x
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ANNUAL REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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13-4005439
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(State or Other Jurisdiction of
Incorporation or Organization)
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(IRS Employer Identification Number)
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177 West Putnam Avenue, Greenwich, CT 06830
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||
(Address of Principal Executive Offices, including Zip Code)
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(914) 242-5700
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(Registrant’s telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act:
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None
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Securities registered pursuant to Section 12(g) of the Act:
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Common Stock, $0.01 Par Value
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(Title of Class)
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Large accelerated filer
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o
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Accelerated filer
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o
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Non-accelerated filer
(Do not check if a smaller reporting company)
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o
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Smaller reporting company
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x
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Page
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PART I
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2
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8
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16
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16
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17
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Item 4. | Mine Safety Disclosures | 18 |
PART II
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18
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18
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19
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23
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24
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42
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42
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42
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PART III
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43
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43
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43
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43
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43
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PART IV
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44
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45
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Quarter
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High
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Low
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|||||||
2015
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First
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$
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2.00
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$
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1.45
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||||
Second
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$
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2.00
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$
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1.52
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|||||
Third
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$
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1.65
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$
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1.31
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|||||
Fourth
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$
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2.00
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$
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1.25
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|||||
2014
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First
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$
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2.25
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$
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1.80
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||||
Second
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$
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2.00
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$
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1.60
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|||||
Third
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$
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1.90
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$
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1.72
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|||||
Fourth
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$
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1.74
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$
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1.05
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Page
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25
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26
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27
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28
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29
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30
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WRIGHT INVESTORS' SERVICE HOLDINGS, INC.
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(in thousands, except per share amounts)
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Years Ended December 31,
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||||||||
2015
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2014
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|||||||
Revenues
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||||||||
Investment management services
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$ | 2,453 | $ | 2,600 | ||||
Other investment advisory services
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2,839 | 2,600 | ||||||
Financial research and related data
|
733 | 620 | ||||||
6,025 | 5,820 | |||||||
Expenses
|
||||||||
Compensation and benefits
|
4,802 | 5,108 | ||||||
Other operating
|
3,783 | 4,036 | ||||||
8,585 | 9,144 | |||||||
Operating loss
|
(2,560 | ) | (3,324 | ) | ||||
Investment and other expense, net
|
(170 | ) | (56 | ) | ||||
Gain on sale of investment in MXL
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- | 719 | ||||||
Change in fair value of liability for contingent consideration
|
336 | (66 | ) | |||||
Loss from continuing operations before income taxes
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(2,394 | ) | (2,727 | ) | ||||
Income tax (expense) benefit
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(27 | ) | 172 | |||||
Loss from continuing operations
|
(2,421 | ) | (2,555 | ) | ||||
Income from discontinued operations, net of taxes
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- | 315 | ||||||
Net loss
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$ | (2,421 | ) | $ | (2,240 | ) | ||
Basic and diluted loss per share
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||||||||
Continuing operations
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$ | (0.13 | ) | $ | (0.14 | ) | ||
Discontinued operations
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- | 0.02 | ||||||
Net loss
|
$ | (0.13 | ) | $ | (0.12 | ) |
WRIGHT INVESTORS' SERVICE HOLDINGS, INC.
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(in thousands, except per share amounts)
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December 31,
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||||||||
2015
|
2014
|
|||||||
Assets
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||||||||
Current assets
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||||||||
Cash and cash equivalents
|
$ | 8,493 | $ | 11,163 | ||||
Short-term investments
|
157 | 154 | ||||||
Accounts receivable
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326 | 336 | ||||||
Prepaid income taxes
|
37 | 12 | ||||||
Prepaid expenses and other current assets
|
456 | 451 | ||||||
Total current assets
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9,469 | 12,116 | ||||||
Property and equipment, net
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44 | 40 | ||||||
Intangible assets, net
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2,644 | 3,281 | ||||||
Goodwill
|
3,364 | 3,364 | ||||||
Investment in LLC
|
287 | - | ||||||
Investment in undeveloped land
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355 | 355 | ||||||
Other assets
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120 | 108 | ||||||
Total assets
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$ | 16,283 | $ | 19,264 | ||||
Liabilities and stockholders’ equity
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||||||||
Current liabilities
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||||||||
Accounts payable and accrued expenses
|
$ | 1,030 | $ | 1,116 | ||||
Deferred revenue
|
- | 12 | ||||||
Liability for contingent consideration
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- | 572 | ||||||
Current portion of officers retirement bonus liability
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200 | 160 | ||||||
Total current liabilities
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1,230 | 1,860 | ||||||
Officers retirement bonus liability, net of current portion
|
714 | 698 | ||||||
Total liabilities
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1,944 | 2,558 | ||||||
Stockholders’ equity
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||||||||
Preferred stock, par value $0.01 per share, authorized
10,000,000 shares; none issued
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||||||||
Common stock, par value $0.01 per share, authorized
30,000,000 shares; issued 19,720,971 in 2015 (including
596,513 shares issuable for vested restricted stock units)
and 19,059,198 in 2014; outstanding 19,155,752 in 2015
and 18,494,129 in 2014
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197 | 191 | ||||||
Additional paid-in capital
|
33,488 | 33,440 | ||||||
Accumulated deficit
|
(17,987 | ) | (15,566 | ) | ||||
Treasury stock, at cost (565,219 in 2015 and 565,069 shares in 2014)
|
(1,359 | ) | (1,359 | ) | ||||
Total stockholders' equity
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14,339 | 16,706 | ||||||
Total liabilities and stockholders’ equity
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$ | 16,283 | $ | 19,264 |
WRIGHT INVESTORS' SERVICE HOLDINGS, INC.
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(in thousands, except per share amounts)
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Years Ended December 31,
|
||||||||
2015
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2014
|
|||||||
Cash flows from operating activities
|
||||||||
Net loss
|
$ | (2,421 | ) | $ | (2,240 | ) | ||
Adjustments to reconcile net loss to cash used in operating activities:
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||||||||
Depreciation and amortization
|
652 | 659 | ||||||
Change in liability for contingent consideration
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(336 | ) | 66 | |||||
Decrease in value of warrant
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108 | - | ||||||
Equity based compensation, including issuance of stock to directors
|
446 | 330 | ||||||
Equity in income of LLC
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(74 | ) | - | |||||
Gain on sale of investment in MXL
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- | (719 | ) | |||||
Changes in other operating items:
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||||||||
Accounts receivable
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10 | (14 | ) | |||||
Short-term investments
|
(3 | ) | (22 | ) | ||||
Deferred revenue
|
(12 | ) | (2 | ) | ||||
Officers retirement bonus liability
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56 | (44 | ) | |||||
Prepaid income tax
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(25 | ) | 4 | |||||
Prepaid expenses and other current assets
|
(5 | ) | (116 | ) | ||||
Accounts payable and accrued expenses
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(86 | ) | (286 | ) | ||||
Net cash used in operating activities
|
(1,690 | ) | (2,384 | ) | ||||
Cash flows from investing activities
|
||||||||
Proceeds from sale of investment in MXL
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- | 994 | ||||||
Investment in LLC
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(333 | ) | - | |||||
Additions to property and equipment
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(19 | ) | (13 | ) | ||||
Net cash provided by (used in) investing activities
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(352 | ) | 981 | |||||
Cash flows from financing activities
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||||||||
Payment of liability for contingent consideration
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(236 | ) | - | |||||
Repurchase of fully vested restricted stock units
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(392 | ) | - | |||||
Net cash used in financing activities
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(628 | ) | - | |||||
Net decrease in cash and cash equivalents
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(2,670 | ) | (1,403 | ) | ||||
Cash and cash equivalents at the beginning of the year
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11,163 | 12,566 | ||||||
Cash and cash equivalents at the end of the year
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$ | 8,493 | $ | 11,163 | ||||
Supplemental disclosures of cash flow information
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||||||||
Net cash paid during the year for
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||||||||
Income taxes
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$ | 35 | $ | 31 |
WRIGHT INVESTORS' SERVICE HOLDINGS, INC.
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YEARS ENDED DECEMBER 31, 2015 AND 2014
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(in thousands, except share data)
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||||||||||||||||||||||||
Total
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||||||||||||||||||||||||
Additional
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Treasury
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stock-
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||||||||||||||||||||||
Common stock
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paid -in
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Accumulated
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stock , at
|
holders
|
||||||||||||||||||||
shares
|
amount
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capital
|
deficit
|
cost
|
equity
|
|||||||||||||||||||
Balance at December 31, 2013
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19,040,416 | $ | 190 | $ | 33,111 | $ | (13,326 | ) | $ | (1,359 | ) | $ | 18,616 | |||||||||||
Net loss
|
- | - | - | (2,240 | ) | - | (2,240 | ) | ||||||||||||||||
Equity based compensation expense
|
- | - | 298 | - | - | 298 | ||||||||||||||||||
Issuance of common stock to directors
|
18,782 | 1 | 31 | - | - | 32 | ||||||||||||||||||
Balance at December 31, 2014
|
19,059,198 | 191 | 33,440 | (15,566 | ) | (1,359 | ) | 16,706 | ||||||||||||||||
Net loss
|
- | - | - | (2,421 | ) | - | (2,421 | ) | ||||||||||||||||
Equity based compensation expense
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- | - | 344 | - | - | 344 | ||||||||||||||||||
Repurchase of vested restricted stock units
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- | (392 | ) | (392 | ) | |||||||||||||||||||
Shares issuable for vested restricted stock units
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596,513 | 5 | (5 | ) | - | - | - | |||||||||||||||||
Issuance of common stock to directors
|
65,260 | 1 | 101 | - | - | 102 | ||||||||||||||||||
Balance at December 31, 2015
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19,720,971 | $ | 197 | $ | 33,488 | $ | (17,987 | ) | $ | (1,359 | ) | $ | 14,339 |
1.
|
Description of activities
|
2.
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Summary of significant accounting policies
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3.
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Discontinued Operation
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4.
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Sale of MXL investment
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5.
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Liability for contingent consideration
|
6.
|
Short-term investments:
|
|
·
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Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
|
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·
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Level 2 – Quoted prices in active markets for similar assets and liabilities or quoted prices in less active, dealer or broker markets;
|
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·
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Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and are unobservable.
|
December 31, 2015
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||||||||||||
Cost
|
Unrealized
Gains
|
Estimated
Fair Value
|
||||||||||
Mutual funds
|
$
|
91
|
$
|
66
|
$
|
157
|
||||||
$
|
91
|
$
|
66
|
$
|
157
|
December 31, 2014
|
||||||||||||
Cost
|
Unrealized
Gains
|
Estimated
Fair Value
|
||||||||||
Mutual funds
|
$
|
91
|
$
|
63
|
$
|
154
|
||||||
$
|
91
|
$
|
63
|
$
|
154
|
7.
|
Investment in LLC
|
8.
|
Accounts receivable
|
9.
|
Accounts payable and accrued expenses
|
December 31,
|
||||||||
2015
|
2014
|
|||||||
Accrued professional fees
|
$
|
328
|
$
|
323
|
||||
Accrued compensation and related expenses
|
193
|
322
|
||||||
Other
|
509
|
471
|
||||||
$
|
1,030
|
$
|
1,116
|
10.
|
Income taxes
|
Year Ended December
31,
|
||||||||
2015
|
2014
|
|||||||
Continuing operations:
|
||||||||
Current
|
||||||||
Federal
|
$
|
-
|
$
|
(179)
|
||||
State and local
|
27
|
7
|
||||||
Total current
|
27
|
(172)
|
||||||
Discontinued operations:
|
||||||||
Current
|
||||||||
Federal
|
$
|
-
|
$
|
179
|
||||
State and local
|
-
|
31
|
||||||
Total current
|
-
|
210
|
||||||
Total income tax expense
|
$
|
27
|
$
|
38
|
Year ended December 31,
|
||||||||
2015
|
2014
|
|||||||
Federal income tax rate
|
(34.0)
|
%
|
(34.0)
|
%
|
||||
State income tax (net of federal effect)
|
(4.7)
|
(4.9)
|
||||||
Change in valuation allowance
|
41.9
|
38.6
|
||||||
Loss utilized against discontinued operations
|
-
|
(6.4)
|
||||||
Non-deductible expenses
|
2.7
|
0.6
|
||||||
Non-taxable income
|
(4.8)
|
-
|
||||||
Effective tax rate
|
1.1
|
%
|
(6.1)
|
%
|
December 31,
|
||||||||
2015
|
2014
|
|||||||
Deferred tax assets:
|
||||||||
Net operating loss carryforwards
|
$
|
8,325
|
$
|
7,076
|
||||
Equity-based compensation
|
1,237
|
1,593
|
||||||
Tax credit carryforwards
|
148
|
148
|
||||||
Accrued compensation
|
369
|
418
|
||||||
Accrued liabilities & other
|
113
|
193
|
||||||
Gross deferred tax assets
|
10,192
|
9,428
|
||||||
Less: valuation allowance
|
(9,138
|
)
|
(8,140
|
)
|
||||
Deferred tax assets after valuation allowance
|
1,054
|
1,288
|
||||||
Deferred tax liabilities:
|
||||||||
Intangible assets
|
(1,043
|
)
|
(1,278
|
)
|
||||
Other
|
(11
|
)
|
(10
|
)
|
||||
Deferred tax liabilities
|
(1,054
|
)
|
(1,288
|
)
|
||||
Net Deferred tax assets
|
$
|
-
|
$
|
-
|
11.
|
Property and equipment:
|
December 31,
|
||||||||
2015
|
2014
|
|||||||
Computer software
|
$
|
2
|
$
|
2
|
||||
Computer equipment
|
108
|
94
|
||||||
Office furniture and equipment
|
45
|
40
|
||||||
Leasehold improvements
|
1
|
1
|
||||||
156
|
137
|
|||||||
Less accumulated depreciation and amortization
|
(112
|
)
|
(97
|
)
|
||||
$
|
44
|
$
|
40
|
12.
|
Intangible Assets
|
December 31, 2015
|
|||||||||||||
Intangible
|
Estimated
useful life
|
Gross
carrying
amount
|
Accumulated
Amortization
|
Net
carrying
amount
|
|||||||||
Investment Management and Advisory Contracts
|
9 years
|
$
|
3,181
|
$
|
1,072
|
$
|
2,109
|
||||||
Trademarks
|
10 years
|
433
|
131
|
302
|
|||||||||
Proprietary Software and
Technology
|
4 years
|
960
|
727
|
233
|
|||||||||
$
|
4,574
|
$
|
1,930
|
$
|
2,644
|
December 31, 2014
|
|||||||||||||
Intangible
|
Estimated
useful life
|
Gross
carrying
amount
|
Accumulated
Amortization
|
Net
carrying
amount
|
|||||||||
Investment Management and Advisory Contracts
|
9 years
|
$
|
3,181
|
$
|
718
|
$
|
2,463
|
||||||
Trademarks
|
10 years
|
433
|
88
|
345
|
|||||||||
Proprietary Software and
Technology
|
4 years
|
960
|
487
|
473
|
|||||||||
$
|
4,574
|
$
|
1,293
|
$
|
3,281
|
Year ending December 31,
|
|
2016
|
$630
|
2017
|
397
|
2018
|
397
|
2019
|
397
|
2020
|
397
|
2020-2023
|
426
|
$2,644
|
13.
|
Capital Stock
|
14.
|
Incentive stock plans and stock based compensation
|
|
a)
|
479,280 RSUs were granted to four key executives of Winthrop, which vested as of the Closing Date and are subject to post-vesting restrictions on sale for three years. The RSUs were valued at the closing price of the Company’s common stock of $2.52, less a 20% discount for post vesting restrictions on sale, or $2.02 per share. The total value of these RSUs of $966,000, were accounted for as compensation and charged to retention bonus expense on the closing date.
|
|
b)
|
370,000 RSUs were granted to four key executives, which vested equally over three years, with the first third vesting one year from the Closing Date. The RSUs were valued based on the closing price of the Company’s common stock on the Closing Date of $2.52, less an average discount of 11% for post-vesting restrictions on sale until the three year anniversary of the grant date, or an average price per share of $2.25. The Company recorded compensation expense of $252,000 and $277,000 for each of the years ended December 31, 2015 and 2014 related to these RSUs.
|
|
At December 19, 2015, the above RSUs were fully vested. In December 2015, the Company repurchased 252,767 RSUs for a total cost of $369,000. The remaining 596,513 RSUs were settled by the issuance of 596,513 common shares in the first quarter of 2016. Such issuable shares are included in the outstanding common shares at December 31, 2015 in the accompanying financial statements.
|
|
c)
|
17,738 RSUs were granted to certain employees on February 4, 2013, which vest equally over three years, with the first third vesting on February 4, 2014 and the second third vesting on February 4, 2015. At December 31, 2015, 11,701 of the RSU’s were still outstanding. The RSUs are valued based on the closing price of the Company’s common stock on February 4, 2013 of $2.40, less an average discount of 11% for post-vesting restrictions on sale until the three year anniversary of the grant date, or an average price per share of $2.25. The Company recorded compensation expense of $11,000 for each of the years ended December 31, 2015 and 2014 related to these RSUs. The total unrecognized compensation expense related to these unvested RSUs at December 31, 2015 is $1,000, which will be recognized over the remaining vesting period of approximately 0.2 years.
|
|
d)
|
30,000 RSUs were granted to an employee on June 10, 2014, which will vest on the third anniversary of the individual’s employment, assuming the individual is still employed at that time. The RSUs were valued based on the closing price of the Company’s common stock on June 10, 2014 of $1.90. The Company recorded compensation expense of $11,000 for the year ended December 31, 2014 related to these RSUs. In the first quarter of 2015, the individual was no longer employed by the Company and the above RSUs were cancelled and $11,000 of expense was reversed.
|
|
e)
|
100,000 RSUs were issued on each of January 19, 2015 and March 31, 2015, to two newly appointed directors of the Company. The RSUs will vest equally over 3 years, with the first third vesting in January and March 2016, respectively. The RSUs are valued based on the closing price of the Company’s common stock on January 19, 2015 and March 31, 2015 of $1.70 and $1.85, respectively, less an average discount of 8% for post-vesting restrictions on sale until the three year anniversary of the grant date, or an average price per share of $1.56 and $1.70, respectively. The Company recorded compensation expense of $92,000 for the year ended December 31, 2015 related to these RSUs. The total unrecognized compensation expense related to these unvested RSUs at December 31, 2015 is $233,000, which will be recognized over the remaining vesting period of approximately 2 years.
|
15.
|
Retirement plans
|
|
a)
|
The Company maintains a 401(k) Savings Plan (the “Plan”), for full time employees who have completed at least one hour of service coincident with the first day of each month. The Plan permits pre-tax contributions by participants. Effective January 15, 2013, the employees of Winthrop and its subsidiaries were eligible to participate in the Plan, and the Company ceased matching the participants contributions.
|
|
b)
|
Winthrop maintains an officer retirement bonus plan (the “Bonus Plan”) that is an unfunded deferred compensation program providing retirement benefits equal to 10% of annual compensation, as defined, to those officers upon their retirement. Effective December 1, 1999, the Plan was frozen so that no additional benefits will be earned. The present value of the obligation under the Bonus Plan at December 31, 2015 is $914,000, of which $200,000 is estimated to be payable over the next twelve months. The liability is payable to individual retired employees at the rate of $50,000 per year in equal monthly amounts commencing upon retirement. The liability was recorded at $885,000 at the date of acquisition, representing its estimated fair value computed based on its present value, utilizing a discount rate of 14%, which was estimated to be the acquired company’s weighted average cost of capital on such date from the perspective of a market participant. The calculated discount of $1,027,000 at the date of acquisition is being amortized as interest expense over the period the obligation is outstanding by use of the effective interest method. For the years ended December 31, 2015 and 2014, interest expense, (included in Investment and other expense, net) amounted to $148,000 and $92,000, respectively. At December 31, 2015, and 2014 the present value of the obligation under the Bonus Plan was $914,000, and $858,000, respectively, net of discount of $606,000 and $756,000, respectively. During 2014, one employee left Winthrop and accordingly forfeited their retirement bonus, and in addition there were certain changes to previously expected retirement dates. The effect of the departure and changes in 2014 resulted in a $36,000 decrease to the liability at the date of departure or change in expected retirement date, and a corresponding credit to Compensation and benefits in the Consolidated Statement of Operations.
|
16.
|
Commitments, Contingencies and Other
|
|
(a)
|
On or about May 17, 2011, the Merit Group, Inc. (“Merit”) filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of South Carolina. On or about December 14, 2011, the Official Committee of Unsecured Creditors of TMG Liquidation Company (formerly known as The Merit Group, Inc.) filed in that court an adversary proceeding against the Company (the “Avoidance Action”) now captioned CohnResnick LLP, as Plan Administrator v. National Patent Development Corp. (In re TMG Liquidation Co.). The Avoidance Action sought, among other things, to avoid and recover the consideration paid by Merit to the Company for the purchase of Five Star Products, Inc. (“Five Star”) from the Company under the Stock Purchase Agreement, dated November 24, 2009 (the “Agreement”), as a constructive fraudulent transfer under sections 548, 550, and 551 of the Bankruptcy Code.
|
(b)
|
Pursuant to his Employment Agreement, Mr. Peter Donovan serves as Chief Executive Officer of Winthrop, commencing upon the Closing Date. Mr. Donovan’s Employment Agreement provides for a term of five years, with automatic annual renewals unless notice of non-renewal is given at least six months prior to the applicable employment period. Mr. Donovan is receiving an annual base salary of $300,000, subject to increases at the discretion of the Compensation Committee of Winthrop’s Board of Directors. During the initial term of Mr. Donovan’s Employment Agreement but subsequent to the third anniversary of the Closing Date, in the sole discretion of the Board of Directors of Winthrop, Mr. Donovan will assume the position of Executive Chairman of Winthrop in lieu of his position as Chief Executive Officer, with such authority, duties and responsibilities as are commensurate with his position as Executive Chairman and such other duties and responsibilities as may reasonably be assigned to him by the Chief Executive Officer of the Company. Effective December 19, 2015, pursuant to the terms and conditions of his Employment Agreement, Mr. Donovan assumed the position of Executive Chairman of Winthrop in lieu of the position of Chief Executive Officer of Winthrop. As Executive Chairman, Mr. Donovan is receiving an annual base salary of $200,000.
|
(c)
|
On July 1, 2014, Winthrop, pursuant to the terms of its Milford Connecticut facility lease, gave eight months’ notice to their landlord to terminate their lease in Milford, Connecticut. In August 2014, the Company entered into a five year sublease in Greenwich, Connecticut for 10,000 square feet. At December 31, 2015, annual future rent for the Greenwich space, which expires on September 30, 2019 aggregated $939,000 payable as follows; $240,000 (2016), $248,000 (2017), $255,000 (2018), and $196,000 (through September 30, 2019). Rent expense charged to operations related to the facilities aggregated $225,000 and $165,000 in 2015 and 2014, respectively. The rent expense in 2015 and 2014 included deferred rent of $65,000 and $68,000, respectively, due to straight lining the amounts payable over the lease term commencing in August 2014 upon the Company gaining access to the premises. The Company also moved their corporate office from Mount Kisco, New York (see Note 17) to the new Greenwich facility in March 2015, which resulted in a consolidation of the Company’s corporate headquarters to Greenwich, Connecticut.
|
(d)
|
On September 26, 2014, the Connecticut Department of Energy and Environmental Protection (“DEEP”) issued two Orders requiring the investigation and repair of two dams in which the Company and its subsidiaries have certain ownership interests. The first Order requires that the Company investigate and make specified repairs to the ACME Pond Dam located in Killingly, Connecticut. The second Order, as subsequently revised by DEEP on October 10, 2014, requires that the Company investigate and make specified repairs to the Killingly Pond Dam located in Killingly, Connecticut. These two properties are included in Investment in undeveloped land in the Consolidated Balance Sheets. The Company has administratively appealed and contested the allegations in both Orders. As the administrative appeal of both Orders is in its early stages, it is not possible at this time to evaluate the likelihood of, or to estimate the range of loss from, an unfavorable outcome.
|
17.
|
Related party transactions
|
18.
|
Segment information
|
Year ended December 31,
|
||||||||
2015
|
2014
|
|||||||
Adjusted EBITDA of operating segment (income/(loss))
|
$ | 366 | $ | (335 | ) | |||
Other operating expenses:
|
||||||||
Corporate
|
(1,629 | ) | (1,833 | ) | ||||
Depreciation and amortization
|
(652 | ) | (659 | ) | ||||
Equity based compensation
|
(446 | ) | (330 | ) | ||||
Amortization of stay and retention bonuses
|
(135 | ) | (133 | ) | ||||
Relocation and severence costs
|
(64 | ) | (34 | ) | ||||
Operating loss
|
(2,560 | ) | (3,324 | ) | ||||
Non- operating income (expense):
|
||||||||
Interest expense and other, net
|
(170 | ) | (56 | ) | ||||
Gain on sale of investment in MXL
|
- | 719 | ||||||
Change in fair value of contingent consideration
|
336 | (66 | ) | |||||
Loss from continuing operations before income taxes
|
$ | (2,394 | ) | $ | (2,727 | ) | ||
Following is a summary of the Company's total
assets (in thousands):
|
||||||||
December 31, | ||||||||
2015 | 2014 | |||||||
Operating segment
|
$ | 7,125 | $ | 7,601 | ||||
Corporate (1)
|
9,158 | 11,663 | ||||||
$ | 16,283 | $ | 19,264 |
Page
|
|
Financial Statements of Wright Investors’ Service Holdings, Inc.:
|
|
25
|
|
26
|
|
27
|
|
28
|
|
29
|
|
30
|
(a)(2)
|
Schedules have been omitted because they are not required or are not applicable, or the required information has been included in the financial statements or the notes thereto.
|
(a)(3)
|
See accompanying Index to Exhibits.
|
WRIGHT INVESTORS’ SERVICE HOLDINGS, INC
|
||||
Date: March 24, 2016
|
By:
|
/s/ HARVEY P. EISEN
|
||
Name:
|
Harvey P. Eisen
|
|||
Title:
|
Chairman, President and Chief Executive Officer
(Principal Executive Officer)
|
Signature
|
Capacity
|
Date
|
|
/s/ HARVEY P. EISEN
|
Chairman, President and Chief Executive Officer
|
March 24, 2016
|
|
Harvey P. Eisen
|
(Principal Executive Officer)
|
||
/s/ LAWRENCE G. SCHAFRAN
|
Director
|
March 24, 2016
|
|
Lawrence G. Schafran
|
|||
/s/ RICHARD C. PFENNIGER Jr.
|
Director
|
March 24, 2016
|
|
Richard C. Penniger Jr.
|
|||
/s/ MARSHALL S. GELLER
|
Director
|
March 24, 2016
|
|
Marshall S. Geller
/s/ PETER M. DONOVAN
|
Director
|
March 24, 2016
|
|
Peter M. Donovan
|
|||
/s/ IRA J. SOBOTKO
|
Vice President, Chief Financial Officer
|
March 24, 2016
|
|
Ira J. Sobotko
|
(Principal Financial and Accounting Officer)
|
2.1
|
Agreement and Plan of Merger, dated June 18, 2012, by and among National Patent Development Corporation, NPT Advisors Inc., The Winthrop Corporation, and Peter M. Donovan as the securityholders’ Representative. Incorporated herein by reference to Exhibit 2.1 of the Registrant’s Form 8-K filed on June 19, 2012.
|
|
|
3(i)
|
Articles of Incorporation of National Patent Development Corporation. Incorporated herein by reference to Exhibit 3.1 of the Registrant’s Form S-1, Registration No. 333-118568.
|
|
|
3(ii)
|
Bylaws of National Patent Development Corporation. Incorporated herein by reference to Exhibit 3.2 of the Registrant’s Form S-1, Registration No. 333-118568.
|
|
|
4.1
|
Form of certificate representing shares of common stock, par value $0.01 per share, of National Patent Development Corporation. Incorporated herein by reference to Exhibit 4.1 of the Registrant’s Form S-1, Registration No. 333-118568.
|
9.1
|
Form of Investors’ Rights Agreement. Incorporated herein by reference to Exhibit 9.1 of the Registrant’s Form 8-K filed on December 22, 2012.
|
|
|
10.1
|
Employment Agreement entered into on June 18, 2012 between the Company and Peter M. Donovan. Incorporated herein by reference to Exhibit 10.1 of the Registrant’s Form 10-Q for the quarterly period ended June 30, 2012 filed on August 14, 2012.
|
|
|
10.2
|
Employment Agreement entered into on June 18, 2012 between the Company and Amit S. Khandwala. Incorporated herein by reference to Exhibit 10.2 of the Registrant’s Form 10-Q for the quarterly period ended June 30, 2012 filed on August 14, 2012.
|
10.3
|
Employment Agreement entered into on June 18, 2012 between the Company and Theodore S. Roman. Incorporated herein by reference to Exhibit 10.3 of the Registrant’s Form 10-Q for the quarterly period ended June 30, 2012 filed on August 14, 2012.
|
|
|
10.4
|
Employment Agreement entered into on June 18, 2012 between the Company and Anthony E. van Daalen. Incorporated herein by reference to Exhibit 10.4 of the Registrant’s Form 10-Q for the quarterly period ended June 30, 2012 filed on August 14, 2012.
|
10.5
|
Non-Competition and Non-Solicitation Agreement entered into on June 18, 2012 between the Company and Peter M. Donovan. Incorporated herein by reference to Exhibit 10.5 of the Registrant’s Form 10-Q for the quarterly period ended June 30, 2012 filed on August 14, 2012.
|
10.6
|
Non-Competition and Non-Solicitation Agreement entered into on June 18, 2012 between the Company and Amit S. Khandwala. Incorporated herein by reference to Exhibit 10.6 of the Registrant’s Form 10-Q for the quarterly period ended June 30, 2012 filed on August 14, 2012.
|
10.7
|
Non-Competition and Non-Solicitation Agreement entered into on June 18, 2012 between the Company and Theodore S. Roman. Incorporated herein by reference to Exhibit 10.7 of the Registrant’s Form 10-Q for the quarterly period ended June 30, 2012 filed on August 14, 2012.
|
10.8
|
Non-Competition and Non-Solicitation Agreement entered into on June 18, 2012 between the Company and Anthony E. van Daalen. Incorporated herein by reference to Exhibit 10.8 of the Registrant’s Form 10-Q for the quarterly period ended June 30, 2012 filed on August 14, 2012.
|
10.9
|
Form of Restricted Stock Unit Agreement. Incorporated herein by reference to Exhibit 10.9 of the Registrant’s Form 8-K filed on December 22, 2012.
|
10.10
|
Form of Support Agreement. Incorporated herein by reference to Exhibit 10.10 of the Registrant’s Form 8-K filed on December 22, 2012.
|
10.11
|
Lease between The Winthrop Corporation, Tenant and 440 Wheelers Farms Road, L.L.C., Landlord dated July 16, 1999, as amended. Incorporated herein by reference to Exhibit 10.11 of the Registrant’s Form 8-K filed on December 22, 2012.
|
10.12
|
Side Letter Agreement between The Winthrop Corporation, Tenant and 440 Wheelers Farms Road, L.L.C., Landlord, dated July 16, 1999. Incorporated herein by reference to Exhibit 12 of the Registrant’s Form 8-K filed on December 22, 2012.
|
10.13
|
Amendment between The Winthrop Corporation, Tenant and 440 Wheelers Farms Road, L.L.C., Landlord, dated January 7, 2000. Incorporated herein by reference to Exhibit 10.13 of the Registrant’s Form 8-K filed on December 22, 2012.
|
10.14
|
Premises and Relocation Lease Amendment between The Winthrop Corporation, Tenant and 440 Wheelers Farms Road, L.L.C., Landlord, dated October 8, 2003. Incorporated herein by reference to Exhibit 10.14 of the Registrant’s Form 8-K filed on December 22, 2012.
|
10.15 **
|
Agreement Upon Withdrawal by the Winthrop Corporation from Worldscope /Disclosure LLC dated as of June 1, 2012. Incorporated herein by reference to Exhibit 10.15 of the Registrant’s Form 8-K filed on December 22, 2012.
|
10.16
|
Agreement of Lease between SOVA Merritt LLC, Landlord and the Winthrop Corporation dated March 17, 2008. Incorporated herein by reference to Exhibit 10.16 of the Registrant’s Form 8-K filed on December 22, 2012.
|
10.17
|
Modification of Amendment to Security Agreement Dated March, 2005 between The Winthrop Corporation and Merritt Acquisitions LLC, as successor in interest to 440 Wheelers Farm Road, LLC. Incorporated herein by reference to Exhibit 10.17 of the Registrant’s Form 8-K filed on December 22, 2012.
|
|
|
10.18
|
Distribution Agreement between Thomson Reuters (Markets) LLC and Wright Investors’ Service, dated November 30, 2009. Incorporated herein by reference to Exhibit 10.18 of the Registrant’s Form 8-K filed on December 22, 2012.
|
10.19
|
Settlement Agreement and Release, between Cohn Reznick LLP, in its capacity as Plan Administrator, and Wright Investors’ Service Holdings, Inc. Incorporated herein by reference to Exhibit 10.1 of the Registrant’s 8-K filed on August 2, 2013.
|
10.20
|
Amendment No. 1 to Agreement Upon Withdrawal by The Winthrop Corporation From Worldscope/Disclosure LLC. Incorporated herein by reference to Exhibit 10.20 to the Registrant’s Form 10-Q for the quarter ended June 30, 2014 filed on August 12, 2014.
|
10.21
|
Sublease between Coldwell Banker Real Estate Services LLC (sublessor) And Wright Investors’’ Service Holdings, Inc. (sublessee) At 177 West Putman Avenue, Greenwich Connecticut. Incorporated herein by reference to Exhibit 10.21 to the Registrant’s Form 10-Q for the quarter ended September 30, 2014 as filed on November 12, 2014.
|
10.22
|
Limited Liability Company Agreement for EGS, LLC effective April 28, 2015
|
10.23
|
Note Purchase Agreement Between EGS, LLC and Merriman Holdings, Inc., effective April 28, 2015
|
10.24
|
Note Purchase Agreement Between EGS, LLC and Merriman Holdings, Inc., effective July 16, 2015
|
14
|
Code of Business Conduct and Ethics for Chief Executive Officer and Senior Financial Officers of the Registrant and its subsidiaries. Incorporated herein by reference to Exhibit 14.1 to the Registrant’s Form 10-K for the year ended December 31, 2004 filed on April 15, 2005
|
21
|
Subsidiaries of the Registrant*
|
|
31.1
|
*
|
Certification of the principal executive officer of the Registrant, pursuant to Securities Exchange Act Rule 13a-14(a)
|
31.2
|
*
|
Certification of the principal financial officer of the Registrant, pursuant to Securities Exchange Act Rule 13a-14(a)
|
32
|
*
|
Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, signed by the principal executive officer and the principal financial officer of the Registrant
|
101.INS
|
XBRL Instance Document
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB
|
XBRL Extension Labels Linkbase Document
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
Name of Subsidiary
|
Other Names Under Which
Subsidiary Conducts Business
|
State or Other Jurisdiction of
Incorporation or Organization
|
||
NPDV Resources, Inc.
|
N/A
|
Delaware
|
||
Chestnut Hill Reservoir Company
|
N/A
|
Connecticut
|
||
The Winthrop Corporation
|
N/A
|
Connecticut
|
|
1.
|
I have reviewed this annual report on Form 10-K of Wright Investors’ Service Holdings, 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(s) 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(e) and 15d-15(f)) for the registrant and have:
|
|
5.
|
The registrant’s other certifying officer(s) 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):
|
/s/ HARVEY P. EISEN
|
||
Name:
|
Harvey P. Eisen
|
|
Title:
|
Chairman, President and
|
|
Chief Executive Officer
|
|
1.
|
I have reviewed this annual report on Form 10-K of Wright Investors’ Service Holdings, 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(s) 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(e) and 15d-15(f)) for the registrant and have:
|
|
5.
|
The registrant’s other certifying officer(s) 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):
|
/s/ IRA J. SOBOTKO
|
||
Name:
|
Ira J. Sobotko
|
|
Title:
|
Vice President, Chief Financial Officer,
|
|
Secretary and Treasurer
|
|
(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.
|
/s/ HARVEY P. EISEN
|
||
Name:
|
Harvey P. Eisen
|
|
Title:
|
Chairman, President and
|
|
Chief Executive Officer
|
||
Date:
|
March 24, 2016
|
/s/ IRA J. SOBOTKO
|
||
Name:
|
Ira J. Sobotko
|
|
Title:
|
Vice President, Chief Financial Officer
|
|
Secretary and Treasurer
|
||
Date:
|
March 24, 2016
|
Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Mar. 03, 2016 |
Jun. 30, 2015 |
|
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 | ||
Entity Registrant Name | Wright Investors Service Holdings, Inc. | ||
Entity Central Index Key | 0001279715 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2015 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 19,169,273 | ||
Entity Current Reporting Status | Yes | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 15,000,000 |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Revenues | ||
Investment management services | $ 2,453 | $ 2,600 |
Other investment advisory services | 2,839 | 2,600 |
Financial research and related data | 733 | 620 |
Total revenues | 6,025 | 5,820 |
Expenses | ||
Compensation and benefits | 4,802 | 5,108 |
Other operating | 3,783 | 4,036 |
Total expenses | 8,585 | 9,144 |
Operating loss | (2,560) | (3,324) |
Investment and other expense, net | $ (170) | (56) |
Gain on sale of investment in MXL | 719 | |
Change in fair value of liability for contingent consideration | $ 336 | (66) |
Loss from continuing operations before income taxes | (2,394) | (2,727) |
Income tax (expense) benefit | (27) | 172 |
Loss from continuing operations | $ (2,421) | (2,555) |
Income from discontinued operations, net of taxes | 315 | |
Net loss | $ (2,421) | $ (2,240) |
Basic and diluted loss per share | ||
Continuing operations | $ (0.13) | $ (0.14) |
Discontinued operations | 0.02 | |
Net loss | $ (0.13) | $ (0.12) |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, issued | 19,720,971 | 19,059,198 |
Common stock, outstanding | 19,155,752 | 18,494,129 |
Treasury stock, shares | 565,219 | 565,069 |
Restricted Stock Units (RSUs) [Member] | ||
Common stock, shares authorized | 596,513 |
Description of activities |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 | |||
Description of activities [Abstract] | |||
Description of activities |
On December 19, 2012 (the “Closing Date”), National Patent Development Corporation, which changed its name on February 4, 2013 to Wright Investors’ Service Holdings, Inc. (hereinafter referred to as the “Company” or “Wright Holdings”), completed the acquisition of The Winthrop Corporation, a Connecticut corporation (“Winthrop”) pursuant to that certain Agreement and Plan of Merger (the “Merger Agreement”) dated June 18, 2012. Winthrop, through its wholly-owned subsidiaries Wright Investors’ Service, Inc. (“Wright”), Wright Investors’ Service Distributors, Inc. (“WISDI”) and Wright’s wholly-owned subsidiary, Wright Private Asset Management, LLC (“WPAM”) (collectively, the “Wright Companies”), offers investment management services, financial advisory services and investment research to large and small investors, both taxable and tax exempt. WISDI is a registered broker dealer with the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the Securities and Exchange Commission. In accordance with the Merger Agreement, a wholly-owned newly formed subsidiary of the Company, was merged with and into Winthrop and Winthrop became a wholly-owned subsidiary of the Company.
|
Summary of significant accounting policies |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 | |||
Summary of significant accounting policies [Abstract] | |||
Summary of significant accounting policies |
Principles of consolidation.
The consolidated financial statements include the accounts of the Company and its subsidiaries all of which are wholly-owned. All significant intercompany accounts and transactions have been eliminated in consolidation.
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America, 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 financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.
Cash and cash equivalents
Cash equivalents represent short-term, highly liquid investments, which are readily convertible to cash and have maturities of three months or less at time of purchase. Cash equivalents, which are carried at cost plus accrued interest, which approximates fair value, consist of an investment in a money market fund which invests in treasury bills and amounted to approximately $7,833,000, and $10,985,000 at December 31, 2015 and 2014, respectively.
Cash equivalents are classified within level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets.
Short-term investments
Short term investments are recorded at fair value, with related unrealized gains and losses recognized in operations. Fair values are based on listed market prices, where available. If listed market prices are not available or if the liquidation of our positions would reasonably be expected to impact market prices, fair value is determined based on other relevant factors, including dealer price quotations. See Note 6.
Basic and diluted loss per share
Basic and diluted loss per share for the years ended December 31, 2015 and 2014, respectively, is calculated based on 19,250,000 and 19,101,000 weighted average outstanding shares of common stock including common shares underlying vested RSUs. Options for 3,250,000 shares of common stock in 2015 and 2014, and unvested RSUs for 204,000 and 207,000 shares of common stock in 2015 and 2014, respectively, were not included in the diluted computation as their effect would be anti-dilutive since the Company has losses from continuing operations for both years.
Employees’ stock based compensation
Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, which is generally the vesting period. See Note 14.
Income taxes
Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to carryforwards and to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
The accounting for uncertain tax positions guidance requires that the Company recognize the financial statement benefit of a tax position only after determining that the Company would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company recognizes interest and penalties on uncertain tax positions as interest and other expenses, respectively.
Concentrations of credit risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash investments. The Company places its cash investments with high quality financial institutions.
Property and equipment
Property and equipment are carried at cost, net of allowance for depreciation. Depreciation is provided on a straight-line basis over estimated useful lives of 3 to 7 years for equipment and furniture.
Intangible Assets
Intangible assets, which were recorded in connection with the acquisition of Winthrop, are amortized over their estimated useful lives, on a straight-line basis. Intangible assets subject to amortization are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company assesses the recoverability of its intangible assets by determining whether the unamortized balance can be recovered over the assets’ remaining life through undiscounted forecasted cash flows. If undiscounted forecasted cash flows indicate that the unamortized amounts will not be recovered, an adjustment will be made to reduce such amounts to fair value determined based on forecasted future cash flows discounted at a rate commensurate with the risk associated with achieving such cash flows. Future cash flows are based on trends of historical performance and the Company’s estimate of future performance, giving consideration to existing and anticipated competitive and economic conditions. No impairment of intangible assets was recognized at December 31, 2015 or 2014.
Goodwill
Goodwill,
which was recorded in connection with the acquisition of Winthrop, is not subject to amortization and is tested for
impairment annually on December 31, or more frequently if events or changes in circumstances indicate that the asset may
be impaired. The impairment test consists of a comparison of the fair value of the reporting unit, which consists of
The Wright Companies operating segment, with its carrying amount, including goodwill. Fair value was calculated based upon
future cash flows discounted at a rate commensurate with the risk involved, market based comparables and recent
transactions within the financial services industry. Future cash flows are based on projection of adjusted EBITDA of the
operating segment (see Note 18). If the carrying amount of the reporting unit exceeds its fair value then an analysis will be
performed to compare the implied fair value of goodwill with the carrying amount of goodwill. An impairment loss will be
recognized in an amount equal to the excess of the carrying amount over the implied fair value. After an impairment loss is
recognized, the adjusted carrying amount of goodwill is its new accounting basis. No impairment of goodwill was
recognized at December 31, 2015 or 2014. There were no changes in the carrying value of goodwill during
2015 or 2014.
Revenue recognition
Revenue from investment advisory services and investment management services are recognized over the period in which the service is performed. Accordingly, the amount of such revenue billed as of the balance sheet date relating to periods after the balance sheet date is accounted for as deferred revenue. Revenue from research reports is recognized monthly upon the downloading of reports by institutional and other investors from investment industry distributors. |
Discontinued Operation |
12 Months Ended | ||
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Dec. 31, 2015 | |||
Discontinued Operation [Abstract] | |||
Discontinued Operation |
During the year ended December 31, 2014, the Company agreed to a settlement of its insurance claim related to a loss in connection with the litigation related to the sale of a former subsidiary, and received a net payment of $525,000, which has been credited to discontinued operations (See Note 16(a)). See Note 10 with respect to $210,000 of tax expense charged to discontinued operations in 2014. |
Sale of MXL investment |
12 Months Ended | ||
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Dec. 31, 2015 | |||
Sale of MXL investment [Abstract] | |||
Sale of MXL investment |
The Company held a 19.9% equity investment in a privately-held company, MXL, which is engaged in the plastic molding and precision coating businesses. On February 3, 2014, MXL exercised its right to purchase the Company’s 19.9% interest for $994,000, resulting in a gain of $719,000 for the year ended December 31, 2014. |
Liability for Contingent Consideration |
12 Months Ended | ||
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Dec. 31, 2015 | |||
Liability for Contingent Consideration [Abstract] | |||
Liability for Contingent Consideration |
In connection with the Company’s acquisition of Winthrop on December 19, 2012, the Company agreed to pay contingent consideration in cash to a holder of Winthrop common stock who received 852,228 shares of Company Common Stock to the extent that such shares had a value of less than $1,900,000 on the expiration of the three year period based on the average closing price of the Company’s Common Stock for the ten trading days prior to such date.
A liability was recognized for an estimate of the acquisition date fair value of the acquisition-related contingent consideration which may be paid. The fair value was calculated by utilizing a lattice model, which takes into account the potential for the Company’s stock price per share being less than $2.23 per share at the end of the 3 year lock-up period. The fair value measurement was based on significant unobservable inputs that were supported by little market activity and reflect the Company’s own assumptions. Key assumptions included expected volatility (50% at December 31, 2014) in the Company’s Common Stock and the risk free interest rate (0.25 % at December 31, 2014) during the then remainder of the three year lock up period. Changes in the fair value of the contingent consideration subsequent to the acquisition date were recognized in earnings prior to the liability being settled. The fair value of the liability was $572,000 on December 31, 2014 (Level 3 under the fair value hierarchy-see Note 6). In December 2015, the Company paid $236,000 to settle the contingent consideration liability and recognized income of $336,000 for the reduction in the fair value of the liability during 2015. Based on the fair value of the liability at September 30, 2015, the Company recognized a gain of $532,000 (unaudited) for the fourth quarter ended December 31, 2015. The Company recognized expense of $66,000 for the change in the value for the year ended December 31, 2014. |
Short-term investments |
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Short-term investments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-term investments |
The Financial Accounting Standards Board has issued authoritative accounting guidance that defines fair value, establishes a framework for measuring fair value and establishes a fair value hierarchy which prioritizes the inputs to valuation techniques. The guidance clarifies that fair value should be based on assumptions that market participants would use when pricing an asset or liability. The three levels of fair value hierarchy are described below:
Marketable securities at December 31, 2015 and 2014 consist of (in thousands):
Short-term investments in mutual funds managed by a subsidiary of Winthrop, which are classified as a level 1, are stated at the net asset value of the funds. The Company liquidated these investments in the first quarter of 2016 for a total of $148,000 and recognized a loss of $9,000. |
Investment in LLC |
12 Months Ended | ||
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Dec. 31, 2015 | |||
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract] | |||
Investment in LLC |
The Company entered into a Limited Liability Company Agreement dated April 28, 2015 by and among EGS, LLC, a newly formed Delaware limited liability company (“EGS”) and the members named therein. The Company invested $333,333 and acquired 333,333 Units, representing a 33.33% Membership Interest in EGS. In addition to the Company, EGS has two other members, one of whom is Marshall Geller, a member of the Company’s Board of Directors. The EGS transaction, as well as Mr. Geller’s participation in the transaction, received the prior approval of the Company’s Audit Committee. Mr. Geller is the Managing Member of the LLC and also invested $333,333 and acquired 333,333 Units, representing a 33.33% Membership Interest in EGS.
EGS entered into a Note Purchase Agreement effective April 28, 2015 with Merriman Holdings, Inc. (“Merriman”), a publically traded company, pursuant to which EGS purchased from Merriman for an aggregate purchase price of $1,000,000 (i) a one-year Senior Secured Note in the original principal amount of $1,000,000, at 12% interest, payable quarterly, in arrears (the “Note”) and (ii) a Common Stock Purchase Warrant which expires in five years to purchase 500,000 shares of Merriman common stock at $1.00 per share (the “Warrants”). EGS distributed the Warrants to its members and the Company received 166,666 Warrants which expire in five years. The investment in EGS is being accounted for under the equity method. Under this method, the Company records its share of EGS’s earnings (losses) in the statement of operations with equivalent amount of increases (decreases) to the investment. At April 28, 2015, the Company valued the Warrants at their fair value, of $120,000, using the Black Scholes model, and recorded their value as a reduction in the investment in EGS. The Company recorded approximately $74,000 as its share of EGS’s net income for the year ended December 31, 2015 which is included in Investment and other expense, net in the Consolidated Statements of Operations. At December 31, 2015, the carrying value of the investment in EGS was $287,000. The Warrant which permits a cashless exercise, qualifies as a derivative, and is recorded at fair value (based on observable inputs) with change in such value included in earnings. At December 31, 2015, the value of the Warrant (a Level 2 Security) was $12,000, which is included in Other Assets in the Consolidated Balance Sheet. The decrease in the value of the Warrant of $108,000 is included in Interest expense and other, net in the Consolidated Statement of Operations. Such reduction reflects the decrease in the price of Merriman’s common stock as measured for the period ended December 31, 2015.
On July 20, 2015, a fourth member joined EGS and invested $333,333, and received a 25% Membership Interest in EGS. EGS advanced the funds to Merriman and increased its investment in the Note and in addition, received 166,666 additional Warrants which it distributed to its new member. This transaction reduced the Company’s interest in EGS to 25%, and changed the expiration date of the Note to July 20, 2016, and extended the exercise date of the warrant to five years from that date.
Merriman is a financial services holding company that provides capital markets advisory and research, corporate and investment banking services through its wholly-owned principal operating subsidiary, Merriman Capital, Inc. (“MC”). The Note is secured by 99.998% of the capital stock of MC. Marshall Geller also received 166,666 Warrants with an exercise price of $1.00 per share that expire in five years.
The Note, pursuant to the terms of an Intercreditor Agreement entered into with Merriman’s current debt holders, is senior to all of Merriman’s debt. |
Accounts receivable |
12 Months Ended | ||
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Dec. 31, 2015 | |||
Accounts receivable [Abstract] | |||
Accounts receivable |
Winthrop and its subsidiaries continuously monitor the creditworthiness of customers and establish an allowance for uncollectible accounts based on specific customer related collection issues. As of December 31, 2015 and 2014, there was no allowance for uncollectible accounts. |
Accounts payable and accrued expenses |
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Accounts payable and accrued expenses [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts payable and accrued expenses |
Accounts payable and accrued expenses consist of the following (in thousands):
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Income taxes |
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Income taxes [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income taxes |
The components of income tax expense (benefit) are as follows (in thousands):
For the year ended December 31, 2015, current income tax expense related to continuing operations substantially represents minimum state income taxes.
For the year ended December 31, 2014, current income tax benefit related to continuing operations substantially represents a benefit from utilizing the loss from continuing operations against income from discontinued operations, offset by minimum state taxes.
The difference between the benefit for income taxes computed at the statutory rate and the reported amount of tax expense (benefit) from continuing operations is as follows:
The deferred tax assets and liabilities are summarized as follows (in thousands):
A valuation allowance is provided when it is more likely than not that some portion of deferred tax assets will not be realized. The valuation allowance increased by approximately $998,000 and $1,109,000 respectively, during the years ended December 31, 2015 and 2014 principally due to increases of net operating loss carryforwards.
The Company files a consolidated federal tax return with its subsidiaries. As of December 31, 2015, the Company has a federal net operating loss carryforward of approximately $19.9 million, which expires from 2030 through 2035, and various state and local net operating loss carryforwards totaling approximately $29.3 million, which expire between 2016 and 2035. Approximately $1.3 million of the federal net operating loss carryforward and $8.5 million of the state net operating loss carryforward were acquired from Winthrop. The acquired federal net operating loss carryfoward is limited in its utilization by Section 382 of the Internal Revenue Code due to an ownership change.
The 2012 through 2015 tax years remain open for examination by the Internal Revenue Service. For state tax purposes, the 2011 through 2015 tax years remain open for examination by the tax authorities under a four year statute of limitations. |
Property and equipment |
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Property and equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and equipment |
Property and equipment consists of the following (in thousands):
Depreciation expense for the years ended December 31, 2015 and 2014 was $15,000 and $22,000, respectively. |
Intangible Assets |
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Intangible Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets |
Intangible assets subject to amortization consisted of the following (in thousands):
Amortization expense amounted to $637,000 for each of the years ended December 31, 2015 and 2014. The weighted-average amortization period for total amortizable intangibles at December 31, 2015 is 5 years. Estimated amortization expense for each of the five succeeding years and thereafter is as follows (in thousands):
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Capital Stock |
12 Months Ended | ||
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Dec. 31, 2015 | |||
Capital Stock [Abstract] | |||
Capital Stock |
The Company’s Board of Directors, without any vote or action by the holders of common stock, is authorized to issue preferred stock from time to time in one or more series and to determine the number of shares and to fix the powers, designations, preferences and relative, participating, optional or other special rights of any series of preferred stock.
The Board of Directors authorized the Company to repurchase up to 5,000,000 outstanding shares of common stock from time to time either in open market or privately negotiated transactions. At December 31, 2015, the Company had repurchased 1,791,971 shares of its common stock (of which 150 shares were purchased in 2015 at a cost of $200) and a total of 3,208,029 shares, remained available for repurchase. |
Incentive stock plans and stock based compensation |
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Incentive stock plans and stock based compensation [Abstract] | ||||||||||||||||||||
Incentive stock plans and stock based compensation |
Common stock options
The Company had initially adopted a stock-based compensation plan for employees and non-employee members of its Board of Directors in November 2003 which was subsequently amended in March 2007 (the “2003 Plan”). In December 2007, the Company adopted the National Patent Development Corporation 2007 Incentive Stock Plan (the “2007 NPDC Plan”). The plans provide for up to 3,500,000 and 7,500,000 awards for shares under the 2003 Plan and 2007 NPDC Plan, respectively, in form of discretionary grants of stock options, restricted stock shares, restricted stock units (RSUs) and other stock-based awards to employees, directors and outside service providers. The Company’s plans are administered by the Compensation Committee of the Board of Directors, which consists solely of non-employee directors. The term of any option granted under the plans will not exceed ten years from the date of grant and, in the case of incentive stock options granted to a 10% or greater holder of total voting stock of the Company, three years from the date of grant. The exercise price of any option granted under the plans may not be less than the fair market value of the common stock on the date of grant or, in the case of incentive stock options granted to a 10% or greater holder of total voting stock, 110% of such fair market value. As of December 31, 2015, the number of shares reserved and available for award under the 2007 NPDC Plan is 6,241,786 and under the 2003 Plan is 700,000.
During the year ended December 31, 2015, there was no option activity. No compensation expense related to option grants was recorded for the years ended December 31, 2015 and 2014. As of December 31, 2015 there were outstanding options to acquire 3,250,000 common shares, all of which were vested and exercisable, having a weighted average exercise price of $2.31 per share, a weighted average contractual term of 1.6 years and an aggregate intrinsic value of $284,000.
Restricted stock units
As a result of the Winthrop acquisition, the Company issued a total of 849,280 RSUs on the Closing Date to be settled in shares of Company common stock as follows:
In addition, the following RSUs were granted to employees of the Company:
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Retirement plans |
12 Months Ended | ||||||||
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Dec. 31, 2015 | |||||||||
Retirement plans [Abstract] | |||||||||
Retirement plans |
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Commitments, Contingencies and Other |
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Commitments, Contingencies and Other [Abstract] | ||||||||||||
Commitments, Contingencies and Other |
On August 2, 2013, the Company entered into a Settlement Agreement and Release (the “Settlement Agreement”) with CohnReznick LLP (the “Plan Administrator”) to settle the Avoidance Action. Under the terms of the Settlement Agreement, the Plan Administrator was required to file with the Bankruptcy Court, no later than August 9, 2013, a motion to approve the Settlement Agreement (the “Settlement Motion”) and a proposed order approving relief to be requested in the Settlement Motion (the “Proposed Order”). Pursuant to the Settlement Agreement, the Company agreed to make a settlement payment of $2,375,000 (the “Settlement Payment”) to the Plan Administrator conditioned upon the entry of an order (the “Approval Order”) by the Bankruptcy Court approving the Settlement Motion, that is in a form acceptable to the Company and in substantially the same form as the Proposed Order. The Bankruptcy Court entered an order approving the Settlement Agreement on September 4, 2013, and the Settlement Agreement required the Company to make the Settlement Payment within fifteen days of the Approval Order becoming a final, non-appealable order (a “Final Order”). On October 3, 2013, the Company made a payment of $2,375,000 to the Plan Administrator pursuant to the terms of the Settlement Agreement.
The Settlement Agreement also provides for general mutual releases by each of the parties, including a general release in favor of the Company and its affiliates, and the Company’s and its affiliates’ officers, directors, employees, agents, and professionals. The mutual releases became effective upon entry of the Final Order and receipt of the Settlement Payment by the Plan Administrator. In addition, pursuant to the terms of the Settlement Agreement, on October 9, 2013 the Plan Administrator made the requisite filings to dismiss, with prejudice, the Avoidance Action and a second pending adversary complaint against the Company. Upon entry of the Final Order by the Bankruptcy Court, the Company resolved all claims and causes of action that have been or could have been asserted against it by the Plan Administrator.
As a result of entering into the Settlement Agreement, during the year ended December 31, 2013, the Company recorded a loss in discontinued operations of $2,375,000 in connection with the Avoidance Action. In April 2014, the Company agreed to a settlement of its insurance claim related to this matter, and received a net payment of $525,000, which was recorded as income in discontinued operations during the year ended December 31, 2014.
Under their respective Employment Agreements, the three other key executives were serving as Senior Managing Directors of Winthrop. Their Employment Agreements each provide for a term of three years, with automatic annual renewals unless notice of non-renewal is given at least six months prior to the applicable employment period. On June 16, 2015, the other three key executives were informed that their contracts would not be automatically renewed. Each of the three key executives is receiving an annual base salary of $250,000. In addition to their base salaries, each of the other three key executives are entitled to receive a “Stay/Client Retention Bonus” of $114,000. The Stay/Client Retention Bonus was payable in equal installments on the Closing Date and first, second and third anniversaries of the Closing Date. Two of the executives elected to receive the Stay/Client Retention Bonus in RSUs, valued at $2.00 per RSU (a total of 114,000 RSUs) which vested in equal annual installments on the first, second and third anniversaries of the Closing and one elected to receive cash payable in four equal installments of $28,500, the first paid and expensed on the Closing Date. In the first quarter of 2016, one of the three key executives was no longer employed by the Company.
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Related party transactions |
12 Months Ended | ||
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Dec. 31, 2015 | |||
Related party transactions [Abstract] | |||
Related party transactions |
Effective June 1, 2010, the Company relocated its headquarters to the offices of Bedford Oak in Mount Kisco, New York. Bedford Oak is controlled by Harvey P. Eisen, Chairman, Chief Executive Officer and a director of the Company. The Company had been subleasing a portion of the Bedford Oak space and had access to various administrative support services on a month-to-month basis. On October 31, 2012, the Company’s Audit Committee approved an increase to approximately $40,700 per month (effective as of September 1, 2012) in the monthly sublease and administrative support services rate, which increased rate the Company believed, was necessary to provide for the increased personnel and space requirements necessary for an operating company.
On May 13, 2014, the Company’s Audit Committee approved a decrease to approximately $27,600 per month (effective as of June 1, 2014) in the monthly sublease and administrative support services rate, which decreased rate was part of the Company’s effort to control and reduce costs. In March 2015, the Audit Committee approved the elimination of the monthly sublease and administrative support services fee effective March 31, 2015. Operating expenses for the year ended December 31, 2015 and 2014, includes $83,000 and $397,000, respectively, related to the sublease arrangement with Bedford Oak. See Note 16 (c) for a description and the terms of the Company’s sublease transaction for its new corporate headquarters.
Wright acts as an investment advisor, its subsidiary acts as a principal underwriter and one officer of Winthrop is also an officer for a family of mutual funds from which investment management and distribution fees are earned based on the net asset values of the respective funds. Such fees, which are included in Other investment advisory services, amounted to $871,000 and $794,000 for the years ended December 31, 2015 and 2014, respectively. |
Segment Information |
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Segment Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information |
The Company through its wholly-owned subsidiary has one operating segment which is engaged in the investment management and financial advisory business and derives its revenue from investment management services, other investment advisory services and financial research.
The
Company’s corporate operations are not considered an operating segment and the Company does not allocate corporate
expense for management and administrative services or income and expense related to other corporate activity to its operating
segment to measure its operations. The Company’s management utilizes adjusted EBITDA to measure segment
performance. Adjusted EBITDA is a measure defined as EBITDA before corporate expense, equity based compensation, ,
amortization of stay and retention bonuses, relocation and severance costs and non-operating income
(expense). EBITDA is a measure defined as earnings (loss) before interest, taxes, depreciation and
amortization
Adjusted
EBITDA is a non-GAAP measure and should not be construed as an alternative to operating loss or net loss as an indicator of the
Companys performance, or as an alternative to cash used in operating activities, or as a measure of liquidity, or as any
other measure determined in accordance with GAAP.
Following is a reconciliation of adjusted EBITDA of the operating segment to loss from continuing operations before income taxes (in thousands):
(1) Consists principally of cash and cash equivalents |
Summary of Significant Accounting Policies (Policies) |
12 Months Ended |
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Dec. 31, 2015 | |
Summary of significant accounting policies [Abstract] | |
Principles of consolidation | Principles of consolidation.
The consolidated financial statements include the accounts of the Company and its subsidiaries all of which are wholly-owned. All significant intercompany accounts and transactions have been eliminated in consolidation.
|
Use of estimates | Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America, 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 financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. |
Cash and cash equivalents | Cash and cash equivalents
Cash equivalents represent short-term, highly liquid investments, which are readily convertible to cash and have maturities of three months or less at time of purchase. Cash equivalents, which are carried at cost plus accrued interest, which approximates fair value, consist of an investment in a money market fund which invests in treasury bills and amounted to approximately $7,833,000, and $10,985,000 at December 31, 2015 and 2014, respectively.
Cash equivalents are classified within level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets. |
Short-term investments | Short-term investments
Short term investments are recorded at fair value, with related unrealized gains and losses recognized in operations. Fair values are based on listed market prices, where available. If listed market prices are not available or if the liquidation of our positions would reasonably be expected to impact market prices, fair value is determined based on other relevant factors, including dealer price quotations. See Note 6. |
Basic and diluted loss per share | Basic and diluted loss per share
Basic and diluted loss per share for the years ended December 31, 2015 and 2014, respectively, is calculated based on 19,250,000 and 19,101,000 weighted average outstanding shares of common stock including common shares underlying vested RSUs. Options for 3,250,000 shares of common stock in 2015 and 2014, and unvested RSUs for 204,000 and 207,000 shares of common stock in 2015 and 2014, respectively, were not included in the diluted computation as their effect would be anti-dilutive since the Company has losses from continuing operations for both years. |
Employees' stock based compensation | Employees’ stock based compensation
Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, which is generally the vesting period. See Note 14. |
Income taxes | Income taxes
Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to carryforwards and to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
The accounting for uncertain tax positions guidance requires that the Company recognize the financial statement benefit of a tax position only after determining that the Company would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company recognizes interest and penalties on uncertain tax positions as interest and other expenses, respectively. |
Concentrations of credit risk | Concentrations of credit risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash investments. The Company places its cash investments with high quality financial institutions. |
Property and equipment | Property and equipment
Property and equipment are carried at cost, net of allowance for depreciation. Depreciation is provided on a straight-line basis over estimated useful lives of 3 to 7 years for equipment and furniture. |
Intangible Assets | Intangible Assets
Intangible assets, which were recorded in connection with the acquisition of Winthrop, are amortized over their estimated useful lives, on a straight-line basis. Intangible assets subject to amortization are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company assesses the recoverability of its intangible assets by determining whether the unamortized balance can be recovered over the assets’ remaining life through undiscounted forecasted cash flows. If undiscounted forecasted cash flows indicate that the unamortized amounts will not be recovered, an adjustment will be made to reduce such amounts to fair value determined based on forecasted future cash flows discounted at a rate commensurate with the risk associated with achieving such cash flows. Future cash flows are based on trends of historical performance and the Company’s estimate of future performance, giving consideration to existing and anticipated competitive and economic conditions. No impairment of intangible assets was recognized at December 31, 2015 or 2014. |
Goodwill | Goodwill
Goodwill,
which was recorded in connection with the acquisition of Winthrop, is not subject to amortization and is tested for
impairment annually on December 31, or more frequently if events or changes in circumstances indicate that the asset may
be impaired. The impairment test consists of a comparison of the fair value of the reporting unit, which consists of
The Wright Companies operating segment, with its carrying amount, including goodwill. Fair value was calculated based upon
future cash flows discounted at a rate commensurate with the risk involved, market based comparables and recent
transactions within the financial services industry. Future cash flows are based on projection of adjusted EBITDA of the
operating segment (see Note 18). If the carrying amount of the reporting unit exceeds its fair value then an analysis will be
performed to compare the implied fair value of goodwill with the carrying amount of goodwill. An impairment loss will be
recognized in an amount equal to the excess of the carrying amount over the implied fair value. After an impairment loss is
recognized, the adjusted carrying amount of goodwill is its new accounting basis. No impairment of goodwill was
recognized at December 31, 2015 or 2014. There were no changes in the carrying value of goodwill during
2015 or 2014. |
Revenue recognition | Revenue recognition
Revenue from investment advisory services and investment management services are recognized over the period in which the service is performed. Accordingly, the amount of such revenue billed as of the balance sheet date relating to periods after the balance sheet date is accounted for as deferred revenue. Revenue from research reports is recognized monthly upon the downloading of reports by institutional and other investors from investment industry distributors. |
Short-term investments (Tables) |
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Short-term investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current Trading Marketable Securities |
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Accounts payable and accrued expenses (Tables) |
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Accounts payable and accrued expenses [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accounts payable and accrued expenses |
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Income taxes (Tables) |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income taxes [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income Tax Expense (Benefit) |
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Differences Between Statutory and Reported Amount Tax Rates |
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Schedule of Deferred Tax Assets and Liabilities |
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Property and equipment (Tables) |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of property and equipment |
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Intangible Assets (Tables) |
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Intangible Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Acquired Intangible Assets |
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Amortization Expense Related to Intangible Assets |
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Segment Information (Tables) |
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Information |
(1) Consists principally of cash and cash equivalents |
Summary of significant accounting policies (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Cash equivalents | $ 7,833,000 | $ 10,985,000 |
Weighted average number of common shares outstanding | 19,250,000 | 19,101,000 |
Office Furniture and Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 7 years | |
Office Furniture and Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Restricted Stock Units (RSUs) [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive options outstanding | 204,000 | 207,000 |
Employee Stock Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive options outstanding | 3,250,000 | 3,250,000 |
Discontinued Operation (Details) |
12 Months Ended |
---|---|
Dec. 31, 2014
USD ($)
| |
Discontinued Operation [Abstract] | |
Tax (benefit) expense to discontinued operations | $ 210,000 |
Insurance claim settlement, amount awarded to company | $ 525,000 |
Sale of MXL investment (Details) - USD ($) |
1 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 26, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Schedule of Equity Method Investments [Line Items] | ||||
Proceeds from sale of investment in MXL | $ 994,000 | |||
Gain on sale of investment in MXL | $ 719,000 | |||
MXL [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity investment, percentage | 19.90% | |||
Proceeds from sale of investment in MXL | $ 994,000 | |||
Gain on sale of investment in MXL | $ 719,000 |
Liability for Contingent Consideration (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 19, 2012 |
Dec. 31, 2015 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Mar. 31, 2015 |
Jan. 19, 2015 |
Jun. 10, 2014 |
|
Business Acquisition [Line Items] | ||||||||
Stock price | $ 1.85 | $ 1.70 | $ 1.90 | |||||
Change in liability for contigent consideration | $ 336,000 | $ (66,000) | ||||||
Winthrop [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Cash paid | $ 236,000 | |||||||
Change in liability for contigent consideration | $ 336,000 | $ 532,000 | ||||||
Winthrop [Member] | Nonspecified Stock Holder [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Issuance of common stock in connection with acquisition, shares | 852,228 | |||||||
Contingent consideration, maximum value of shares | $ 1,900,000 | |||||||
Stock price | $ 2.23 | |||||||
Expected volatility | 50.00% | |||||||
Risk-free interest rate | 0.25% | |||||||
Fair value of contingent liability | $ 572,000 |
Short-term investments (Details) - USD ($) $ in Thousands |
2 Months Ended | ||
---|---|---|---|
Mar. 06, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Schedule of Available-for-sale Securities [Line Items] | |||
Cost | $ 91 | $ 91 | |
Unrealized Gains | 66 | 63 | |
Estimated Fair Value | 157 | 154 | |
Mutual Funds [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Cost | 91 | 91 | |
Unrealized Gains | 66 | 63 | |
Estimated Fair Value | $ 157 | $ 154 | |
Subsequent Event [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Proceeds from sale of investments | $ 148 | ||
Recognized Loss | $ 9 |
Accounts payable and accrued expenses (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Accounts payable and accrued expenses [Abstract] | ||
Accrued professional fees | $ 328 | $ 323 |
Accrued compensation and related expenses | 193 | 322 |
Other | 509 | 471 |
Accounts payable and accrued expenses | $ 1,030 | $ 1,116 |
Income taxes (Components of Income Tax Expense (Benefit)) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Current | ||
Federal | $ (179) | |
State and local | $ 27 | 7 |
Total current | $ 27 | (172) |
Current | ||
Federal | 179 | |
State and local | 31 | |
Total current | 210 | |
Total income tax expense | $ 27 | $ 38 |
Income taxes (Differences Between Statutory and Reported Amount Tax Rates) (Details) |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Income taxes [Abstract] | ||
Federal income tax rate | (34.00%) | (34.00%) |
State income tax (net of federal effect) | (4.70%) | (4.90%) |
Change in valuation allowance | 41.90% | 38.60% |
Loss utilized against discontinued operations | (6.40%) | |
Non-deductible expenses | 2.70% | 0.60% |
Non-taxable income | (4.80%) | |
Effective tax rate | 1.10% | (6.10%) |
Income taxes (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Deferred tax assets: | ||
Net operating loss carryforwards | $ 8,325 | $ 7,076 |
Equity-based compensation | 1,237 | 1,593 |
Tax credit carryforwards | 148 | 148 |
Accrued compensation | 369 | 418 |
Accrued liabilities & other | 113 | 193 |
Gross deferred tax assets | 10,192 | 9,428 |
Less: valuation allowance | (9,138) | (8,140) |
Deferred tax assets after valuation allowance | 1,054 | 1,288 |
Deferred tax liabilities: | ||
Intangible assets | (1,043) | (1,278) |
Others | (11) | (10) |
Deferred tax liabilities | $ (1,054) | $ (1,288) |
Net Deferred tax assets |
Property and equipment (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 156 | $ 137 |
Less accumulated depreciation and amortization | (112) | (97) |
Property and Equipment, Net, Total | 44 | 40 |
Depreciation expenses | 15 | 22 |
Computer Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 2 | 2 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 108 | 94 |
Office Furniture and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 45 | 40 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 1 | $ 1 |
Intangible Assets (Intangible Assets) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 4,574 | $ 4,574 |
Accumulated Amortization | 1,930 | 1,293 |
Net carrying amount | $ 2,644 | $ 3,281 |
Investment Management and Advisory Contracts [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 9 years | 9 years |
Gross carrying amount | $ 3,181 | $ 3,181 |
Accumulated Amortization | 1,072 | 718 |
Net carrying amount | $ 2,109 | $ 2,463 |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 10 years | 10 years |
Gross carrying amount | $ 433 | $ 433 |
Accumulated Amortization | 131 | 88 |
Net carrying amount | $ 302 | $ 345 |
Proprietary Software and Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 4 years | 4 years |
Gross carrying amount | $ 960 | $ 960 |
Accumulated Amortization | 727 | 487 |
Net carrying amount | $ 233 | $ 473 |
Intangible Assets (Estimated Amortization Expense) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Intangible Assets [Abstract] | ||
2016 | $ 630 | |
2017 | 397 | |
2018 | 397 | |
2019 | 397 | |
2020 | 397 | |
2020-2023 | 426 | |
Finite-Lived Intangible Assets, Net, Total | 2,644 | $ 3,281 |
Amortization expense related to intangible assets | $ 637 | $ 637 |
Weighted average useful life of intangible assets | 5 years |
Capital Stock (Details) |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
shares
| |
Capital Stock [Abstract] | |
Number of shares authorized to be repurchased | 5,000,000 |
Number of shares repurchased | 1,791,971 |
Number of shares repurchased during period | 150 |
Value of shares repurchased during period | $ | $ 200 |
Remaining number of shares available for repurchase | 3,208,029 |
Retirement plans (Details) - Pension Plans, Defined Benefit [Member] - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Dec. 19, 2012 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2012 |
|
Defined Benefit Plan Disclosure [Line Items] | ||||
Employer match of eligible compensation of employees | 10.00% | |||
Total obligation | $ 914,000 | $ 858,000 | ||
Total obligation, payable in 2016 | 200,000 | |||
Annual liability payable to individual retired employees | $ 50,000 | |||
Liability recorded at date of acquisition | $ 885,000 | |||
Present value discount factor | 14.00% | |||
Amount to be amortized, as interest expense | $ 1,027,000 | |||
Interest expense | $ 148,000 | 92,000 | ||
Discounts | $ 606,000 | 756,000 | ||
Decrease in obligation liability | $ (36,000) |
Related party transactions (Details) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
May. 13, 2014 |
Oct. 31, 2012 |
|
Related Party Transaction [Line Items] | ||||
Operating expenses | $ 8,585,000 | $ 9,144,000 | ||
Winthrop [Member] | ||||
Related Party Transaction [Line Items] | ||||
Investment management and distribution fees | 871,000 | 794,000 | ||
Lease Agreements [Member] | Bedford Oak [Member] | ||||
Related Party Transaction [Line Items] | ||||
Monthly sublease payment amount | $ 27,600 | $ 40,700 | ||
Operating expenses | $ 83,000 | $ 397,000 |
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