Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 30, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | MORGAN GROUP HOLDING CO | |
Entity Central Index Key | 0001162283 | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Address, State or Province | NY | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 600,090 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
ASSETS | ||
Cash and cash equivalents | $ 3,919,365 | $ 4,746,403 |
Receivables from brokers and clearing organizations | 107,310 | 66,211 |
Receivables from affiliates | 117,010 | 62,514 |
Deposits with clearing organizations | 200,000 | 200,000 |
Income taxes receivable (including deferred tax asset of $0 and $0, respectively) | 273,735 | 273,735 |
Fixed assets, net of accumulated depreciation of $43,782 and $40,956, respectively | 31,090 | 33,915 |
Other assets | 232,226 | 220,799 |
Total assets | 4,880,736 | 5,603,577 |
LIABILITIES AND EQUITY | ||
Compensation payable | 227,415 | 455,492 |
Payable to affiliates | 17,572 | 29,376 |
Income tax payable | 46,850 | 46,850 |
Accrued expenses and other liabilities | 543,989 | 464,554 |
Total liabilities | 835,826 | 996,272 |
Commitments and contingencies (Note 9) | ||
Equity | ||
Common stock, $0.01 par value; 100,000,000 shares authorized and 600,090 shares issued and outstanding | 6,001 | 6,001 |
Additional paid-in capital | 53,886,180 | 53,886,180 |
Accumulated deficit | (49,847,271) | (49,284,876) |
Total equity | 4,044,910 | 4,607,305 |
Total liabilities and equity | $ 4,880,736 | $ 5,603,577 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
ASSETS | ||
Deferred tax asset | $ 0 | $ 0 |
Accumulated depreciation | $ 43,782 | $ 40,956 |
Equity | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 600,090 | 600,090 |
Common stock, shares outstanding (in shares) | 600,090 | 600,090 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues | ||
Commissions | $ 655,608 | $ 1,038,943 |
Principal transactions | (3,256) | (903) |
Dividends and interest | 8,985 | 36,256 |
Underwriting fees | 6,311 | 30,488 |
Sales manager fees | 0 | 334,825 |
Other revenues | 10,453 | 3,107 |
Total revenues | 678,101 | 1,442,716 |
Expenses | ||
Compensation and related costs | 688,153 | 1,143,433 |
Clearing charges | 185,025 | 302,838 |
General and administrative | 266,260 | 287,653 |
Occupancy and equipment | 101,058 | 127,897 |
Total expenses | 1,240,496 | 1,861,821 |
Loss before income tax benefit | (562,395) | (419,105) |
Income tax benefit | 0 | (136,651) |
Net loss | $ (562,395) | $ (282,454) |
Net loss per share | ||
Basic (in dollars per share) | $ (0.94) | $ (0.47) |
Diluted (in dollars per share) | $ (0.94) | $ (0.47) |
Weighted average shares outstanding: | ||
Basic (in shares) | 600,090 | 600,090 |
Diluted (in shares) | 600,090 | 600,090 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2019 | $ 6,001 | $ 53,886,180 | $ (47,854,840) | $ 6,037,341 |
Balance (in shares) at Dec. 31, 2019 | 600,090 | |||
Increase (Decrease) in Statements of Equity [Roll Forward] | ||||
Net loss | $ 0 | 0 | (282,454) | (282,454) |
Balance at Mar. 31, 2020 | $ 6,001 | 53,886,180 | (48,137,294) | 5,754,887 |
Balance (in shares) at Mar. 31, 2020 | 600,090 | |||
Balance at Dec. 31, 2020 | $ 6,001 | 53,886,180 | (49,284,876) | $ 4,607,305 |
Balance (in shares) at Dec. 31, 2020 | 600,090 | 600,090 | ||
Increase (Decrease) in Statements of Equity [Roll Forward] | ||||
Net loss | $ 0 | 0 | (562,395) | $ (562,395) |
Balance at Mar. 31, 2021 | $ 6,001 | $ 53,886,180 | $ (49,847,271) | $ 4,044,910 |
Balance (in shares) at Mar. 31, 2021 | 600,090 | 600,090 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (562,395) | $ (282,454) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 2,825 | 3,038 |
Deferred income tax, net | 0 | (8,568) |
(Increase)/decrease in assets: | ||
Receivables from brokers and clearing organizations | (41,099) | 509,476 |
Receivables from affiliates | (52,287) | (141,356) |
Income taxes receivable | 0 | (113,668) |
Other assets | (11,429) | 44,096 |
Increase/(decrease) in liabilities: | ||
Payable to affiliates | (14,012) | (765,044) |
Income taxes payable | 0 | 3,673 |
Compensation payable | (228,076) | (367,443) |
Accrued expenses and other liabilities | 79,435 | 200,022 |
Total adjustments | (264,643) | (635,774) |
Net cash used in operating activities | (827,038) | (918,228) |
Net decrease in cash and cash equivalents and restricted cash | (827,038) | (918,228) |
Cash, cash equivalents, and restricted cash at beginning of period | 4,946,403 | 6,787,097 |
Cash, cash equivalents, and restricted cash at end of period | 4,119,365 | 5,868,869 |
Supplemental disclosures of cash flow information: | ||
Cash received from Associated Capital Group, Inc. for income taxes | 0 | 18,087 |
Reconciliation to cash, cash equivalents, and restricted cash | ||
Cash and cash equivalents | 3,919,365 | 5,668,869 |
Restricted cash: deposits from clearing organizations | 200,000 | 200,000 |
Cash, cash equivalents, and restricted cash | $ 4,119,365 | $ 5,868,869 |
Organization and Business Descr
Organization and Business Description | 3 Months Ended |
Mar. 31, 2021 | |
Organization and Business Description [Abstract] | |
Organization and Business Description | Organization and Business Description Morgan Group Holding Co. (the “Company,” “Morgan Group,” or “Morgan”) was incorporated in November 2001 as a Delaware corporation to serve as a holding company which seeks acquisitions as part of its strategic alternatives. Prior to the October 31, 2019 merger with G.research, LLC (“G.research”), discussed below, Morgan Group had no operating companies. The Company acquired G.research from Associated Capital Group, Inc. (“AC”), an affiliate of the Company, on October 31, 2019, in exchange for issuing 500,000 shares of the Company’s common stock to AC (the “Merger”). Accordingly, G.research became a wholly owned subsidiary of the Company. Prior to the transaction, G.research was a wholly-owned subsidiary of Institutional Services holdings, LLC, which, in turn, was a wholly-owned subsidiary of AC. After the transaction, AC had an 83.3% ownership interest in the Company. As a result of this common ownership, the transaction was treated as a combination between entities under common control that led to a change in the reporting entity. The recognized assets and liabilities were transferred at their carrying amounts at the date of the transaction. On March 16, 2020, AC’s Board of Directors approved the spin-off of the Company to AC’s shareholders. Upon execution of the spin-off on August 5, 2020, AC distributed to its shareholders on a pro rata basis the 500,000 shares of Morgan that AC owned. On May 5, 2020, the Morgan Group board approved a reverse stock split of the issued and outstanding shares of their common stock, par value $0.01 per share, in a ratio of 1‑for‑100 that was effective on June 10, 2020. G.research is a broker-dealer registered with the Securities and Exchange Commission (the “SEC”) and is regulated by the Financial Industry Regulatory Authority (“FINRA”). The Company provides institutional investors and investment partnerships with investment research with a particular focus on small-cap and mid-cap companies. The team of sell-side analysts follows industry sectors on a global basis and performs fundamental security analysis using a Private Market Value (“PMV”) framework. PMV investing is a disciplined, research-driven approach based on security analysis. In this process, the analyst selects stocks whose intrinsic value, based on the analyst’s estimate of current asset value and future growth and earnings power, is significantly different from the public market value as reflected in the public market. PMV is defined as the price an informed industrial buyer would be likely to pay to acquire the business. The research focuses on company fundamentals, cash flow statistics, and catalysts that will help realize returns. The Company generates brokerage commission revenues from securities transactions executed on an agency basis on behalf of institutional clients and mutual funds, private wealth management clients, and retail customers of affiliated companies. The Company generates revenue from syndicated underwriting activities. It primarily participates in the offerings of certain closed-end funds advised by Gabelli Funds, LLC, a wholly-owned subsidiary of GAMCO Investors, Inc. (“GBL”), an affiliate. The Company also earns investment income generated from its proprietary trading activities. The Company acts as an introducing broker, and all securities transactions for the Company and its customers are cleared through and carried by three New York Stock Exchange (“NYSE”) member firms on a fully disclosed basis. The Company has Proprietary Accounts of Introducing Brokers (“PAIB”) agreements with these firms. Accordingly, open customer transactions are not reflected in the accompanying Condensed Consolidated Statement of Financial Condition. The Company is exposed to credit losses on these open transactions in the event of nonperformance by its customers, pursuant to conditions of its clearing agreements with its clearing brokers. This exposure is mitigated by the clearing brokers’ policy of monitoring the collateral and credit of the counterparties until the transaction is completed. The Company’s principal market is in the United States (“U.S”). |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | 1. Significant Accounting Policies Basis of Presentation The unaudited interim condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for the fair presentation of financial position, results of operations, and cash flows of Morgan for the interim periods presented and are not necessarily indicative of a full year’s results. The interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, G.research. Intercompany accounts and transactions have been eliminated. These interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2020. Use of Estimates The Company’s financial statements are prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during that reporting period. Actual results could differ from those estimates. Recent Accounting Developments In June 2016, the FASB issued ASU 2016-13, Accounting for Financial Instruments - Credit Losses (Topic 326) Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), Leases (Topic 842): Effective Dates Reclassification of Prior Period Presentation Certain general and administrative expenses reported in the prior period have been reclassified to occupancy and equipment rental to conform to the current period presentation in the consolidated statements of operations. This reclassification had no effect on the reported results of operations. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contracts with Customers [Abstract] | |
Revenue from Contracts with Customers | 2. Revenue from Contracts with Customers The Company records revenue from contracts with customers in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers Significant judgments that affect the amounts and timing of revenue recognition: The Company’s analysis of the timing of revenue recognition of each revenue stream is based on the provisions of each respective contract. Performance obligations could, however, change from time to time if and when existing contracts are modified or new contracts are entered into. These changes could potentially affect the timing of satisfaction of performance obligations, the determination of the transaction price, and the allocation of the price to performance obligations. In the case of the revenue streams discussed below, the performance obligation is satisfied either at a point in time or over time. The judgments outlined below, where the determination as to these factors is discussed in detail, are continually reviewed and monitored by the Company when new contracts or contract modifications occur. Transaction price is in all instances formulaic and not subject to significant (or any) judgment at the current time. The Company’s assessment of the recognition of these revenues is as follows: Revenue from contracts with customers includes commissions, fees earned from affiliated entities pursuant to research services agreements, underwriting fees, and sales manager fees. Commissions Brokerage commissions Hard dollar payments Commission revenues are impacted by the perceived value of the research product provided to clients, the volume of securities transactions, and the acquisition or loss of new client relationships. Fees earned from affiliated entities pursuant to research services agreements The Company receives direct payments for research services provided to related parties pursuant to contracts. The contractual fee for the period is fixed and recognized ratably over the contract period, typically a calendar year, which is considered the period over which the Company satisfies its performance obligation. Payments for contracts with affiliated parties are collected monthly. Underwriting fees Underwriting fees Selling concessions Sales manager fees The Company participates as sales manager of at-the-market offerings of certain affiliated closed-end funds and receives a tiered percentage of proceeds as stipulated in agreements between the Company, the funds and the funds’ investment adviser. The Company recognizes sales manager fees upon sale of the related closed-end funds. Sales manager fees earned are fixed and typically collected from the clearing brokers utilized by the Company on a daily or weekly basis. Revenue Disaggregated Total revenues from contracts with customers by type were as follows for the three months ended March 31, 2021 and 2020: Three months ended March 31, 2021 2020 Commissions $ 591,248 $ 936,784 Hard dollar payments 64,360 102,159 655,608 1,038,943 Underwriting fees - 30,488 Sales manager fees 6,311 334,825 $ 661,920 $ 1,404,256 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 3. Related Party Transactions At March 31, 2021 and December 31, 2020, the Company had an investment of $3,900,445 and $4,724,290, respectively, in The Gabelli U.S. Treasury Money Market Fund advised by Gabelli Funds, LLC, which is an affiliate of the Company. The amount is recorded in cash and cash equivalents in the Condensed Consolidated Statements of Financial Condition. Income earned from this investment totaled $116 and $29,550 for the three months ended March 31, 2021 and 2020, respectively, and is included in dividends and interest revenues in the Condensed Consolidated Statements of Operations. For the three months ended March 31, 2021 and 2020, the Company earned $372,250 and $691,784, or approximately 57% and 62%, respectively, of its commission revenue from transactions executed on behalf of funds advised by Gabelli Funds, LLC. (“Gabelli Funds”) and private wealth management clients advised by GAMCO Asset Management Inc., (“GAMCO Asset”), each affiliates of the Company. The Company participated as agent in the secondary offerings of the GAMCO Global Gold, Natural Resources & Income Trust (“GGN”). Pursuant to sales agreements between the parties, the Company earned sales manager fees related to this offering of $0 and $334,825 during the three months ended March 31, 2021 and 2020, respectively. Sales manager fees are separately disclosed in the Condensed Consolidated Statements of Operations. The Company participated in the secondary offerings of the preferred stock of affiliated closed end funds in December 2019. The final settlements were received during March 2020 resulting in additional underwriting profit of $30,488. The Company pays AC a management fee equal to 20% of the Company’s year-to-date pretax profits before consideration of this fee. In the three months ended March 31, 2020, the Company did not pay a management fee to AC as there were no pretax profits. AC has a sublease agreement with GBL that expired on April 1, 2020 and continues on a month to month basis. AC allocates this expense to the Company based on the percentage of square footage occupied by the Company’s employees (including pro rata allocation of common space). Pursuant to the sublease, AC and the Company pay a monthly fixed lease amount. For the three months ended March 31, 2021 and 2020, the Company paid $26,131 and $27,113, respectively, under the sublease agreement. These amounts are included within occupancy and equipment expenses on the Condensed Consolidated Statements of Operations. |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value [Abstract] | |
Fair Value | 4. Fair Value The carrying amounts of all financial instruments in the Condensed Consolidated Statements of Financial Condition approximate their fair values. The Company’s financial instruments have been categorized based upon a fair value hierarchy: - Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 1 assets include cash equivalents. - Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. - Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. These assets include infrequently traded common stocks. The following tables present information about the Company’s assets and liabilities by major category measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020 and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value: Assets Measured at Fair Value on a Recurring Basis as of March 31, 2021: Assets Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Cash equivalents $ 3,900,445 $ - $ - $ 3,900,445 Total assets at fair value $ 3,900,445 $ - $ - $ 3,900,445 There were no transfers between any levels during the year ended March 31, 2021. Assets Measured at Fair Value on a Recurring Basis as of December 31, 2020: Assets Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Cash equivalents $ 4,724,290 $ - $ - $ 4,724,290 Total assets at fair value $ 4,724,290 $ - $ - $ 4,724,290 There were no transfers between any levels during the year ended December 31, 2020. Cash equivalents primarily consist of an affiliated money market mutual fund which is invested solely in U.S. Treasuries and valued based on the net asset value of the fund. Financial assets disclosed but not carried at fair value The carrying value of other financial assets and liabilities approximates their fair value based on the short term nature of these items. |
Retirement Plan
Retirement Plan | 3 Months Ended |
Mar. 31, 2021 | |
Retirement Plan [Abstract] | |
Retirement Plan | 5. Retirement Plan The Company participates in Associated Capital’s incentive savings plan (the “Plan”), covering substantially all employees. Company contributions to the Plan are determined annually by management of the Company and AC’s Board of Directors but may not exceed the amount permitted as a deductible expense under the Internal Revenue Code. Amounts expensed for allocated contributions to this Plan amounted to approximately $4,436 and $4,436 for the three months ended March 31, 2021 and 2020, respectively, and were recorded as compensation and related costs in the Condensed Consolidated Statements of Operations. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Taxes [Abstract] | |
Income Taxes | 6. Income Taxes The effective tax rate for the three months ended March 31, 2021 and 2020 was (.01)% and 32.6%, respectively. For the three months ended March 31, 2021 the impact to effective tax rate was mostly related to the change in the federal and state valuation allowance offset by state deferred income taxes. |
Earnings per Share
Earnings per Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings per Share [Abstract] | |
Earnings per Share | 7. Earnings per Share Basic earnings per share is computed by dividing net income / (loss) attributable to shareholders by the weighted average number of shares outstanding during the period. There were no dilutive shares outstanding during the periods. The computations of basic and diluted net loss per share are as follows: Three Months Ended March 31, 2021 2020 Basic and diluted: Net loss attributable to shareholders $ (562,395 ) $ (282,454 ) Weighted average shares outstanding 600,090 600,090 Basic and diluted net loss per share $ (0.94 ) $ (0.47 ) |
Equity
Equity | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Equity | 8. Equity In conjunction with the Merger on October 31, 2019, the Company issued 50,000,000 shares of common stock to AC. The common stock, additional paid in capital, earnings per share, and accumulated deficit amounts in these consolidated financial statements for the period prior to the Merger have been restated to reflect the recapitalization in accordance with the shares issued as a result of the Merger. See the Organization and Business Description Note above for detail. |
Guarantees, Contingencies, and
Guarantees, Contingencies, and Commitments | 3 Months Ended |
Mar. 31, 2021 | |
Guarantees, Contingencies, and Commitments [Abstract] | |
Guarantees, Contingencies, and Commitments | 9. Guarantees, Contingencies, and Commitments The Company has agreed to indemnify its clearing brokers for losses they may sustain from the customer accounts that trade on margin introduced by the Company. At March 31, 2021 and December 31, 2020, the total amount of customer balances subject to indemnification (i.e., unsecured margin debits) was immaterial. The Company also has entered into arrangements with various other third parties, many of which provide for indemnification of the third parties against losses, costs, claims, and liabilities arising from the performance of the Company’s obligations under the agreements. The Company has had no claims or payments pursuant to these or prior agreements, and management believes the likelihood of a claim being made is remote, and therefore, an accrual has not been made in the consolidated financial statements. From time to time, the Company is named in legal actions and proceedings. These actions may seek substantial or indeterminate compensatory as well as punitive damages or injunctive relief. The Company is also subject to governmental or regulatory examinations or investigations. The examinations or investigations could result in adverse judgments, settlements, fines, injunctions, restitutions, or other relief. The Company cannot predict the ultimate outcome of such matters. The consolidated financial statements include the necessary provisions for losses that the Company believes are probable and estimable, if any. Furthermore, the Company evaluates whether losses exist which may be reasonably possible and, if material, makes the necessary disclosures. Such amounts, both those that are probable and those that are reasonably possible, are not considered material to the Company’s financial condition, operations, or cash flows. |
Net Capital Requirements
Net Capital Requirements | 3 Months Ended |
Mar. 31, 2021 | |
Net Capital Requirements [Abstract] | |
Net Capital Requirements | 10. Net Capital Requirements As a registered broker-dealer, G.research is subject to the SEC Uniform Net Capital Rule 15c3-1 (the “Rule”), which specifies, among other requirements, minimum net capital requirements for registered broker-dealers. G.research computes its net capital under the alternative method as permitted by the Rule, which requires that minimum net capital be the greater of $250,000 or 2% of the aggregate debit items in the reserve formula for those broker-dealers subject to Rule 15c3-3. G.research is exempt from Rule 15c3-3 pursuant to paragraph (k)(2)(ii) of that rule which exempts all customer transactions cleared through another broker-dealer on a fully disclosed basis. In addition, our assets at the clearing broker-dealer are treated as allowable assets for net capital purposes as we have in place PAIB agreements pursuant to Rule 15c3-3. These requirements also provide that equity capital may not be withdrawn, advances to affiliates may not be made, or cash dividends paid if certain minimum net capital requirements are not met. G.research had net capital, as defined, of $3,013,082 and $3,490,673 exceeding the required amount of $250,000 by $2,763,082 and $3,240,673 at March 31, 2021 and December 31, 2020, respectively. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 11. Subsequent Events The Company has evaluated subsequent events for adjustment to or disclosure through May 17, 2021, the date of this report and the Company has not identified any subsequent events not otherwise reported in these financial statements or the notes thereto, that required recognition or additional disclosures in the financial statements. |
Organization and Business Des_2
Organization and Business Description (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Organization and Business Description [Abstract] | |
Organization and Business Description | Morgan Group Holding Co. (the “Company,” “Morgan Group,” or “Morgan”) was incorporated in November 2001 as a Delaware corporation to serve as a holding company which seeks acquisitions as part of its strategic alternatives. Prior to the October 31, 2019 merger with G.research, LLC (“G.research”), discussed below, Morgan Group had no operating companies. The Company acquired G.research from Associated Capital Group, Inc. (“AC”), an affiliate of the Company, on October 31, 2019, in exchange for issuing 500,000 shares of the Company’s common stock to AC (the “Merger”). Accordingly, G.research became a wholly owned subsidiary of the Company. Prior to the transaction, G.research was a wholly-owned subsidiary of Institutional Services holdings, LLC, which, in turn, was a wholly-owned subsidiary of AC. After the transaction, AC had an 83.3% ownership interest in the Company. As a result of this common ownership, the transaction was treated as a combination between entities under common control that led to a change in the reporting entity. The recognized assets and liabilities were transferred at their carrying amounts at the date of the transaction. On March 16, 2020, AC’s Board of Directors approved the spin-off of the Company to AC’s shareholders. Upon execution of the spin-off on August 5, 2020, AC distributed to its shareholders on a pro rata basis the 500,000 shares of Morgan that AC owned. On May 5, 2020, the Morgan Group board approved a reverse stock split of the issued and outstanding shares of their common stock, par value $0.01 per share, in a ratio of 1‑for‑100 that was effective on June 10, 2020. G.research is a broker-dealer registered with the Securities and Exchange Commission (the “SEC”) and is regulated by the Financial Industry Regulatory Authority (“FINRA”). The Company provides institutional investors and investment partnerships with investment research with a particular focus on small-cap and mid-cap companies. The team of sell-side analysts follows industry sectors on a global basis and performs fundamental security analysis using a Private Market Value (“PMV”) framework. PMV investing is a disciplined, research-driven approach based on security analysis. In this process, the analyst selects stocks whose intrinsic value, based on the analyst’s estimate of current asset value and future growth and earnings power, is significantly different from the public market value as reflected in the public market. PMV is defined as the price an informed industrial buyer would be likely to pay to acquire the business. The research focuses on company fundamentals, cash flow statistics, and catalysts that will help realize returns. The Company generates brokerage commission revenues from securities transactions executed on an agency basis on behalf of institutional clients and mutual funds, private wealth management clients, and retail customers of affiliated companies. The Company generates revenue from syndicated underwriting activities. It primarily participates in the offerings of certain closed-end funds advised by Gabelli Funds, LLC, a wholly-owned subsidiary of GAMCO Investors, Inc. (“GBL”), an affiliate. The Company also earns investment income generated from its proprietary trading activities. The Company acts as an introducing broker, and all securities transactions for the Company and its customers are cleared through and carried by three New York Stock Exchange (“NYSE”) member firms on a fully disclosed basis. The Company has Proprietary Accounts of Introducing Brokers (“PAIB”) agreements with these firms. Accordingly, open customer transactions are not reflected in the accompanying Condensed Consolidated Statement of Financial Condition. The Company is exposed to credit losses on these open transactions in the event of nonperformance by its customers, pursuant to conditions of its clearing agreements with its clearing brokers. This exposure is mitigated by the clearing brokers’ policy of monitoring the collateral and credit of the counterparties until the transaction is completed. The Company’s principal market is in the United States (“U.S”). |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited interim condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for the fair presentation of financial position, results of operations, and cash flows of Morgan for the interim periods presented and are not necessarily indicative of a full year’s results. The interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, G.research. Intercompany accounts and transactions have been eliminated. These interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2020. |
Use of Estimates | Use of Estimates The Company’s financial statements are prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during that reporting period. Actual results could differ from those estimates. |
Recent Accounting Developments | Recent Accounting Developments In June 2016, the FASB issued ASU 2016-13, Accounting for Financial Instruments - Credit Losses (Topic 326) Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), Leases (Topic 842): Effective Dates |
Reclassification of Prior Period Presentation | Reclassification of Prior Period Presentation Certain general and administrative expenses reported in the prior period have been reclassified to occupancy and equipment rental to conform to the current period presentation in the consolidated statements of operations. This reclassification had no effect on the reported results of operations. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contracts with Customers [Abstract] | |
Total Revenues by Type | Total revenues from contracts with customers by type were as follows for the three months ended March 31, 2021 and 2020: Three months ended March 31, 2021 2020 Commissions $ 591,248 $ 936,784 Hard dollar payments 64,360 102,159 655,608 1,038,943 Underwriting fees - 30,488 Sales manager fees 6,311 334,825 $ 661,920 $ 1,404,256 |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value [Abstract] | |
Assets Measured at Fair Value on a Recurring Basis | Assets Measured at Fair Value on a Recurring Basis as of March 31, 2021: Assets Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Cash equivalents $ 3,900,445 $ - $ - $ 3,900,445 Total assets at fair value $ 3,900,445 $ - $ - $ 3,900,445 Assets Measured at Fair Value on a Recurring Basis as of December 31, 2020: Assets Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Cash equivalents $ 4,724,290 $ - $ - $ 4,724,290 Total assets at fair value $ 4,724,290 $ - $ - $ 4,724,290 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings per Share [Abstract] | |
Computations of Basic and Diluted Net Loss Per Share | The computations of basic and diluted net loss per share are as follows: Three Months Ended March 31, 2021 2020 Basic and diluted: Net loss attributable to shareholders $ (562,395 ) $ (282,454 ) Weighted average shares outstanding 600,090 600,090 Basic and diluted net loss per share $ (0.94 ) $ (0.47 ) |
Organization and Business Des_3
Organization and Business Description (Details) | Aug. 05, 2020shares | Jun. 10, 2020$ / shares | Oct. 31, 2019shares | Mar. 31, 2021Firm$ / shares | Dec. 31, 2020$ / shares |
Organization and Business Description [Abstract] | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||
Reverse stock split ratio | 0.01 | ||||
Number of NYSE member firms through which all securities transactions are cleared | Firm | 3 | ||||
Associated Capital Group [Member] | |||||
Organization and Business Description [Abstract] | |||||
Shares distributed to shareholders in spin-off (in shares) | 500,000 | ||||
G.research, LLC [Member] | Associated Capital Group [Member] | |||||
Organization and Business Description [Abstract] | |||||
Stock acquired (in shares) | 500,000 | ||||
G.research, LLC [Member] | Morgan Group, Inc. [Member] | Associated Capital Group [Member] | |||||
Organization and Business Description [Abstract] | |||||
Ownership interest | 83.30% |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue from Contracts with Customers [Abstract] | ||
Underwriter payment receiving period | 90 days | |
Total Revenues by Type [Abstract] | ||
Total revenues | $ 661,920 | $ 1,404,256 |
Brokerage Commissions [Member] | ||
Total Revenues by Type [Abstract] | ||
Total revenues | 655,608 | 1,038,943 |
Commissions [Member] | ||
Total Revenues by Type [Abstract] | ||
Total revenues | 591,248 | 936,784 |
Hard Dollar Payments [Member] | ||
Total Revenues by Type [Abstract] | ||
Total revenues | 64,360 | 102,159 |
Underwriting Fees [Member] | ||
Total Revenues by Type [Abstract] | ||
Total revenues | 0 | 30,488 |
Sales Manager Fees [Member] | ||
Total Revenues by Type [Abstract] | ||
Total revenues | $ 6,311 | $ 334,825 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |||
Investment income | $ 8,985 | $ 36,256 | |
Underwriting and Sales Manager Fees [Member] | |||
Related Party Transactions [Abstract] | |||
Revenue from related party transactions | 30,488 | ||
Gabelli Funds, LLC [Member] | Gabelli U.S. Treasury Money Market Fund [Member] | |||
Related Party Transactions [Abstract] | |||
Affiliated investments | 3,900,445 | $ 4,724,290 | |
Investment income | 116 | 29,550 | |
Affiliated Entities [Member] | Commissions [Member] | |||
Related Party Transactions [Abstract] | |||
Revenue from related party transactions | $ 372,250 | $ 691,784 | |
Revenue percentage | 57.00% | 62.00% | |
GAMCO Global Gold, Natural Resources & Income Trust ("GGN") [Member] | Sales Manager Fees [Member] | |||
Related Party Transactions [Abstract] | |||
Revenue from related party transactions | $ 0 | $ 334,825 |
Related Party Transactions, Ass
Related Party Transactions, Associated Capital Group (Details) - Associated Capital Group [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Related Party Transactions [Abstract] | ||
Management fee percentage | 20.00% | |
Management fees | $ 0 | |
Payment made under sublease agreement | $ 26,131 | $ 27,113 |
Fair Value (Details)
Fair Value (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Assets Measured at Fair Value [Abstract] | ||
Transfers from Level 1 to Level 2 | $ 0 | $ 0 |
Transfers from Level 2 to Level 1 | 0 | 0 |
Transfers into Level 3 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 |
Recurring [Member] | ||
Assets Measured at Fair Value [Abstract] | ||
Cash equivalents | 3,900,445 | 4,724,290 |
Total assets at fair value | 3,900,445 | 4,724,290 |
Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets Measured at Fair Value [Abstract] | ||
Cash equivalents | 3,900,445 | 4,724,290 |
Total assets at fair value | 3,900,445 | 4,724,290 |
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Assets Measured at Fair Value [Abstract] | ||
Cash equivalents | 0 | 0 |
Total assets at fair value | 0 | 0 |
Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Assets Measured at Fair Value [Abstract] | ||
Cash equivalents | 0 | 0 |
Total assets at fair value | $ 0 | $ 0 |
Retirement Plan (Details)
Retirement Plan (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Retirement Plan [Abstract] | ||
Allocated contributions | $ 4,436 | $ 4,436 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Taxes [Abstract] | ||
Effective tax rate | (0.10%) | 32.60% |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Abstract] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 0 |
Basic and diluted [Abstract] | ||
Net loss attributable to shareholders | $ (562,395) | $ (282,454) |
Weighted average shares outstanding, basic (in shares) | 600,090 | 600,090 |
Weighted average shares outstanding, diluted (in shares) | 600,090 | 600,090 |
Basic net loss per share (in dollars per share) | $ (0.94) | $ (0.47) |
Diluted net loss per share (in dollars per share) | $ (0.94) | $ (0.47) |
Equity (Details)
Equity (Details) | Oct. 31, 2019shares |
Associated Capital Group [Member] | |
Stockholders' Equity [Abstract] | |
Common stock issued in conjunction with merger (in shares) | 50,000,000 |
Net Capital Requirements (Detai
Net Capital Requirements (Details) - G.research, LLC [Member] - USD ($) | Mar. 31, 2021 | Mar. 31, 2020 |
Net Capital [Abstract] | ||
Net capital | $ 3,013,082 | $ 3,490,673 |
Excess net capital than required amount | $ 2,763,082 | $ 3,240,673 |