Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 31, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Document Transition Report | false | |
Entity File Number | 333-73996 | |
Entity Registrant Name | Morgan Group Holding Co | |
Entity Central Index Key | 0001162283 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 13-4196940 | |
Entity Address, Address Line One | 401 Theodore Fremd Avenue | |
Entity Address, City or Town | Rye | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10580 | |
City Area Code | 914 | |
Local Phone Number | 921-5216 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | MGHL | |
Security Exchange Name | NONE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 600,090 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
ASSETS | ||
Cash and cash equivalents | $ 1,289,553 | $ 2,285,501 |
Receivables from brokers and clearing organizations | 170,933 | 330,621 |
Receivables from affiliates | $ 22,010 | $ 20,190 |
Other Receivable, after Allowance for Credit Loss, Related Party, Type [Extensible Enumeration] | Affiliated Entities [Member] | Affiliated Entities [Member] |
Deposits with clearing organizations | $ 350,000 | $ 350,000 |
Income taxes receivable (including deferred tax asset of $0 and $0, respectively) | 18,950 | 290,785 |
Fixed assets, net of accumulated depreciation of $69,683 and $63,100, respectively | 5,189 | 11,772 |
Other assets | 108,191 | 128,847 |
Total assets | 1,964,826 | 3,417,716 |
LIABILITIES AND EQUITY | ||
Compensation payable | 200,421 | 227,098 |
Payable to affiliates | $ 933 | $ 594 |
Other Liability, Related Party, Type [Extensible Enumeration] | Affiliated Entities [Member] | Affiliated Entities [Member] |
Income tax payable | $ 17,583 | $ 62,535 |
Accrued expenses and other liabilities | 547,245 | 1,040,435 |
Total liabilities | 766,182 | 1,330,662 |
Commitments and contingencies (Note J) | ||
Equity | ||
Common stock, $0.01 par value; 10,000,000 and 100,000,000 authorized, respectively, and 600,090 issued and outstanding, respectively | 6,001 | 6,001 |
Additional paid-in capital | 53,886,180 | 53,886,180 |
Accumulated deficit | (52,693,537) | (51,805,127) |
Total equity | 1,198,644 | 2,087,054 |
Total liabilities and equity | $ 1,964,826 | $ 3,417,716 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
ASSETS | ||
Deferred tax asset | $ 0 | $ 0 |
Fixed assets, accumulated depreciation | $ 69,683 | $ 63,100 |
Equity | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 10,000,000 | 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 | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues | ||||
Commissions | $ 462,365 | $ 389,823 | $ 1,366,010 | $ 1,343,225 |
Principal transactions | (124) | 188 | (2,108) | 7,558 |
Dividends and interest | 24,134 | 15,545 | 87,443 | 29,758 |
Other revenues | 655 | 7,760 | 1,865 | 16,803 |
Total revenues | 487,030 | 413,316 | 1,453,210 | 1,397,344 |
Expenses | ||||
Compensation and related costs | 294,354 | 274,908 | 883,538 | 895,492 |
Clearing charges | 187,573 | 116,057 | 613,370 | 574,067 |
General and administrative | 199,404 | 190,994 | 732,306 | 653,392 |
Occupancy and equipment | 37,669 | 20,348 | 112,406 | 161,829 |
Total expenses | 719,000 | 602,307 | 2,341,620 | 2,284,780 |
Loss before income tax benefit | (231,970) | (188,991) | (888,410) | (887,436) |
Income tax benefit | 0 | 0 | 0 | 0 |
Net loss | $ (231,970) | $ (188,991) | $ (888,410) | $ (887,436) |
Net loss per share | ||||
Basic (in dollars per share) | $ (0.39) | $ (0.31) | $ (1.48) | $ (1.48) |
Diluted (in dollars per share) | $ (0.39) | $ (0.31) | $ (1.48) | $ (1.48) |
Weighted average shares outstanding: | ||||
Basic (in shares) | 600,090 | 600,090 | 600,090 | 600,090 |
Diluted (in shares) | 600,090 | 600,090 | 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, 2021 | $ 6,001 | $ 53,886,180 | $ (50,855,936) | $ 3,036,245 |
Balance (in shares) at Dec. 31, 2021 | 600,090 | |||
Increase (Decrease) in Statements of Equity [Roll Forward] | ||||
Net loss | $ 0 | 0 | (347,113) | (347,113) |
Balance at Mar. 31, 2022 | $ 6,001 | 53,886,180 | (51,203,049) | 2,689,132 |
Balance (in shares) at Mar. 31, 2022 | 600,090 | |||
Balance at Dec. 31, 2021 | $ 6,001 | 53,886,180 | (50,855,936) | 3,036,245 |
Balance (in shares) at Dec. 31, 2021 | 600,090 | |||
Increase (Decrease) in Statements of Equity [Roll Forward] | ||||
Net loss | (887,436) | |||
Balance at Sep. 30, 2022 | $ 6,001 | 53,886,180 | (51,743,372) | 2,148,809 |
Balance (in shares) at Sep. 30, 2022 | 600,090 | |||
Balance at Mar. 31, 2022 | $ 6,001 | 53,886,180 | (51,203,049) | 2,689,132 |
Balance (in shares) at Mar. 31, 2022 | 600,090 | |||
Increase (Decrease) in Statements of Equity [Roll Forward] | ||||
Net loss | $ 0 | 0 | (351,332) | (351,332) |
Balance at Jun. 30, 2022 | $ 6,001 | 53,886,180 | (51,554,381) | 2,337,800 |
Balance (in shares) at Jun. 30, 2022 | 600,090 | |||
Increase (Decrease) in Statements of Equity [Roll Forward] | ||||
Net loss | $ 0 | 0 | (188,991) | (188,991) |
Balance at Sep. 30, 2022 | $ 6,001 | 53,886,180 | (51,743,372) | 2,148,809 |
Balance (in shares) at Sep. 30, 2022 | 600,090 | |||
Balance at Dec. 31, 2022 | $ 6,001 | 53,886,180 | (51,805,127) | $ 2,087,054 |
Balance (in shares) at Dec. 31, 2022 | 600,090 | 600,090 | ||
Increase (Decrease) in Statements of Equity [Roll Forward] | ||||
Net loss | $ 0 | 0 | (276,437) | $ (276,437) |
Balance at Mar. 31, 2023 | $ 6,001 | 53,886,180 | (52,081,564) | 1,810,617 |
Balance (in shares) at Mar. 31, 2023 | 600,090 | |||
Balance at Dec. 31, 2022 | $ 6,001 | 53,886,180 | (51,805,127) | $ 2,087,054 |
Balance (in shares) at Dec. 31, 2022 | 600,090 | 600,090 | ||
Increase (Decrease) in Statements of Equity [Roll Forward] | ||||
Net loss | $ (888,410) | |||
Balance at Sep. 30, 2023 | $ 6,001 | 53,886,180 | (52,693,537) | $ 1,198,644 |
Balance (in shares) at Sep. 30, 2023 | 600,090 | 600,090 | ||
Balance at Mar. 31, 2023 | $ 6,001 | 53,886,180 | (52,081,564) | $ 1,810,617 |
Balance (in shares) at Mar. 31, 2023 | 600,090 | |||
Increase (Decrease) in Statements of Equity [Roll Forward] | ||||
Net loss | $ 0 | 0 | (380,003) | (380,003) |
Balance at Jun. 30, 2023 | $ 6,001 | 53,886,180 | (52,461,567) | 1,430,614 |
Balance (in shares) at Jun. 30, 2023 | 600,090 | |||
Increase (Decrease) in Statements of Equity [Roll Forward] | ||||
Net loss | $ 0 | 0 | (231,970) | (231,970) |
Balance at Sep. 30, 2023 | $ 6,001 | $ 53,886,180 | $ (52,693,537) | $ 1,198,644 |
Balance (in shares) at Sep. 30, 2023 | 600,090 | 600,090 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||||
Net loss | $ (231,970) | $ (188,991) | $ (888,410) | $ (887,436) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation | 6,583 | 8,206 | ||
(Increase)/decrease in assets: | ||||
Receivables from brokers and clearing organizations | 159,688 | (159,688) | ||
Receivables from affiliates | (1,820) | (13,367) | ||
Income taxes receivable | 271,785 | (4,200) | ||
Other assets | 20,655 | 505,340 | ||
Increase/(decrease) in liabilities: | ||||
Compensation payable | (26,677) | (251,180) | ||
Payable to affiliates | 339 | 171 | ||
Income taxes payable | (44,902) | (1,501) | ||
Accrued expenses and other liabilities | (493,189) | 300,065 | ||
Total adjustments | (107,538) | 383,846 | ||
Net cash used in operating activities | (995,948) | (503,590) | ||
Net decrease in cash, cash equivalents, and restricted cash | (995,948) | (503,590) | ||
Cash, cash equivalents, and restricted cash at beginning of period | 2,635,501 | 3,238,897 | ||
Cash, cash equivalents, and restricted cash at end of period | 1,639,553 | 2,735,307 | 1,639,553 | 2,735,307 |
Reconciliation to cash, cash equivalents, and restricted cash: | ||||
Cash and cash equivalents | 1,289,553 | 2,385,307 | 1,289,553 | 2,385,307 |
Restricted cash: deposits with clearing organizations | 350,000 | 350,000 | 350,000 | 350,000 |
Cash, cash equivalents, and restricted cash | $ 1,639,553 | $ 2,735,307 | $ 1,639,553 | $ 2,735,307 |
Organization and Business Descr
Organization and Business Description | 9 Months Ended |
Sep. 30, 2023 | |
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 ‑ ‑ 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 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. (“GAMI”), an affiliate. The Company also earns investment income generated from its proprietary trading activities. The Company, through its consolidated subsidiary G.research 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 | 9 Months Ended |
Sep. 30, 2023 | |
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, 2022. 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. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2023 | |
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 . The Company acts as underwriter in an agent capacity. Revenues are earned from fees arising from these offerings and the terms are set forth in contracts between the underwriters and the issuer. The Company’s underwriting revenue is considered to be conditional revenue because it is subject to reduction to zero once the offsetting syndicate expenses have been quantified by the syndicate manager (i.e., lead underwriter) and allocated to each underwriter in proportion to their participation in the offering. Revenue recognition is therefore delayed until it is probable that a significant reversal in the amount of revenue recognized will not occur. That is, it is recognized only when uncertainty associated with the syndicate expenses is subsequently resolved and final settlement of syndicate accounts is affected by the syndicate manager. Payment is typically received from the syndicate manager within ninety days after settlement date. Selling concessions . The Company participates as a member of the selling group of underwritten equity offerings and receives compensation based on the difference between what its institutional 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 and nine months ended September 30, 2023 and 2022: Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Commissions $ 450,162 $ 369,171 $ 1,300,608 $ 1,249,687 Hard dollar payments 12,203 20,652 65,402 93,538 $ 462,365 $ 389,823 $ 1,366,010 $ 1,343,225 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 3. Related Party Transactions At September 30, 2023 and December 31, 2022, the Company had an investment of $1,270,618 and $2,259,801, respectively in The Gabelli U.S. Treasury Money Market Fund pectively, and $67,628 and $14,089 for the nine months ended September 30, 2023 and 2022, respectively, and For the three months ended September 30, 2023 and 2022, the Company earned $325,036 and $248,012 or approximately 70% and 64%, 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., (“GAMI”), each affiliates of the Compa ny. For the nine months ended September 30, 2023 and 2022, the Company earned $930,455 and $785,432 or approximately 68% and 58%, respectively, of its commission revenue from transactions executed on behalf of funds advised by Gabelli Funds and private wealth management clients advised by GAMCO Asset. The Company’s rent is currently being accounted for on a month-to-month basis. GAMI 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 arrangement, GAMI and its affiliates shall pay a monthly fixed lease amount for the twelve month period. For the three months ended September 30, 2023 and 2022, the Company paid $19,544 and $13,740, respectively, under the sublease agreeme nt. For the nine months ended September 30, 2023 and 2022, the Company paid $51,275 and $42,504 respectively, under the sublease agreement. These amounts are included withi |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023 and December 31, 2022 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 September 30 September 30, 2023 Quoted Prices in Active Significant Other Significant Markets for Identical Observable Unobservable Assets Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Total Cash equivalents $ 1,270,618 $ - $ - $ 1,270,618 Total assets at fair value $ 1,270,618 $ - $ - $ 1,270,618 There were no transfers between any levels during the nine months ended September 30 Assets Measured at Fair Value on a Recurring Basis as of December 31, 2022: December 31, 2022 Quoted Prices in Active Significant Other Significant Markets for Identical Observable Unobservable Assets Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Total Cash equivalents $ 2,259,801 $ - $ - $ 2,259,801 Total assets at fair value $ 2,259,801 $ - $ - $ 2,259,801 There were no transfers between any levels during the year ended December 31, 2022. 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 | 9 Months Ended |
Sep. 30, 2023 | |
Retirement Plan [Abstract] | |
Retirement Plan | 5. Retirement Plan The Company maintains its own incentive savings plan (the “Plan”) covering substantially all employees. Company contributions to the Plan are determined annually by Company Board of Directors but may not exceed the amount permitted as a deductible expense under the Internal Revenue Code. There were no amounts expensed for the three months and nine months ended September 30, 2023 and 2022. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Taxes [Abstract] | |
Income Taxes | 6. Income Taxes The effective tax rate (“ETR”) for the three months ended September 30, 2023 and 2022 was 0.0% and 0.0%, respectively, and the ETR for the nine months ended September |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2023 | |
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 September 30, Nine months ended September 30, 2023 2022 2023 2022 Basic and diluted: Net loss attributable to shareholders $ (231,970 ) $ (188,991 ) $ (888,410 ) $ (887,436 ) Weighted average shares outstanding 600,090 600,090 600,090 600,090 Basic and diluted net loss per share $ (0.39 ) $ (0.31 ) $ (1.48 ) $ (1.48 ) |
Equity
Equity | 9 Months Ended |
Sep. 30, 2023 | |
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 | 9 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023 and December 31, 2022, 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. |
Risks and Uncertainties
Risks and Uncertainties | 9 Months Ended |
Sep. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
Risks and Uncertainties | 10. Risks and Uncertainties Morgan entered into a Loan Agreement (‘the Loan”) with an affiliate, Associated Capital Group, Inc. on November set to mature on December 31, 2024 The principal amount of the Loan is at an interest rate of per annum and is unsecured. At present there is no plan to extend the maturity of the Loan. Absent a further extension of the maturity of the Loan or a capital infusion, Morgan may not have the resources from operations to repay the Loan in full at maturity. Accordingly, there is uncertainty as to Morgan’s ability to repay this obligation at maturity. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business. |
Net Capital Requirements
Net Capital Requirements | 9 Months Ended |
Sep. 30, 2023 | |
Net Capital Requirements [Abstract] | |
Net Capital Requirements | 11. 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 $809,545 and $1,670,152 exceeding the required amount of $250,000 by $559,545 and $1,420,152 as of September 30, 2023 and December 31, 2022, respectively. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | 12. Subsequent Events The Company has evaluated subsequent events for adjustment to or disclosure as of November 20, 2023, 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) | 9 Months Ended |
Sep. 30, 2023 | |
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 ‑ ‑ 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 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. (“GAMI”), an affiliate. The Company also earns investment income generated from its proprietary trading activities. The Company, through its consolidated subsidiary G.research 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) | 9 Months Ended |
Sep. 30, 2023 | |
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, 2022. |
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. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contracts with Customers [Abstract] | |
Total Revenues by Type | Total revenues from contracts with customers by type were as follows for the three and nine months ended September 30, 2023 and 2022: Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Commissions $ 450,162 $ 369,171 $ 1,300,608 $ 1,249,687 Hard dollar payments 12,203 20,652 65,402 93,538 $ 462,365 $ 389,823 $ 1,366,010 $ 1,343,225 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value [Abstract] | |
Assets Measured at Fair Value on a Recurring Basis | Assets Measured at Fair Value on a Recurring Basis as of September 30 September 30, 2023 Quoted Prices in Active Significant Other Significant Markets for Identical Observable Unobservable Assets Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Total Cash equivalents $ 1,270,618 $ - $ - $ 1,270,618 Total assets at fair value $ 1,270,618 $ - $ - $ 1,270,618 Assets Measured at Fair Value on a Recurring Basis as of December 31, 2022: December 31, 2022 Quoted Prices in Active Significant Other Significant Markets for Identical Observable Unobservable Assets Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Total Cash equivalents $ 2,259,801 $ - $ - $ 2,259,801 Total assets at fair value $ 2,259,801 $ - $ - $ 2,259,801 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 September 30, Nine months ended September 30, 2023 2022 2023 2022 Basic and diluted: Net loss attributable to shareholders $ (231,970 ) $ (188,991 ) $ (888,410 ) $ (887,436 ) Weighted average shares outstanding 600,090 600,090 600,090 600,090 Basic and diluted net loss per share $ (0.39 ) $ (0.31 ) $ (1.48 ) $ (1.48 ) |
Organization and Business Des_3
Organization and Business Description (Details) | 9 Months Ended | ||||
Aug. 05, 2020 shares | Jun. 10, 2020 $ / shares | Oct. 31, 2019 shares | Sep. 30, 2023 Firm $ / shares | Dec. 31, 2022 $ / 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 | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue from Contracts with Customers [Abstract] | ||||
Underwriter payment receiving period | 90 days | |||
Brokerage Commissions [Member] | ||||
Total Revenues by Type [Abstract] | ||||
Revenues | $ 462,365 | $ 389,823 | $ 1,366,010 | $ 1,343,225 |
Commissions [Member] | ||||
Total Revenues by Type [Abstract] | ||||
Revenues | 450,162 | 369,171 | 1,300,608 | 1,249,687 |
Hard Dollar Payments [Member] | ||||
Total Revenues by Type [Abstract] | ||||
Revenues | $ 12,203 | $ 20,652 | $ 65,402 | $ 93,538 |
Related Party Transactions, Rev
Related Party Transactions, Revenue from Transactions with Related Parties (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Related Party Transaction [Abstract] | |||||
Investment income | $ 24,134 | $ 15,545 | $ 87,443 | $ 29,758 | |
Commission revenue | 462,365 | 389,823 | 1,366,010 | 1,343,225 | |
Gabelli Funds, LLC [Member] | |||||
Related Party Transaction [Abstract] | |||||
Affiliated investments | 1,270,618 | 1,270,618 | $ 2,259,801 | ||
Investment income | $ 18,133 | $ 10,668 | $ 67,628 | $ 14,089 | |
Investment, Type [Extensible Enumeration] | mghl:USTreasuryMoneyMarketFundMember | mghl:USTreasuryMoneyMarketFundMember | mghl:USTreasuryMoneyMarketFundMember | mghl:USTreasuryMoneyMarketFundMember | mghl:USTreasuryMoneyMarketFundMember |
Affiliated Entities [Member] | Commissions [Member] | |||||
Related Party Transaction [Abstract] | |||||
Commission revenue | $ 325,036 | $ 248,012 | $ 930,455 | $ 785,432 | |
Revenue percentage | 70% | 64% | 68% | 58% |
Related Party Transactions, GAM
Related Party Transactions, GAMI (Details) - GAMI [Member] - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Related Party Transaction [Abstract] | ||||
Period for monthly fixed lease payment | 12 months | |||
Payment made under sublease agreement | $ 19,544 | $ 13,740 | $ 51,275 | $ 42,504 |
Fair Value (Details)
Fair Value (Details) - Recurring [Member] - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Assets Measured at Fair Value [Abstract] | ||
Cash equivalents | $ 1,270,618 | $ 2,259,801 |
Total assets at fair value | 1,270,618 | 2,259,801 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets Measured at Fair Value [Abstract] | ||
Cash equivalents | 1,270,618 | 2,259,801 |
Total assets at fair value | 1,270,618 | 2,259,801 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Assets Measured at Fair Value [Abstract] | ||
Cash equivalents | 0 | 0 |
Total assets at fair value | 0 | 0 |
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 | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Retirement Plan [Abstract] | ||||
Retirement plan expense | $ 0 | $ 0 | $ 0 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Taxes [Abstract] | ||||
Effective tax rate | 0% | 0% | 0% | 0% |
U.S. corporate rate | 21% |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Abstract] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 0 | 0 | 0 |
Basic [Abstract] | ||||
Net loss attributable to shareholders | $ (231,970) | $ (188,991) | $ (888,410) | $ (887,436) |
Weighted average shares outstanding, basic (in shares) | 600,090 | 600,090 | 600,090 | 600,090 |
Basic net loss per share (in dollars per share) | $ (0.39) | $ (0.31) | $ (1.48) | $ (1.48) |
Diluted [Abstract] | ||||
Net loss attributable to shareholders | $ (231,970) | $ (188,991) | $ (888,410) | $ (887,436) |
Weighted average shares outstanding, diluted (in shares) | 600,090 | 600,090 | 600,090 | 600,090 |
Diluted net loss per share (in dollars per share) | $ (0.39) | $ (0.31) | $ (1.48) | $ (1.48) |
Equity (Details)
Equity (Details) | Oct. 31, 2019 shares |
Associated Capital Group [Member] | |
Stockholders' Equity [Abstract] | |
Common stock issued in conjunction with merger (in shares) | 50,000,000 |
Risks and Uncertainties (Detail
Risks and Uncertainties (Details) - Subordinated Loan Agreement [Member] - Associated Capital Group [Member] - Subsequent Event [Member] | Nov. 20, 2023 USD ($) |
Debt Instruments [Abstract] | |
Maturity date | Dec. 31, 2024 |
Principal amount of loan | $ 400,000 |
Interest rate | 14% |
Net Capital Requirements (Detai
Net Capital Requirements (Details) - G.research, LLC [Member] - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Net Capital [Abstract] | ||
Net capital | $ 809,545 | $ 1,670,152 |
Excess net capital than required amount | $ 559,545 | $ 1,420,152 |