Unaudited Pro Forma Condensed Financial Statements

On October 31, 2019, G.research and the Company entered into and closed the definitive Merger Agreement. Under the terms of the Merger Agreement, a total of 50,000,000 shares of Common Stock were issued to ISH upon the cancellation and conversion of the limited liability company interest in G.research held by ISH immediately prior to the effective time of the Merger.

The Merger has been approved by the board of directors of AC, the parent of ISH, and has received regulatory approval from FINRA.

On October 31, 2019 the Company entered into and closed a private placement pursuant to which it issued 5,150,000 shares of common stock to the Company's President and an employee for aggregate proceeds of $515,000.

The Company’s unaudited pro forma combined condensed statements of operations for the nine months ended September 30, 2019 and 2018 gives effects to the Merger and the Private Placement as if they had occurred on January 1, 2018 while the unaudited pro forma combined condensed statement of financial condition as of September 30, 2019 gives effect to the Merger and the Private Placement as if they had occurred on that date. Collectively, the unaudited pro forma combined condensed statements of operations and unaudited pro forma combined condensed statement of financial condition are referred to as Unaudited Pro Forma Combined Condensed Financial Statements.

G.research’s and the Company’s Unaudited Pro Forma Combined Condensed Financial Statements for the nine months ended September 30, 2019 and 2018 were derived from their historical financial statements, included in Exhibit 99.1 to this amendment to the Form 8-K or incorporated by reference to Morgan Group's Form 10-Q for the quarter ended September 30, 2019, and should be read in conjunction with those historical condensed financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Exhibit 99.1 to the Form 8-K and in Exhibits 99.1 and 99.2 to this amendment to Form 8-K. The unaudited pro forma combined condensed statement of financial condition as of September 30, 2019 was derived from the historical balance sheet of Morgan Group as of September 30, 2019 included in its Form 10-Q for the quarter ended September 30, 2019 and the historical unaudited statement of financial condition as of September 30, 2019 of G.research included in Exhibit 99.1 to this amendment to the Form 8-K.

The Unaudited Pro Forma Combined Condensed Financial Statements are for illustrative purposes only and do not reflect what G.research’s and the Company’s financial position and results of operations would have been had the Merger occurred on the dates indicated and are not necessarily indicative of our future financial position and future results of operations. Accordingly, the Unaudited Pro Forma Condensed Financial Statements include certain pro forma adjustments designed to reflect transactions that would be implemented in relation to the Merger.

The Unaudited Pro Forma Condensed Financial Statements constitute forward-looking information and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated. See “Special Note Regarding Forward-Looking Statements” in the Form 8-K and accompanying information statement.

The unaudited pro forma condensed combined financial information was prepared based on the historical financial statements of G.research and the Company. The Merger transaction was a transaction among entities under common control and has been accounted for pursuant to ASC 805-50, Transactions Between Entities Under Common Control. A common-control transaction is similar to a business combination for the entity that receives the net assets or equity interests; however, such a transaction does not meet the definition of a business combination because there is no change in control over the entity by the parent. Therefore, the accounting and reporting for a transaction between entities under common control is outside the scope of the business combinations guidance in ASC 805-10, ASC 805-20, and ASC 805-30 and is addressed in ASC 805-50. For transactions between entities under common control, there is no change in basis in the net assets received and therefore they are recorded at their historical carrying amounts.

Morgan Group Holding Co.

Unaudited Pro Forma Combined Condensed Statement of Operations

For the Nine Months Ended September 30, 2019

Income Statement Data	G.research			Morgan			Pro Forma
Revenues
Commission	$	4,549,985		$	–		$	4,549,985
Fees earned from affiliated entities pursuant to research services agreements		1,127,500			–			1,127,500
Principal transactions		(7,623	)		–			(7,623	)
Dividends and interest		158,195			1,708			159,903
Underwriting fees		75,000			–			75,000
Sales manager fees		590,761						590,761
Other revenues		37,214			–			37,214
Total revenues		6,531,032			1,708			6,532,740
Expenses:
Compensation and related costs		6,955,176			–			6,955,176
Clearing charges		933,620			–			933,620
General and administrative		712,338			67,819			780,157
Occupancy and equipment		666,986			–			666,986
Total expenses		9,268,120			67,819			9,335,939

Loss before income tax benefit		(2,737,088	)		(66,111	)		(2,803,199	)
Income tax benefit		(596,386	)		–			(596,386	)
Net loss	$	(2,140,702	)	$	(66,111	)	$	(2,206,813	)

Net loss attributable to Morgan Group shareholders per share:
Basic	$	(10,703.51	)	$	(0.01	)	$	(0.04	)
Diluted	$	(10,703.51	)	$	(0.01	)	$	(0.04	)

Weighted average shares outstanding:
Basic		200			4,859,055			60,009,055	^(a)
Diluted		200			4,859,055			60,009,055

Actual shares outstanding		200			4,859,055			60,009,055

(a) Includes the issuance of 50,000,000 and 5,150,000 shares of Common Stock issued pursuant to the Merger and the Private Placement, respectively.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Exhibit 99.1 to the Form 8-K and in Exhibit 99.2 to this amendment to Form 8‑K for a discussion of the expected impact of anticipated operational changes.

Morgan Group Holding Co.

Unaudited Pro Forma Combined Condensed Statement of Financial Condition

As of September 30, 2019

	G.research			Morgan			Adjustments			Pro Forma
Assets
Cash and cash equivalents	$	5,394,380		$	79,074		$	515,000	^(b)	$	5,988,454
Investment in securities		16,725			–			–			16,725
Receivables from affiliates		136,482			–			–			136,482
Commissions receivable		124,087			–			–			124,087
Deposits with clearing organizations		200,000			–			–			200,000
Income taxes receivable		87,406			–			–			87,406
Fixed assets, net of accumulated depreciation and amortization		47,494			–			–			47,494
Other assets		217,863			9,875			–			227,738
Total assets	$	6,224,437			88,949		$	515,000		$	6,828,386

Liabilities and stockholder’s equity
Compensation payable	$	922,447		$	–			–		$	922,477
Due to brokers		279,500			–			–			279,500
Deferred tax liability		6,973			–			–			6,973
Securities sold, not yet purchased		562			–			–			562
Accrued expenses and other liabilities		274,479			18,193			–			292,672
Total liabilities		1,483,961			18,193			–			1,502,154

Stockholder’s Equity:
Preferred stock, $0.01 par value, 1,000,000 shares authorized, none outstanding		–			–			–			–
Common stock, $0.01 par value, 10,000,000 shares authorized,4,589,055 outstanding		–			48,591			5,515,000	^(a),(b)		5,563,591
Common stock, $0.01 par value, 200 shares issued and outstanding		2			–			(2	)^(a)		–
Additional paid in capital		46,980,331			5,937,368			(4,999,998	)^(a)		47,917,701
Accumulated deficit		(42,239,857	)		(5,915,203	)		–			(48,155,060	)
Total stockholder’s equity		4,740,476			70,756			515,000			5,326,232
Total liabilities and stockholder’s equity	$	6,224,437		$	88,949		$	515,000		$	6,828,386

(a) Includes the issuance of 50,000,000 and 5,150,000 shares of Common Stock issued pursuant to the Merger and the Private Placement, respectively

(b) Issuance of 5,150,000 shares of Common Stock pursuant to the Private Placement at $0.10 per share for total proceeds of $515,000.

Morgan Group Holding Co.

Unaudited Pro Forma Combined Condensed Statement of Operations

For the Nine Months Ended September 30, 2018

Income Statement Data	G.research			Morgan			Pro Forma
Revenues
Commission income	$	4,432,059		$	–		$	4,432,059
Fees earned from affiliated entities pursuant to research services agreements		1,649,000			–			1,649,000
Principal transactions		(13,576,471	)		–			(13,576,471	)
Dividends and interest		727,424			1,317			728,741
Underwriting fees		18,832			–			18,832
Sale Manager Fees		99,715			–			99,715
Other revenues		15,447			–			15,447
Total revenues		(6,633,994	)		1,317			(6,632,677	)
Expenses:
Compensation and related costs		8,769,294			–			8,769,294
Clearing charges		1,013,867			–			1,013,867
General and administrative expenses		800,450			48,381			848,831
Occupancy and equipment rental		799,527			–			799,527
Total expenses		11,383,138			48,381			11,431,519

Loss before income tax benefit		(18,017,132	)		(47,064	)		(18,064,196	)
Income tax benefit		(4,402,697	)		–			(4,402,697	)
Net loss	$	(13,614,435	)	$	(47,064	)	$	(13,661,499	)

Net loss attributable to Morgan Group shareholders per share:
Basic	$	(68,072.18	)	$	(0.01	)	$	(0.23	)
Diluted	$	(68,072.18	)	$	(0.01	)	$	(0.23	)

Weighted average shares outstanding:
Basic		200			4,430,484			59,580,484(a	)
Diluted		200			4,430,484			59,580,484

Actual shares outstanding		200			4,859,055			60,009,055

(a) Includes the issuance of 50,000,000 and 5,150,000 shares of Common Stock issued pursuant to the Merger and the Private Placement, respectively.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion of the expected impact of anticipated operational changes included in Exhibit 99.1 to the Form 8-K and in Exhibit 99.2 to this amendment to Form 8‑K.