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, 2024 |
| | |
| 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.) |
| 118 North Bedford Road, Ste. 100, Mount Kisco, NY | 10549 |
| (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 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
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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C 7262(b)) by the registered public accounting firm that
prepared or issued its audit report. Yes ☐ No ☐
If securities are registered
pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements. Yes ☐ No
☐
Indicate by check mark whether
any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of
the registrant’s executive officers during the relevant recovery period. Yes ☐ No
☐
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 | IWSH | OTC |
As of May 6, 2024, there were
20,620,711 shares of the registrant’s common stock, $0.01 par value, outstanding.
WRIGHT INVESTORS’ SERVICE HOLDINGS, INC.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
| Item 1. | Financial Statements. |
WRIGHT INVESTORS' SERVICE HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
| | |
March 31, | | |
December 31, | |
| | |
2024 | | |
2023 | |
| | |
(unaudited) | | |
| | |
| Assets | |
| | | |
| | |
| Current assets | |
| | | |
| | |
| Cash and cash equivalents | |
$ | 2,489 | | |
$ | 125 | |
| Investments | |
| 550 | | |
| 3,144 | |
| Prepaid expenses and other current assets | |
| 65 | | |
| 97 | |
| Total current assets | |
| 3,104 | | |
| 3,366 | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| Other assets | |
| 8 | | |
| 8 | |
| | |
| | | |
| | |
| Total assets | |
$ | 3,112 | | |
$ | 3,374 | |
| | |
| | | |
| | |
| Liabilities and stockholders’ equity | |
| | | |
| | |
| | |
| | | |
| | |
| Current liabilities | |
| | | |
| | |
| Accounts payable and accrued expenses | |
$ | 80 | | |
$ | 83 | |
| Total current liabilities | |
| 80 | | |
| 83 | |
| | |
| | | |
| | |
Total liabilities | |
$ | 80 | | |
$ | 83 | |
| | |
| | | |
| | |
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 21,628,680 as of March 31, 2024 and December 31, 2023;
Outstanding 20,620,711 as of March 31, 2024 and December 31, 2023. | |
| 216 | | |
| 216 | |
| Additional paid-in capital | |
| 34,392 | | |
| 34,392 | |
| Accumulated deficit | |
| (29,829 | ) | |
| (29,610 | ) |
| Accumulated other comprehensive income | |
| - | | |
| 40 | |
| Treasury stock, at cost (1,007,969 shares at March 31, 2024 and December 31, 2023) | |
| (1,747 | ) | |
| (1,747 | ) |
| Total stockholders' equity | |
| 3,032 | | |
| 3,291 | |
| Total liabilities and stockholders’ equity | |
$ | 3,112 | | |
$ | 3,374 | |
See accompanying notes to condensed consolidated
financial statements.
WRIGHT INVESTORS' SERVICE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share amounts)
| | |
Three Months Ended March 31, | |
| | |
2024 | | |
2023 | |
| | |
| | |
| |
| Expenses | |
| | | |
| | |
| Compensation and benefits | |
$ | 113 | | |
$ | 115 | |
| Other operating | |
| 172 | | |
| 205 | |
| Total operating expenses | |
| 285 | | |
| 320 | |
| Loss from operations | |
| (285 | ) | |
| (320 | ) |
| Interest and other income, net | |
| 66 | | |
| 6 | |
| Loss from operations | |
| (219 | ) | |
| (314 | ) |
| Net loss | |
$ | (219 | ) | |
$ | (314 | ) |
| | |
| | | |
| | |
| | |
| | | |
| | |
Basic and diluted weighted average common
shares outstanding | |
| 20,620,711 | | |
| 20,620,711 | |
| | |
| | | |
| | |
Basic and diluted loss per share | |
$ | (0.01 | ) | |
$ | (0.02 | ) |
See accompanying notes to condensed consolidated
financial statements.
WRIGHT INVESTORS' SERVICE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
LOSS
(unaudited)
(in thousands)
| | |
Three Months Ended March 31, | |
| | |
2024 | | |
2023 | |
| | |
| | |
| |
| | |
| | |
| |
| Net loss | |
$ | (219 | ) | |
$ | (314 | ) |
| Unrealized (loss) gain on available for sale securities | |
| (40 | ) | |
| 35 | |
| Comprehensive loss | |
$ | (259 | ) | |
$ | (279 | ) |
See accompanying notes to condensed consolidated
financial statements.
WRIGHT INVESTORS' SERVICE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES
IN STOCKHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 2024 and 2023
(UNAUDITED)
(in thousands, except per share data)
| | |
| | |
| | |
| | |
| | |
Accumulated | | |
| | |
Total | |
| | |
| | |
| | |
Additional | | |
| | |
Other | | |
Treasury | | |
stock- | |
| | |
Common stock (Issued) | | |
paid -in | | |
Accumulated | | |
comprehensive | | |
stock, at | | |
holders’ | |
| | |
shares | | |
amount | | |
capital | | |
deficit | | |
Income | | |
cost | | |
equity | |
| Balance at December 31, 2022 | |
| 21,343,680 | | |
$ | 213 | | |
$ | 34,395 | | |
$ | (28,604 | ) | |
$ | 32 | | |
$ | (1,747 | ) | |
$ | 4,289 | |
| Net loss | |
| - | | |
| - | | |
| - | | |
| (314 | ) | |
| - | | |
| - | | |
| (314 | ) |
| Stock based compensation expense to directors | |
| 285,000 | | |
| 3 | | |
| (3 | ) | |
| - | | |
| - | | |
| - | | |
| - | |
| Other comprehensive income | |
| - | | |
| - | | |
| - | | |
| - | | |
| 35 | | |
| - | | |
| 35 | |
| Balance at March 31, 2023 | |
| 21,628,680 | | |
$ | 216 | | |
$ | 34,392 | | |
$ | (28,918 | ) | |
$ | 67 | | |
$ | (1,747 | ) | |
$ | 4,010 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance at December 31, 2023 | |
| 21,628,680 | | |
$ | 216 | | |
$ | 34,392 | | |
$ | (29,610 | ) | |
$ | 40 | | |
$ | (1,747 | ) | |
$ | 3,291 | |
| Net loss | |
| - | | |
| - | | |
| - | | |
| (219 | ) | |
| - | | |
| - | | |
| (219 | ) |
| Other comprehensive income | |
| - | | |
| - | | |
| - | | |
| - | | |
| (40 | ) | |
| - | | |
| (40 | ) |
| Balance at March 31, 2024 | |
| 21,628,680 | | |
$ | 216 | | |
$ | 34,392 | | |
$ | (29,829 | ) | |
$ | - | | |
$ | (1,747 | ) | |
$ | 3,032 | |
See accompanying notes to condensed consolidated
financial statements.
WRIGHT INVESTORS' SERVICE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
| | |
Three Months Ended
March 31, | |
| | |
2024 | | |
2023 | |
| Cash flows from operating activities | |
| | | |
| | |
| | |
| | | |
| | |
| Net loss | |
$ | (219 | ) | |
$ | (314 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
| Realized gain on investments | |
| (56 | ) | |
| - | |
| Changes in other operating items: | |
| | | |
| | |
| Prepaid expenses and other current assets | |
| 32 | | |
| 32 | |
| Accounts payable and accrued expenses | |
| (3 | ) | |
| 1 | |
| Net cash used in operating activities | |
| (246 | ) | |
| (281 | ) |
| | |
| | | |
| | |
Cash flows from investing activities | |
| | | |
| | |
| Proceeds from redemptions and sale of investments | |
$ | 3,160 | | |
| 294 | |
| Purchase of investments | |
| (550 | ) | |
| - | |
| Net cash provided by investing activities | |
| 2,610 | | |
| 294 | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| Net increase in cash and cash equivalents | |
| 2,364 | | |
| 13 | |
| Cash and cash equivalents at the beginning of the period | |
| 125 | | |
| 90 | |
| Cash and cash equivalents at the end of the period | |
$ | 2,489 | | |
$ | 103 | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| Supplemental disclosures of cash flow information | |
| | | |
| | |
| Unrealized (loss) gain on available for sale securities | |
$ | (40 | ) | |
$ | 35 | |
See accompanying notes to condensed consolidated
financial statements.
WRIGHT INVESTORS’ SERVICE HOLDINGS, INC.
Notes to Condensed Consolidated Financial Statements
Three months ended March 31, 2024 and 2023
(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, 2023 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, 2023 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 2024 interim period are not necessarily indicative
of results to be expected for the entire year.
Description of activities
Wright Investors’
Service Holdings, Inc. (the “Company”) has nominal operations and nominal assets aside from its cash and cash equivalents
and investments in U.S. Treasury Bills, and is therefore considered a shell company, as defined in U.S. securities laws and regulations.
The Company is not engaged in the business of investing, reinvesting, or trading in securities, and it does not hold itself out as being
engaged in those activities.
The
Company intends to evaluate and explore all available strategic options. The Company 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 the
Company’s cash and cash equivalents and investments in U.S. Treasury Bills and mutual funds.
Until such time as a decision is made as to how the liquid assets of the Company are so deployed, the Company intends to invest its
liquid assets in high-grade, short- term investments (such as cash and cash equivalents and Investment in U.S. Treasury Bills and
mutual funds) consistent with the preservation of principal, maintenance of liquidity and avoidance of speculation.
The Company
may be classified as an inadvertent investment company if the Company acquires investment securities in excess of 40% of the Company’s
total assets (exclusive of government securities). As of March 31, 2024, the Company is not considered an inadvertent investment company.
Loss per share for the three months ended March
31, 2024 and 2023 is calculated based on 20,620,711 weighted average outstanding shares of common stock.
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, 2024, the
Company held investments in U.S. government debt securities of $2,422,000 which are included in cash and cash equivalents. As of
December 31, 2023, the Company held investments in U.S. government debt securities of $2,409,000. As of March 31, 2024 and December
31, 2023, the Company held investments in equity securities which consist of mutual funds of $550,000 and $735,000,
respectively. U.S. government 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. Money market and mutual funds are valued at the closing price reported by the fund sponsor from an actively
traded exchange. U.S. government securities are categorized in Level 2 of the fair value hierarchy, depending on the inputs used and
market activity levels for specific securities. Mutual funds are categorized in Level 1 of the fair value hierarchy, depending on
the unadjusted quoted prices in active markets for identical assets. The U.S. government debt securities, which have
maturities of three months or less at time of purchase, are reported as Cash and cash equivalents, and
those with longer maturities are reported as Investments, on the Condensed Consolidated Balance Sheets as of March 31, 2024
and December 31, 2023.
Short-term investments
in marketable securities have a stated maturity of twelve months or less from the balance sheet date. These securities are considered
as available for sale and are reported at fair value. For debt securities, unrealized gains and losses are recorded net of tax as a component
of Accumulated other comprehensive income within stockholders' equity. Credit losses related
to available-for-sale debt securities are recorded through an allowance for credit losses rather than as a reduction in the amortized
cost basis of the securities. Realized gains and losses are calculated based on the specific identification method and are included in Interest
and other income, net, in the Condensed Consolidated Statement of Operations.
The
Company follows the guidance in ASC 321, “Investments – Equity Securities” (“ASC 321”) for its investments
in equity securities with unrealized and realized gains and losses recorded in Interest and other income, net, on the Condensed
Consolidated Statement of Operations.
The
following table presents the Company’s financial instruments at fair value (in thousands):
| | |
Fair
Value Measurements
as of March 31, 2024 | |
| | |
Total | | |
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | |
Significant
Other
Observable
Inputs
(Level 2) | | |
Significant
Unobservable
Inputs
(Level 3) | |
| | |
| | |
| | |
| | |
| |
| Investments in Mutual Funds | |
$ | 550 | | |
$ | 550 | | |
$ | - | | |
$ | - | |
| | |
Fair Value Measurements as of December 31, 2023 | |
| | |
Total | | |
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1) | | |
Significant
Other
Observable
Inputs
(Level 2) | | |
Significant
Unobservable
Inputs
(Level 3) | |
| | |
| | |
| | |
| | |
| |
| Investments in U.S. Treasury bills | |
$ | 2,409 | | |
$ | - | | |
$ | 2,409 | | |
| - | |
| Investments in Mutual Funds | |
| 735 | | |
| 735 | | |
| - | | |
| - | |
| | |
| | | |
| | | |
| | | |
| | |
| Total | |
$ | 3,144 | | |
$ | 735 | | |
$ | 2,409 | | |
| - | |
Investments in equity securities as of March
31, 2024 are summarized by type below (in thousands).
| | |
Amortized Cost | | |
Gross Unrealized Gains | | |
Gross Unrealized Losses | | |
Fair Value | |
| | |
| | | |
| | | |
| | | |
| | |
| Mutual Funds | |
$ | 550 | | |
$ | - | | |
$ | - | | |
$ | 550 | |
Investments in
debt and equity securities as of December 31, 2023 are summarized by type below (in thousands).
| | |
Amortized Cost | | |
Gross Unrealized Gains | | |
Gross Unrealized Losses | | |
Fair Value | |
| U.S. Treasury bills | |
$ | 2,369 | | |
$ | 40 | | |
$ | - | | |
$ | 2,409 | |
| | |
| | | |
| | | |
| | | |
| | |
| Mutual Funds | |
| 735 | | |
| - | | |
| - | | |
| 735 | |
| | |
| | | |
| | | |
| | | |
| | |
| Total | |
$ | 3,104 | | |
$ | 40 | | |
$ | - | | |
$ | 3,144 | |
All investments
in debt securities are due in one year or less as of March 31, 2024.
Changes
in the accumulated other comprehensive income balance, net of income taxes, relates solely to net unrealized gain on available-for-sale
securities for the three-month ended March 31, 2024 is as follows:
| Balance at December 31, 2023 | |
$ | 40 | |
| | |
| | |
| Amounts reclassified from accumulated other Comprehensive income to interest income and other income | |
| (56 | ) |
| | |
| | |
| | |
| (16 | ) |
| | |
| | |
| Net current-period other comprehensive income | |
| 16 | |
| | |
| | |
| Balance at March 31, 2024 | |
$ | - | |
The Company
may be exposed to credit losses through its available-for-sale investments. An available-for-sale security is impaired when its
fair value declines below its amortized cost basis. Unrealized losses resulting from the amortized cost basis of any available-for-sale
debt security exceeding its fair value are evaluated for identification of credit losses. When evaluating the investments for impairment
at each reporting period, the Company reviews factors such as the extent of the unrealized loss, historical losses, current and future
economic market conditions, and financial condition of the issuer. As of March 31, 2024, the Company has not recognized an allowance
for expected credit losses related to its available-for-sale securities as the Company has not identified any unrealized losses for these
investments attributable to credit factors.
No tax
benefit has been recorded in relation to the pre-tax loss for the three months ended March 31, 2024 and 2023, due to a full valuation
allowance to offset any deferred tax asset related to net operating loss carry forwards attributable to the losses.
5. 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 March 31, 2024 and 2023, the Company had repurchased 2,234,721 shares
of its common stock and a total of 2,765,279 of the authorized shares, remained available for repurchase as of March 31, 2024.
On March 9, 2023, there were 285,000 shares
of Company common stock issued to the independent directors of the Company, for payment of quarterly directors’ fees due to them
for services in 2022, which were classified as issuable at December 31, 2022. The equity compensation
awards were issued pursuant to the exemption from the registration requirements of Section 5 of the Securities Act of 1933 (“1933
Act”) provided by Section 4(a)(2) of the 1933 Act.
In March
2023, the Company amended its Directors’ Compensation Program for Directors who are not employees of the Company to provide that
effective January 1, 2023 and as long as the Company remains a shell company (i) the issuance of any annual stock compensation for Directors
serving as a member of the Board or a committee of the Board shall be terminated, and (ii) the payment of any cash compensation for attendance
in person or by telephone of meetings of the Board or committees of the Board shall be terminated.
| 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, 2023 filed by the Company with the Securities and Exchange Commission (the “SEC”)
on March 27, 2024.
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
The Company is 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.
The Company’s Board of
Directors is considering strategic uses for its funds 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 Company’s funds have
been, and we anticipate will continue to be, invested in high-grade, short-term investments (such as cash and cash equivalents, U.S. Treasury
Bills and mutual funds) 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 and Investments in U.S. Treasury Bills and mutual funds
to stockholders.
Results of operations
Three months ended March 31, 2024 compared to the three months
ended March 31, 2023
For the three months ended March 31, 2024, the
Company had a loss from operations before income taxes of $219,000 compared to a loss from operations before income taxes of $314,000
for the three months ended March 31, 2023.
The decreased loss
before income taxes of $95,000 was primarily a result of a decrease in Other operating expenses of $33,000, decrease of compensation of
$2,000, and an increase in Interest and other income of $60,000.
Compensation and benefits
For the three months ended March 31, 2024, Compensation
and benefits were $113,000 as compared to $115,000 for the three months ended March 31, 2023.
Other operating expenses
For the three months ended March 31, 2024, Other
operating expenses were $172,000 as compared to $205,000 for the three months ended March 31, 2023. The decreased operating expenses of
$33,000 were primarily the result of decreased professional fees of $17,000, decreased travel and entertainment expenses of $12,000, and
decreased other expenses of $4,000.
Interest and other income
For the three months ended March 31, 2024, Interest
and other income was $66,000 as compared to $6,000 for the three months ended March 31, 2023. The increased interest and other income,
including net realized gains and losses on U.S. Treasury bills, of $60,000 was primarily the result of the investments in U.S. Treasury
securities, and the related interest income of $66,000 during the three months ended March 31, 2024.
Income taxes
For the three months
ended March 31, 2024 and 2023, the Company recorded no income tax expense from operations. No tax benefit has been recorded in relation
to the pre-tax loss for the three months ended March 31, 2024 and 2023, due to a full valuation allowance to offset any deferred tax asset
related to net operating loss carry forwards attributable to the losses.
Financial condition
Liquidity and Capital Resources
At March 31, 2024, the Company had cash and
cash equivalents totaling $2,489,000 and investments in mutual funds totaling $550,000 which
it intends to use to acquire interests in one or more operating businesses, to fund the Company’s general and administrative
expenses. The directors will also consider alternatives for distributing some or all of its cash and cash equivalents and
investments to stockholders. The Company believes that its working capital is sufficient to support its operating requirements
through June 30, 2025.
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 3 for valuation of Investments.
The increase in cash and cash equivalents of $2,364,000 for
the three months ended March 31, 2024 was primarily the result of $246,000 used in operating activities, $550,000 used in the purchase
of mutual funds, offset by the sale of mutual funds for $543,000, and the redemption of investments of $2,617,000.
| 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, 2024 that has materially
affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II. OTHER INFORMATION
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
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, 2024, the Company had repurchased 2,234,721 shares of its common stock
and, a total of 2,765,279 shares remained available for repurchase at March 31, 2024, pursuant to the 5,000,000 shares repurchase plans. The
Company did not repurchase shares of common stock during the quarter ended March 31, 2024.
None
_____________________
*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.
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 |
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| |
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| Date: May 15, 2024 |
By: |
/s/ HARVEY P. EISEN |
|
| |
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Name: |
Harvey P. Eisen |
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| |
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Title: |
Chairman, President, and Chief Executive Officer
(Principal Executive Officer) |
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| Date: May 15, 2024 |
By: |
/s/ HAROLD D. KAHN |
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| |
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Name: |
Harold D. Kahn |
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| |
|
Title: |
Acting Chief Financial Officer and Acting Principal
Accounting Officer
(Principal Financial Officer) |
|
16
I, Harvey P. Eisen, certify that:
(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
(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.
I, Harold D. Kahn, certify that:
(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
(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.
In connection with this Quarterly Report on Form
10-Q of Wright Investors’ Service Holdings, Inc. (the “Company”) for the fiscal quarter ended March 31, 2024 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.