent Change
(Dollars in millions)	2017			2016					2017			2016
Research and development	$	1.8		$	2.9		(37.9	)%	$	6.5		$	9.5		(31.6	)%
As a percent of revenue	19.4		%	25.2		%			23.5		%	29.0		%

R&D expense decreased by $1.1 million for the three months ended September 30, 2017 compared with the same period last year. The reduction in R&D expenses was primarily related to (i) lower spending on our Unity product as we substantially completed the Unity product design begun in prior periods and (ii) headcount reductions.

R&D expense decreased by $3.0 million for the nine months ended September 30, 2017 compared with the same period last year. The reduction in R&D expenses was primarily related to (i) lower spending on our Unity product as we substantially completed the Unity product design begun in prior periods, (ii) headcount reductions and (iii) favorable exchange rates as R&D facilities are operated in Canada and the United Kingdom.

Restructuring and Other

	Three Months Ended						Nine Months Ended
	September 30,				Percent Change		September 30,				Percent Change
(Dollars in millions)	2017		2016				2017		2016
Restructuring and other	$	1.2	$	1.3	(7.7	)%	$	1.1	$	7.1	(84.5	)%

For the three months ended September 30, 2017, restructuring and other expenses of $1.2 million was flat compared to $1.3 million for the same period last year.

For the nine months ended September 30, 2017, restructuring and other was $1.1 million compared to $7.1 million for the same period last year. The decrease of $6.0 million primarily due to the significant restructuring costs related to the Legacy Businesses and a benefit of $1.3 million relating to an asset sale.

See Note 7 - Restructuring and Other Expense in our Notes to Condensed Consolidated Financial Statements in Item 1 for further details on our restructuring and other expenses.

Operating Loss from Continuing Operations

	Three Months Ended								Nine Months Ended
	September 30,						Percent Change		September 30,						Percent Change
(Dollars in millions)	2017			2016					2017			2016
Operating loss from continuing operations	$	(6.3	)	$	(7.7	)	(18.2	)%	$	(18.8	)	$	(29.9	)	(37.1	)%
As a percent of revenue	(67.7		)%	(67.0		)%			(67.9		)%	(91.2		)%

Operating loss from continuing operations decreased by $1.4 million for the three months ended September 30, 2017 compared with the same period last year primarily due to a $2.6 million decrease in SG&A and a $1.1 million decrease in R&D expenses, offset by a $1.2 million decrease in gross profit, $0.9 million start-up expenses related to our Asset Management Business and $0.3 million in GBAM Fund expenses.

Operating loss from continuing operations decreased by $11.1 million for the nine months ended September 30, 2017 compared with the same period last year primarily due to a $6.8 million decrease in SG&A, a $3.0 million decrease in R&D expenses and a $6.0 million decrease in restructuring and other charges, offset by $1.8 million decrease in gross profit, $2.6 million start-up expenses related to our Asset Management Business and $0.3 million in GBAM Fund expenses.

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Other Income (Expense)

	Three Months Ended								Nine Months Ended
	September 30,						Percent Change		September 30,						Percent Change
(Dollars in millions)	2017			2016					2017			2016
Interest income	$	—		$	—		NM		$	—		$	0.2		NM
Net gains from GBAM Fund activities	$	1.0		$	—		NM		1.0			—			NM
Other income (expense), net	0.1			0.2			(50.0	)%	(0.6		)	(0.8		)	(25.0	)%
Total other income (expense)	$	1.1		$	0.2		450.0	%	$	0.4		$	(0.6	)	(166.7	)%
As a percent of revenue	11.8		%	1.7		%			1.4		%	(1.8		)%

“NM” - Indicates the Percent Change is not meaningful

Other income (expense) for the three months ended September 30, 2017 improved by $0.9 million compared with the same period last year. The change was primarily driven by the net gains from GBAM Fund activities.

Other income (expense) for the nine months ended September 30, 2017 improved by $1.0 million compared with the same period last year. The change was primarily driven by the net gains from GBAM Fund activities.

See Asset Management Business discussion within the Segment Results section for additional information on net gains from GBAM Fund activities.

Income Tax Benefit

	Three Months Ended								Nine Months Ended
	September 30,						Percent Change		September 30,						Percent Change
(Dollars in millions)	2017			2016					2017			2016
Income tax benefit	$	3.5		$	0.2		1,650.0	%	$	3.5		$	2.3		52.2	%
Effective tax rate	(67.3		)%	(2.7		)%			(19.0		)%	(7.5		)%

The change in the income tax provision for the three months ended September 30, 2017 compared to the same period last year was primarily related to the intraperiod allocation of total tax expense between continuing operations and discontinued operations. The effective income tax rate for the three months ended September 30, 2017 differs from the U.S. federal statutory rate of 35% primarily due to a valuation allowance on various deferred tax assets.

Income (Loss) from Discontinued Operations

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in millions)	2017			2016			2017			2016
Net revenue	$	0.3		$	—		$	0.3		$	2.0
Cost of goods sold	0.2			—			0.2			0.6
Gross profit	0.1			—			0.1			1.4
Selling, general and administrative	1.3			0.8			4.2			3.6
Research and development	—			—			—			0.5
Restructuring and other	(13.2		)	(0.7		)	(13.6		)	(0.4		)
Reclassification of cumulative translation adjustment	—			—			—			75.8
Other (income) expense	0.8			(0.4		)	1.7			(0.6		)
Income (loss) from discontinued operations, before income taxes	11.2			0.3			7.8			(77.5		)
Gain on sale of discontinued businesses, before income taxes	—			—			—			3.8
Income tax provision	(3.5		)	(0.1		)	(3.3		)	(1.9		)
Income (loss) from discontinued operations, net of income taxes	$	7.7		$	0.2		$	4.5		$	(75.6	)

Discontinued operations comprise results from our Legacy Businesses. For the three months ended September 30, 2017, income from discontinued operations increased by $7.5 million compared with the same period last year primarily due to

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increase in restructuring and other gain of $12.5 million, slightly offset by increase in income tax provision of $3.4 million. Restructuring and other gain of $13.2 million predominantly includes a $7.3 million net gain on the CMC Magnetic Corp. (“CMC”) settlement, a $3.3 million gain on the IOENGINE, LLC (“IOENGINE”) settlement, a $2.4 million gain on resolution of customer and vendor balances related to the Legacy Businesses, and a $0.6 million gain on asset claim recovery.

For the nine months ended September 30, 2017, income (loss) from discontinued operations increased by $80.1 million compared with the same period last year primarily due to a $75.8 million loss from reclassification of cumulative translation adjustment in the prior year and a $13.6 million restructuring and other gain in the current year.

In September 2017, we entered into an agreement with a Dutch counterparty with respect to certain potential transactions (the “French Levy Monetization Transactions”) intended to monetize our claims against the French levy collecting society in furtherance of our efforts to position for winddown the European subsidiary holding such claims. The French Levy Monetization Transactions are structured as “back-to-back” sales of certain leviable products to French purchasers designed to utilize the Dutch company's French distribution channel to recover a portion of overpaid levies via setoff. See Note 15 - Litigation, Commitments and Contingencies for additional information on these overpaid levies.

For the three and nine months ended September 30, 2017, we recorded less than $0.1 million of services fee revenue and as of September 30, 2017, our European subsidiary recorded less than $0.1 million of services fee due to the Dutch counterparty. For the three months and nine months ended September 30, 2017, our European subsidiary recorded revenue of $0.3 million due from a French purchaser and cost of goods sold of $0.2 million due to the Dutch counterparty.

See Note 4 - Discontinued Operations in our Notes to Condensed Consolidated Financial Statements in Item 1 for more information on our discontinued operations.

Segment Results

Following the launch of GBAM, the Nexsan Business and Asset Management Business are our reportable segments as of September 30, 2017. The Legacy Businesses were reported within discontinued operations.

We evaluate segment performance based on revenue and operating loss. The operating loss reported in our segments excludes corporate and other unallocated amounts. Although such amounts are excluded from the business segment results, they are included in reported consolidated results. Corporate and unallocated amounts include costs which are not allocated to the business segments in management’s evaluation of segment performance such as litigation settlement expense, corporate expense and other expenses.

Information related to our segments is as follows:

Nexsan Business

	Three Months Ended								Nine Months Ended
	September 30,						Percent Change		September 30,						Percent Change
(Dollars in millions)	2017			2016					2017			2016
Net revenue	$	9.3		$	11.5		(19.1	)%	$	27.7		$	32.8		(15.5	)%
Operating loss	$	(2.5	)	$	(4.3	)	(41.9	)%	(10.4		)	(14.3		)	(27.3	)%
As a percent of revenue	(26.9		)%	(37.4		)%			(37.5		)%	(43.6		)%

Nexsan Business revenue decreased by 19.1% for the three months ended September 30, 2017 compared with the same period last year. The decrease was a result of declines in the block hard disk drive and hybrid flash storage arrays market sectors, which affected sales of certain of our products.

The operating loss decreased by $1.8 million for the three months ended September 30, 2017 compared with the same period last year driven primarily by expense reductions.

Nexsan Business revenue decreased by 15.5% for the nine months ended September 30, 2017 compared with the same period last year. The decrease was a result of declines in the block hard disk drive and hybrid flash storage arrays market sectors, which affected sales of certain of our products.

The operating loss decreased by $3.9 million for the nine months ended September 30, 2017 compared with the same period last year driven primarily by expense reductions and improved gross margin percentages due to production cost improvements and product mix changes.

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Asset Management Business

	Three Months Ended						Nine Months Ended
	September 30,					Percent Change	September 30,					Percent Change
(Dollars in millions)	2017			2016			2017			2016
Net revenue	$	—		$	—	NM	$	—		$	—	NM
Operating loss	$	(1.2	)	$	—	NM	$	(2.9	)	$	—	NM
Net gains from GBAM Fund activities	$	1.0		$	—	NM	$	1.0		$	—	NM
As a percent of revenue	NM			NM			NM			NM

“NM” - Indicates the Percent is not meaningful

GBAM is an investment advisor focused on technology-driven quantitative strategies and other alternative investment strategies. Revenue from our Asset Management Business would primarily consist of management and performance fees paid by the funds under our management. Since we closed the Capacity and Services Transaction in February 2017, we jump-started the Asset Management Business by leveraging Clinton’s resources. As of September 30, 2017, we have launched the GBAM Fund. We are executing our business development plan and have been in contact with over one hundred potential strategic investors. Obtaining third party investment for similarly situated funds can take time, particularly in light of recent headwinds resulting from industry trends of under performance of our initial fund's strategy. As of September 30, 2017, our Asset Management Business has not yet generated any revenue from third parties.

The operating loss for the three months ended September 30, 2017 included marketing, operating personnel and consulting costs of $0.4 million. We retained and utilized various consultants and outside legal counsel to assist in the development of policies, procedures and compliance functionality tailored to the launch of GBAM.  These outside resources were tasked with building and launching an asset management platform designed to comply with all applicable laws and regulations.  Because we intend for the scope of our Asset Management Business to increase substantially, management instructed our consultants and counsel to focus on developing a platform that is well-positioned to scale up in an efficient manner as our business grows. 

In addition, we incurred $0.5 million of amortization cost during the quarter related to the 1,250,000 shares of our common stock issued as consideration under the Capacity and Services Transaction. See Note 6 - Intangible Assets and Goodwill and Note 16 - Related Party Transactions in our Notes to Condensed Consolidated Financial Statements in Item 1 for additional information.

The operating loss for the three months ended September 30, 2017 also included fund expenses of $0.3 million related to the GBAM Fund.

The operating loss for the nine months ended September 30, 2017 included marketing, operating personnel, consulting and other costs of $1.2 million, amortization cost of $1.4 million and GBAM Fund expenses of $0.3 million.

Net gains from GBAM Fund activities were $1.0 million for both the three and nine months ended September 30, 2017. Net gains from GBAM Fund activities represents realized and unrealized gains and losses for the GBAM Fund.

Corporate and Unallocated

	Three Months Ended								Nine Months Ended
	September 30,						Percent Change		September 30,						Percent Change
(Dollars in millions)	2017			2016					2017			2016
Corporate and unallocated operating loss	$	(1.4	)	$	(2.1	)	(33.3	)%	$	(4.4	)	$	(8.5	)	(48.2	)%
Restructuring and other	(1.2		)	(1.3		)	(7.7	)%	(1.1		)	(7.1		)	(84.5	)%
Total	$	(2.6	)	$	(3.4	)			$	(5.5	)	$	(15.6	)

For the three months ended September 30, 2017, corporate and unallocated operating loss consists of $1.4 million of corporate general and administrative expenses, a 9.5% reduction year over year. Restructuring and other expenses is flat year over year.

For the nine months ended September 30, 2017, corporate and unallocated operating loss consists of $4.4 million of corporate general and administrative expenses, a 42.4% reduction year over year. Restructuring and other expenses decreased by $6.0 million year over year.

35

See Note 7 - Restructuring and Other Expense in our Notes to Condensed Consolidated Financial Statements in Item 1 for further details on our restructuring and other expenses.

Impact of Changes in Foreign Currency Rates

The impact of changes in foreign currency exchange rates to worldwide revenue was immaterial for the three and nine months ended September 30, 2017.

Financial Position

Our cash and cash equivalents balance as of September 30, 2017 was $15.7 million compared to $10.0 million as of December 31, 2016. In addition, we had $2.2 million invested in Clinton Lighthouse, $0.3 million in other short term investments and $0.2 million in short term investments within the GBAM Fund.

Our accounts receivable balance as of September 30, 2017 was $6.0 million, a decrease of $1.7 million from $7.7 million as of December 31, 2016 as a result of the $1.2 million accounts receivable sale (see Note 5 - Supplemental Balance Sheet in our Notes to Condensed Consolidated Financial Statements in Item 1 for further details) and the lower revenue for the quarter ended September 30, 2017. Days sales outstanding (“DSO”) was 67 days as of September 30, 2017, up fourteen days from December 31, 2016. DSO is calculated using the count-back method, which calculates the number of days of most recent revenue that is reflected in the net accounts receivable balance.

Our inventory balance as of September 30, 2017 was $5.5 million, an increase of $1.4 million from $4.1 million as of December 31, 2016 due to a delay of order shipment at the quarter end. Days of inventory supply was 136 days as of September 30, 2017, up 53 days from December 31, 2016, primarily due to the backlog of orders resulting from the Company’s decision to reduce operating expenses and headcount. Days of inventory supply is calculated using the current period inventory balance divided by an estimate of the inventoriable portion of cost of goods sold expressed in days.

Our accounts payable balance as of September 30, 2017 was $8.1 million, an increase of $1 million from $7.1 million as of December 31, 2016. The increase in accounts payable was mainly due to the seasonal timing of payments.

Our other current liabilities balance as of September 30, 2017 was $17.6 million compared to $16.0 million as of December 31, 2016. The increase of $1.6 million was mainly due to the increase of accrued expenses and deferred revenues.

Liquidity and Capital Resources

Cash Flows Provided by (Used in) Operating Activities:

	Nine Months Ended
	September 30,
(Dollars in millions)	2017			2016
Net loss	$	(10.4	)	$	(103.8	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	3.2			1.9
Stock-based compensation	0.2			—
Loss on abandonment of unused property, plant and equipment	1.1			—
Reclassification of cumulative translation adjustment	—			75.8
Gain on sale of asset	(1.0		)	—
Short term investment	19.3			(37.7		)
Other, net	(0.2		)	1.7
Changes in operating assets and liabilities	(7.6		)	(21.0		)
Net cash provided by (used in) operating activities	$	4.6		$	(83.1	)

Cash provided by operating activities was $4.6 million for the nine months ended September 30, 2017, primarily relating to redemptions of our investment in Clinton Lighthouse and other short term investments which were partially offset by the operating loss. Cash used in operating activities was $83.1 million for the nine months ended September 30, 2016, reflecting negative earnings and our investment of $34.8 million in Clinton Lighthouse and $2.9 million in other short term investments as well as the payments for accrued severance and restructuring.

36

Cash Flows Provided by (Used in) Investing Activities:

	Nine Months Ended
	September 30,
(Dollars in millions)	2017			2016
Capital expenditures	$	(0.9	)	$	(0.6	)
Proceeds from sale of assets and business	0.5			25.5
Purchase of equity securities	(4.0		)	—
Net cash provided by (used in) investing activities	$	(4.4	)	$	24.9

Cash used in investing activities for the nine months ended September 30, 2017 included the Nexsan Business’s capital expenditures and our strategic investment in equity securities, slightly offset by proceeds from an asset sale. Cash provided by investing activities for the nine months ended September 30, 2016 primarily included the sale of our former corporate campus in Minnesota, Memorex brand and IronKey business.

Cash Flows Provided by (Used in) Financing Activities:

	Nine Months Ended
	September 30,
(Dollars in millions)	2017			2016
Purchase of treasury shares	$	(0.1	)	$	(0.2	)
Debt repayments	$	—		$	(0.2	)
Capital contributions from noncontrolling interest	5.6			—
Net cash provided by (used in) financing activities	$	5.5		$	(0.4	)

Cash provided by financing activities for the nine months ended September 30, 2017 represented proceeds from NXSN’s sale of non-voting preferred stock to SPPE in connection with the NXSN Transaction. Cash used in financing activities for the nine months ended September 30, 2016 represented cash used to purchase treasury shares and debt repayments.

We have various resources available to us for purposes of managing liquidity and capital needs. Our primary sources of liquidity include our cash and cash equivalents and short term investments. Our primary operating liquidity needs relate to our working capital and funding our operations.

We had $15.7 million cash on hand as of September 30, 2017 with an additional $2.7 million of short term investment. In January 2017 we completed the NXSN Transaction. The terms of the NXSN Transaction provide that NXSN may raise up to $10 million from the sale of NXSN non-voting preferred stock on or before August 15, 2017. As of September 30, 2017, NXSN had sold $5.6 million of NXSN non-voting preferred stock. Although the time period during which NXSN was permitted to sell NXSN non-voting preferred stock has lapsed under the terms of the NXSN Transaction, we are continuing to work with SPPE to find capital solutions to sufficiently fund the continuing operations of the Nexsan Business. In the event NXSN does not raise sufficient capital to fund its continuing operations, we will continue to explore options to preserve the enterprise value of the Nexsan Business.

Our liquidity needs for the next 12 months include the following: legal settlement payment of $6.8 million to IOENGINE and CMC, corporate expenses of $4 million to $5 million, pension funding of approximately $2.0 million to $2.5 million, any amounts associated with organic investment opportunities and any amounts associated with the repurchase of common stock under the authorization discussed above. Additionally, in the event NXSN does not raise sufficient capital to funds its continuing operations, we may consider one or more investments in the Nexsan Business to protect its enterprise value.

We expect that our cash and short term investment and potential cash flow from GBAM and asset monetization will provide liquidity sufficient to meet our needs for our operations and our obligations. We also plan to raise additional capital if necessary, although no assurance can be made that we will be able to secure such financing, if needed, on favorable terms or at all.

Copyright Levies

See Note 15 - Litigation, Commitments and Contingencies in our Notes to Condensed Consolidated Financial Statements in Part I, Item 1 herein for further information.

Short Term Investment

37

See Note 12 - Fair Value measurements in our Notes to Condensed Consolidated Financial Statements in Part I, Item 1 herein for further information.

Off Balance Sheet Arrangements

As of September 30, 2017, we did not have any material off-balance sheet arrangements.

Critical Accounting Policies and Estimates

A discussion of the Company’s critical accounting policies was provided in Part II Item 7 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016.

Recent Accounting Pronouncements

See Note 2 - Recently Issued or Adopted Accounting Pronouncements in our Notes to Condensed Consolidated Financial Statements in Part I, Item 1 herein for further information.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, this Item is not applicable to the Company.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Based on an evaluation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)) as of September 30, 2017, the end of the period covered by this report, the Chairman and principal executive officer, Joseph A. De Perio, and the Interim Chief Executive Officer and Chief Financial Officer, Danny Zheng, have concluded that the disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of September 30, 2017 based on the guidelines established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO 2013). Our internal control over financial reporting includes policies and procedures that provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles. During the quarter ended September 30, 2017, management concluded there was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(e) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

38

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

See Note 15 - Litigation, Commitments and Contingencies in our Notes to Condensed Consolidated Financial Statements in Part I, Item 1 herein for further information regarding our legal proceedings.

The Company is subject to various pending or threatened lawsuits, claims and other legal matters that arise in the ordinary course of conducting business. All such matters involve uncertainty and accordingly, outcomes that cannot be predicted with assurance. It is reasonably possible that the ultimate resolution of these matters, individually or in the aggregate, could materially affect our financial condition, results of operations and cash flows.

On December 31, 2014, IOENGINE, LLC (“IOENGINE”), an NPE, filed suit in the District Court for the District of Delaware alleging infringement of United States Patent No. 8,539,047 by certain products we formerly sold under the IronKey brand. On February 17, 2017, following a trial, the jury returned a verdict against us in the patent infringement case brought by IOENGINE against the Company in the United States District Court for the District of Delaware. The jury awarded the IOENGINE $11.0 million in damages. As previously disclosed in the Current Report on Form 8-K we filed with the SEC on September 28, 2017, we entered into a settlement agreement with IOENGINE on September 28, 2017 resolving all claims relating to the IOENGINE lawsuit. Pursuant to the settlement agreement, (i) we paid IOENGINE $3.75 million in cash on October 3, 2017, (ii) issued to IOENGINE a promissory note (the “IOENGINE Note”) in the principal amount of $4 million under which no payments are due until June 30, 2019 (except in connection with acceleration upon an event of default), and (iii) we pledged certain of our assets to secure our obligations under the IOENGINE Note.

On January 26, 2016, CMC Magnetic Corp. (“CMC”), a supplier of our Legacy Businesses, filed a suit in the District Court of Ramsey County Minnesota, seeking damages from the Company the Company’s wholly-owned subsidiary Imation Latin America Corp. (“ILAC”) for alleged breach of contract. CMC also brought similar claims in Japan and the Netherlands against other of our subsidiaries. As previously disclosed in the Current Report on Form 8-K we filed with the SEC on September 18, 2017, we entered into a settlement agreement with CMC on September 15, 2017 resolving all claims relating to the CMC lawsuits. Pursuant to the settlement agreement, (i) we agreed that our subsidiary Imation Corporation Japan (“ICJ”) will cause the release and payment to CMC of approximately $9.2 million in attached assets, (ii) ICJ made a payment to CMC of $1.5 million on October 10, 2017, (iii) our subsidiary Imation Europe B.V. will cause the release and payment to CMC of approximately $825,000 in attached assets, (iv) ICJ issued to CMC an unsecured promissory note (the “CMC Note”) in the amount of $1.5 million, and (v) we guaranteed to CMC ICJ’s obligations under the CMC Note.

We received correspondence from former employees of our Legacy Businesses asserting their alleged eligibility to receive severance benefits.  Employee restructuring costs are accrued when a probable liability has been determined and the amount of such liability has been reasonably estimated. We did not have any employee restructuring accruals as of September 30, 2017.  On March 29, 2017, three former Legacy Business employees filed a lawsuit (the “Severance Action”) in the Minnesota State District Court of Ramsey County asserting state law claims for non-payment of allegedly promised severance benefits.  On April 28, 2017, we removed the Severance Action to the U.S. District Court for the District of Minnesota, based on our position that the Severance Action should properly be litigated in federal court because the alleged severance claims are, in essence, based on alleged rights under the Company’s ERISA severance plan.  On May 5, 2017, the Company also moved that the U.S. District Court dismiss the Severance Action based on our position that the plaintiffs’ state law claims are preempted by ERISA and the plaintiffs failed to follow the plan’s appeal procedures as required by ERISA. On July 21, 2017, the U.S. District Court remanded the Severance Action to Minnesota State District Court for further proceedings on the basis that plaintiffs plausibly alleged certain state law claims that may not arise under ERISA. We believe these state law claims are entirely without merit and intend to vigorously defend our position.

Item 1A. Risk Factors.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, this Item is not applicable to the Company.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 Not applicable.

Item 3. Defaults Upon Senior Securities.

 Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

39

Item 5. Other Information.

 Not applicable.

Item 6. Exhibits.

 The following documents are filed as part of, or incorporated by reference into, this report:

Exhibit Number	Description of Exhibit
31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following financial information from GlassBridge Enterprises, Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2017, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2017 and 2016, (ii) the Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2017 and 2016, (iii) the Condensed Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016, (iv) the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016, and (v) the Notes to Condensed Consolidated Financial Statements.

40

SIGNATURE

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.

		GLASSBRIDGE ENTERPRISES, INC.
Date:	November 14, 2017	/s/ Danny Zheng
		Name: Danny Zheng
		Title: Interim Chief Executive Officer and Chief Financial Officer (duly authorized officer and principal financial officer)

41

EXHIBIT INDEX

The following exhibits are filed as part of this report:

Exhibit Number	Description of Exhibit
31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following financial information from GlassBridge Enterprises, Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2017, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2017 and 2016, (ii) the Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2017 and 2016, (iii) the Condensed Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016, (iv) the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016, and (v) the Notes to Condensed Consolidated Financial Statements.

42

EX-31.1

Exhibit 31.1

Certification Pursuant to Section 302

of the Sarbanes-Oxley Act of 2002

     I, Joseph A. De Perio, certify that:

1. I have reviewed this quarterly report on Form 10-Q of GlassBridge Enterprises, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a -15(e) and 15d -15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a -15(f) and 15d -15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

November 14, 2017
By:	/s/ Joseph A. De Perio
	Joseph A. De Perio,
	Chairman (principal executive officer)

EX-31.2

Exhibit 31.2

Certification Pursuant to Section 302

of the Sarbanes-Oxley Act of 2002

     I, Danny Zheng, certify that:

1. I have reviewed this quarterly report on Form 10-Q of GlassBridge Enterprises, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a -15(e) and 15d -15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a -15(f) and 15d -15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

November 14, 2017
By:	/s/ Danny Zheng
	Danny Zheng,
	Interim Chief Executive Officer and Chief Financial Officer (principal financial officer)

EX-32.1

Exhibit 32.1

Certification Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

     In connection with the Quarterly Report of GlassBridge Enterprises, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2017, as filed with the Securities and Exchange Commission (the “Report”), I, Joseph A. De Perio, Chairman and principal executive officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November 14, 2017

/s/ Joseph De Perio

Joseph De Perio, 

Chairman (principal executive officer)

EX-32.2

Exhibit 32.2

Certification Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

     In connection with the Quarterly Report of GlassBridge Enterprises, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2017, as filed with the Securities and Exchange Commission (the “Report”), I, Danny Zheng, Interim Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November 14, 2017

/s/ Danny Zheng

Danny Zheng, 

Interim Chief Executive Officer and Chief Financial Officer (principal financial officer)

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Nov. 10, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	GLASSBRIDGE ENTERPRISES, INC.
Entity Central Index Key	0001014111
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		4,977,307

XML

Condensed Consolidated Statements of Operations - USD ($) shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Income Statement [Abstract]
Net revenue	$ 9,300,000	$ 11,500,000	$ 27,700,000	$ 32,800,000
Cost of goods sold	5,300,000	6,300,000	15,200,000	18,500,000
Gross profit	4,000,000	5,200,000	12,500,000	14,300,000
Operating expenses:
Selling, general and administrative	7,000,000	8,700,000	23,400,000	27,600,000
Research and development	1,800,000	2,900,000	6,500,000	9,500,000
GBAM Fund expenses	300,000	0	300,000	0
Restructuring and other	1,200,000	1,300,000	1,100,000	7,100,000
Total operating expenses	10,300,000	12,900,000	31,300,000	44,200,000
Operating loss from continuing operations	(6,300,000)	(7,700,000)	(18,800,000)	(29,900,000)
Other income (expense):
Interest income	0	0	0	200,000
Net gains from GBAM Fund activities	1,000,000	0	1,000,000	0
Other income (expense), net	100,000	200,000	(600,000)	(800,000)
Total other income (expense)	1,100,000	200,000	400,000	(600,000)
Loss from continuing operations before income taxes	(5,200,000)	(7,500,000)	(18,400,000)	(30,500,000)
Income tax benefit	3,500,000	200,000	3,500,000	2,300,000
Loss from continuing operations	(1,700,000)	(7,300,000)	(14,900,000)	(28,200,000)
Discontinued operations:
Gain on sale of discontinued businesses, net of income taxes	0	0	0	2,400,000
Income (loss) from discontinued operations, net of income taxes	7,700,000	200,000	4,500,000	(2,200,000)
Reclassification of cumulative translation adjustment	0	0	0	(75,800,000)
Income (loss) from discontinued operations, net of income taxes	7,700,000	200,000	4,500,000	(75,600,000)
Net income (loss) including noncontrolling interest	6,000,000	(7,100,000)	(10,400,000)	(103,800,000)
Less: Net loss attributable to noncontrolling interest	(2,000,000)	0	(5,500,000)	0
Net income (loss) attributable to GlassBridge Enterprises, Inc.	$ 8,000,000	$ (7,100,000)	$ (4,900,000)	$ (103,800,000)
Income(loss) per common share attributable to GlassBridge common shareholders — basic and diluted:
Continuing operations (in dollars per share)	$ 0.06	$ (1.97)	$ (2.04)	$ (7.62)
Discontinued operations (in dollars per share)	1.54	0.05	0.98	(20.43)
Net income (loss) (in dollars per share)	$ 1.60	$ (1.92)	$ (1.06)	$ (28.05)
Weighted average common shares outstanding:
Basic and diluted (in shares)	5.0	3.7	4.6	3.7

XML

Condensed Consolidated Statements of Comprehensive (Income) Loss - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Statement of Comprehensive Income [Abstract]
Net income (loss) including noncontrolling interest	$ 6.0	$ (7.1)	$ (10.4)	$ (103.8)
Net pension adjustments, net of tax:
Liability adjustments for defined benefit pension plans	(0.8)	0.3	(0.8)	(1.8)
Reclassification of adjustment for defined benefit plans recorded in net income (loss)	0.9	0.5	1.1	3.0
Total net pension adjustments	0.1	0.8	0.3	1.2
Net foreign currency translation:
Unrealized foreign currency translation gains (losses)	0.1	0.0	0.1	(0.8)
Realized cumulative translation adjustments from disposal of businesses	0.0	0.0	0.0	75.8
Total net foreign currency translation	0.1	0.0	0.1	75.0
Total other comprehensive income, net of tax	0.2	0.8	0.4	76.2
Comprehensive income (loss) including noncontrolling interest	6.2	(6.3)	(10.0)	(27.6)
Less: Comprehensive loss attributable to noncontrolling interest	(2.0)	0.0	(5.5)	0.0
Comprehensive income (loss) attributable to GlassBridge Enterprises, Inc.	$ 8.2	$ (6.3)	$ (4.5)	$ (27.6)

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Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Sep. 30, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 15.7	$ 10.0
Short term investments	2.7	22.0
Accounts receivable, net	6.0	7.7
Inventories	5.5	4.1
Other current assets	3.8	3.2
Current assets of discontinued operations	10.3	10.5
Total current assets	44.0	57.5
Property, plant and equipment, net	1.3	2.8
Intangible assets, net	11.6	3.4
Goodwill	3.8	3.8
Other assets	4.9	1.0
Non-current assets of discontinued operations	2.8	2.8
Total assets	68.4	71.3
Current liabilities:
Accounts payable	8.1	7.1
Other current liabilities	17.6	16.0
Current liabilities of discontinued operations	22.4	39.7
Total current liabilities	48.1	62.8
Other liabilities	30.6	29.4
Other liabilities of discontinued operations	9.2	4.4
Total liabilities	87.9	96.6
Shareholders’ deficit:
Preferred stock, $.01 par value, authorized 25 million shares, none issued and outstanding	0.0	0.0
Common stock, $.01 par value, authorized 10 million shares, 5.7 million issued	0.1	0.0
Additional paid-in capital	1,053.0	1,042.8
Accumulated deficit	(1,023.8)	(1,019.1)
Accumulated other comprehensive loss	(20.3)	(20.6)
Treasury stock, at cost: 0.8 million shares at September 30, 2017; 0.7 million shares at December 31, 2016	(28.6)	(28.4)
Total GlassBridge Enterprises, Inc. shareholders’ deficit	(19.6)	(25.3)
Noncontrolling interest	0.1	0.0
Total shareholders’ deficit	(19.5)	(25.3)
Total liabilities and shareholders’ deficit	68.4	$ 71.3
Variable Interest Entity
Current assets:
Cash and cash equivalents	0.9
Accounts receivable, net	6.0
Inventories	5.5
Intangible assets, net and Goodwill	6.7
Other assets	3.3
Current liabilities:
Accounts payable	7.2
Other current liabilities	8.5
Other liabilities	$ 4.7

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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	25,000,000	25,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	10,000,000	10,000,000
Common stock, shares issued (in shares)	5,700,000	5,700,000
Treasury stock (in shares)	753,808	744,091

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Cash Flows from Operating Activities:
Net loss including noncontrolling interest	$ (10.4)	$ (103.8)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	3.2	1.9
Stock-based compensation	0.2	0.0
Loss on abandonment of unused property, plant and equipment	1.1	0.0
Realized cumulative translation adjustment	0.0	75.8
Gain on sale of asset	(1.0)	0.0
Short term investment	19.3	(37.7)
Other, net	(0.2)	1.7
Changes in operating assets and liabilities	(7.6)	(21.0)
Net cash provided by (used in) operating activities	4.6	(83.1)
Cash Flows from Investing Activities:
Capital expenditures	(0.9)	(0.6)
Purchase of equity securities	(4.0)	0.0
Proceeds from sale of assets and business	0.5	25.5
Net cash provided by (used in) investing activities	(4.4)	24.9
Cash Flows from Financing Activities:
Purchase of treasury stock	(0.1)	(0.2)
Debt repayments	0.0	(0.2)
Capital contributions from noncontrolling interest	5.6	0.0
Net cash provided by (used in) financing activities	5.5	(0.4)
Effect of exchange rate changes on cash and cash equivalents	0.0	0.1
Net change in cash and cash equivalents	5.7	(58.5)
Cash and cash equivalents — beginning of period	10.0	70.4
Cash and cash equivalents — end of period	15.7	11.9
Supplemental disclosures of non-cash investing and financing activities:
Non-cash transaction with Clinton Group, Inc.	$ 10.1	$ 0.0

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Basis of Presentation

9 Months Ended

Sep. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

GlassBridge Enterprises, Inc. (“GlassBridge”, the “Company”, “we”, “us” or “our”) is a holding company. We actively explore a diverse range of new, strategic asset management business opportunities for our portfolio. The company’s wholly-owned subsidiary GlassBridge Asset Management, LLC (“GBAM”) is an investment advisor focused on technology-driven quantitative strategies and other alternative investment strategies. Our partially-owned subsidiary NXSN Acquisition Corp. (together with its subsidiaries, “NXSN”) operates a global enterprise data storage business through its subsidiaries.

The interim Condensed Consolidated Financial Statements of GlassBridge are unaudited but, in the opinion of management, reflect all adjustments necessary for a fair statement of financial position, results of operations, comprehensive loss and cash flows for the periods presented. Except as otherwise disclosed herein, these adjustments consist of normal and recurring items. The results of operations for any interim period are not necessarily indicative of full year results. The Condensed Consolidated Financial Statements and Notes are presented in accordance with the requirements for Quarterly Reports on Form 10-Q and do not contain certain information included in our annual Consolidated Financial Statements and Notes presented in accordance with the requirements of Annual Reports on Form 10-K.

The unaudited Condensed Consolidated Financial Statements include the accounts of the Company, its wholly-owned subsidiaries, and entities in which the Company owns or controls fifty percent or more of the voting shares and has the right to control. The results of entities disposed of are included in the unaudited Condensed Consolidated Financial Statements up to the date of the disposal and, where appropriate, these operations have been reflected as discontinued operations. All inter-company balances and transactions have been eliminated in consolidation and, in the opinion of management, all normal recurring adjustments necessary for a fair presentation have been included in the interim results reported.

The preparation of the interim Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim Condensed Consolidated Financial Statements and the reported amounts of revenue and expenses for the reporting periods. Despite our intention to establish accurate estimates and use reasonable assumptions, actual results may differ from our estimates.

The December 31, 2016 Condensed Consolidated Balance Sheet data was derived from the audited Consolidated Financial Statements but does not include all disclosures required by GAAP. This Form 10-Q should be read in conjunction with our Consolidated Financial Statements and Notes included in our Annual Report on Form 10-K for the year ended December 31, 2016 as filed with the U.S. Securities and Exchange Commission on March 24, 2017.

The operating results of our legacy business segments, Consumer Storage and Accessories and Tiered Storage and Security Solutions (the “Legacy Businesses”), are presented in our Condensed Consolidated Statements of Operations as discontinued operations for all periods presented. Our continuing operations in each period presented represents our global enterprise data storage business with an emerging enterprise-class, private cloud sync and share product line (the “Nexsan Business”, which consists of the products of NXSN’s subsidiaries Nexsan Corporation (together with its subsidiaries other than Connected Data, Inc. ("CDI"), “Nexsan”) and CDI), and our “Asset Management Business,” which consists of our investment advisory business conducted through GBAM, as well as corporate expenses and activities not directly attributable to our Legacy Businesses. Assets and liabilities directly associated with our Legacy Businesses and that are not part of our ongoing operations have been separately presented on the face of our Condensed Consolidated Balance Sheet as of both September 30, 2017 and December 31, 2016. See Note 4 - Discontinued Operations for further information.

On January 23, 2017, we closed a transaction (the “NXSN Transaction”) with NXSN, pursuant to which all of the issued and outstanding common stock of Nexsan and CDI was transferred to NXSN in exchange for 50% of the issued and outstanding common stock of NXSN and a $25 million senior secured convertible promissory note (the “NXSN Note”). Spear Point Private Equity LP (“SPPE”), an affiliate of Spear Point Capital Management, LLC (“Spear Point”), owns the remaining 50% issued and outstanding shares of NXSN common stock and shares of NXSN non-voting preferred stock.

The terms of the NXSN Transaction provided that NXSN had the right to raise up to $10 million from the sale of NXSN non-voting preferred stock. As of September 30, 2017, NXSN had sold $5.6 million of NXSN non-voting preferred stock. Although the time period during which NXSN was permitted to sell NXSN non-voting preferred stock has lapsed under the terms of the NXSN Transaction, we are continuing to work with SPPE to find capital solutions to sufficiently fund the continuing operations of the Nexsan Business. In the event NXSN does not raise sufficient capital to fund its continuing operations, we will continue to explore options to preserve the enterprise value of the Nexsan Business.

As a result of the NXSN Transaction, we identified NXSN as a variable interest entity (“VIE”). We consolidate a VIE in our financial statements if we are deemed to be the primary beneficiary of the VIE. The primary beneficiary of a VIE is the party that has the power to direct activities that most significantly impact the activities of the VIE and has the obligation to absorb losses or the right to benefits from the VIE that could potentially be significant to the VIE. Following January 23, 2017, NXSN’s financial results are included in our Condensed Consolidated Financial Statements since we made the determination that we are the primary beneficiary of such VIE. Until January 23, 2017, as we owned 100% of the equity interest of Nexsan and CDI, the financial results of Nexsan and CDI were included in our Condensed Consolidated Financial Statements as wholly-owned subsidiaries. See Note 14 - Segment Information for additional information.

On February 2, 2017, we closed a transaction with Clinton Group, Inc. (“Clinton”) which has facilitated the launch of our Asset Management Business, that consists of our investment advisory business conducted through GBAM (the “Capacity and Services Transaction”). See Note 6 - Intangible Assets and Goodwill and Note 16 - Related Party Transactions for further information.

On February 21, 2017, we effected a 1:10 reverse split of our common stock, without any change in the par value per share (the “Reverse Stock Split”), and decreased the number of authorized shares of our common stock from 100,000,000 to 10,000,000. All share and per share values of our common stock for all periods presented are retroactively restated for the effect of the Reverse Stock Split.

In June 2017, we launched our first GBAM-managed investment fund (the “GBAM Fund”) which focuses on technology-driven quantitative strategies and other alternative investment strategies. As of September 30, 2017, we had invested certain of our cash as proprietary capital in the GBAM Fund. We have made the determination to consolidate the GBAM Fund and, accordingly, its financial results were included in our Condensed Consolidated Financial Statements as part of the Asset Management Business. Our cash and cash equivalents balance as of September 30, 2017 included the proprietary capital invested in the GBAM Fund. See Note 14 - Segment Information for additional information.

The Company’s continued operations and ultimate ability to continue as a going concern will depend on its ability to enhance revenue and operating results, enter into strategic relationships or raise additional capital. The Company can provide no assurances that such plans will occur and if the Company is unable to return to profitability or otherwise raise sufficient capital, there would be a material adverse effect on its business.

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Recently Issued or Adopted Accounting Pronouncements

9 Months Ended

Sep. 30, 2017

Accounting Policies [Abstract]

Recently Issued or Adopted Accounting Pronouncements

Recently Issued or Adopted Accounting Pronouncements

In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-11, Simplifying the Measurement of Inventory, which modifies existing requirements regarding measuring inventory at the lower of cost or market. Under existing standards, the market amount requires consideration of replacement cost, net realizable value (“NRV”), and NRV less an approximately normal profit margin. The new ASU replaces market with NRV, defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This eliminates the need to determine and consider replacement cost or NRV less an approximately normal profit margin when measuring inventory. For GlassBridge, this standard was effective prospectively beginning January 1, 2017, with early adoption permitted. This standard did not have a material impact on the Company’s consolidated results of operations or financial condition.

In March 2016, the FASB issued ASU No. 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which amends ASU No. 2014-09, Revenue from Contracts with Customers, to clarify principal versus agent guidance in situations in which a revenue transaction involves a third party in providing goods or services to a customer. In such circumstances, an entity must determine whether the nature of its promise to the customer is to provide the underlying goods or services (i.e., the entity is the principal in the transaction) or to arrange for the third party to provide the underlying goods or services (i.e., the entity is the agent in the transaction). To determine the nature of its promise to the customer, the entity must first identify each specified good or service to be provided to the customer and then (before transferring it) assess whether it controls each specified good or service. The new ASU clarifies how an entity should identify the unit of accounting (the specified good or service) for the principal versus agent evaluation, and how it should apply the control principle to certain types of arrangements, such as service transactions, by explaining what a principal controls before the specified good or service is transferred to the customer. ASU No. 2016-08 will be effective for fiscal years beginning after December 15, 2017, including interim periods within that year, concurrent with ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The Company is evaluating the impact this standard will have on the Company’s consolidated results of operations and financial condition.

In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718), which simplified certain aspects of the accounting for share-based payment transactions, including income taxes, classification of awards and classification in the statement of cash flows. ASU No. 2016-09 was effective for the Company beginning in its first quarter of 2017. This standard did not have a material impact on the Company’s consolidated results of operations or financial condition.

In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing, which amends ASU No. 2014-09, Revenue from Contracts with Customers. In terms of identifying performance obligations in a revenue arrangement, the amendments clarify how entities would determine whether promised goods or services are separately identifiable from other promises in a contract and, therefore, would be accounted for separately. The guidance would also allow entities to disregard goods or services that are immaterial in the context of a contract and provides an accounting policy election to account for shipping and handling activities as fulfillment costs rather than as additional promised services. With regard to the licensing, the amendments clarify how an entity would evaluate the nature of its promise in granting a license of intellectual property, which determines whether the entity recognizes revenue over time or at a point in time. The standard also clarifies certain other aspects relative to licensing. ASU No. 2016-10 will be effective for fiscal years beginning after December 15, 2017, including interim periods within that year, concurrent with ASU No. 2014-09. The Company is evaluating the impact this standard will have on the Company’s consolidated results of operations and financial condition.

In October 2016, the FASB issued ASU No. 2016-17, Interests Held through Related Parties That Are under Common Control, which modifies existing guidance with respect to how a decision maker that holds an indirect interest in a VIE through a common control party determines whether it is the primary beneficiary of the VIE as part of the analysis of whether the VIE would need to be consolidated. Under the ASU, a decision maker would need to consider only its proportionate indirect interest in the VIE held through a common control party. Previous guidance had required the decision maker to treat the common control party’s interest in the VIE as if the decision maker held the interest itself. As a result of the ASU, in certain cases, previous consolidation conclusions may change. The standard was effective January 1, 2017 with retrospective application to January 1, 2016. This standard did not have a material impact on the Company’s consolidated results of operations or financial condition.

In February 2017, the FASB issued ASU No. 2017-06, Employee Benefit Plan Master Trust Reporting. This ASU provides guidance for reporting by an employee benefit plan for its interest in a master trust. The amendment is effective for fiscal years beginning after December 15, 2018. The amendment should be applied retrospectively with earlier adoption permitted. The Company is in the process of determining the effect of adopting this standard on the Company’s consolidated results of operations and financial condition.

In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which amends the requirements related to the presentation of the components of net periodic benefit cost for an entity’s sponsored defined benefit pension and other postretirement plans. This ASU requires entities to (1) disaggregate the current-service-cost component from the other components of net benefit cost (the “other components”) and present it with other current compensation costs for related employees in the income statement and (2) present the other components elsewhere in the income statement and outside of income from operations if such a subtotal is presented. In addition, only service costs are eligible for capitalization. The standard will be effective in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the impact of adopting this standard on the Company’s consolidated results of operations and financial condition.

In May 2017, the FASB issued ASU No. 2017-09, Scope of Modification Accounting. This ASU provides clarification on when modification accounting should be used for changes to the terms and conditions of a share-based payment award. This ASU does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. The standard will be effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The amendment should be applied prospectively to an award modified on or after the adoption date. The Company is currently assessing the impact of adopting this standard on the Company’s consolidated results of operations and financial condition.

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Income (Loss) per Common Share

9 Months Ended

Sep. 30, 2017

Earnings Per Share [Abstract]

Income (Loss) per Common Share

(Loss) per Common Share

Basic income (loss) per common share is calculated using the weighted average number of shares outstanding for the period. Unvested restricted stock and treasury shares are excluded from the calculation of basic weighted average number of common shares outstanding. Once restricted stock vests, it is included in our common shares outstanding.

Diluted income (loss) per common share is computed on the basis of the weighted average shares outstanding plus the dilutive effect of our stock-based compensation plans using the “treasury stock” method. Since the exercise price of our stock options is greater than the average market price of the Company’s common stock for the period, we did not include dilutive common equivalent shares for these instruments in the computation of diluted net income (loss) per share because the effect would have been anti-dilutive.

The following table sets forth the computation of the weighted average basic and diluted income (loss) per share:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In millions, except for per share amounts)	2017			2016			2017			2016
Numerator:
Loss from continuing operations	$	(1.7	)	$	(7.3	)	$	(14.9	)	$	(28.2	)
Less: loss attributable to noncontrolling interest	(2.0		)	—			(5.5		)	—
Net income (loss) from continuing operations attributable to GlassBridge Enterprises, Inc.	0.3			(7.3		)	(9.4		)	(28.2		)
Income (loss) from discontinued operations, net of income taxes	7.7			0.2			4.5			(75.6		)
Net income (loss) attributable to GlassBridge Enterprises, Inc.	$	8.0		$	(7.1	)	$	(4.9	)	$	(103.8	)
Denominator:
Weighted average number of common shares outstanding during the period - basic and diluted	5.0			3.7			4.6			3.7
Income (loss) per common share attributable to GlassBridge common shareholders — basic and diluted:
Continuing operations	$	0.06		$	(1.97	)	$	(2.04	)	$	(7.62	)
Discontinued operations	1.54			0.05			0.98			(20.43		)
Net income (loss)	$	1.60		$	(1.92	)	$	(1.06	)	$	(28.05	)
Anti-dilutive shares excluded from calculation	0.3			0.4			0.3			0.4

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Discontinued Operations

9 Months Ended

Sep. 30, 2017

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

The operating results for the Legacy Businesses are presented in our Condensed Consolidated Statements of Operations as discontinued operations for all periods presented and reflect revenues and expenses that are directly attributable to these businesses that were eliminated from our ongoing operations.

GAAP requires accumulated foreign currency translation balances to be reclassified into the Consolidated Statement of Operations once the liquidation of the net assets of a foreign entity is substantially complete. As of March 31, 2016, because we had ceased operations in all of our international legal entities other than those associated with the Nexsan Business, we had determined that the liquidations of our international entities associated with our Legacy Businesses are substantially complete. All remaining activities associated with these entities, including the final disposition of remaining balance sheet amounts and formal dissolution of these entities are being managed and controlled by the Company’s U.S. corporate function. Accordingly, the Company reclassified into discontinued operations $75.7 million and $75.8 million of foreign currency translation losses associated with our Legacy Businesses for the three months ended March 31, 2016 and for the nine months ended September 30, 2016, respectively.

Additionally, in February 2016 the Company sold its IronKey mobile security solutions business to Kingston Digital, Inc. (“Kingston”) and DataLocker Inc. (“DataLocker”) pursuant to two asset purchase agreements which qualified as the sale of a business. The Company recorded a pre-tax gain on the IronKey sale of $3.8 million during the first quarter of 2016.

In September 2017, we entered into an agreement with a Dutch counterparty with respect to certain potential transactions (the “French Levy Monetization Transactions”) intended to monetize our claims against the French levy collecting society in furtherance of our efforts to position for winddown the European subsidiary holding such claims. The French Levy Monetization Transactions are structured as “back-to-back” sales of certain leviable products to French purchasers designed to utilize the Dutch company’s French distribution channel to recover a portion of overpaid levies via setoff. See Note 15 - Litigation, Commitments and Contingencies for additional information on these overpaid levies.

For the three and nine months ended September 30, 2017, we recorded less than $0.1 million of services fee revenue and as of September 30, 2017, our European subsidiary recorded less than $0.1 million of services fee due to the Dutch counterparty. For the three months and nine months ended September 30, 2017, our European subsidiary recorded revenue of $0.3 million due from a French purchaser and cost of goods sold of $0.2 million due to the Dutch counterparty.

The key components of the results of discontinued operations were as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In millions)	2017			2016			2017			2016
Net revenue	$	0.3		$	—		$	0.3		$	2.0
Cost of goods sold	0.2			—			0.2			0.6
Gross profit	0.1			—			0.1			1.4
Selling, general and administrative	1.3			0.8			4.2			3.6
Research and development	—			—			—			0.5
Restructuring and other	(13.2		)	(0.7		)	(13.6		)	(0.4		)
Reclassification of cumulative translation adjustment	—			—			—			75.8
Other (income) expense	0.8			(0.4		)	1.7			(0.6		)
Income (loss) from discontinued operations, before income taxes	11.2			0.3			7.8			(77.5		)
Gain on sale of discontinued businesses, before income taxes	—			—			—			3.8
Income tax provision	(3.5		)	(0.1		)	(3.3		)	(1.9		)
Income (loss) from discontinued operations, net of income taxes	$	7.7		$	0.2		$	4.5		$	(75.6	)

For the three months ended September 30, 2017, “restructuring and other” predominantly reflects a $7.3 million net gain attributable to the settlement of the lawsuits brought against us by CMC Magnetic Corp. (“CMC”), a $3.3 million net gain attributable to the settlement of the lawsuit brought against us by IOENGINE, LLC (“IOENGINE”), a $2.4 million gain on resolution of customer and vendor balances related to the Legacy Businesses, and a $0.6 million gain on asset claim recovery. See Note 15 - Litigation, Commitments and Contingencies for additional information on the CMC and IOENGINE settlements.

Current assets of discontinued operations of $10.3 million as of September 30, 2017 principally include approximately $9.0 million of restricted cash, primarily associated with disputed CMC trade payables. Current assets of discontinued operations of $10.5 million as of December 31, 2016 principally included approximately $9.4 million of restricted cash, primarily associated with disputed trade payables. The change in the restricted cash was due to currency translation. Pursuant to the settlement agreement with CMC, we undertook certain obligations to release restricted cash associated with the CMC trade payables. See Note 15 - Litigation, Commitments and Contingencies for additional information.

Current liabilities of discontinued operations of $22.4 million as of September 30, 2017 included $1.1 million of accounts payable, $1.0 million of customer credit and rebate accruals, $11.1 million due to CMC (includes $9.0 million of restricted cash to be released to CMC), $3.8 million due to IOENGINE, $1.8 million of legal accruals and $3.6 million of other current liability amounts. Current liabilities of discontinued operations of $39.7 million as of December 31, 2016 included $22.8 million of accounts payable, $3.2 million of customer credit and rebate accruals, $11.0 million of legal accruals and $2.7 million of other current liability amounts. The change in accounts payable and legal accruals were primarily attributable to the settlement of our CMC and IOENGINE lawsuits. See Note 15 - Litigation, Commitments and Contingencies for additional information.

Other liabilities of discontinued operations of $9.2 million as of September 30, 2017 included $1.0 million due to CMC, $4.0 million due to IOENGINE, and $4.2 million of other liability amounts. Other liabilities of discontinued operations of $4.4 million as of December 31, 2016 included $4.4 million of other liability amounts. See Note 15 - Litigation, Commitments and Contingencies for additional information on the CMC and IOENGINE settlements.

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Supplemental Balance Sheet Information

9 Months Ended

Sep. 30, 2017

Balance Sheet Related Disclosures [Abstract]

Supplemental Balance Sheet Information

Supplemental Balance Sheet Information

Additional supplemental balance sheet information is provided as follows:

The Company’s accounts receivable are solely related to the Nexsan Business and reported on the Condensed Consolidated Balance Sheet net of reserves and allowances. The reserves and allowances were $0.3 million and $0.2 million for the periods ended September 30, 2017 and December 31, 2016, respectively. Reserves and allowances include estimated amounts for customer returns, discounts on payment terms and uncollectible accounts.

In the third quarter of 2017, Nexsan sold $1.2 million of its accounts receivable to affiliates of Spear Point for a discounted purchase price of $1.1 million, subject to a right to repurchase within five months of the original sale at the original sales price plus 2% interest per month. The accounts receivable sale was recorded as a sale of financial assets under ASC860. The purchase price discounts associated with the sales of Nexsan Business accounts receivable are recorded in Other income (expense), net in our Condensed Consolidated Statement of Operations. The amount of the accounts receivable sold was excluded from our Condensed Consolidated Balance Sheet.

Other assets include a $4.0 million strategic investment in equity securities, which is consistent with our stated strategy of exploring a diverse range of new strategic asset management business opportunities for our portfolio. We will account for such investments under the cost method of accounting.

Other current liabilities primarily includes deferred revenue of $7.0 million and $6.7 million related to the Nexsan Business, levy accruals of $5.5 million and $4.9 million and accrued payroll of $2.0 million and $2.6 million as of September 30, 2017 and December 31, 2016, respectively.

Other liabilities include pension liabilities of $25.3 million and $24.1 million as of September 30, 2017 and December 31, 2016, respectively.

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Intangible Assets and Goodwill

9 Months Ended

Sep. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Goodwill

Intangible Assets and Goodwill

Intangible Assets

Intangible assets consist of developed technology recorded as a result of the acquisition of CDI on October 14, 2015 and intangible assets acquired when we closed the Capacity and Services Transaction with Clinton on February 2, 2017. The Capacity and Services Transaction allows for GBAM to place up to $1 billion of investment capacity under Clinton’s management within Clinton’s quantitative equity strategy for an initial term of five years, for which the Company issued to Clinton’s affiliate Madison Avenue Capital Holdings, Inc. 1,250,000 shares of its common stock as consideration. We recorded the 1,250,000 shares of common stock issued as an intangible asset and calculated a fair value of $10.1 million using our closing stock price on February 2, 2017. We are amortizing the $10.1 million on a straight-line basis over the five year term. See Note 16 - Related Party Transactions for additional information.

(In millions)	Capacity Agreement			Developed Technology			Total
September 30, 2017
Cost	$	10.1		$	4.3		$	14.4
Accumulated amortization	(1.4		)	(1.4		)	(2.8		)
Intangible assets, net	$	8.7		$	2.9		$	11.6
December 31, 2016
Cost	$	—		$	4.3		$	4.3
Accumulated amortization	—			(0.9		)	(0.9		)
Intangible assets, net	$	—		$	3.4		$	3.4

Amortization expense for intangible assets consisted of the following:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2017		2016		2017		2016
Amortization expense	$	0.7	$	0.2	$	1.9	$	0.6

Estimated amortization expense for the remainder of 2017 and each of the next four years is as follows:

(In millions)	2017 (Remainder)		2018		2019		2020		2021
Amortization expense	$	0.7	$	2.7	$	2.7	$	2.7	$	2.6

Goodwill

The goodwill balance was $3.8 million as of September 30, 2017 and December 31, 2016. The goodwill is solely contained within the Nexsan Business. There are no impairment indicators based on management’s assessment. We monitor our results and expected cash flows in the future to access whether consideration of an impairment of goodwill may be necessary.

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Restructuring and Other Expense

9 Months Ended

Sep. 30, 2017

Restructuring and Related Activities [Abstract]

Restructuring and Other Expense

Restructuring and Other Expense

The components of our restructuring and other expense included in the Condensed Consolidated Statements of Operations were as follows:

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(In millions)	2017			2016		2017			2016
Restructuring Expense:
Severance and related	$	0.1		$	0.4	$	1.0		$	0.4
Loss on abandonment of unused property, plant and equipment	1.1			—		1.1			—
Other(1)	(0.8		)	—		(1.7		)	—
Total Restructuring	$	0.4		$	0.4	$	0.4		$	0.4
Other Expense:
Pension settlement/curtailment (Note 9)	$	0.8		$	0.3	0.8			2.6
Asset disposals / write down	—			—		—			0.1
Other(2)	—			0.6		(0.1		)	4.0
Total Other	$	0.8		$	0.9	$	0.7		$	6.7
Total Restructuring and Other	$	1.2		$	1.3	$	1.1		$	7.1

⁽¹⁾ For the three months ended September 30, 2017, other includes $0.8 million net gain from an asset sale. For the nine months ended September 30, 2017, other includes $1.0 million net gain from an asset sale, $0.3 million reversal of contingent consideration obligations related to the CDI acquisition (see Note 15 - Litigation, Commitments and Contingencies for additional information), and $0.4 million reversal of other employee costs. We have considered these costs to be attributable to our corporate activities and, therefore, they are not part of our discontinued operations.

⁽²⁾ For the three months ended September 30, 2016, other includes consulting expenses of $0.3 million and $0.2 million for Realization Services, Inc. (See Note 16 - Related Party Transactions for additional information) and Otterbourg P.C., respectively and $0.1 million for other consulting fees. For the nine months ended September 30, 2016, other includes consulting expenses of $2.4 million and $1.4 million for Realization Services, Inc. and Otterbourg P.C., respectively, a net credit of $1.9 million for property tax refund for the former Oakdale site, as well as $2.1 million for other employee costs and consulting fees directly attributable to our Restructuring Plan. We have considered these costs to be attributable to our corporate activities and, therefore, they are not part of our discontinued operations.

Activity related restructuring accruals was as follows:

(In millions)	Severance and Related
Accrued balance at December 31, 2016	$	—
Charges	0.6
Usage and payments	(0.4		)
Accrued balance at March 31, 2017	$	0.2
Charges	0.3
Usage and payments	(0.2		)
Accrued balance at June 30, 2017	$	0.3
Usage and payments	(0.3		)
Accrued balance at September 30, 2017	$	—

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock-Based Compensation

Stock-based compensation for continuing operations consisted of the following:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2017		2016		2017		2016
Stock-based compensation expense	$	0.2	$	0.2	$	0.3	$	0.6

We have stock-based compensation awards consisting of stock options, restricted stock and stock appreciation rights under four plans (collectively, the “Stock Plans”) which are described in detail in our Annual Report on Form 10-K for the year ended December 31, 2016. As of September 30, 2017, there were 186,225 shares available for grant under the 2011 Incentive Plan. No further shares were available for grant under any other stock incentive plan.

Stock Options

The following table summarizes our stock option activity:

	Stock Options		Weighted Average Exercise Price
Outstanding December 31, 2016	286,707		$	77.50
Granted	—		—
Exercised	—		—
Canceled	(40,213	)	128.72
Forfeited	(6,602	)	23.46
Outstanding September 30, 2017	239,892		$	70.41
Exercisable as of September 30, 2017	210,943		$	78.15

The outstanding options are non-qualified and generally have a term of ten years. The following table summarizes our weighted average assumptions used in the Black-Scholes valuation of stock options:

	Nine Months Ended
	September 30,
	2017		2016
Volatility	44.3	%	41.0	%
Risk-free interest rate	1.6	%	1.8	%
Expected life (months)	72		72
Dividend yield	—		—

As of September 30, 2017, there was $0.2 million of total unrecognized compensation expense related to non-vested stock options granted under our Stock Plans. That expense is expected to be recognized over a weighted average period of 1.3 years.

Restricted Stock

The following table summarizes our restricted stock activity:

	Restricted Stock		Weighted Average Grant Date Fair Value Per Share
Nonvested as of December 31, 2016	79,926		$	20.63
Granted	86,000		5.85
Grant adjustments	(324	)	38.00
Vested	(2,071	)	17.57
Forfeited	(67,206	)	22.84
Nonvested as of September 30, 2017	96,325		$	5.91

The cost of the awards is determined using the fair market value of the Company’s common stock on the date of the grant, and compensation is recognized on a straight-line basis over the requisite vesting period.

As of September 30, 2017, there was $0.4 million of total unrecognized compensation expense related to non-vested restricted stock granted under our Stock Plans. That expense is expected to be recognized over a weighted average period of 2.4 years.

Stock Appreciation Rights

During the nine months ended September 30, 2017 we did not grant any Stock Appreciation Rights (“SARs”). Outstanding SARs only vest when both stock price and revenue performance conditions specified by the terms of the SARs are met by December 31, 2017. As of September 30, 2017 and December 31, 2016, we had less than 0.1 million and 0.2 million SARs outstanding, respectively. We have not recorded any related compensation expense based on the applicable accounting rules. We will continue to assess these SARs each quarter to determine if any expense should be recorded.

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Retirement Plans

9 Months Ended

Sep. 30, 2017

Retirement Benefits [Abstract]

Retirement Plans

Retirement Plans

Pension Plans

During the three and nine months ended September 30, 2017, consistent with the funding requirements of our worldwide pension plans we made a contribution of $0.4 million to such plans. Effective January 1, 2010, the U.S. plan was amended to exclude new hires and rehires from participating in the plan. In addition, we eliminated benefit accruals under the U.S. plan as of January 1, 2011, thus “freezing” the defined benefit pension plan. Under the plan freeze, no pay credits were made to a participant’s account balance after December 31, 2010. However, interest credits will continue in accordance with the annual update process. We presently anticipate contributing between $0.3 million and $0.5 million to fund our worldwide pension plans in the next six months.

Components of net periodic pension (credit) cost included the following:

	United States						United States
	Three Months Ended September 30,						Nine Months Ended September 30,
(In millions)	2017			2016			2017			2016
Interest cost	$	0.7		$	0.7		$	1.9		$	2.2
Expected return on plan assets	(0.9		)	(0.9		)	(2.5		)	(2.8		)
Amortization of net actuarial loss	0.1			0.1			0.3			0.3
Net periodic pension credit	(0.1		)	(0.1		)	(0.3		)	(0.3		)
Settlement loss	0.8			0.3			0.8			2.6
Total pension (credit) cost	$	0.7		$	0.2		$	0.5		$	2.3

Germany is the Company’s only remaining international plan and the components of net periodic pension (credit) cost for this plan were immaterial for the three and nine months ended September 30, 2017 and 2016.

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Income Taxes

9 Months Ended

Sep. 30, 2017

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

For interim income tax reporting, we are required to estimate our annual effective tax rate and apply it to year-to-date pre-tax income/loss excluding unusual or infrequently occurring discrete items. Tax jurisdictions with losses for which tax benefits cannot be realized are excluded.

For the three and nine months ended September 30, 2017, we recorded income tax benefit from continuing operations of $3.5 million. For the three and nine months ended September 30, 2016, we recorded income tax benefit of $0.2 million and $2.3 million. Similar to the same period last year, this is primarily related to the intraperiod allocation of total tax expense between continuing operations and discontinued operations. The effective income tax rate for the three and nine months ended September 30, 2017 differs from the U.S. federal statutory rate of 35% primarily due to a valuation allowance on various deferred tax assets and the intraperiod allocation between continuing and discontinued operations.

We file income tax returns in multiple jurisdictions and are subject to review by various U.S and foreign taxing authorities. Our U.S. federal income tax returns for 2014 through 2016 are subject to examination by the Internal Revenue Service. With few exceptions, we are no longer subject to examination by foreign tax jurisdictions or state and local tax jurisdictions for years before 2010. In the event that we have determined not to file tax returns with a particular state or city, all years remain subject to examination by the tax jurisdiction.

We accrue for the effects of uncertain tax positions and the related potential penalties and interest. Our liability related to uncertain tax positions, which is presented in other liabilities on our Condensed Consolidated Balance Sheets and which includes interest and penalties and excludes certain unrecognized tax benefits that have been netted against deferred tax assets, was $1.0 million and $1.3 million as of September 30, 2017 and December 31, 2016, respectively. These liabilities are associated with our Legacy Businesses and have been included with the separately presented other liabilities of discontinued operations on the face of our Condensed Consolidated Balance Sheet. It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain of our unrecognized tax positions will increase or decrease during the next 12 months; however, it is not possible to reasonably estimate the effect at this time.

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Major Customers and Accounts Receivable

9 Months Ended

Sep. 30, 2017

Risks and Uncertainties [Abstract]

Major Customers and Accounts Receivable

Major Customers and Accounts Receivable

Major customers are those customers that account for more than 10% of revenues or accounts receivable. For the three and nine months ended September 30, 2017, 19% and 22% of revenues, respectively, were derived from one major Nexsan Business customer. The loss of this customer could have a material adverse effect on the Company’s operations. As of September 30, 2017, there were no customers that accounted for more than 10% of accounts receivable.

For the three months ended September 30, 2016, 17% of revenues were derived from one major Nexsan Business customer and for the nine months ended September 30, 2016, 21% of revenues were derived from one major Nexsan Business customer. The accounts receivable from this customer represented 10% of total accounts receivable as of December 31, 2016.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, or the exit price in an orderly transaction between market participants on the measurement date. A three-level hierarchy is used for fair value measurements based upon the observability of the inputs to the valuation of an asset or liability as of the measurement date. Level 1 measurements consist of unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 measurements include quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 3 measurements include significant unobservable inputs. A financial instrument’s level within the hierarchy is based on the highest level of any input that is significant to the fair value measurement. Following is a description of our valuation methodologies used to estimate the fair value for our assets and liabilities.

Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis

The Company’s non-financial assets such as goodwill, intangible assets and property, plant and equipment are recorded at fair value when an impairment is recognized or at the time acquired in a business combination. The determination of the estimated fair value of such assets required the use of significant unobservable inputs which would be considered Level 3 fair value measurements. As of September 30, 2017, there were no indicators that would require an impairment of goodwill, intangible assets or property, plant and equipment.

Assets and Liabilities that are Measured at Fair Value on a Recurring Basis

The Company measures certain assets and liabilities at their estimated fair value on a recurring basis, including cash and cash equivalents, our contingent consideration obligations associated with the acquisition of CDI and investments in trading securities (described further below under the “Trading Equity Securities” heading). See Note 15 - Litigation, Commitments and Contingencies for additional information on the CDI contingent consideration. The following table provides information by level for assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016:

	September 30, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Assets:
Trading securities	$	0.3	$	0.3			$	—
	December 31, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Assets:
Trading securities	$	2.5	$	2.5			$	—
Liabilities:
Contingent consideration associated with CDI acquisition	$	0.3	$	—	$	—	$	0.3

Trading Equity Securities

On February 8, 2016, the Company entered into a subscription agreement with Clinton Lighthouse Equity Strategies Fund (Offshore) Ltd. (“Clinton Lighthouse”). Clinton Lighthouse is a market neutral fund which provides daily liquidity to its investors. The short term investment was classified as a trading security as we expect to be actively managing this investment at all times with the intention of maximizing our investment returns. Income or loss including unrealized gains and losses associated with this trading security is recorded as a component of “Other income (expense), net” in our Condensed Consolidated Statements of Operations and purchases or sales of this security are reflected as operating activities in our Condensed Consolidated Statements of Cash Flows. As of September 30, 2017, the short term investment balance in Clinton Lighthouse was $2.2 million compared to $19.5 million as of December 31, 2016. The decrease of $17.3 million mainly relates to $16.9 million of redemptions and approximately $0.4 million of unrealized loss for the nine months ended September 30, 2017. Unrealized loss for the nine months ended September 30, 2016 was approximately $0.7 million, which includes $0.5 million accrued performance fees. See Note 16 - Related Party Transactions for more information.

In June 2017, we launched the GBAM Fund which focuses on technology-driven quantitative strategies and other alternative investment strategies. The short term investments within the GBAM Fund were classified as trading securities as we expect to be actively managing the GBAM Fund at all times with the intention of maximizing our investment returns. Income or loss associated with these trading securities is recorded as a component of “Net gains from GBAM Fund activities” in our Condensed Consolidated Statements of Operations and purchases or sales of these securities are reflected as operating activities in our Condensed Consolidated Statements of Cash Flows. As of September 30, 2017, the short term investment balance for the GBAM Fund was $0.2 million. See Note 14 - Segment Information for additional information.

In connection with the adoption of ASU No. 2015-07, Fair Value Measurement (Topic 820), FASB Accounting Standards Codification 820 - Fair Value Measurement and Disclosures no longer requires investments for which fair value is determined based on practical expedient reliance to be reported utilizing the fair value hierarchy. As of September 30, 2017 and December 31, 2016, our short term investments in Clinton Lighthouse and the GBAM Fund were fair valued using the NAV as practical expedient and has been removed from the fair value hierarchy table above.

Other Assets and Liabilities

The carrying value of accounts receivable and accounts payable approximate their fair values due to the short term duration of these items.

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Shareholders' Equity

9 Months Ended

Sep. 30, 2017

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

Common Stock

In connection with the Capacity and Services Transaction with Clinton, we issued to Clinton’s affiliate Madison Avenue Capital Holdings, Inc. 1,250,000 shares of our common stock as consideration for the capacity and services provided by Clinton. We recorded the 1,250,000 shares of common stock issued as an intangible asset and calculated a fair value of $10.1 million using our closing stock price on February 2, 2017. We recorded par value of the shares as common stock and amount in excess of the par value as additional paid-in capital. See Note 16 - Related Party Transactions for additional information.

Treasury Stock

On May 2, 2012, the Company's Board of Directors (the “Board”) authorized a share repurchase program that allowed for the repurchase of 500,000 shares of common stock. On November 14, 2016, our Board authorized a new share repurchase program under which we may repurchase up to 500,000 shares of common stock. This authorization replaces the Board’s prior May 2, 2012 share repurchase authorization. Under the share repurchase program, we may repurchase shares from time to time using a variety of methods, which may include open market transactions and privately negotiated transactions.

We purchased 27,950 shares during the three and nine months ended September 30, 2017. Since the inception of the November 14, 2016 authorization, we have repurchased 52,036 shares of common stock for $0.3 million and, as of September 30, 2017, we had remaining authorization to repurchase 447,964 additional shares. The treasury stock held as of September 30, 2017 was acquired at an average price of $37.82 per share.

Following is a summary of treasury share activity:

	Treasury Shares
Balance as of December 31, 2016	744,091
Purchases	27,950
Restricted stock grants	(86,000	)
Forfeitures and other	67,767
Balance as of September 30, 2017	753,808

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss and related activity consisted of the following:

(In millions)	Defined Benefit Plans			Foreign Currency Translation			Total
Balance as of December 31, 2016	$	(19.6	)	$	(1.0	)	$	(20.6	)
Other comprehensive income (loss) before reclassifications, net of tax	(0.8		)	0.1			(0.7		)
Amounts reclassified from accumulated other comprehensive income, net of tax	1.1			—			1.1
Reclassification	(0.1		)	—			(0.1		)
Net current period other comprehensive income	0.2			0.1			0.3
Balance as of September 30, 2017	$	(19.4	)	$	(0.9	)	$	(20.3	)

Details of amounts reclassified from accumulated other comprehensive loss and the line item in the Condensed Consolidated Statements of Operations are as follows:

	Amounts Reclassified from Accumulated Other Comprehensive Loss										Affected Line Item in the Condensed Consolidated Statements of Operations Where (Gain) Loss is Presented
	Three Months Ended September 30,					Nine Months Ended September 30,
(In millions)	2017			2016		2017			2016
Amortization of net actuarial loss	$	0.9		$	0.2	$	1.1		$	0.4	Selling, general and administrative
Pension curtailment / settlement loss	(0.8		)	0.3		(0.8		)	2.6		Restructuring and other
Subtotal	0.1			0.5		0.3			3.0
Cumulative translation adjustment	0.1			—		0.1			75.8		Discontinued operations
Total reclassifications for the period	$	0.2		$	0.5	$	0.4		$	78.8

Income taxes are not provided for cumulative translation adjustment relating to permanent investments in international subsidiaries. Reclassification adjustments are made to avoid double counting in comprehensive income (loss) items that are also recorded as part of net income (loss) and are presented net of taxes in the Consolidated Statements of Comprehensive Income (Loss).

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Segment Information

9 Months Ended

Sep. 30, 2017

Segment Reporting [Abstract]

Segment Information

Segment Information

Beginning in the fourth quarter of 2015, in conjunction with our accelerated wind-down of the Company’s Legacy Businesses, the Company changed the manner in which it evaluates the operations of the Company and makes decisions with respect to the allocation of resources. The Company operated in three reportable segments as of December 31, 2015: Storage Media and Accessories; IronKey (which, together with Storage Media and Accessories, we now refer to as our Legacy Businesses); and the Nexsan Business. We sold our IronKey business in February 2016 and have substantially completed the wind-down of the Legacy Businesses as of March 31, 2016. The Legacy Businesses are presented in our Condensed Consolidated Statements of Operations as discontinued operations and are not included in segment results for all periods presented. See Note 4 - Discontinued Operations for further information about these divestitures.

In connection with the NXSN Transaction (See Note 1 - Basis of Presentation for further information about the NXSN Transaction), all of the issued and outstanding common stock of Nexsan and CDI was transferred to NXSN in exchange for 50% of the issued and outstanding common stock of NXSN and the $25 million NXSN Note. SPPE, an affiliate of Spear Point, owns the remaining 50% issued and outstanding shares of NXSN common stock and shares of NXSN non-voting preferred stock. We entered into a stockholders agreement (the “NXSN Stockholders Agreement”) with SPPE and NXSN providing for certain oversight, management and veto rights with respect to NXSN. As a result, we have the right to designate, individually, two of the five directors serving on the NXSN board of directors (the “NXSN Board”), and to designate jointly, with SPPE, an additional independent director to serve on the NXSN Board, until the NXSN Note is paid in full. We also have approval rights with respect to certain actions proposed to be taken by NXSN, including the issuance of additional amendments to its organizational documents and issuances of additional capital stock.

As a result of the terms and conditions of the NXSN Transaction (including the NXSN Stockholders Agreement and NXSN Note), we identified NXSN as a VIE. We consolidate a VIE in our financial statements if we are deemed to be the primary beneficiary of the VIE. The primary beneficiary is the party that has the power to direct activities that most significantly impact the activities of the VIE and has the obligation to absorb losses or the right to benefits from the VIE that could potentially be significant to the VIE. Although we and SPPE share the power to direct NXSN’s activities until the NXSN Note is paid in full, we have approval rights under the NXSN Note and NXSN Stockholders Agreement with respect to certain actions proposed to be taken by NXSN. Therefore, we are determined to be the primary beneficiary and following January 23, 2017, NXSN’s financial results are included in our Condensed Consolidated Financial Statements. Until January 23, 2017, we owned 100% of the equity interests of Nexsan and CDI. Their financial results were included in our Condensed Consolidated Financial Statements as wholly-owned subsidiaries.

Pursuant to the terms of the NXSN Transaction, if, on the six month anniversary of the Closing Date, the aggregate Funded Equity Commitments are less than $10 million, then the aggregate principal amount of the NXSN Note shall be increased by an amount equal to $10 million, minus the aggregate Funded Equity Commitments. On May 1, 2017, we amended the terms of the NXSN Transaction to extend the Funded Equity Commitments to August 15, 2017. As of August 15, 2017, NXSN had sold $5.3 million of NXSN non-voting preferred stock and as a result, the aggregate principal amount of the NXSN Note was increased by $4.7 million and remains subject to further working capital adjustments pursuant to the terms of the NXSN Note. Although the time period during which NXSN was permitted to sell NXSN non-voting preferred stock has lapsed under the terms of the NXSN Transaction, we are continuing to work with SPPE to find capital solutions to sufficiently fund the continuing operations of the Nexsan Business. In the event NXSN does not raise sufficient capital to fund its continuing operations, we will continue to explore options to preserve the enterprise value of the Nexsan Business.

On February 2, 2017, we closed the Capacity and Services Transaction with Clinton. The Capacity and Services Transaction allows GBAM to access investment capacity within Clinton’s quantitative equity strategy. In addition, we have recently taken steps to build our own independent organizational foundation while leveraging Clinton’s capabilities and infrastructure. While our intention is to primarily engage in the management of third-party assets, we may make opportunistic proprietary investments from time to time that comply with applicable laws and regulations. Going forward, we will focus on our Asset Management Business as our primary operating business segment. See Note 16 - Related Party Transactions for additional information.

In June 2017, we launched the GBAM Fund which focuses on technology-driven quantitative strategies and other alternative investment strategies. As of September 30, 2017, we invested $10.0 million in the GBAM Fund. We have made the determination to consolidate the GBAM Fund and, accordingly, its financial results were included in our Condensed Consolidated Financial Statements as part of the Asset Management Business shown below.

As of September 30, 2017, the Nexsan Business and Asset Management Business are our reportable segments.

We evaluate segment performance based on revenue and operating loss. The operating loss reported in our segments excludes corporate and other unallocated amounts. Although such amounts are excluded from the business segment results, they are included in reported consolidated results. The corporate and unallocated operating loss includes costs which are not allocated to the business segments in management’s evaluation of segment performance such as litigation settlement expense, corporate expense and other expenses.

For our Asset Management Business, we include net gains from GBAM Fund activities in our performance evaluation. Net gains from GBAM Fund activities represent realized and unrealized gains and losses for the GBAM Fund.

Net revenue and operating loss from continuing operations by segment were as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2017		2016		2017		2016
Net revenue
Nexsan Business	$	9.3	$	11.5	$	27.7	$	32.8
Asset Management Business	—		—		—		—
Total net revenue	$	9.3	$	11.5	27.7		$	32.8

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In millions)	2017			2016			2017			2016
Operating loss from continuing operations
Nexsan Business	$	(2.5	)	$	(4.3	)	$	(10.4	)	$	(14.3	)
Asset Management Business	(1.2		)	—			(2.9		)	—
Total segment operating loss	(3.7		)	(4.3		)	(13.3		)	(14.3		)
Corporate and unallocated	(1.4		)	(2.1		)	(4.4		)	(8.5		)
Restructuring and other	(1.2		)	(1.3		)	(1.1		)	(7.1		)
Total operating loss	(6.3		)	(7.7		)	(18.8		)	(29.9		)
Interest income	—			—			—			0.2
Net gains from GBAM Fund activities	1.0			—			1.0			—
Other income (expense), net	0.1			0.2			(0.6		)	(0.8		)
Loss from continuing operations before income taxes	$	(5.2	)	$	(7.5	)	$	(18.4	)	$	(30.5	)

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Litigation, Commitments and Contingencies

9 Months Ended

Sep. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Litigation, Commitments and Contingencies

Litigation, Commitments and Contingencies

The Company is subject to various lawsuits, claims and other legal matters that arise in the ordinary course of conducting business (including litigation relating to our Legacy Businesses and discontinued operations). All such matters involve uncertainty and accordingly, outcomes that cannot be predicted with assurance. As of September 30, 2017, we are unable to estimate with certainty the ultimate aggregate amount of monetary liability or financial impact that we may incur with respect to these matters. It is reasonably possible that the ultimate resolution of these matters, individually or in the aggregate, could materially affect our financial condition, results of the operations and cash flows.

Intellectual Property Litigation

The Company is subject to allegations of patent infringement by our competitors as well as non-practicing entities (“NPEs”) — sometimes referred to as “patent trolls” — who may seek monetary settlements from us, our competitors, suppliers and resellers. The nature of such litigation is complex and unpredictable and, consequently, as of September 30, 2017, the Company is not able to reasonably estimate the amount of any monetary liability or financial impact that may be incurred with respect to these matters. It is reasonably possible that the ultimate resolution of these matters could materially affect our financial condition, results of operations and cash flows.

On December 31, 2014, IOENGINE, an NPE, filed suit in the District Court for the District of Delaware alleging infringement of United States Patent No. 8,539,047 by certain products we formerly sold under the IronKey brand. On February 17, 2017, following a trial, the jury returned a verdict against us in the patent infringement case brought by IOENGINE against the Company in the United States District Court for the District of Delaware. The jury awarded the IOENGINE $11.0 million in damages. As previously disclosed in the Current Report on Form 8-K we filed with the SEC on September 28, 2017, we entered into a settlement agreement with IOENGINE on September 28, 2017 resolving all claims relating to the IOENGINE lawsuit. Pursuant to the settlement agreement, (i) we paid IOENGINE $3.75 million in cash on October 3, 2017, (ii) issued to IOENGINE a promissory note (the "IOENGINE Note") in the principal amount of $4 million under which no payments are due until June 30, 2019 (except in connection with acceleration upon an event of default), and (iii) we pledged certain of our assets to secure our obligations under the IOENGINE Note.

On May 6, 2016 Nexsan Technologies Incorporated, a subsidiary of NXSN (“NTI”), filed a complaint in United States District Court for the District of Massachusetts seeking a declaratory judgment against EMC Corporation (“EMC”). NTI alleges that NTI has a priority of right to use certain of its UNITY trademarks and that NTI’s prosecution of its trademark applications with the respect to, and to use of, such trademarks does not infringe upon EMC’s trademarks. In addition, NTI seeks and injunctive relief to prevent EMC from threatening NTI with legal action related to use of UNITY trademarks, or making any public statements or statements to potential customers calling into question NTI’s right to use UNITY trademarks. EMC has answered and counterclaimed alleging that NTI’s use of the UNITY trademark, infringes EMC’s common law rights in the UNITY and EMC UNITY trademarks. On April 14, 2017, the court in the EMC UNITY matter ruled that NTI has priority over EMC to the UNITY trademark in relation to computer data storage and associated technologies. NTI intends to continue to assert its rights to the UNITY trademark in further proceedings.

Trade Payables

On January 26, 2016, CMC, a supplier of our Legacy Businesses, filed a suit in the District Court of Ramsey County Minnesota, seeking damages from the Company and the Company’s wholly-owned subsidiary Imation Latin America Corp. (“ILAC”) for alleged breach of contract. CMC also brought similar claims in Japan and the Netherlands against other of our subsidiaries. As previously disclosed in the Current Report on Form 8-K we filed with the SEC on September 18, 2017, we entered into a settlement agreement with CMC on September 15, 2017 resolving all claims relating to the CMC lawsuits. Pursuant to the settlement, (i) we agreed that our subsidiary Imation Corporation Japan ("ICJ") will cause the release and payment to CMC of approximately $9.2 million in attached assets, (ii) ICJ made a payment to CMC of $1.5 million on October 10, 2017, (iii) our subsidiary Imation Europe B.V. will cause the release and payment to CMC of approximately$825,000in attached assets, (iv) ICJ issued to CMC an unsecured promissory note (the "CMC Note") in the amount of$1.5 million, and (v) we guaranteed CMC ICJ’s obligations under the CMC Note.

Employee Matters

We received correspondence from former employees of our Legacy Businesses asserting their alleged eligibility to receive severance benefits.  Employee restructuring costs are accrued when a probable liability has been determined and the amount of such liability has been reasonably estimated. We did not have any employee restructuring accruals as of September 30, 2017.  On March 29, 2017, three former Legacy Business employees filed a lawsuit (the “Severance Action”) in the Minnesota State District Court of Ramsey County asserting state law claims for non-payment of allegedly promised severance benefits.  On April 28, 2017, we removed the Severance Action to the U.S. District Court for the District of Minnesota, based on our position that the Severance Action should properly be litigated in federal court because the alleged severance claims are, in essence, based on alleged rights under the Company’s ERISA severance plan.  On May 5, 2017, the Company also moved that the U.S. District Court dismiss the Severance Action based on our position that the plaintiffs’ state law claims are preempted by ERISA and the plaintiffs failed to follow the plan’s appeal procedures as required by ERISA. On July 21, 2017, the U.S. District Court remanded the Severance Action to Minnesota State District Court for further proceedings on the basis that plaintiffs plausibly alleged certain state law claims that may not arise under ERISA. We believe these state law claims are entirely without merit and intend to vigorously defend our position.

Copyright Levies

In many European Union (EU) member countries, the sale of certain of our Legacy Business products is subject to a private copyright levy. The levies are intended to compensate copyright holders with “fair compensation” for the harm caused by private copies made by natural persons of protected works under the European Copyright Directive, which became effective in 2002 (the “Directive”). Levies are generally charged directly to the importer of the product upon the sale of the products. Payers of levies remit levy payments to collecting societies which, in turn, are expected to distribute funds to copyright holders. Levy systems of EU member countries must comply with the Directive, but individual member countries are responsible for administering their own systems. Since implementation, the levy systems have been the subject of numerous litigation and law-making activities. On October 21, 2010, the Court of Justice of the European Union (the “CJEU”) ruled that fair compensation is an autonomous European law concept that was introduced by the Directive and must be uniformly applied in all EU member states. The CJEU stated that fair compensation must be calculated based on the harm caused to the authors of protected works by private copying. The CJEU ruling made clear that copyright holders are only entitled to fair compensation payments (funded by levy payments made by importers of applicable products, including the Company) when sales of optical media are made to natural persons presumed to be making private copies. Within this disclosure, we use the term “commercial channel sales” when referring to products intended for uses other than private copying and “consumer channel sales” when referring to products intended for uses including private copying.

Since the Directive was implemented in 2002, we estimate that we have paid in excess of $100 million in levies to various ongoing collecting societies related to commercial channel sales. Based on the CJEU’s October 2010 ruling and subsequent litigation and law-making activities, we believe that these payments were not consistent with the Directive and should not have been paid to the various collecting societies. Accordingly, subsequent to the October 21, 2010 CJEU ruling, we began withholding levy payments to the various collecting societies and, in 2011, we reversed our existing accruals for unpaid levies related to commercial channel sales. However, we continued to accrue, but not pay, a liability for levies arising from consumer channel sales, in all applicable jurisdictions except Italy and France due to certain court rulings in those jurisdictions. As of September 30, 2017 and December 31, 2016, we had accrued liabilities of $5.5 million and $4.9 million, respectively, associated with levies related to consumer channel sales for which we are withholding payment. These accruals are recorded as “Other current liabilities” on the Company’s Consolidated Balance Sheets (and not within discontinued operations). The Company’s management oversees copyright levy matters and continues to explore options to resolve these matters.

Since the October 2010 CJEU ruling, we evaluate quarterly on a country-by-country basis whether (i) levies should be accrued on current period commercial and/or consumer channel sales; and, (ii) whether accrued, but unpaid, copyright levies on prior period consumer channel sales should be reversed. Our evaluation is made on a jurisdiction-by-jurisdiction basis and considers ongoing and cumulative developments related to levy litigation and law-making activities within each jurisdiction as well as throughout the EU.

The Company is subject to several pending or threatened legal actions by the individual European national levy collecting societies in relation to private copyright levies under the Directive. Those actions generally seek payment of the commercial and consumer optical levies withheld by GlassBridge. GlassBridge has corresponding claims in those actions seeking reimbursement of levies improperly collected by those collecting societies. We are subject to threatened actions by certain customers of GlassBridge seeking reimbursement of funds they allege related to commercial levies that they claim they should not have paid. Although these actions are subject to the uncertainties inherent in the litigation process, based on the information presently available to us, management does not expect the ultimate resolution of these actions will have a material adverse effect on our financial condition, results of operations or cash flows. We anticipate that additional court decisions may be rendered that may directly or indirectly impact our levy exposure in specific European countries which could cause us to review our levy exposure in those countries.

France. We have overpaid levies related to sales into the Company’s commercial channel in an amount of $55.1 million. We adopted a practice of offsetting ongoing levy liability with the French collecting society for GlassBridge’s sales in the consumer channel against the $55.1 million we have overpaid for copyright levies in France (due to us paying levies on commercial channels sales prior to the October 21, 2010 CJEU ruling). During the fourth quarter of 2013, GlassBridge reversed $9.5 million of French copyright levies (existing at the time of a 2013 French court decision) that arose from consumer channel sales that had been accrued but not paid to cost of sales. As of September 30, 2017 the Company had offset approximately $14.4 million. We believe that we have utilized a methodology, and have sufficient documentation and evidence, to fully support our estimates that we have overpaid $55.1 million to the French collection society of levies on commercial channel sales and that we have incurred (but not paid) $14.4 million of levies on consumer channel sales in France. However, such amounts are currently subject to challenge in court and there is no certainty that our estimates would be upheld and supported. In December 2012, GlassBridge filed a complaint against the French collection society, Copie France, for reimbursement of the $55.1 million in commercial channel levies that GlassBridge had paid prior to October 2010. A hearing occurred on December 8, 2015, in the High Court of Justice (Tribunal de Grande Instance de Paris) on GlassBridge Europe’s claim and Copie France’s counterclaim. On April 8, 2016, the Paris District Court rejected all of GlassBridge Europe’s claims finding that the European Union law arguments raised by GlassBridge were inapplicable and relied solely on French law to grant Copie France’s counterclaims. GlassBridge Europe has filed a notice of appeal which suspends enforcement of the ruling and we anticipate that an appellate hearing and decision could occur during 2018. GlassBridge believes Copie France’s counterclaims are without merit and intends to defend its position vigorously. Despite the April 2016 ruling of the Paris District Court, the Company does not believe it to be probable that it will have to make any copyright levy payments in the future to Copie France and, accordingly, has not recorded an accrual for this matter.

Germany. During the first quarter of 2015, GlassBridge reversed $2.8 million accrual for German copyright levies on optical products as the result of a favorable German court decision retroactively setting levy rates at a level much lower than the rates sought by the German collecting society. The reversal was recorded as a reduction of cost of sales. At September 30, 2017, the further recovery of some or all of the copyright levies previously paid on commercial sales in EU jurisdictions represents a gain contingency that has not yet met the required criteria for recognition in our financial statements. There is no assurance that we will realize any of this gain contingency.

Italy. In December 2015, we settled our claim for reimbursement of the levies that the Company had paid for sales into its commercial channel with the Italian collecting society, S.I.A.E. The settlement was for $1.0 million and is recorded as a reduction in cost of sales. There are no ongoing levy disputes with respect to Italy.

Canada. The Canadian Private Copying Collective (“CPCC”) filed suit in the Ontario Superior Court against our subsidiary Imation Enterprises Corp. (“IEC”) seeking damages of approximated CAD 1 million and penalties and interest of approximately CAD 5 million. On September 29, 2017, after we provided discovery materials to the CPCC which we believe demonstrated that the CPCC’s claims were entirely without merit, the CPCC declined to pursue the lawsuit further, issued to IEC a full and final release of the claims underlying the lawsuit and the lawsuit was dismissed on October 4, 2017.

Indemnification Obligations

In the normal course of business, we periodically enter into agreements that incorporate general indemnification language. Performance under these indemnities would generally be triggered by a breach of terms of the contract or by a supportable third-party claim. There have historically been no material losses related to such indemnifications. As of September 30, 2017 and 2016, estimated liability amounts associated with such indemnifications were not material.

Environmental Matters

Our Legacy Business operations and indemnification obligations resulting from our spinoff from 3M subject us liabilities arising from a wide range of federal, state and local environmental laws. For example, from time to time we have received correspondence from 3M notifying us that we may have a duty to defend and indemnify 3M with respect to certain environmental claims such as remediation costs. Environmental remediation costs are accrued when a probable liability has been determined and the amount of such liability has been reasonably estimated. These accruals are reviewed periodically as remediation and investigatory activities proceed and are adjusted accordingly. We did not have any environmental accruals as of September 30, 2017. Compliance with environmental regulations has not had a material adverse effect on our financial results.

Contingencies

On October 14, 2015, the Company acquired 100% of the stock of CDI for a total purchase price of $6.7 million. The purchase price included future contingent consideration totaling up to $5 million (considered to have an estimated fair value of $0.8 million at the time of acquisition). We used the real option valuation technique for calculating the estimated fair value of contingent consideration with a 15% discount rate. The contingent consideration arrangement included the potential for three separate payments of cash and unregistered shares of GlassBridge common stock to the extent that certain defined revenue targets were achieved for the three consecutive six-month periods commencing January 1, 2016. The period of measurement for the third and final payment was January 1, 2017 to June 30, 2017, and the revenue target was not met for this or any other period. Accordingly, we have not made any contingent purchase price payments for CDI as of September 30, 2017. The Company reversed the remaining accruals for $0.3 million and the 57,482 shares for issuance. Upon the acquisition of CDI, we integrated CDI with the Nexsan Business, both operationally and with respect to its management team. In addition, the Company contributed all of the issued and outstanding stock of CDI to Nexsan prior to the consummation of the NXSN Transaction which closed on January 23, 2017. See Note 14 - Segment Information for more information.

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Related Party Transactions

9 Months Ended

Sep. 30, 2017

Restructuring and Related Activities [Abstract]

Related Party Transactions

Related Party Transactions

Mr. Kasoff serves as president of RSI, a management consulting firm specializing in assisting companies and capital stakeholders in troubled business environments. Pursuant to a consulting agreement between the Company and RSI dated August 17, 2015 and subsequent amendments, RSI performed consulting services for the Company for the period from August 8, 2015 to March 30, 2016, including assisting the Company with a review and assessment of the Company’s business and the formulation of a business plan to enhance shareholder value going forward. On July 15, 2016, the Company entered into a consulting agreement with RSI to perform consulting services from July 18, 2016 through August 14, 2016 with an option for a three week extended term. Under the consulting agreement, RSI could receive consulting fees of up to $125,000 per week during the initial term. Consulting fees for the extended term, if elected by the Company, could not exceed $500,000. RSI received consulting fees of$0.3 millionand$2.4 million for the three and nine months ended September 30, 2016, respectively. These fees are recorded in restructuring and other charges. Mr. Kasoff resigned from his position as the Company’s Chief Restructuring Officer on September 8, 2016 and from the Company’s Board on February 2, 2017.

In connection with the CMC settlement, RSI received consulting fees of $0.6 million for the three and nine months ended September 30, 2017. These fees are recorded in restructuring and other charges. See Note 15 - Litigation, Commitments and Contingencies for additional information.

On October 14, 2015, the Company acquired substantially all of the equity of CDI for approximately $6.7 million in cash, shares of the Company’s common stock and repayment of debt. Mr. Barrall is the founder and, at the time of acquisition, was also the Chief Executive Officer of CDI. In consideration for his CDI common shares and options to purchase CDI common shares, Mr. Barrall received approximately $184,000 at the time of the acquisition and he was eligible to receive up to an additional $260,000 to the extent certain CDI revenue targets are achieved for the 3 consecutive six-month periods commencing January 1, 2016. As of September 30, 2017, none of the revenue targets were met and no such additional payments had been made to Mr. Barrall.

On February 8, 2016, the Company entered into a subscription agreement to invest up to $20 million of its excess cash from various Company subsidiaries in Clinton Lighthouse. Clinton Lighthouse is a market neutral fund which provides daily liquidity to its investors. Clinton Lighthouse is managed by Clinton. Pursuant to the arrangement, Clinton agreed to waive its customary management fee and agreed to the receipt of any consideration pursuant to incentive compensation in the form of the Company’s common stock at a value of $10.00 per share (as adjusted to reflect the Reverse Stock Split). The closing price of the Company’s common stock on February 8, 2016 was $6.50 (as adjusted to reflect the Reverse Stock Split). The Board, in conjunction with management, reviewed various funds and voted to approve this investment, with Mr. De Perio abstaining from the vote and recusing himself from all related discussions and deliberations. Mr. De Perio is the Chairman of the Board and a Senior Portfolio Manager at Clinton. On March 17, 2016, the Board approved the elimination of the 25% limitation on the amount of the Company’s excess cash that may be invested, such that the Company may now invest up to $35 million of its excess cash in Clinton Lighthouse. On April 29, 2016, the Company and Clinton entered into an amended and restated letter agreement in order to adjust the price at which the Company’s stock would be valued for purposes of paying the incentive fee thereunder from $10.00 to $18.00 (each as adjusted to reflect the Reverse Stock Split) beginning May 1, 2016, subject to adjustment based on the volume weighted average price of the Company’s common stock. As of September 30, 2017, the Company paid Clinton $0.5 million associated with the performance fees earned in 2016.

On January 31, 2017, the Company held a special meeting of the stockholders of the Company at which the stockholders approved the issuance of up to 1,500,000 shares (the “Capacity Shares”) of the Company’s common stock (as adjusted to reflect the Reverse Stock Split), par value $0.01 per share (“Common Stock”), pursuant to the Subscription Agreement, dated as of November 22, 2016, by and between the Company and Clinton, as amended by Amendment No. 1 to the Subscription Agreement, dated as of January 9, 2017 (as so amended, the “Subscription Agreement”). Pursuant to the terms of the Subscription Agreement, on February 2, 2017 (the “Initial Closing Date”), the Company entered into the Capacity and Services Transaction with Clinton Group and GBAM. As consideration for the capacity and services Clinton has agreed to provide under the Capacity and Services Transaction and pursuant to the terms of the Subscription Agreement, the Company issued 1,250,000 shares of the Company’s common stock (as adjusted to reflect the Reverse Stock Split) to Madison Avenue Capital Holdings, Inc. (“Madison”), an affiliate of Clinton, on the Initial Closing Date. The closing price of the Company’s common stock on the Initial Closing Date was $8.10. The Company also entered into a Registration Rights Agreement with Madison on the Initial Closing Date, relating to the registration of the resale of the Capacity Shares as well as a letter agreement with Madison pursuant to which Madison has agreed to a three-year lockup with respect to any Capacity Shares issued to it.

As of September 30, 2017, the short term investment balance in Clinton Lighthouse was $2.2 million compared to $19.5 million as of December 31, 2016. The decrease of $17.3 million mainly relates to $16.9 million of redemptions and approximately $0.4 million of unrealized loss for the nine months ended September 30, 2017. Unrealized loss for the nine months ended September 30, 2016 was approximately $0.7 million, which includes $0.5 million accrued performance fees. We recorded the unrealized losses within “Other income (expense), net” in the Condensed Consolidated Statements of Operations. Pursuant to the Capacity and Services Agreement, the Company will no longer incur management or performance fees related to our investment in Clinton Lighthouse.

Mr. Strauss serves as our Chief Operating Officer pursuant to the terms of a Services Agreement we entered into with Clinton on March 2, 2017 (the “Services Agreement”). The Services Agreement provides that Clinton will make available one of its employees to serve as Chief Operating Officer of the Company, and any subsidiary of the Company we may designate from time to time, as well as provide to GBAM, our investment adviser subsidiary, certain additional services. Pursuant to the terms of the Services Agreement, we may request that Clinton designate a mutually agreeable replacement employee to serve as Chief Operating Officer or terminate Clinton’s provision of an employee to us for such role. Under the Services Agreement, we have agreed to pay Clinton $125,000 for an initial term concluding on May 31, 2017, which term will automatically renew unless terminated for successive three-month terms at a rate of $125,000 per renewal term. If the Services Agreement is terminated prior to the conclusion of a term, we will be reimbursed for the portion of the prepaid fee attributable to the unused portion of such term. Clinton will continue to pay Mr. Strauss’s compensation and benefits and we have agreed to pay or reimburse Mr. Strauss for his reasonable expenses. Pursuant to the terms of the Services Agreement, we have also agreed to indemnify Mr. Strauss, Clinton, any substitute Chief Operating Officer and certain of their affiliates for certain losses. As of September 30, 2017, the Company paid Clinton $375,000 under this Services Agreement, of which $291,668 is recorded within “Selling, general and administrative” in our Condensed Consolidated Statements of Operations.

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Subsequent Events

9 Months Ended

Sep. 30, 2017

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Our cash and cash equivalents balance as of September 30, 2017 included $10.0 million we invested in the GBAM fund. On October 1, 2017, we redeemed $5.0 million from the GBAM Fund. The proceeds from the redemption were used in part to satisfy payment obligations to IOENGINE, CMC and RSI related to the settlement of our lawsuits. See Note 14 - Segment Information for additional information on the GBAM Fund. See also Note 15 - Litigation, Commitments and Contingencies for additional information on the CMC and IOENGINE settlements and Note 16 - Related Party Transactions for additional information on the RSI payment obligation.

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Recently Issued or Adopted Accounting Pronouncements (Policies)

9 Months Ended

Sep. 30, 2017

Accounting Policies [Abstract]

Recently Issued or Adopted Accounting Pronouncements

Recently Issued or Adopted Accounting Pronouncements

In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-11, Simplifying the Measurement of Inventory, which modifies existing requirements regarding measuring inventory at the lower of cost or market. Under existing standards, the market amount requires consideration of replacement cost, net realizable value (“NRV”), and NRV less an approximately normal profit margin. The new ASU replaces market with NRV, defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This eliminates the need to determine and consider replacement cost or NRV less an approximately normal profit margin when measuring inventory. For GlassBridge, this standard was effective prospectively beginning January 1, 2017, with early adoption permitted. This standard did not have a material impact on the Company’s consolidated results of operations or financial condition.

In March 2016, the FASB issued ASU No. 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which amends ASU No. 2014-09, Revenue from Contracts with Customers, to clarify principal versus agent guidance in situations in which a revenue transaction involves a third party in providing goods or services to a customer. In such circumstances, an entity must determine whether the nature of its promise to the customer is to provide the underlying goods or services (i.e., the entity is the principal in the transaction) or to arrange for the third party to provide the underlying goods or services (i.e., the entity is the agent in the transaction). To determine the nature of its promise to the customer, the entity must first identify each specified good or service to be provided to the customer and then (before transferring it) assess whether it controls each specified good or service. The new ASU clarifies how an entity should identify the unit of accounting (the specified good or service) for the principal versus agent evaluation, and how it should apply the control principle to certain types of arrangements, such as service transactions, by explaining what a principal controls before the specified good or service is transferred to the customer. ASU No. 2016-08 will be effective for fiscal years beginning after December 15, 2017, including interim periods within that year, concurrent with ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The Company is evaluating the impact this standard will have on the Company’s consolidated results of operations and financial condition.

In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718), which simplified certain aspects of the accounting for share-based payment transactions, including income taxes, classification of awards and classification in the statement of cash flows. ASU No. 2016-09 was effective for the Company beginning in its first quarter of 2017. This standard did not have a material impact on the Company’s consolidated results of operations or financial condition.

In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing, which amends ASU No. 2014-09, Revenue from Contracts with Customers. In terms of identifying performance obligations in a revenue arrangement, the amendments clarify how entities would determine whether promised goods or services are separately identifiable from other promises in a contract and, therefore, would be accounted for separately. The guidance would also allow entities to disregard goods or services that are immaterial in the context of a contract and provides an accounting policy election to account for shipping and handling activities as fulfillment costs rather than as additional promised services. With regard to the licensing, the amendments clarify how an entity would evaluate the nature of its promise in granting a license of intellectual property, which determines whether the entity recognizes revenue over time or at a point in time. The standard also clarifies certain other aspects relative to licensing. ASU No. 2016-10 will be effective for fiscal years beginning after December 15, 2017, including interim periods within that year, concurrent with ASU No. 2014-09. The Company is evaluating the impact this standard will have on the Company’s consolidated results of operations and financial condition.

In October 2016, the FASB issued ASU No. 2016-17, Interests Held through Related Parties That Are under Common Control, which modifies existing guidance with respect to how a decision maker that holds an indirect interest in a VIE through a common control party determines whether it is the primary beneficiary of the VIE as part of the analysis of whether the VIE would need to be consolidated. Under the ASU, a decision maker would need to consider only its proportionate indirect interest in the VIE held through a common control party. Previous guidance had required the decision maker to treat the common control party’s interest in the VIE as if the decision maker held the interest itself. As a result of the ASU, in certain cases, previous consolidation conclusions may change. The standard was effective January 1, 2017 with retrospective application to January 1, 2016. This standard did not have a material impact on the Company’s consolidated results of operations or financial condition.

In February 2017, the FASB issued ASU No. 2017-06, Employee Benefit Plan Master Trust Reporting. This ASU provides guidance for reporting by an employee benefit plan for its interest in a master trust. The amendment is effective for fiscal years beginning after December 15, 2018. The amendment should be applied retrospectively with earlier adoption permitted. The Company is in the process of determining the effect of adopting this standard on the Company’s consolidated results of operations and financial condition.

In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which amends the requirements related to the presentation of the components of net periodic benefit cost for an entity’s sponsored defined benefit pension and other postretirement plans. This ASU requires entities to (1) disaggregate the current-service-cost component from the other components of net benefit cost (the “other components”) and present it with other current compensation costs for related employees in the income statement and (2) present the other components elsewhere in the income statement and outside of income from operations if such a subtotal is presented. In addition, only service costs are eligible for capitalization. The standard will be effective in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the impact of adopting this standard on the Company’s consolidated results of operations and financial condition.

In May 2017, the FASB issued ASU No. 2017-09, Scope of Modification Accounting. This ASU provides clarification on when modification accounting should be used for changes to the terms and conditions of a share-based payment award. This ASU does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. The standard will be effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The amendment should be applied prospectively to an award modified on or after the adoption date. The Company is currently assessing the impact of adopting this standard on the Company’s consolidated results of operations and financial condition.

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Gain (Loss) per Common Share (Tables)

9 Months Ended

Sep. 30, 2017

Earnings Per Share [Abstract]

Computation of the Weighted Average Basic and Diluted Loss Per Share

The following table sets forth the computation of the weighted average basic and diluted income (loss) per share:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In millions, except for per share amounts)	2017			2016			2017			2016
Numerator:
Loss from continuing operations	$	(1.7	)	$	(7.3	)	$	(14.9	)	$	(28.2	)
Less: loss attributable to noncontrolling interest	(2.0		)	—			(5.5		)	—
Net income (loss) from continuing operations attributable to GlassBridge Enterprises, Inc.	0.3			(7.3		)	(9.4		)	(28.2		)
Income (loss) from discontinued operations, net of income taxes	7.7			0.2			4.5			(75.6		)
Net income (loss) attributable to GlassBridge Enterprises, Inc.	$	8.0		$	(7.1	)	$	(4.9	)	$	(103.8	)
Denominator:
Weighted average number of common shares outstanding during the period - basic and diluted	5.0			3.7			4.6			3.7
Income (loss) per common share attributable to GlassBridge common shareholders — basic and diluted:
Continuing operations	$	0.06		$	(1.97	)	$	(2.04	)	$	(7.62	)
Discontinued operations	1.54			0.05			0.98			(20.43		)
Net income (loss)	$	1.60		$	(1.92	)	$	(1.06	)	$	(28.05	)
Anti-dilutive shares excluded from calculation	0.3			0.4			0.3			0.4

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Discontinued Operations (Tables)

9 Months Ended

Sep. 30, 2017

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Key Components of Discontinued Operations

The key components of the results of discontinued operations were as follows:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In millions)	2017			2016			2017			2016
Net revenue	$	0.3		$	—		$	0.3		$	2.0
Cost of goods sold	0.2			—			0.2			0.6
Gross profit	0.1			—			0.1			1.4
Selling, general and administrative	1.3			0.8			4.2			3.6
Research and development	—			—			—			0.5
Restructuring and other	(13.2		)	(0.7		)	(13.6		)	(0.4		)
Reclassification of cumulative translation adjustment	—			—			—			75.8
Other (income) expense	0.8			(0.4		)	1.7			(0.6		)
Income (loss) from discontinued operations, before income taxes	11.2			0.3			7.8			(77.5		)
Gain on sale of discontinued businesses, before income taxes	—			—			—			3.8
Income tax provision	(3.5		)	(0.1		)	(3.3		)	(1.9		)
Income (loss) from discontinued operations, net of income taxes	$	7.7		$	0.2		$	4.5		$	(75.6	)

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Intangible Assets and Goodwill (Tables)

9 Months Ended

Sep. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

Intangible assets consist of developed technology recorded as a result of the acquisition of CDI on October 14, 2015 and intangible assets acquired when we closed the Capacity and Services Transaction with Clinton on February 2, 2017. The Capacity and Services Transaction allows for GBAM to place up to $1 billion of investment capacity under Clinton’s management within Clinton’s quantitative equity strategy for an initial term of five years, for which the Company issued to Clinton’s affiliate Madison Avenue Capital Holdings, Inc. 1,250,000 shares of its common stock as consideration. We recorded the 1,250,000 shares of common stock issued as an intangible asset and calculated a fair value of $10.1 million using our closing stock price on February 2, 2017. We are amortizing the $10.1 million on a straight-line basis over the five year term. See Note 16 - Related Party Transactions for additional information.

(In millions)	Capacity Agreement			Developed Technology			Total
September 30, 2017
Cost	$	10.1		$	4.3		$	14.4
Accumulated amortization	(1.4		)	(1.4		)	(2.8		)
Intangible assets, net	$	8.7		$	2.9		$	11.6
December 31, 2016
Cost	$	—		$	4.3		$	4.3
Accumulated amortization	—			(0.9		)	(0.9		)
Intangible assets, net	$	—		$	3.4		$	3.4

Schedule of Amortization Expense for Intangible Assets

Amortization expense for intangible assets consisted of the following:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2017		2016		2017		2016
Amortization expense	$	0.7	$	0.2	$	1.9	$	0.6

Schedule of Intangible Assets Estimated Amortization Expense

Estimated amortization expense for the remainder of 2017 and each of the next four years is as follows:

(In millions)	2017 (Remainder)		2018		2019		2020		2021
Amortization expense	$	0.7	$	2.7	$	2.7	$	2.7	$	2.6

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Restructuring and Other Expense (Tables)

9 Months Ended

Sep. 30, 2017

Restructuring and Related Activities [Abstract]

Components of Restructuring and Other Expense

The components of our restructuring and other expense included in the Condensed Consolidated Statements of Operations were as follows:

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(In millions)	2017			2016		2017			2016
Restructuring Expense:
Severance and related	$	0.1		$	0.4	$	1.0		$	0.4
Loss on abandonment of unused property, plant and equipment	1.1			—		1.1			—
Other(1)	(0.8		)	—		(1.7		)	—
Total Restructuring	$	0.4		$	0.4	$	0.4		$	0.4
Other Expense:
Pension settlement/curtailment (Note 9)	$	0.8		$	0.3	0.8			2.6
Asset disposals / write down	—			—		—			0.1
Other(2)	—			0.6		(0.1		)	4.0
Total Other	$	0.8		$	0.9	$	0.7		$	6.7
Total Restructuring and Other	$	1.2		$	1.3	$	1.1		$	7.1

⁽¹⁾ For the three months ended September 30, 2017, other includes $0.8 million net gain from an asset sale. For the nine months ended September 30, 2017, other includes $1.0 million net gain from an asset sale, $0.3 million reversal of contingent consideration obligations related to the CDI acquisition (see Note 15 - Litigation, Commitments and Contingencies for additional information), and $0.4 million reversal of other employee costs. We have considered these costs to be attributable to our corporate activities and, therefore, they are not part of our discontinued operations.

⁽²⁾ For the three months ended September 30, 2016, other includes consulting expenses of $0.3 million and $0.2 million for Realization Services, Inc. (See Note 16 - Related Party Transactions for additional information) and Otterbourg P.C., respectively and $0.1 million for other consulting fees. For the nine months ended September 30, 2016, other includes consulting expenses of $2.4 million and $1.4 million for Realization Services, Inc. and Otterbourg P.C., respectively, a net credit of $1.9 million for property tax refund for the former Oakdale site, as well as $2.1 million for other employee costs and consulting fees directly attributable to our Restructuring Plan. We have considered these costs to be attributable to our corporate activities and, therefore, they are not part of our discontinued operations.

Schedule of Restructuring Reserve Activity

Activity related restructuring accruals was as follows:

(In millions)	Severance and Related
Accrued balance at December 31, 2016	$	—
Charges	0.6
Usage and payments	(0.4		)
Accrued balance at March 31, 2017	$	0.2
Charges	0.3
Usage and payments	(0.2		)
Accrued balance at June 30, 2017	$	0.3
Usage and payments	(0.3		)
Accrued balance at September 30, 2017	$	—

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Stock-Based Compensation for Continuing Operations

Stock-based compensation for continuing operations consisted of the following:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2017		2016		2017		2016
Stock-based compensation expense	$	0.2	$	0.2	$	0.3	$	0.6

Summary of Stock Option Activity

The following table summarizes our stock option activity:

	Stock Options		Weighted Average Exercise Price
Outstanding December 31, 2016	286,707		$	77.50
Granted	—		—
Exercised	—		—
Canceled	(40,213	)	128.72
Forfeited	(6,602	)	23.46
Outstanding September 30, 2017	239,892		$	70.41
Exercisable as of September 30, 2017	210,943		$	78.15

Summary of Weighted Average Assumptions Used in the Valuation of Stock Options

The following table summarizes our weighted average assumptions used in the Black-Scholes valuation of stock options:

	Nine Months Ended
	September 30,
	2017		2016
Volatility	44.3	%	41.0	%
Risk-free interest rate	1.6	%	1.8	%
Expected life (months)	72		72
Dividend yield	—		—

Summary of Restricted Stock Activity

The following table summarizes our restricted stock activity:

	Restricted Stock		Weighted Average Grant Date Fair Value Per Share
Nonvested as of December 31, 2016	79,926		$	20.63
Granted	86,000		5.85
Grant adjustments	(324	)	38.00
Vested	(2,071	)	17.57
Forfeited	(67,206	)	22.84
Nonvested as of September 30, 2017	96,325		$	5.91

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Retirement Plans (Tables)

9 Months Ended

Sep. 30, 2017

Retirement Benefits [Abstract]

Components of Net Periodic Pension (Credit) Cost

Components of net periodic pension (credit) cost included the following:

	United States						United States
	Three Months Ended September 30,						Nine Months Ended September 30,
(In millions)	2017			2016			2017			2016
Interest cost	$	0.7		$	0.7		$	1.9		$	2.2
Expected return on plan assets	(0.9		)	(0.9		)	(2.5		)	(2.8		)
Amortization of net actuarial loss	0.1			0.1			0.3			0.3
Net periodic pension credit	(0.1		)	(0.1		)	(0.3		)	(0.3		)
Settlement loss	0.8			0.3			0.8			2.6
Total pension (credit) cost	$	0.7		$	0.2		$	0.5		$	2.3

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2017

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following table provides information by level for assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016:

	September 30, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Assets:
Trading securities	$	0.3	$	0.3			$	—
	December 31, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Assets:
Trading securities	$	2.5	$	2.5			$	—
Liabilities:
Contingent consideration associated with CDI acquisition	$	0.3	$	—	$	—	$	0.3

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Shareholders' Equity (Tables)

9 Months Ended

Sep. 30, 2017

Equity [Abstract]

Schedule of Treasury Share Activity

Following is a summary of treasury share activity:

	Treasury Shares
Balance as of December 31, 2016	744,091
Purchases	27,950
Restricted stock grants	(86,000	)
Forfeitures and other	67,767
Balance as of September 30, 2017	753,808

Schedule of Accumulated Other Comprehensive Loss and Related Activity

Accumulated other comprehensive loss and related activity consisted of the following:

(In millions)	Defined Benefit Plans			Foreign Currency Translation			Total
Balance as of December 31, 2016	$	(19.6	)	$	(1.0	)	$	(20.6	)
Other comprehensive income (loss) before reclassifications, net of tax	(0.8		)	0.1			(0.7		)
Amounts reclassified from accumulated other comprehensive income, net of tax	1.1			—			1.1
Reclassification	(0.1		)	—			(0.1		)
Net current period other comprehensive income	0.2			0.1			0.3
Balance as of September 30, 2017	$	(19.4	)	$	(0.9	)	$	(20.3	)

Schedule of Amounts Reclassified from Accumulated Other Comprehensive Loss

Details of amounts reclassified from accumulated other comprehensive loss and the line item in the Condensed Consolidated Statements of Operations are as follows:

	Amounts Reclassified from Accumulated Other Comprehensive Loss										Affected Line Item in the Condensed Consolidated Statements of Operations Where (Gain) Loss is Presented
	Three Months Ended September 30,					Nine Months Ended September 30,
(In millions)	2017			2016		2017			2016
Amortization of net actuarial loss	$	0.9		$	0.2	$	1.1		$	0.4	Selling, general and administrative
Pension curtailment / settlement loss	(0.8		)	0.3		(0.8		)	2.6		Restructuring and other
Subtotal	0.1			0.5		0.3			3.0
Cumulative translation adjustment	0.1			—		0.1			75.8		Discontinued operations
Total reclassifications for the period	$	0.2		$	0.5	$	0.4		$	78.8

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2017

Segment Reporting [Abstract]

Schedule of Net Revenue and Operating Income (Loss) by Segment

Net revenue and operating loss from continuing operations by segment were as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2017		2016		2017		2016
Net revenue
Nexsan Business	$	9.3	$	11.5	$	27.7	$	32.8
Asset Management Business	—		—		—		—
Total net revenue	$	9.3	$	11.5	27.7		$	32.8

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In millions)	2017			2016			2017			2016
Operating loss from continuing operations
Nexsan Business	$	(2.5	)	$	(4.3	)	$	(10.4	)	$	(14.3	)
Asset Management Business	(1.2		)	—			(2.9		)	—
Total segment operating loss	(3.7		)	(4.3		)	(13.3		)	(14.3		)
Corporate and unallocated	(1.4		)	(2.1		)	(4.4		)	(8.5		)
Restructuring and other	(1.2		)	(1.3		)	(1.1		)	(7.1		)
Total operating loss	(6.3		)	(7.7		)	(18.8		)	(29.9		)
Interest income	—			—			—			0.2
Net gains from GBAM Fund activities	1.0			—			1.0			—
Other income (expense), net	0.1			0.2			(0.6		)	(0.8		)
Loss from continuing operations before income taxes	$	(5.2	)	$	(7.5	)	$	(18.4	)	$	(30.5	)

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Basis of Presentation - (Details) $ in Millions	Feb. 21, 2017 shares	Sep. 30, 2017 USD ($) shares	Aug. 15, 2017 USD ($)	Feb. 20, 2017 shares	Jan. 31, 2017 shares	Jan. 23, 2017 USD ($)	Jan. 22, 2017	Dec. 31, 2016 USD ($) shares
Related Party Transaction [Line Items]
Non-voting preferred stock, issued		$ 0.0						$ 0.0
Reverse stock split conversion ratio	0.1
Common stock, shares authorized (in shares) | shares	10,000,000	10,000,000		100,000,000	1,500,000			10,000,000
NXSN Acquisition Corp
Related Party Transaction [Line Items]
Noncontrolling interest, percentage held by noncontrolling owners						50.00%
Senior secured convertible promissory note						$ 25.0
Noncontrolling interest, percentage held by parent						50.00%	100.00%
Non-voting preferred stock, outstanding		$ 10.0
Non-voting preferred stock, issued		$ 5.6	$ 5.3

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Gain (Loss) per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Numerator:
Loss from continuing operations	$ (1,700,000)	$ (7,300,000)	$ (14,900,000)	$ (28,200,000)
Less: loss attributable to noncontrolling interest	(2,000,000)	0	(5,500,000)	0
Net income (loss) from continuing operations attributable to GlassBridge Enterprises, Inc.	300,000	(7,300,000)	(9,400,000)	(28,200,000)
Income (loss) from discontinued operations, net of income taxes	7,700,000	200,000	4,500,000	(75,600,000)
Net income (loss) attributable to GlassBridge Enterprises, Inc.	$ 8,000,000	$ (7,100,000)	$ (4,900,000)	$ (103,800,000)
Denominator:
Weighted average number of common shares outstanding during the period - basic and diluted (in shares)	5.0	3.7	4.6	3.7
Income (loss) per common share attributable to GlassBridge common shareholders — basic and diluted:
Continuing operations (in dollars per share)	$ 0.06	$ (1.97)	$ (2.04)	$ (7.62)
Discontinued operations (in dollars per share)	1.54	0.05	0.98	(20.43)
Net income (loss) (in dollars per share)	$ 1.60	$ (1.92)	$ (1.06)	$ (28.05)
Anti-dilutive shares excluded from calculation (in shares)	0.3	0.4	0.3	0.4

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Discontinued Operations - Narrative (Details) $ in Millions	3 Months Ended			9 Months Ended
	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)	Feb. 29, 2016 agreement
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Discontinued operation, foreign currency translation loss	$ 0.0	$ 0.0		$ 0.0	$ 75.8
Services fee revenue (less than)	0.1			0.1
Gain on asset claim recovery	0.6
Current assets of discontinued operations	10.3			10.3		$ 10.5
Current liabilities of discontinued operations	22.4			22.4		39.7
CMC Magnetic Corp
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Litigation settlement	7.3
IOENGINE LLC
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Litigation settlement	3.3
Legacy Businesses
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain on resolution of customer balances	2.4
GlassBridge Europe
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Services fee revenue (less than)	0.3
GlassBridge Europe | Dutch Counterparty
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Services fee due (less than for the Dutch Counterparty)	0.1			0.1
Cost of goods sold	0.2			0.2
GlassBridge Europe | French Purchaser
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Services fee revenue (less than)				0.3
Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Discontinued operation, foreign currency translation loss	0.0	$ 0.0	$ 75.7	0.0	$ 75.8
Current assets of discontinued operations	10.3			10.3		10.5
Restricted cash of discontinued operations	9.0			9.0		9.4
Current liabilities of discontinued operations	22.4			22.4		39.7
Accounts payable of discontinued operations	1.1			1.1		22.8
Customer credit and rebate accruals of discontinued operations	1.0			1.0
Legal accruals of discontinued operations	1.8			1.8
Other current liabilities of discontinued operations	3.6			3.6
Customer credit and rebate accruals of discontinued operations						3.2
Legal accruals of discontinued operations						11.0
Other current liabilities of discontinued operations						2.7
Other liabilities of discontinued operations	9.2			9.2		4.4
Other liability of discontinued operations	4.2			4.2		$ 4.4
Discontinued Operations | CMC
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Current amount due of discontinued operations	11.1			11.1
Restricted cash to be released of discontinued operations	9.0			9.0
Other liabilities of discontinued operations	1.0			1.0
Discontinued Operations | IOENGINE
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Current amount due of discontinued operations	3.8			3.8
Other liabilities of discontinued operations	$ 4.0			$ 4.0
Discontinued Operations, Disposed of by Sale | Imation Mobile Security (IronKey Brand)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of asset purchase agreements | agreement							2
Disposal group, gain on disposal			$ 3.8

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Discontinued Operations - Schedule of Key Components of Discontinued Operations (Details) - USD ($) $ in Millions	3 Months Ended			9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Mar. 31, 2016	Sep. 30, 2017	Sep. 30, 2016
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Reclassification of cumulative translation adjustment	$ 0.0	$ 0.0		$ 0.0	$ 75.8
Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net revenue	0.3	0.0		0.3	2.0
Cost of goods sold	0.2	0.0		0.2	0.6
Gross profit	0.1	0.0		0.1	1.4
Selling, general and administrative	1.3	0.8		4.2	3.6
Research and development	0.0	0.0		0.0	0.5
Restructuring and other	(13.2)	(0.7)		(13.6)	(0.4)
Reclassification of cumulative translation adjustment	0.0	0.0	$ 75.7	0.0	75.8
Other (income) expense	0.8	(0.4)		1.7	(0.6)
Income (loss) from discontinued operations, before income taxes	11.2	0.3		7.8	(77.5)
Gain on sale of discontinued businesses, before income taxes	0.0	0.0		0.0	3.8
Income tax provision	(3.5)	(0.1)		(3.3)	(1.9)
Gain (loss) from discontinued operations, net of income taxes	$ 7.7	$ 0.2		$ 4.5	$ (75.6)

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Supplemental Balance Sheet Information - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Supplemental Balance Sheet Disclosures [Line Items]
Reserves and allowances	$ 0.3	$ 0.2
Decrease in accounts receivable	1.2
Cash advance for accounts receivable sold	$ 1.1
Repurchase of accounts receivable, term	5 months
Interest per month on receivables sold	2.00%
Other Current Liabilities
Supplemental Balance Sheet Disclosures [Line Items]
Deferred revenue	$ 7.0	6.7
Levy accruals	5.5	4.9
Accrued payroll	2.0	2.6
Other Liabilities
Supplemental Balance Sheet Disclosures [Line Items]
Pension liabilities	25.3	$ 24.1
Equity securities | Other Noncurrent Assets
Supplemental Balance Sheet Disclosures [Line Items]
Cost method investments	$ 4.0

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Intangible Assets and Goodwill (Details) - USD ($)		3 Months Ended		9 Months Ended
	Feb. 02, 2017	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Acquired Finite-Lived Intangible Assets [Line Items]
Investment capacity under Clinton's management	$ 1,000,000,000
Stock issued (in shares)	1,250,000
Fair value of stock issued	$ 10,100,000
Finite-Lived Intangible Assets, Net [Abstract]
Cost		$ 14,400,000		$ 14,400,000		$ 4,300,000
Accumulated amortization		(2,800,000)		(2,800,000)		(900,000)
Intangible assets, net		11,600,000		11,600,000		3,400,000
Amortization expense		700,000	$ 200,000	1,900,000	$ 600,000
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Amortization expense, remainder of 2017		700,000		700,000
Amortization expense, 2018		2,700,000		2,700,000
Amortization expense, 2019		2,700,000		2,700,000
Amortization expense, 2020		2,700,000		2,700,000
Amortization expense, 2021		2,600,000		2,600,000
Goodwill		3,800,000		3,800,000		3,800,000
Capacity Agreement
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets useful life (in years)	5 years
Finite-Lived Intangible Assets, Net [Abstract]
Cost		10,100,000		10,100,000		0
Accumulated amortization		(1,400,000)		(1,400,000)		0
Intangible assets, net		8,700,000		8,700,000		0
Developed Technology
Finite-Lived Intangible Assets, Net [Abstract]
Cost		4,300,000		4,300,000		4,300,000
Accumulated amortization		(1,400,000)		(1,400,000)		(900,000)
Intangible assets, net		$ 2,900,000		$ 2,900,000		$ 3,400,000

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Restructuring and Other Expense - Components of Restructuring and Other Expense (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Restructuring and Related Activities [Abstract]
Severance and related		$ 0.1	$ 0.4	$ 1.0	$ 0.4
Loss on abandonment of unused property, plant and equipment		1.1	0.0	1.1	0.0
Other	[1]	(0.8)	0.0	(1.7)	0.0
Total Restructuring		0.4	0.4	0.4	0.4
Pension settlement/curtailment (Note 9)		0.8	0.3	0.8	2.6
Asset disposals / write down		0.0	0.0	0.0	0.1
Other	[2]	0.0	0.6	(0.1)	4.0
Total Other		0.8	0.9	0.7	6.7
Total Restructuring and Other		1.2	1.3	1.1	7.1
Restructuring Cost and Reserve [Line Items]
Earnest money payment relating to asset sale		0.8		1.0
Other consulting fees			0.1
Property tax refund					(1.9)
Other	[2]	0.0	0.6	(0.1)	4.0
Affiliated Entity | Realization Services, Inc. | Consulting Expenses with Realization Services
Restructuring Cost and Reserve [Line Items]
Consulting expenses with related party		$ 0.6	0.3	0.6	2.4
Affiliated Entity | Otterbourg P.C. | Consulting Expenses with Realization Services
Restructuring Cost and Reserve [Line Items]
Consulting expenses with related party			$ 0.2		1.4
Contingent Consideration Obligations | CDI
Restructuring Cost and Reserve [Line Items]
Reversal of cost				0.3
Other Employee Costs
Restructuring and Related Activities [Abstract]
Other					2.1
Restructuring Cost and Reserve [Line Items]
Reversal of cost				$ 0.4
Other					$ 2.1

[1] For the three months ended September 30, 2017, other includes $0.8 million net gain from an asset sale. For the nine months ended September 30, 2017, other includes $1.0 million net gain from an asset sale, $0.3 million reversal of contingent consideration obligations related to the CDI acquisition (see Note 15 - Litigation, Commitments and Contingencies for additional information), and $0.4 million reversal of other employee costs. We have considered these costs to be attributable to our corporate activities and, therefore, they are not part of our discontinued operations.

[2] For the three months ended September 30, 2016, other includes consulting expenses of $0.3 million and $0.2 million for Realization Services, Inc. (See Note 16 - Related Party Transactions for additional information) and Otterbourg P.C., respectively and $0.1 million for other consulting fees. For the nine months ended September 30, 2016, other includes consulting expenses of $2.4 million and $1.4 million for Realization Services, Inc. and Otterbourg P.C., respectively, a net credit of $1.9 million for property tax refund for the former Oakdale site, as well as $2.1 million for other employee costs and consulting fees directly attributable to our Restructuring Plan. We have considered these costs to be attributable to our corporate activities and, therefore, they are not part of our discontinued operations.

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Restructuring and Other Expense - Schedule of Restructuring Reserve Activity (Details) - USD ($) $ in Millions	3 Months Ended				9 Months Ended
	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Restructuring Reserve [Roll Forward]
Charges	$ 0.4			$ 0.4	$ 0.4	$ 0.4
Restructuring Plan | Severance and Related
Restructuring Reserve [Roll Forward]
Accrued balance, beginning balance	0.3	$ 0.2	$ 0.0		0.0
Charges		0.3	0.6
Usage and payments	(0.3)	(0.2)	(0.4)
Accrued balance, ending balance	$ 0.0	$ 0.3	$ 0.2		$ 0.0

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Stock-Based Compensation (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2017 USD ($) shares	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($) plan shares	Sep. 30, 2016 USD ($)	Dec. 31, 2016 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense | $	$ 200,000	$ 200,000	$ 300,000	$ 600,000
Number of share-based compensation plans | plan			4
Number of shares available for grant (in shares)	0		0
Stock Appreciation Rights (SARs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense | $			$ 0
Number of awards outstanding (less than) (in shares)	100,000		100,000		200,000
Stock Incentive Plan 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for grant (in shares)	186,225		186,225

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Stock-Based Compensation - Stock Option Activity (Details) - Stock Options	9 Months Ended
	Sep. 30, 2017 $ / shares shares
Stock Options [Roll Forward]
Beginning, outstanding (in shares) | shares	286,707
Granted (in shares) | shares	0
Exercised (in shares) | shares	0
Canceled (in shares) | shares	(40,213)
Forfeited (in shares) | shares	(6,602)
Ending, outstanding (in shares) | shares	239,892
Exercisable (in shares) | shares	210,943
Weighted Average Exercise Price [Roll Forward]
Beginning, outstanding (in dollars per share) | $ / shares	$ 77.50
Granted (in dollars per share) | $ / shares	0.00
Exercised (in dollars per share) | $ / shares	0.00
Canceled (in dollars per share) | $ / shares	128.72
Forfeited (in dollars per share) | $ / shares	23.46
Ending, outstanding (in dollars per share) | $ / shares	70.41
Exercisable (in dollars per share) | $ / shares	$ 78.15

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Stock-Based Compensation - Weighted Average Assumptions Used in the Valuation of Stock Options (Details) - Stock Options - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration term (in years)	10 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Volatility	44.30%	41.00%
Risk-free interest rate	1.60%	1.80%
Expected life (months)	72 months	72 months
Dividend yield	0.00%	0.00%
Total unrecognized compensation expense related to non-vested stock	$ 0.2
Total compensation cost not yet recognized, period for recognition (in years)	1 year 3 months

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Stock-Based Compensation - Restricted Stock (Details) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2017 USD ($) $ / shares shares
Restricted Stock [Roll Forward]
Vested (in shares)	(86,000)
Restricted Stock
Restricted Stock [Roll Forward]
Beginning, nonvested (in shares)	79,926
Granted (in shares)	86,000
Grant adjustments (in shares)	(324)
Vested (in shares)	(2,071)
Forfeited (in shares)	(67,206)
Ending, nonvested (in shares)	96,325
Weighted Average Grant Date Fair Value Per Share [Roll Forward]
Beginning, nonvested (in dollars per share) | $ / shares	$ 20.63
Granted (in dollars per share) | $ / shares	5.85
Grant adjustments (in dollars per share) | $ / shares	38.00
Vested (in dollars per share) | $ / shares	17.57
Forfeited (in dollars per share) | $ / shares	22.84
Ending, nonvested (in dollars per share) | $ / shares	$ 5.91
Total unrecognized compensation expense related to non-vested stock | $	$ 0.4
Total compensation cost not yet recognized, period for recognition (in years)	2 years 4 months 24 days

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Retirement Plans (Details) - Pension Plan - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017
Defined Benefit Plan Disclosure [Line Items]
Pension plan contribution	$ 0.4		$ 0.4
Minimum
Defined Benefit Plan Disclosure [Line Items]
Anticipated contributions in the next 12 months	0.3		0.3
Maximum
Defined Benefit Plan Disclosure [Line Items]
Anticipated contributions in the next 12 months	0.5		$ 0.5
International Plan
Defined Benefit Plan Disclosure [Line Items]
Net periodic pension (credit) cost	$ 0.0	$ 0.0

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Retirement Plans - Components of Net Periodic Pension (Credit) Cost (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Defined Benefit Plan Disclosure [Line Items]
Settlement loss	$ 0.8	$ 0.3	$ 0.8	$ 2.6
Pension Plan | United States
Defined Benefit Plan Disclosure [Line Items]
Interest cost	0.7	0.7	1.9	2.2
Expected return on plan assets	(0.9)	(0.9)	(2.5)	(2.8)
Amortization of net actuarial loss	0.1	0.1	0.3	0.3
Net periodic pension credit	(0.1)	(0.1)	(0.3)	(0.3)
Settlement loss	0.8	0.3	0.8	2.6
Total pension (credit) cost	$ 0.7	$ 0.2	$ 0.5	$ 2.3

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Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Income tax provision (benefit)	$ (3.5)	$ (0.2)	$ (3.5)	$ (2.3)
Federal statutory income tax rate	35.00%		35.00%
Unrecognized tax benefits	$ 1.0		$ 1.0		$ 1.3

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Major Customers and Accounts Receivable (Details) - Customer concentration risk - Nexsan Business	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Revenue
Concentration Risk [Line Items]
Concentration risk, percentage	19.00%	17.00%	22.00%	21.00%
Accounts receivable
Concentration Risk [Line Items]
Concentration risk, percentage					10.00%

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Fair Value Measurements - Assets and Liabilities Measured on Recurring Basis (Details) - Recurring - USD ($) $ in Millions	Sep. 30, 2017	Dec. 31, 2016
Assets
Trading securities	$ 0.3	$ 2.5
Liabilities
Contingent consideration associated with CDI acquisition		0.3
Quoted Prices in Active Markets for Identical Assets (Level 1)
Assets
Trading securities	0.3	2.5
Liabilities
Contingent consideration associated with CDI acquisition		0.0
Significant Other Observable Inputs (Level 2)
Assets
Trading securities
Liabilities
Contingent consideration associated with CDI acquisition		0.0
Unobservable Inputs (Level 3)
Assets
Trading securities	$ 0.0	0.0
Liabilities
Contingent consideration associated with CDI acquisition		$ 0.3

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Fair Value Measurements (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Short term investments	$ 2.7		$ 22.0
Clinton Group
Schedule of Available-for-sale Securities [Line Items]
Short term investments	2.2		$ 19.5
Decrease in short term investment balance	17.3
Redemptions	16.9
Accrued fees		$ 0.5
Clinton Group | Other (income) expense
Schedule of Available-for-sale Securities [Line Items]
Unrealized holding loss	0.4	$ 0.7
GBAM Fund
Schedule of Available-for-sale Securities [Line Items]
Short term investments	$ 0.2

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Shareholders' Equity - Common Stock (Details) $ in Millions	Feb. 02, 2017 USD ($) shares
Equity [Abstract]
Stock issued (in shares) | shares	1,250,000
Fair value of stock issued | $	$ 10.1

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Shareholders' Equity - Treasury Stock (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended	9 Months Ended		11 Months Ended
	Sep. 30, 2017	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Nov. 14, 2016	May 02, 2012
Equity [Abstract]
Number of shares authorized to be repurchased (in shares)					500,000.0	500,000
Number of shares repurchased (in shares)	27,950	27,950		52,036
Payments for repurchase of common stock		$ 0.1	$ 0.2	$ 0.3
Remaining number of shares authorized to be repurchased (in shares)	447,964	447,964		447,964
Average price per share of treasury stock acquired and held (in dollars per share)		$ 37.82
Movement in Treasury Stock [Roll Forward]
Beginning balance (in shares)		744,091
Purchases (in shares)	27,950	27,950		52,036
Restricted stock grants (in shares)		(86,000)
Forfeitures and other (in shares)		67,767
Ending balance (in shares)	753,808	753,808		753,808

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Shareholders' Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance			$ (25.3)
Total other comprehensive income, net of tax	$ 0.2	$ 0.8	0.4	$ 76.2
Ending balance	(19.5)		(19.5)
Amortization of net actuarial loss	7.0	8.7	23.4	27.6
Pension curtailment / settlement loss	1.2	1.3	1.1	7.1
Net loss including noncontrolling interest	(6.0)	7.1	10.4	103.8
Cumulative translation adjustment	0.0	0.0	0.0	(75.8)
Reclassification out of Accumulated Other Comprehensive Income
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Net loss including noncontrolling interest	0.2	0.5	0.4	78.8
Defined Benefit Plans
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance			(19.6)
Other comprehensive income (loss) before reclassifications, net of tax			(0.8)
Amounts reclassified from accumulated other comprehensive income, net of tax			1.1
Reclassification			(0.1)
Total other comprehensive income, net of tax			0.2
Ending balance	(19.4)		(19.4)
Defined Benefit Plans | Reclassification out of Accumulated Other Comprehensive Income
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Amortization of net actuarial loss	0.9	0.2	1.1	0.4
Pension curtailment / settlement loss	(0.8)	0.3	(0.8)	2.6
Net loss including noncontrolling interest	0.1	0.5	0.3	3.0
Foreign Currency Translation
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance			(1.0)
Other comprehensive income (loss) before reclassifications, net of tax			0.1
Amounts reclassified from accumulated other comprehensive income, net of tax			0.0
Reclassification			0.0
Total other comprehensive income, net of tax			0.1
Ending balance	(0.9)		(0.9)
Foreign Currency Translation | Reclassification out of Accumulated Other Comprehensive Income
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Cumulative translation adjustment	0.1	$ 0.0	0.1	$ 75.8
Total
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance			(20.6)
Other comprehensive income (loss) before reclassifications, net of tax			(0.7)
Amounts reclassified from accumulated other comprehensive income, net of tax			1.1
Reclassification			(0.1)
Total other comprehensive income, net of tax			0.3
Ending balance	$ (20.3)		$ (20.3)

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Segment Information (Details) $ in Millions		1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Jan. 23, 2017 USD ($) director	Sep. 30, 2017 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Dec. 31, 2015 segment	Aug. 15, 2017 USD ($)	Jan. 22, 2017	Dec. 31, 2016 USD ($)
Segment Reporting Information [Line Items]
Number of reporting segments | segment							3
Non-voting preferred stock, issued		$ 0.0	$ 0.0		$ 0.0					$ 0.0
Segment Reporting Information, Profit (Loss) [Abstract]
Net revenue			9.3	$ 11.5	27.7	$ 32.8
Operating loss from continuing operations			(6.3)	(7.7)	(18.8)	(29.9)
Restructuring and other			(1.2)	(1.3)	(1.1)	(7.1)
Interest income			0.0	0.0	0.0	0.2
Net gains from GBAM Fund activities			1.0	0.0	1.0	0.0
Other income (expense), net			0.1	0.2	(0.6)	(0.8)
Loss from continuing operations before income taxes			(5.2)	(7.5)	(18.4)	(30.5)
Nexsan Business
Segment Reporting Information, Profit (Loss) [Abstract]
Net revenue			9.3	11.5	27.7	32.8
Asset Management Business
Segment Reporting Information, Profit (Loss) [Abstract]
Net revenue			0.0	0.0	0.0	0.0
Operating Segments
Segment Reporting Information, Profit (Loss) [Abstract]
Operating loss from continuing operations			(3.7)	(4.3)	(13.3)	(14.3)
Operating Segments | Nexsan Business
Segment Reporting Information, Profit (Loss) [Abstract]
Operating loss from continuing operations			(2.5)	(4.3)	(10.4)	(14.3)
Operating Segments | Asset Management Business
Segment Reporting Information, Profit (Loss) [Abstract]
Operating loss from continuing operations			(1.2)	0.0	(2.9)	0.0
Corporate and Unallocated
Segment Reporting Information, Profit (Loss) [Abstract]
Operating loss from continuing operations			(1.4)	(2.1)	(4.4)	(8.5)
Segment Reconciling Items
Segment Reporting Information, Profit (Loss) [Abstract]
Restructuring and other			(1.2)	$ (1.3)	(1.1)	$ (7.1)
GBAM Fund
Segment Reporting Information [Line Items]
Investment amount		10.0
NXSN Acquisition Corp
Segment Reporting Information [Line Items]
Noncontrolling interest, percentage held by parent	50.00%								100.00%
Senior secured convertible promissory note	$ 25.0
Noncontrolling interest, percentage held by noncontrolling owners	50.00%
Number of board directors designated to company | director	2
Number of board directors | director	5
Aggregate funded equity commitments		10.0	10.0		10.0			$ 4.7
Increase senior secured convertible promissory note					10.0
Non-voting preferred stock, issued		$ 5.6	$ 5.6		$ 5.6			$ 5.3

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Litigation, Commitments and Contingencies (Details) CAD in Millions					1 Months Ended		3 Months Ended		9 Months Ended		186 Months Ended
	Oct. 10, 2017 USD ($)	Sep. 28, 2017 USD ($)	Sep. 15, 2017 USD ($)	Feb. 17, 2017 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2012 USD ($)	Sep. 30, 2017 USD ($)	Mar. 31, 2015 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2017 CAD	Jun. 30, 2017 USD ($)	Aug. 15, 2017 USD ($)	Mar. 29, 2017 employee	Dec. 31, 2016 USD ($)	Dec. 31, 2013 USD ($)
Loss Contingencies [Line Items]
Reversed accrual								$ 2,800,000
France Copyright Levy
Loss Contingencies [Line Items]
Copyright levy accrual							$ 14,400,000		$ 14,400,000						$ 9,500,000
Copyright levy overpaid						$ 55,100,000			55,100,000
Italy Copyright Levy | Cost of sales
Loss Contingencies [Line Items]
Litigation settlement					$ 1,000,000
ECJ Copyright Levy
Loss Contingencies [Line Items]
Copyright levy payment											$ 100,000,000
Copyright levy accrual							5,500,000		$ 5,500,000					$ 4,900,000
IOENGINE Note | Notes Payable, Other Payables
Loss Contingencies [Line Items]
Debt instrument, principal amount												$ 4,000,000
IOENGINE LLC
Loss Contingencies [Line Items]
Damages awarded to IOENGINE				$ 11,000,000
Payments for legal settlements		$ 3,750,000
Litigation settlement							3,300,000
CMC Magnetic Corp vs. Imation
Loss Contingencies [Line Items]
Litigation settlement							$ 7,300,000
CMC Magnetic Corp vs. Imation | Imation Corporation Japan
Loss Contingencies [Line Items]
Damages awarded to IOENGINE			$ 9,200,000
CMC Magnetic Corp vs. Imation | Subsequent Event | Imation Corporation Japan
Loss Contingencies [Line Items]
Financing Receivable, Net	$ 1,500,000
Payments for legal settlements	1,500,000
CMC Magnetic Corp vs. Imation | Subsequent Event | Imation Europe B.V.
Loss Contingencies [Line Items]
Damages awarded to IOENGINE	$ 825,000
Severance Action
Loss Contingencies [Line Items]
Number of employees filing lawsuit | employee													3
Canadian Private Copying Collective vs. Imation | Pending Litigation | Imation Enterprises Corp.
Loss Contingencies [Line Items]
Loss contingency, damages sought | CAD										CAD 1
Loss contingency, penalties and interests sought, value | CAD										CAD 5

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Litigation, Commitments and Contingencies - Contingencies (Details) - Connected Data, Inc.		9 Months Ended
	Oct. 14, 2015 USD ($) period payment	Sep. 30, 2017 USD ($) shares
Business Acquisition [Line Items]
Percentage of voting interest acquired	100.00%
Purchase price	$ 6,700,000
Future contingent consideration	$ 5,000,000
Number of potential payments | payment	3
Number of periods to achieve revenue targets | period	3
Target period duration	6 months
Payments under agreement		$ 0
Accrual for possible contingent compensation		$ 300,000
Common Stock
Business Acquisition [Line Items]
Discount rate	15.00%
Possible contingent compensation payment, number of shares (in shares) | shares		57,482
Fair Value
Business Acquisition [Line Items]
Future contingent consideration	$ 800,000

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Related Party Transactions (Details)						1 Months Ended	3 Months Ended		9 Months Ended
	Mar. 02, 2017 USD ($)	Feb. 02, 2017 $ / shares shares	Jul. 15, 2016 USD ($)	Mar. 17, 2016 USD ($)	Oct. 14, 2015 USD ($) period	Aug. 14, 2016 USD ($)	Sep. 30, 2017 USD ($) $ / shares shares	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($) $ / shares shares	Sep. 30, 2016 USD ($)	Feb. 21, 2017 shares	Feb. 20, 2017 shares	Jan. 31, 2017 $ / shares shares	Dec. 31, 2016 USD ($) $ / shares shares	Apr. 29, 2016 $ / shares	Feb. 08, 2016 USD ($) $ / shares
Restructuring Cost and Reserve [Line Items]
Subscription agreement, incentive compensation of common stock value (in dollars per share) | $ / shares																$ 10.00
Closing price of common stock (in dollars per share) | $ / shares																$ 6.5
Cash investment limitation				25.00%
Common stock, shares authorized (in shares) | shares							10,000,000		10,000,000		10,000,000	100,000,000	1,500,000	10,000,000
Common stock, par value (in dollars per share) | $ / shares							$ 0.01		$ 0.01				$ 0.01	$ 0.01
Stock issued (in shares) | shares		1,250,000
Short term investments							$ 2,700,000		$ 2,700,000					$ 22,000,000
Connected Data, Inc.
Restructuring Cost and Reserve [Line Items]
Consideration transferred					$ 6,700,000
Additional contingent compensation							300,000		300,000
Number of periods to achieve revenue targets | period					3
Target period duration					6 months
Payments under agreement									0
Clinton Group
Restructuring Cost and Reserve [Line Items]
Subscription agreement, cash managed				$ 35,000,000												$ 20,000,000
Short term investments							2,200,000		2,200,000					$ 19,500,000
Decrease in short term investment balance									17,300,000
Redemptions									16,900,000
Accrued fees										$ 500,000
Clinton Group | Other (income) expense
Restructuring Cost and Reserve [Line Items]
Unrealized holding loss									400,000	700,000
Madison Avenue Capital Holdings, Inc.
Restructuring Cost and Reserve [Line Items]
Closing price of common stock (in dollars per share) | $ / shares		$ 8.10
Stock issued (in shares) | shares		1,250,000
Lock-up period		3 years
Services Agreement
Restructuring Cost and Reserve [Line Items]
Consulting fees paid									375,000
Initial term compensation	$ 125,000
Renewal period	3 months
Renewal term compensation	$ 125,000
Services Agreement | Selling, general and administrative
Restructuring Cost and Reserve [Line Items]
Consulting fees paid									291,668
Maximum
Restructuring Cost and Reserve [Line Items]
Subscription agreement, incentive compensation of common stock value (in dollars per share) | $ / shares															$ 18.0
Minimum
Restructuring Cost and Reserve [Line Items]
Subscription agreement, incentive compensation of common stock value (in dollars per share) | $ / shares															$ 10.00
President | Realization Services, Inc.
Restructuring Cost and Reserve [Line Items]
Consulting services extension term			21 days
President | Maximum
Restructuring Cost and Reserve [Line Items]
Consulting fees per week			$ 125,000
Related party transaction, amounts of transaction						$ 500,000
Affiliated Entity | Consulting Expenses with Realization Services | Realization Services, Inc.
Restructuring Cost and Reserve [Line Items]
Consulting fees paid							$ 600,000	$ 300,000	600,000	$ 2,400,000
Affiliated Entity | Payment of performance fees | Clinton Group
Restructuring Cost and Reserve [Line Items]
Related party transaction, amounts of transaction									500,000
Director
Restructuring Cost and Reserve [Line Items]
Consulting fees paid					$ 184,000
Additional contingent compensation					$ 260,000
Number of periods to achieve revenue targets | period					3
Target period duration					6 months
Payments under agreement									$ 0

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Subsequent Events (Details) - USD ($) $ in Millions	Oct. 01, 2017	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016	Dec. 31, 2015
Subsequent Event [Line Items]
Cash and cash equivalents		$ 15.7	$ 10.0	$ 11.9	$ 70.4
GBAM
Subsequent Event [Line Items]
Cash and cash equivalents		$ 10.0
GBAM | Subsequent Event
Subsequent Event [Line Items]
Redemptions	$ 5.0