10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2019
or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from _____ to _____

Commission File Number: 000-50587

WRIGHT INVESTORS’ SERVICE HOLDINGS, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	13-4005439
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

177 West Putnam Avenue, Greenwich, CT	06830
(Address of principal executive offices)	(Zip code)

(914) 242-5700

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or, an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company”, in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

Securities registered pursuant to Section 12(b) of the Act:            None 

Securities registered pursuant to Section 12(g) of the Act:

Title of each class	Trading Symbol (s)	Name of each exchange on which registered
Common Stock, $0.01 par value	WISH	OTC

As of May 10, 2019, there were 19,744,321 shares of the registrant’s common stock, $0.01 par value, outstanding. 

WRIGHT INVESTORS’ SERVICE HOLDINGS, INC.

TABLE OF CONTENTS

	Part I.  Financial Information	Page No.
Item 1.	Financial Statements of Wright Investors’ Service Holdings, Inc.	1
	Condensed Consolidated Statements of Operations- Three Months Ended March 31, 2019 and 2018 (Unaudited)	1
	Condensed Consolidated Balance Sheets - March 31, 2019 (Unaudited) and December 31, 2018	2
	Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2019 and 2018 (Unaudited)	3
	Condensed Consolidated Statement of Changes in Stockholders’ Equity- Three Months Ended March 31, 2019 and 2018 (Unaudited)	4
	Notes to Condensed Consolidated Financial Statements - Three Months Ended March 31, 2019 and 2018 (Unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	11
Item 4.	Controls and Procedures	11
	Part II. Other Information
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	12
Item 6.	Exhibits	13
SIGNATURES		14

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

WRIGHT INVESTORS' SERVICE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except per share amounts)

	Three Months Ended March 31,
	2019			2018
Expenses
Compensation and benefits	$	152		$	177
Other operating		475			427
		627			604
Operating loss from continuing operations		(627	)		(604	)
Interest and other income, net		146			2
Loss from continuing operations before income taxes		(481	)		(602	)
Income tax expense		(11	)		(13	)
Net loss from continuing operations		(492	)		(615	)
Income from discontinued operations, net of tax		-			198
Net loss	$	(492	)	$	(417	)
Basic and diluted income (loss) per share
Continuing operations loss per share	$	(0.03	)	$	(0.03	)
Discontinuing operations income per share		-			0.01
Net loss per share	$	(0.03	)	$	(0.02	)

See accompanying notes to condensed consolidated financial statements.

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WRIGHT INVESTORS' SERVICE HOLDINGS, INC.

 CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

	March 31,			December 31,
	2019			2018
		(unaudited)
Assets
Current assets
Cash and cash equivalents	$	745		$	6,163
Investments in U.S. Treasury Bills, held for trading		7,990			2,980
Income tax receivable		114			51
Prepaid expenses and other current assets		105			146
Total current assets		8,954			9,340
Deferred tax asset		-			74
Right of use lease asset		111			-
Other assets		58			58
Total assets	$	9,123		$	9,472
Liabilities and stockholders’ equity
Current liabilities
Accounts payable and accrued expenses	$	195		$	204
Operating lease liability		130			-
Total current liabilities		325			204
Total liabilities		325			204
Stockholders’ equity
Preferred stock, par value $0.01 per share, authorized 10,000,000 shares; none issued
Common stock, par value $0.01 per share, authorized 30,000,000 shares; issued 20,462,462 and 20,462,462 as of March 31, 2019 and December 31, 2018, respectively; outstanding 19,647,243 and 19,647,243 at March 31, 2019 and December 31, 2018, respectively		204			204
Additional paid-in capital		34,068			34,046
Accumulated deficit		(23,775	)		(23,283	)
Treasury stock, at cost (815,219 shares at March 31, 2019 and December 31, 2018)		(1,699	)		(1,699	)
Total stockholders' equity		8,798			9,268
Total liabilities and stockholders’ equity	$	9,123		$	9,472

See accompanying notes to condensed consolidated financial statements.

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WRIGHT INVESTORS' SERVICE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

	Three Months Ended March 31,
	2019			2018
Cash flows from operating activities
Net loss	$	(492	)	$	(417	)
Adjustments to reconcile net loss to net cash used in operating activities:
Equity based compensation, including vesting of stock to directors		22			43
Change in unrealized appreciation on investments in U.S. Treasury Bills		(25	)		-
Changes in other operating items:
Assets net of liabilities held for sale		-			(221	)
Deferred tax asset		74			-
Income taxes receivable/ payable		(63	)		13
Prepaid expenses and other current expenses		41			48
Right of use lease asset		(111	)		-
Accounts payable and accrued expenses		(9	)		(24	)
Operating lease liability		130			-
Net cash used in operating activities		(433	)		(558	)
Cash flows from investing activities
Investments in Treasury Bills		(4,985	)		-
Net cash used in investing activities		(4,985	)		-
Net decrease in cash and cash equivalents		(5,418	)		(558	)
Cash and cash equivalents at the beginning of the period		6,163			5,601
Cash and cash equivalents at the end of the period	$	745		$	5,043

See accompanying notes to condensed consolidated financial statements. 

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WRIGHT INVESTORS' SERVICE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

THREE MONTHS ENDED MARCH 31, 2019 and 2018

(UNAUDITED)

(in thousands, except per share data)

													Total
					Additional					Treasury			stock-
	Common stock (Issued)				paid -in		Accumulated			stock, at			holders
	shares		amount		capital		deficit			cost			equity
Balance at December 31, 2017		19,962,014	$	199	$	33,933	$	(21,409	)	$	(1,699	)	$	11,024
ASC 606 cumulative adjustment		-		-		-		(157	)		-			(157	)
Adjusted balance at December 31, 2017		19,962,014	$	199	$	33,933	$	(21,566	)	$	(1,699	)	$	10,867
Net loss		-		-		-		(417	)		-			(417	)
Equity based compensation expense		-		-		16		-			-			16
Shares issuable for vested restricted stock units		200,000		-		-		-			-			-
Issuance and vesting of common stock to directors		129,975		-		27		-			-			27
Balance at March 31, 2018		20,291,989	$	199	$	33,976	$	(21,983	)	$	(1,699	)	$	10,493
Balance at December 31, 2018		20,462,462	$	204	$	34,046	$	(23,283	)	$	(1,699	)	$	9,268
Net loss		-		-		-		(492	)		-			(492	)
Vesting of restricted stock units		-		-		2		-			-			2
Vesting of common stock to directors		-		-		20		-			-			20
Balance at March 31, 2019		20,462,462	$	204	$	34,068	$	(23,775	)	$	(1,699	)	$	8,798

See accompanying notes to condensed consolidated financial statements.

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WRIGHT INVESTORS’ SERVICE HOLDINGS, INC.

Notes to Condensed Consolidated Financial Statements

Three months ended March 31, 2019 and 2018

(unaudited)

1. Basis of presentation and description of activities

Basis of presentation

The accompanying interim financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X.  The information and note disclosures normally included in complete financial statements have been condensed or omitted pursuant to such rules and regulations.  The Condensed Consolidated Balance Sheet as of December 31, 2018 has been derived from audited financial statements. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2018 as presented in our Annual Report on Form 10-K. In the opinion of management, this interim information includes all material adjustments, which are of a normal and recurring nature, necessary for a fair presentation. The results for the 2019 interim period are not necessarily indicative of results to be expected for the entire year.

Description of activities

On July 17, 2018, the Company completed the sale of its primary operating subsidiary The Winthrop Corporation (“Winthrop”), to Khandwala Capital Management, Inc., a company principally owned and controlled by Amit S. Khandwala, the Co-Chief Executive Officer and Chief Investment Officer of Winthrop, prior to the sale, for $6,000,000 in cash as well as $173,000 from Winthrop for repayment of the intercompany balance between the Company and Winthrop (“Sale”). 

Winthrop’s results of operations for the quarter ended March 31, 2018 have been reclassified as discontinued operations to be consistent with the current period’s presentation.

As a public company after the Sale, we intend to evaluate and explore all available strategic options. We will continue to work to maximize stockholder value. Such strategic options may include acquisition of an investment advisory business, acquisition of a financial services business, creating partnerships or joint ventures for those or other businesses and investing in other businesses that provide attractive opportunities for growth. The directors will also consider alternatives for distributing some or all of its cash and cash equivalents. Until such time as a decision is made as to how the proceeds from the Sale and other liquid assets of the Company are so deployed, we intend to invest the proceeds of the Sale and our other liquid assets in high-grade, short- term investments (such as cash and cash equivalents) consistent with the preservation of principal, maintenance of liquidity and avoidance of speculation.

Currently, the Company has no or nominal operations. As a result, we are a “shell company”, as defined in Rule 405 of the Securities Act of 1933, as amended, or the Securities Act, and Rule 12b-2 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. As a shell company, our stockholders will be unable to utilize Rule 144 of the Securities Act, or Rule 144 to sell “restricted stock” as defined in Rule 144 or otherwise use Rule 144 to sell stock of the Company, and we would be ineligible to utilize registration statements on Form S-3 or Form S-8 for so long as we remain a shell company and for 12 months thereafter. Among other things, as a consequence, the offering, issuance and sale of our securities is likely to be more expensive and time consuming and may make our securities less attractive to investors.

The Company is not engaged in the business of investing, reinvesting, or trading in securities, and we do not hold ourselves out as being engaged in those activities. However, under the Investment Company Act of 1940, as amended (the “Investment Company Act”), a company may fall within the scope of being an “inadvertent investment company” under section 3(a)(1)(C) of such Act if the value of its investment securities (as defined in the Investment Company Act) is more than 40% of its total assets (exclusive of government securities and cash and certain cash equivalents). As of March 31, 2019, the Company is not considered an inadvertent investment company.

2. Adoption of new accounting guidance

In February 2016, the FASB established ASC Topic 842, Leases (Topic 842), by issuing ASU No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. Lease expense is recognized based on an effective interest method for finance leases, and on a straight-line basis over the term of the lease for operating leases. The new guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018. The Company adopted this standard on January 1, 2019, which did not have a material impact on the condensed consolidated financial statements.

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3. Certain new accounting guidance not yet adopted

In January 2017, FASB issued ASU 2017-04, “Intangibles- Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment”, which eliminates the second step of the previous FASB guidance for testing goodwill for impairment and is intended to reduce cost and complexity of goodwill impairment testing. The standard is effective for periods beginning after December 15, 2019 for both interim and annual periods.  Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.  The Company does not expect the adoption of ASU 2017-04 to have an impact on its consolidated financial statements.

4. Per share data

Loss per share for the three months ended March 31, 2019 and 2018 respectively, is calculated based on 19,647,243 and 19,378,000 weighted average outstanding shares of common stock. Included in the share number are vested Restricted Stock Units (“RSUs”) of 211,970 for the quarter ended March 31, 2018. There were no vested Restricted Stock Units for the quarter ended March 31, 2019.

Options for 550,000 shares of common stock, for the three months ended March 31, 2019 and 2018 were not included in the diluted computation as their effect would be anti-dilutive since the Company incurred net losses for both periods.

5. Investment valuation

The Company carries its investments at fair value. Fair value is an estimate of the exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (i.e., the exit price at the measurement date). Fair value measurements are not adjusted for transaction costs. A fair value hierarchy provides for prioritizing inputs to valuation techniques used to measure fair value into three levels:

Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 Inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company.

Level 3 Unobservable inputs. Unobservable inputs reflect the assumptions that the Company develops based on available information about what market participants would use in valuing the asset or liability.

An asset or liability's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Availability of observable inputs can vary and is affected by a variety of factors. The Company uses judgment in determining fair value of assets and liabilities and Level 3 assets and liabilities involve greater judgment than Level 1 or Level 2 assets or liabilities.

As of March 31, 2019, and December 31, 2018 the Company had $7,990,000 and $2,980,000, respectively, of investments of in U.S. government debt securities, which it holds as trading securities. U.S. government debt securities are valued using a model that incorporates market observable data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations. U.S. government debt securities are categorized in Level 2 of the fair value hierarchy, depending on the inputs used and market activity levels for specific securities.

6. Leases

In August 2014, the Company entered into a five-year sublease in Greenwich, Connecticut (“Lease”) for 10,000 square feet of office space which expires on September 30, 2019. The Company adopted ASC 842 – Leases on January 1, 2019 and elected the “package of practical expedients” noted in the transition guidance, which permits the Company not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The lease continues to be classified as an operating lease. Upon adoption on January 1, 2019, the Company recognized Right of Use Asset (“ROU”) of approximately $173,000, net of deferred rent of approximately $19,000, and lease liability of $192,000, which represented the present value of future lease payments as of January 1, 2019.

6 

Lease expense charged to operations related to the facilities aggregated $65,000 and $14,000 in the three months ended March 31, 2019 and March 31, 2018, respectively. Rent expense allocated to Winthrop in the amount of $54,000 is included in Income from discontinued operations for the quarter ended March 31, 2018. Cash payment for the operating lease for the three months ended March 31, 2019 aggregated to $65,000. Future minimum rent payment for the lease aggregated approximately $131,000, payable through September 30, 2019. Right of use lease asset and liability are included in the Condensed Consolidated Balance Sheet. At March 31, 2019, the Company reported approximately $111,000 right of use lease asset, net of deferred rent, and $130,000 lease liability.

7. Income taxes

Income tax expense represents minimum state taxes. No tax benefit has been recorded in relation to the pre-tax loss for the three months ended March 31, 2019 and 2018, due to a full valuation allowance to offset any deferred tax asset related to net operating loss carry forwards attributable to the losses.

8. 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. As of March 31, 2019, the Company had repurchased 2,041,971 shares of its common stock and a total of 2,958,029 of the authorization shares, remained available for repurchase as of March 31, 2019.

9. Incentive stock plans and stock-based compensation

Common stock options

The Company adopted a stock-based compensation plan for employees and non-employee members of its Board of Directors in November 2003 (the “2003 Plan”), and the National Patent Development Corporation 2007 Incentive Stock Plan in December 2007 (the “2007 NPDC Plan”).  The periods during which additional awards may be granted under the plans have expired and no further awards may be granted under any of these plans after December 20, 2017. As a consequence, any equity compensation awards issued after that time will be on terms determined by the Board of Directors or the Compensation Committee of the Board of Directors and pursuant to exemptions from the registration requirements of the securities laws.

The Company recorded compensation expense of $100 for each of the three months ended March 31, 2019 and 2018, respectively, under these plans. 

The Company issued 100,000 options to a consultant on March 28, 2016 which vest equally over 3 years and are subject to post vesting restrictions for sale for three years with an exercise price of $1.29, which price was equal to the market value at the date of the grant. 

The fair value of the options granted on March 28, 2016 were reduced by an 8% discount for post vesting restrictions.

As of March 31, 2019, all options were vested and there were outstanding options to acquire 550,000 common shares under the 2007 NPDC Plan, all 550,000 options were vested and exercisable, having a weighted average exercise price of $1.35 per share, a weighted average contractual term of 1.75 years and zero aggregate intrinsic value. There were no grants, forfeitures or options exercised during the first quarter of 2019.

Restricted stock units

On January 19, 2015 and March 31, 2015, 100,000 restricted stock units (“RSUs”) were issued on each date to two newly appointed directors of the Company.  The RSUs vested equally over 3 years.  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. As of March 31, 2019, the RSU’s were already fully vested and the related 200,000 shares of the Company’s common stock was issued during the year ended December 31, 2018.

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On February 13, 2019, 100,000 restricted stock units (“RSUs”) were issued to a newly appointed director of the Company. The RSUs vest equally over 3 years. The RSUs are valued based on the closing price of $0.42 of the Company’s common stock on February 13, 2019, 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 $0.39.

The Company recorded compensation expense of $2,000 and $16,000 for the quarters ended March 31, 2019 and 2018, respectively, related to these RSUs. The total unrecognized compensation expense related to these unvested RSUs at March 31, 2019 is $40,000, which will be recognized over the remaining vesting period of approximately 2.8 years.

10. Commitments, Contingencies, and Other

The Company has interests in land and certain flowage rights in undeveloped property (the “properties”) primarily located in Killingly, Connecticut. As of December 31, 2018, the properties were shown in the Consolidated Balance Sheet at $0 after recording an impairment loss of $355,000. The properties were deemed to be fully impaired as of March 31, 2019.

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 required 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, required that the Company investigate and make specified repairs to the Killingly Pond Dam located in Killingly, Connecticut.  The Company administratively appealed and contested the allegations in both Orders.  On July 27, 2017, the Company entered into a Consent Order with the DEEP relative to Killingly Pond Dam. The Killingly Pond Consent Order requires the Company to continue to perform routine maintenance and administrative procedures consistent with DEEP’s Dam Safety regulations, the cost of which is not material to the Company’s financial position or results of operations.

On July 27, 2018, the Company entered into a Consent Order with the DEEP relative to Acme Pond Dam. The Acme Pond Dam Consent Order requires the Company to investigate and recommend repairs to Acme Pond Dam. Based up on the work performed by the Company’s retained consulting engineering firm, the Company submitted its recommended action plan (the “action plan”) for Acme Pond Dam pursuant to the Consent Order on November 30, 2017 and such recommended action plan remains under review by the DEEP as of the current date. The estimated cost of work to be performed under the action plan developed by the Company’s retained consulting engineering firm was $90,000 and such amount has been recorded as a liability in the accompanying Consolidated Balance Sheet as of March 31,2019. It cannot be determined at this time whether such action plan may be ultimately accepted as is, revised or otherwise changed between the Company and the DEEP and, as such, the $90,000 provision currently provided may change based upon a final resolution of this matter. 

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

Cautionary Statement Regarding Forward-Looking Statements

This report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward looking statements. Forward-looking statements are not statements of historical facts, but rather reflect our current expectations concerning future events and results. The words “may,” “will,” “anticipate,” “should,” “would,” “believe,” “contemplate,” “could,” “project,” “predict,” “expect,” “estimate,” “continue,” and “intend,” as well as other similar words and expressions of the future, are intended to identify forward-looking statements.

Factors that may cause actual results to differ from those results expressed or implied, include, but are not limited to, those listed under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018 filed by the Company with the Securities and Exchange Commission (the “SEC”) on March 29, 2019.

These forward-looking statements generally relate to our plans, objectives and expectations for future events and include statements about our expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts.  These statements are based upon our opinions and estimates as of the date they are made.  Although we believe that the expectations reflected in these forward-looking statements are reasonable, such forward-looking statements are subject to known and unknown risks and uncertainties that may be beyond our control, which could cause actual results, performance and achievements to differ materially from results, performance and achievements projected, expected, expressed or implied by the forward-looking statements.  While we cannot assess the future impact that any of these differences could have on our business, financial condition, results of operations and cash flows or the market price of shares of our common stock, the differences could be significant. You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this report and you are urged to consider all such risks and uncertainties. In light of the uncertainty inherent in such forward-looking statements, you should not consider their inclusion to be a representation that such forward-looking matters will be achieved. 

General Overview

On July 17, 2018, we completed the sale of The Winthrop Corporation (the “Sale”) to Khandwala Capital Management, Inc., a company principally owned and controlled by Amit S. Khandwala, the Co-Chief Executive Officer and Chief Investment Officer of Winthrop, prior to the Sale, for $6,000,000, subject to certain adjustments for intercompany accounts at closing (see Note 1 to the Condensed Consolidated Financial Statements).  

The Winthrop Corporation’s results of operations for the quarter ended March 31, 2018 have been reclassified as discontinued operations to be consistent with the current period’s presentation.

Upon the consummation of the Sale of The Winthrop Corporation, we became a “shell company”, as defined in Rule 12b-2 of the Exchange Act.  Because we are a shell company, our stockholders are unable to utilize Rule 144 to sell “restricted stock” as defined in Rule 144 or to otherwise use Rule 144 to sell our securities, and we are ineligible to utilize registration statements on Form S-3 or Form S-8 for so long as we remain a shell company and for 12 months thereafter.  As a consequence, among other things, the offering, issuance and sale of our securities is likely to be more expensive and time consuming and may make our securities less attractive to investors.

Our Board of Directors is considering strategic uses for the Sale of The Winthrop Corporation proceeds including, without limitation, using such funds, together with other funds of the Company, to develop or acquire interests in one or more operating businesses.  While we have focused our development or acquisition efforts on sectors in which our management has expertise, we do not wish to limit ourselves to, or to foreclose any opportunities in, any particular industry or sector.  Prior to this use, the Sale of The Winthrop Corporation proceeds have been, and we anticipate will continue to be, invested in high-grade, short-term investments (such as cash and cash equivalents) consistent with the preservation of principal, maintenance of liquidity and avoidance of speculation, until such time as we need to utilize such funds, or any portion thereof, for the purposes described above.   The directors will also consider alternatives for distributing some or all of its cash and cash equivalents to stockholders.

Results of operations

Three months ended March 31, 2019 compared to the three months ended March 31, 2018

For the three months ended March 31, 2019, the Company had a loss from continuing operations before income taxes of $481,000 compared to a loss from continuing operations of $602,000 for the three months ended March 31, 2018.  The decreased loss before income taxes of $121,000 was primarily the result of increased Interest and other income of $144,000, mainly as the result of the recovery of an old investment in a private entity that was deemed worthless.

The increased income was accompanied by a decrease in Compensation and benefits of $25,000 due to the Company having fewer employees as of the quarter ended March 31, 2019 in comparison to the quarter ended March 31, 2018, partially offset by increased Other operating expenses of $48,000, mainly as a consequence of increased rent expense due to the full absorption of rent by the Company subsequent to the sale of Winthrop.

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Compensation and benefits

For the three months ended March 31, 2019, Compensation and benefits were $152,000 as compared to $177,000 for the three months ended March 31, 2018 as the result of the Company having fewer employees as of the quarter ended on March 31, 2019 in comparison to the quarter ended March 31, 2018.

Other operating expenses

For the three months ended March 31, 2019, Other operating expenses were $475,000 as compared to $427,000 for the three months ended March 31, 2018. The increased operating expenses of $48,000 were primarily the result of increased rent expense after the sale of Winthrop during the third quarter of 2018, increased consulting fees and expenses associated with remediation of the reservoirs, partially offset by decreased travel and entertainment expenses.

Income taxes

For the three months ended March 31, 2019 and 2018, the Company recorded income tax expense from operations of $11,000 and $13,000, respectively. Such amounts represent minimum state taxes. No tax benefit has been recorded in relation to the pre-tax loss for the three months ended March 31, 2019 and 2018, due to a full valuation allowance to offset any deferred tax asset related to net operating loss carry forwards attributable to the losses.

Other Assets

The Company monitors investment in non-strategic assets for impairment by considering current factors, including the economic environment, market conditions, operational performance and other specific factors relating to the business underlying the investment, and records impairments in carrying values when necessary.   

The Company has interests in land and certain flowage rights in undeveloped property (the “properties”) primarily located in Killingly, Connecticut, which are deemed to be fully impaired as of March 31, 2019 and December 31, 2018.

Financial condition

Liquidity and Capital Resources

At March 31, 2019, the Company had cash and cash equivalents totaling $745,000 and investments of $7,990,000 in U.S. Treasury Bills.

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. Please refer to note 5 for valuation on Investments.

The decrease in cash and cash equivalents of $5,418,000 for the quarter ended March 31, 2019 was primarily the result of $433,000 used in operating activities and $4,985,000 used to invest in U.S. Treasury Bills.

The Company believes that its working capital is sufficient to support its operating requirements through June 30, 2020.

10 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required.

Item 4. Controls and Procedures

The Company’s principal executive officer and principal financial officer, with the assistance of other members of the Company’s management, have evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this quarterly report. Based upon such evaluation, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures are effective as of the end of the period covered by this quarterly report.

The Company’s principal executive officer and principal financial officer have also concluded that there was no change in the Company’s internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended March 31, 2019 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

11 

PART II. OTHER INFORMATION

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

Issuances of Equity Securities

As compensation for his role as a Director of the Company, Dort Cameron III was granted on February 13, 2019 (the "Grant Date") 100,000 Stock Units (" RSU's"), each representing the initial right to receive, on the settlement date(s) one share of common stock, par value $.01 per share, of the Issuer. The 100,000 RSU's shall vest in 1/3 increments of 33,333, on each of the one year, two year anniversary and 33,334 on the three year anniversary of the Grant Date, and shall be subject to a three year transfer or sale restriction until the three year anniversary of the Grant Date. No shares were vested as of March 31, 2019. These shares were issued pursuant to exemptions from registration set forth in Section 4(2) of the Securities Act and Regulation D promulgated thereunder.

This issuance qualified for exemption from registration under the Securities Act because (i) Mr. Cameron is an accredited investor, (ii) the Company did not engage in any general solicitation or advertising in connection with the issuance, and (iii) Mr. Cameron received restricted securities.

Purchases of Equity Securities

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 March 31, 2019, the Company had repurchased 2,041,971 shares of its common stock and, a total of 2,958,029 shares remained available for repurchase at March 31, 2019, pursuant to the 5,000,000 shares repurchase plans. The Company did not repurchase shares of common stock during the quarter ended March 31, 2019.

12 

Item 6. Exhibits.

Exhibit No.		Description
31.1	*	Certification of principal executive officer of the Company, pursuant to Securities Exchange Act Rule 13a-14(a)
31.2	*	Certification of principal financial officer of the Company, pursuant to Securities Exchange Act Rule 13a-14(a)
32.1	*	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 of the Company and the principal financial officer of the Company
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

*Filed herewith

**Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Act of 1934 and otherwise are not subject to liability.

13 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	WRIGHT INVESTORS’ SERVICE HOLDINGS, INC
Date:  May 15, 2019	By:	/s/ HARVEY P. EISEN
		Name:	Harvey P. Eisen
		Title:	Chairman, President, and Chief Executive Officer (Principal Executive Officer)

Date:  May 15, 2019	By:	/s/ HAROLD D. KAHN
		Name:	Harold D. Kahn
		Title:	Acting Chief Financial Officer and Acting Principal Accounting Officer (Principal Financial Officer)

14 

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Harvey P. Eisen, certify that:

1.	I have reviewed this annual report on Form 10-Q 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:

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

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

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

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

5. The registrant’s other certifying officer(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):

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

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

Date: May 15, 2019

/s/ HARVEY P. EISEN
Name:	Harvey P. Eisen
Title:	Chairman, President, and
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Harold D. Kahn, certify that:

1. I have reviewed this annual report on Form 10-Q 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:

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

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

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

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

5. The registrant’s other certifying officer(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):

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

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

Date: May 15, 2019

/s/ HAROLD D. KAHN
Name:	Harold D. Kahn
Title:	Acting Chief Financial Officer and
	Acting Principal Accounting Officer

EX-32.1

Exhibit 32.1

CERTIFICATIONS PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Annual Report on Form 10-Q of Wright Investors’ Service Holdings, Inc. (the “Company”) for the fiscal quarter ended March 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company hereby certifies, pursuant to 18 U.S.C. (section) 1350, as adopted pursuant to (section) 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

(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:	May 15, 2019

/s/ HAROLD D. KAHN
Name:	Harold D. Kahn
Title:	Acting Chief Financial Officer and
	Acting Principal Accounting Officer
Date:	May 15, 2019

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 10, 2019
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Entity Registrant Name	Wright Investors Service Holdings, Inc.
Entity Central Index Key	0001279715
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2019
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		19,744,321

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Expenses
Compensation and benefits	$ 152	$ 177
Other operating	475	427
Total expenses	627	604
Operating loss from continuing operations	(627)	(604)
Interest and other income, net	146	2
Loss from continuing operations before income taxes	(481)	(602)
Income tax expense	(11)	(13)
Net loss from continuing operations	(492)	(615)
Income from discontinued operations, net of tax		198
Net loss	$ (492)	$ (417)
Basic and diluted income (loss) per share
Continuing operations loss per share	$ (0.03)	$ (0.03)
Discontinuing operations income per share		0.01
Net loss per share	$ (0.03)	$ (0.02)

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 745	$ 6,163
Investments in U.S. Treasury Bills, held for trading	7,990	2,980
Income tax receivable	114	51
Prepaid expenses and other current assets	105	146
Total current assets	8,954	9,340
Deferred tax asset		74
Right of use lease asset	111
Other assets	58	58
Total assets	9,123	9,472
Current liabilities
Accounts payable and accrued expenses	195	204
Operating lease liability	130
Total current liabilities	325	204
Total liabilities	325	204
Stockholders' equity
Preferred stock, par value $0.01 per share, authorized 10,000,000 shares; none issued
Common stock, par value $0.01 per share, authorized 30,000,000 shares; issued 20,462,462 and 20,462,462 as of March 31, 2019 and December 31, 2018, respectively; outstanding 19,647,243 and 19,647,243 at March 31, 2019 and December 31, 2018, respectively	204	204
Additional paid-in capital	34,068	34,046
Accumulated deficit	(23,775)	(23,283)
Treasury stock, at cost (815,219 shares at March 31, 2019 and December 31, 2018)	(1,699)	(1,699)
Total stockholders' equity	8,798	9,268
Total liabilities and stockholders' equity	$ 9,123	$ 9,472

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Preferred Stock, par value per share	$ 0.01	$ 0.01
Preferred Stock, shares authorized	10,000,000	10,000,000
Preferred Stock, shares issued	0	0
Common Stock, par value per share	$ 0.01	$ 0.01
Common Stock, shares authorized	30,000,000	30,000,000
Common Stock, shares issued	20,462,462	20,462,462
Common Stock, shares outstanding	19,647,243	19,647,243
Treasury stock, shares	815,219	815,219

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities
Net loss	$ (492)	$ (417)
Adjustments to reconcile net loss to net cash used in operating activities:
Equity based compensation, including vesting of stock to directors	22	43
Change in unrealized appreciation on investments in U.S. Treasury Bills	(25)
Changes in other operating items:
Assets net of liabilities held for sale		(221)
Deferred tax asset	74
Income taxes receivable/payable	(63)	13
Prepaid expenses and other current expenses	41	48
Right of use lease asset	(111)
Accounts payable and accrued expenses	(9)	(24)
Operating lease liability	130
Net cash used in operating activities	(433)	(558)
Cash flows from investing activities
Investments in Treasury Bills	(4,985)
Net cash used in investing activities	(4,985)
Net decrease in cash and cash equivalents	(5,418)	(558)
Cash and cash equivalents at the beginning of the period	6,163	5,601
Cash and cash equivalents at the end of the period	$ 745	$ 5,043

XML

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands	Common Stock [Member]	Additional paid-in capital [Member]	Accumulated deficit [Member]	Treasury stock, at cost [Member]	Total
Balance at Dec. 31, 2017	$ 199	$ 33,933	$ (21,409)	$ (1,699)	$ 11,024
Balance, shares at Dec. 31, 2017	19,962,014
New accounting standard cumulative adjustment			(157)		(157)
Adjusted balance at Dec. 31, 2017	$ 199	33,933	(21,566)	(1,699)	10,867
Adjusted balance, Share at Dec. 31, 2017	19,962,014
Net loss			(417)		(417)
Equity based compensation expense		16			16
Vesting of restricted stock units
Vesting of restricted stock units, shares	200,000
Vesting of common stock to directors		27			27
Vesting of common stock to directors, shares	129,975
Balance at Mar. 31, 2018	$ 199	33,976	(21,983)	(1,699)	10,493
Balance, shares at Mar. 31, 2018	20,291,989
Balance at Dec. 31, 2018	$ 204	34,046	(23,283)	(1,699)	9,268
Balance, shares at Dec. 31, 2018	20,462,462
Net loss			(492)		(492)
Vesting of restricted stock units		2			2
Vesting of restricted stock units, shares
Vesting of common stock to directors		20			20
Vesting of common stock to directors, shares
Balance at Mar. 31, 2019	$ 204	$ 34,068	$ (23,775)	$ (1,699)	$ 8,798
Balance, shares at Mar. 31, 2019	20,462,462

XML

Basis of presentation and description of activities

3 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of presentation and description of activities

1. Basis of presentation and description of activities

Basis of presentation

The accompanying interim financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X.  The information and note disclosures normally included in complete financial statements have been condensed or omitted pursuant to such rules and regulations.  The Condensed Consolidated Balance Sheet as of December 31, 2018 has been derived from audited financial statements. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2018 as presented in our Annual Report on Form 10-K. In the opinion of management, this interim information includes all material adjustments, which are of a normal and recurring nature, necessary for a fair presentation. The results for the 2019 interim period are not necessarily indicative of results to be expected for the entire year.

Description of activities

On July 17, 2018, the Company completed the sale of its primary operating subsidiary The Winthrop Corporation (“Winthrop”), to Khandwala Capital Management, Inc., a company principally owned and controlled by Amit S. Khandwala, the Co-Chief Executive Officer and Chief Investment Officer of Winthrop, prior to the sale, for $6,000,000 in cash as well as $173,000 from Winthrop for repayment of the intercompany balance between the Company and Winthrop (“Sale”). 

Winthrop’s results of operations for the quarter ended March 31, 2018 have been reclassified as discontinued operations to be consistent with the current period’s presentation.

As a public company after the Sale, we intend to evaluate and explore all available strategic options. We will continue to work to maximize stockholder value. Such strategic options may include acquisition of an investment advisory business, acquisition of a financial services business, creating partnerships or joint ventures for those or other businesses and investing in other businesses that provide attractive opportunities for growth. The directors will also consider alternatives for distributing some or all of its cash and cash equivalents. Until such time as a decision is made as to how the proceeds from the Sale and other liquid assets of the Company are so deployed, we intend to invest the proceeds of the Sale and our other liquid assets in high-grade, short- term investments (such as cash and cash equivalents) consistent with the preservation of principal, maintenance of liquidity and avoidance of speculation.

Currently, the Company has no or nominal operations. As a result, we are a “shell company”, as defined in Rule 405 of the Securities Act of 1933, as amended, or the Securities Act, and Rule 12b-2 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. As a shell company, our stockholders will be unable to utilize Rule 144 of the Securities Act, or Rule 144 to sell “restricted stock” as defined in Rule 144 or otherwise use Rule 144 to sell stock of the Company, and we would be ineligible to utilize registration statements on Form S-3 or Form S-8 for so long as we remain a shell company and for 12 months thereafter. Among other things, as a consequence, the offering, issuance and sale of our securities is likely to be more expensive and time consuming and may make our securities less attractive to investors.

The Company is not engaged in the business of investing, reinvesting, or trading in securities, and we do not hold ourselves out as being engaged in those activities. However, under the Investment Company Act of 1940, as amended (the “Investment Company Act”), a company may fall within the scope of being an “inadvertent investment company” under section 3(a)(1)(C) of such Act if the value of its investment securities (as defined in the Investment Company Act) is more than 40% of its total assets (exclusive of government securities and cash and certain cash equivalents). As of March 31, 2019, the Company is not considered an inadvertent investment company.

XML

Adoption of new accounting guidance

3 Months Ended

Mar. 31, 2019

Adoption Of New Accounting Guidance

Adoption of new accounting guidance

2. Adoption of new accounting guidance

In February 2016, the FASB established ASC Topic 842, Leases (Topic 842), by issuing ASU No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. Lease expense is recognized based on an effective interest method for finance leases, and on a straight-line basis over the term of the lease for operating leases. The new guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018. The Company adopted this standard on January 1, 2019, which did not have a material impact on the condensed consolidated financial statements.

XML

Certain new accounting guidance not yet adopted

3 Months Ended

Mar. 31, 2019

Certain New Accounting Guidance Not Yet Adopted

Certain new accounting guidance not yet adopted

3. Certain new accounting guidance not yet adopted

In January 2017, FASB issued ASU 2017-04, “Intangibles- Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment”, which eliminates the second step of the previous FASB guidance for testing goodwill for impairment and is intended to reduce cost and complexity of goodwill impairment testing. The standard is effective for periods beginning after December 15, 2019 for both interim and annual periods.  Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.  The Company does not expect the adoption of ASU 2017-04 to have an impact on its consolidated financial statements.

XML

Per share data

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Per share data

4. Per share data

Loss per share for the three months ended March 31, 2019 and 2018 respectively, is calculated based on 19,647,243 and 19,378,000 weighted average outstanding shares of common stock. Included in the share number are vested Restricted Stock Units (“RSUs”) of 211,970 for the quarter ended March 31, 2018. There were no vested Restricted Stock Units for the quarter ended March 31, 2019.

Options for 550,000 shares of common stock, for the three months ended March 31, 2019 and 2018 were not included in the diluted computation as their effect would be anti-dilutive since the Company incurred net losses for both periods.

XML

Investment valuation

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Investment valuation

5. Investment valuation

The Company carries its investments at fair value. Fair value is an estimate of the exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (i.e., the exit price at the measurement date). Fair value measurements are not adjusted for transaction costs. A fair value hierarchy provides for prioritizing inputs to valuation techniques used to measure fair value into three levels:

Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 Inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company.

Level 3 Unobservable inputs. Unobservable inputs reflect the assumptions that the Company develops based on available information about what market participants would use in valuing the asset or liability.

An asset or liability's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Availability of observable inputs can vary and is affected by a variety of factors. The Company uses judgment in determining fair value of assets and liabilities and Level 3 assets and liabilities involve greater judgment than Level 1 or Level 2 assets or liabilities.

As of March 31, 2019, and December 31, 2018 the Company had $7,990,000 and $2,980,000, respectively, of investments of in U.S. government debt securities, which it holds as trading securities. U.S. government debt securities are valued using a model that incorporates market observable data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations. U.S. government debt securities are categorized in Level 2 of the fair value hierarchy, depending on the inputs used and market activity levels for specific securities.

XML

Leases

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Leases

6. Leases

In August 2014, the Company entered into a five-year sublease in Greenwich, Connecticut (“Lease”) for 10,000 square feet of office space which expires on September 30, 2019. The Company adopted ASC 842 – Leases on January 1, 2019 and elected the “package of practical expedients” noted in the transition guidance, which permits the Company not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The lease continues to be classified as an operating lease. Upon adoption on January 1, 2019, the Company recognized Right of Use Asset (“ROU”) of approximately $173,000, net of deferred rent of approximately $19,000, and lease liability of $192,000, which represented the present value of future lease payments as of January 1, 2019.

Lease expense charged to operations related to the facilities aggregated $65,000 and $14,000 in the three months ended March 31, 2019 and March 31, 2018, respectively. Rent expense allocated to Winthrop in the amount of $54,000 is included in Income from discontinued operations for the quarter ended March 31, 2018. Cash payment for the operating lease for the three months ended March 31, 2019 aggregated to $65,000. Future minimum rent payment for the lease aggregated approximately $131,000, payable through September 30, 2019. Right of use lease asset and liability are included in the Condensed Consolidated Balance Sheet. At March 31, 2019, the Company reported approximately $111,000 right of use lease asset, net of deferred rent, and $130,000 lease liability.

XML

Income taxes

3 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

Income taxes

7. Income taxes

Income tax expense represents minimum state taxes. No tax benefit has been recorded in relation to the pre-tax loss for the three months ended March 31, 2019 and 2018, due to a full valuation allowance to offset any deferred tax asset related to net operating loss carry forwards attributable to the losses.

XML

Capital Stock

3 Months Ended

Mar. 31, 2019

Stockholders' Equity Note [Abstract]

Capital Stock

8. 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. As of March 31, 2019, the Company had repurchased 2,041,971 shares of its common stock and a total of 2,958,029 of the authorization shares, remained available for repurchase as of March 31, 2019.

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Incentive stock plans and stock-based compensation

3 Months Ended

Mar. 31, 2019

Share-based Payment Arrangement [Abstract]

Incentive stock plans and stock-based compensation

9. Incentive stock plans and stock-based compensation

Common stock options

The Company adopted a stock-based compensation plan for employees and non-employee members of its Board of Directors in November 2003 (the “2003 Plan”), and the National Patent Development Corporation 2007 Incentive Stock Plan in December 2007 (the “2007 NPDC Plan”).  The periods during which additional awards may be granted under the plans have expired and no further awards may be granted under any of these plans after December 20, 2017. As a consequence, any equity compensation awards issued after that time will be on terms determined by the Board of Directors or the Compensation Committee of the Board of Directors and pursuant to exemptions from the registration requirements of the securities laws.

The Company recorded compensation expense of $100 for each of the three months ended March 31, 2019 and 2018, respectively, under these plans. 

The Company issued 100,000 options to a consultant on March 28, 2016 which vest equally over 3 years and are subject to post vesting restrictions for sale for three years with an exercise price of $1.29, which price was equal to the market value at the date of the grant. 

The fair value of the options granted on March 28, 2016 were reduced by an 8% discount for post vesting restrictions.

As of March 31, 2019, all options were vested and there were outstanding options to acquire 550,000 common shares under the 2007 NPDC Plan, all 550,000 options were vested and exercisable, having a weighted average exercise price of $1.35 per share, a weighted average contractual term of 1.75 years and zero aggregate intrinsic value. There were no grants, forfeitures or options exercised during the first quarter of 2019.

Restricted stock units

On January 19, 2015 and March 31, 2015, 100,000 restricted stock units (“RSUs”) were issued on each date to two newly appointed directors of the Company.  The RSUs vested equally over 3 years.  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. As of March 31, 2019, the RSU’s were already fully vested and the related 200,000 shares of the Company’s common stock was issued during the year ended December 31, 2018.

On February 13, 2019, 100,000 restricted stock units (“RSUs”) were issued to a newly appointed director of the Company. The RSUs vest equally over 3 years. The RSUs are valued based on the closing price of $0.42 of the Company’s common stock on February 13, 2019, 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 $0.39.

The Company recorded compensation expense of $2,000 and $16,000 for the quarters ended March 31, 2019 and 2018, respectively, related to these RSUs. The total unrecognized compensation expense related to these unvested RSUs at March 31, 2019 is $40,000, which will be recognized over the remaining vesting period of approximately 2.8 years.

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Commitments, Contingencies, and Other

3 Months Ended

Mar. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments, Contingencies and Other

10. Commitments, Contingencies, and Other

The Company has interests in land and certain flowage rights in undeveloped property (the “properties”) primarily located in Killingly, Connecticut. As of December 31, 2018, the properties were shown in the Consolidated Balance Sheet at $0 after recording an impairment loss of $355,000. The properties were deemed to be fully impaired as of March 31, 2019.

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 required 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, required that the Company investigate and make specified repairs to the Killingly Pond Dam located in Killingly, Connecticut.  The Company administratively appealed and contested the allegations in both Orders.  On July 27, 2017, the Company entered into a Consent Order with the DEEP relative to Killingly Pond Dam. The Killingly Pond Consent Order requires the Company to continue to perform routine maintenance and administrative procedures consistent with DEEP’s Dam Safety regulations, the cost of which is not material to the Company’s financial position or results of operations.

On July 27, 2018, the Company entered into a Consent Order with the DEEP relative to Acme Pond Dam. The Acme Pond Dam Consent Order requires the Company to investigate and recommend repairs to Acme Pond Dam. Based up on the work performed by the Company’s retained consulting engineering firm, the Company submitted its recommended action plan (the “action plan”) for Acme Pond Dam pursuant to the Consent Order on November 30, 2017 and such recommended action plan remains under review by the DEEP as of the current date. The estimated cost of work to be performed under the action plan developed by the Company’s retained consulting engineering firm was $90,000 and such amount has been recorded as a liability in the accompanying Consolidated Balance Sheet as of March 31,2019. It cannot be determined at this time whether such action plan may be ultimately accepted as is, revised or otherwise changed between the Company and the DEEP and, as such, the $90,000 provision currently provided may change based upon a final resolution of this matter. 

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Basis of presentation and description of activities (Details) - Winthrop Corporation [Member] $ in Thousands	Jul. 17, 2018 USD ($)
Minority interest	$ 6,000
Repayment of intercompany balance	$ 173

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Per share data (Details) - shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average number of common shares outstanding	19,647,243	19,378,000
Weighted average number of common shares, vested RSUs		211,970
Employee Stock Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	550,000	550,000
Restricted Stock Units (RSUs) [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount

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Investment valuation (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Fair Value Disclosures [Abstract]
Investments in U.S. Treasury Bills, held for trading	$ 7,990	$ 2,980

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Leases (Details) $ in Thousands	1 Months Ended	3 Months Ended
	Aug. 31, 2014 ft²	Mar. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)	Jan. 02, 2019 USD ($)	Dec. 31, 2018 USD ($)
Right of Use Asset		$ 111		$ 173
Deferred rent				19
Lease liability		130		$ 192
Greenwich [Member]
Area of Lease | ft²	10,000
Term of Lease	5 years
Maturity date	Sep. 30, 2019
Right of Use Asset		111
Lease liability		130
Lease expense		65	$ 14
Rent expense			$ 54
Future minimum rent payment		131
Cash payment for operating lease		$ 65

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Capital Stock (Details)	3 Months Ended
	Mar. 31, 2019 shares
Stockholders' Equity Note [Abstract]
Number of shares authorized to be repurchased	5,000,000
Remaining number of shares available for repurchase	2,958,029
Shares repurchased during the period	2,041,971

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Incentive stock plans and stock-based compensation (Common Stock Options) (Details) - USD ($)	1 Months Ended	3 Months Ended
	Mar. 28, 2016	Mar. 31, 2019	Mar. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted - Stock Options	100,000
Share-based compensation		$ 100	$ 100
Expected life	3 years
Exercise price	$ 1.29
Option, Discount	8.00%
2007 NPDC Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding		550,000
Options vested and exercisable		550,000
Outstanding options, weighted average exercise price		$ 1.35
Outstanding options, weighted average contractual term		1 year 9 months
Outstanding options, aggregate intrinsic value		$ 0

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Incentive stock plans and stock-based compensation (Restricted Stock) (Details) - Restricted Stock Units (RSUs) [Member] - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended			3 Months Ended		12 Months Ended
	Feb. 13, 2019	Mar. 31, 2015	Jan. 19, 2015	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost				$ 40
Unrecognized compensation recognition period				2 years 9 months 18 days
Options vested						200,000
Two Newly Appointed Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
RSUs, Granted	100,000	100,000	100,000
Vesting period for plan	3 years	3 years	3 years
RSUs value per share	$ 0.42	$ 1.85	$ 1.70
RSU, discount rate	8.00%	8.00%	8.00%
RSUs Value per share, less discount for post vesting restrictions on sale	$ 0.39	$ 1.70	$ 1.56
Compensation				$ 2	$ 16

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Commitments, Contingencies, and Other (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Cost of work	$ 90
Undeveloped property		$ 355
Undeveloped property net of a reserve		$ 0