Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 03, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Entity Registrant Name | Wright Investors Service Holdings, Inc. | |
Entity Central Index Key | 1,279,715 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,017 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 19,213,461 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues | ||||
Investment management services | $ 533 | $ 583 | $ 1,025 | $ 1,171 |
Other investment advisory services | 593 | 708 | 1,262 | 1,422 |
Financial research and related data | 196 | 163 | 379 | 338 |
Total revenues | 1,322 | 1,454 | 2,666 | 2,931 |
Expenses | ||||
Compensation and benefits | 876 | 976 | 1,793 | 2,019 |
Other operating | 891 | 952 | 1,682 | 1,905 |
Total expenses | 1,767 | 1,928 | 3,475 | 3,924 |
Operating loss | (445) | (474) | (809) | (993) |
Impairment of investment in LLC | (328) | (294) | ||
Interest expense and other (loss) income, net | (15) | (30) | (41) | (36) |
Loss from operations before income taxes | (460) | (832) | (850) | (1,323) |
Income tax expense | (17) | (10) | (29) | (26) |
Net loss | $ (477) | $ (842) | $ (879) | $ (1,349) |
Basic and diluted loss per share | $ (0.03) | $ (0.04) | $ (0.05) | $ (0.07) |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 6,507 | $ 7,026 |
Accounts receivable | 257 | 291 |
Prepaid expenses and other current assets | 231 | 393 |
Total current assets | 6,995 | 7,710 |
Property and equipment, net | 120 | 103 |
Intangible assets, net | 1,817 | 2,015 |
Goodwill | 3,364 | 3,364 |
Investment in undeveloped land | 355 | 355 |
Other assets | 108 | 108 |
Total assets | 12,759 | 13,655 |
Current liabilities | ||
Accounts payable and accrued expenses | 688 | 741 |
Deferred revenue | 6 | 11 |
Income taxes payable | 26 | 37 |
Current portion of officers retirement bonus liability | 165 | 200 |
Total current liabilities | 885 | 989 |
Officers retirement bonus liability, net of current portion | 548 | 570 |
Total liabilities | 1,433 | 1,559 |
Stockholders' equity | ||
Common stock | 198 | 198 |
Additional paid-in capital | 33,825 | 33,716 |
Accumulated deficit | (20,998) | (20,119) |
Treasury stock, at cost (815,219 shares at June 30, 2017and December 31, 2016) | (1,699) | (1,699) |
Total stockholders' equity | 11,326 | 12,096 |
Total liabilities and stockholders' equity | $ 12,759 | $ 13,655 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Treasury stock, shares | 815,219 | 815,219 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities | ||
Net loss | $ (879) | $ (1,349) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Share of loss from equity investment in LLC | 294 | |
Realized loss on sale of short-term investments | 9 | |
Depreciation and amortization | 211 | 326 |
Interest expense related to officers retirement bonus liability | 43 | 17 |
Change in value of warrant | 12 | |
Equity based compensation, including issuance of stock to directors | 109 | 115 |
Equity income in LLC | (46) | |
Changes in other operating items: | ||
Accounts receivable | 34 | (89) |
Other assets | 38 | |
Deferred revenue | (5) | 30 |
Officers retirement bonus liability | (100) | (100) |
Income taxes payable | (11) | 5 |
Prepaid expenses and other current assets | 162 | 169 |
Accounts payable and accrued expenses | (53) | (179) |
Net cash used in operating activities | (489) | (748) |
Cash flows from investing activities | ||
Proceeds from sales of short-term investments | 148 | |
Additions to property and equipment | (30) | (4) |
Net cash provided by (used in) investing activities | (30) | 144 |
Cash flows from financing activities | ||
Purchase of treasury stock | (340) | |
Net cash used in financing activities | (340) | |
Net decrease in cash and cash equivalents | (519) | (944) |
Cash and cash equivalents at the beginning of the period | 7,026 | 8,493 |
Cash and cash equivalents at the end of the period | 6,507 | 7,549 |
Net cash paid during the period for | ||
Income taxes | $ 40 | $ 28 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - 6 months ended Jun. 30, 2017 - USD ($) $ in Thousands | Common Stock [Member] | Additional paid-in capital [Member] | Accumulated deficit [Member] | Treasury stock, at cost [Member] | Total |
Balance at Dec. 31, 2016 | $ 198 | $ 33,716 | $ (20,119) | $ (1,699) | $ 12,096 |
Balance, shares at Dec. 31, 2016 | 19,830,219 | ||||
Net loss | (879) | (879) | |||
Equity based compensation expense | 54 | 54 | |||
Issuance of common stock to directors | 55 | 55 | |||
Issuance of common stock to directors, shares | 43,652 | ||||
Balance at Jun. 30, 2017 | $ 198 | $ 33,825 | $ (20,998) | $ (1,699) | $ 11,326 |
Balance, shares at Jun. 30, 2017 | 19,873,871 |
Basis of presentation and descr
Basis of presentation and description of activities | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation and description of activities | 1. Basis of presentation and description of activities Basis of presentation The accompanying interim financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. The information and note disclosures normally included in complete financial statements have been condensed or omitted pursuant to such rules and regulations. The Condensed Consolidated Balance Sheet as of December 31, 2016 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, 2016 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 2017 interim period are not necessarily indicative of results to be expected for the entire year. Description of activities The Winthrop Corporation, a Connecticut Corporation (“Winthrop”) is a wholly- owned subsidiary of Wright Investors’ Service Holdings, Inc. (hereinafter referred to as the “Company” or “Wright Holdings”), and through its wholly-owned subsidiaries Wright Investors’ Service, Inc. (“Wright”), Wright Investors’ Service Distributors, Inc. (“WISDI”) and Wright’s wholly-owned subsidiary, Wright Private Asset Management, LLC (“WPAM”) (collectively, the “Wright Companies”), offers investment management services, financial advisory services and investment research to large and small investors, both taxable and tax exempt. WISDI is a registered broker dealer with the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the Securities and Exchange Commission. Reclassification The Company has reclassified $32,000 and $17,000 of Compensation and benefits for the three and six months ended June 30, 2016, respectively, to Other operating expenses in order to be consistent with the presentation for the three and six months ended June 30, 2017. |
Certain new accounting guidance
Certain new accounting guidance | 6 Months Ended |
Jun. 30, 2017 | |
Certain New Accounting Guidance | |
Certain new accounting guidance | 2. Certain new accounting guidance In May 2014, the Financial Accounting Standards Board (“FASB”) issued an accounting standard update on revenue recognition (ASU 2014-09). The new guidance creates a single, principle based model for revenue recognition and expands and improves disclosures about revenue. The new guidance is effective for fiscal years beginning on or after December 15, 2017 and interim periods within those fiscal years. The Company is currently assessing the impact the adoption of ASU 2014-09 will have on its financial statements. In February 2016, the FASB issued ASU 2016-02, leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-2 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after the date of initial application, with an option to elect to use certain transaction relief. The Company is currently assessing the impact that the adaption of ASU 2016-02 will have on its financial statements. In March 2016, the FASB issued ASU 2016-09, “Compensation- Stock Compensation (Topic 718): Improvements to Employee Share Based Payment Accounting.” ASU 2016-09 simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classifications in the statement of cash flows. ASU 2016-09 is effective for the fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. For the six months ended June 30, 2017, the Company has adopted ASU 2016-09 which did not have any impact in the Company’s financial statements. In accordance with ASU 2016-09, the Company has made the accounting policy election to continue to estimate forfeitures based upon historical occurrences. In January 2016, the FASB issued Accounting Standards Update 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The ASU generally requires companies to measure investments in equity securities, except those accounted for under the equity method, at fair value and recognize any changes in fair value in net income. The new guidance must be applied using a modified-retrospective approach and is effective for periods beginning after December 15, 2017 and early adoption is not permitted. In January 2017, FASB issued ASU 2017-04, “Intangibles- Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment”, which eliminates the second step of the previous FASB guidance for testing goodwill for impairment and is intended to reduce cost and complexity of goodwill impairment testing. The standard is effective for periods beginning after December 15, 2019 for both interim and annual periods. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently assessing the impact that the adoption of ASU 2017-04 will have on its financial statements. In May 2017, the FASB issued ASU 2017-09, “ Compensation – Stock Compensation (Topic 708) Scope of Modification Accounting |
Per share data
Per share data | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Per share data | 3. Per share data Loss per share for the three months ended June 30, 2017 and 2016 respectively, is calculated based on 19,192,000 and 19,066,000 weighted average outstanding shares of common stock. Included in the share number are vested Restricted Stock Units (“RSUs”) of 145,303 and 78,367 for the three months ended June 30, 2017 and 2016, respectively. Loss per share for the six months ended June 30, 2017 and 2016 respectively, is calculated based on 19,161,000 and 19,115,000 weighted average outstanding shares of common stock. Included in the share number are vested RSUs of 126,256 and 53,989 for the six months ended June 30, 2017 and 2016, respectively. Options for 675,000 and 3,375,000 shares of common stock, respectively, for the three and six months ended June 30, 2017 and 2016, and unvested RSUs for 66,668 and 133,334 shares of common stock, respectively, for the three and six months ended June 30, 2017 and 2016 were not included in the diluted computation as their effect would be anti-dilutive since the Company incurred net losses for both periods. On February 28, 2017, 2,700,000 options expired without being exercised. |
Capital Stock
Capital Stock | 6 Months Ended |
Jun. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Capital Stock | 4. 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 June 30, 2017, the Company had repurchased 2,041,971 shares of its common stock, and a total of 2,958,029 shares, remain available for repurchase at June 30, 2017. |
Short-term investments
Short-term investments | 6 Months Ended |
Jun. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Short-term investments | 5. Short-term investments Short-term investments, which had consisted of mutual funds managed by a subsidiary of Winthrop were liquidated in the first quarter of 2016 for proceeds of $148,000 and realized a loss of $9,000. |
Investment in LLC
Investment in LLC | 6 Months Ended |
Jun. 30, 2017 | |
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract] | |
Investment in LLC | 6. Investment in LLC The Company entered into a Limited Liability Company Agreement dated April 28, 2015 by and among EGS, LLC, a newly formed Delaware limited liability company (“EGS”) and the members named therein. The Company invested $333,333 and acquired 333,333 Units, representing a 33.33% Membership Interest in EGS. In addition to the Company, EGS has two other members, one of whom is Marshall Geller, a member of the Company’s Board of Directors. The EGS transaction, as well as Mr. Geller’s participation in the transaction, received the prior approval of the Company’s Audit Committee. Mr. Geller is the Managing Member of the LLC and also invested $333,333 and acquired 333,333 Units, representing a 33.33% Membership Interest in EGS. EGS entered into a Note Purchase Agreement effective April 28, 2015 with Merriman Holdings, Inc. (“Merriman”), a publicly traded company, pursuant to which EGS purchased from Merriman for an aggregate purchase price of $1,000,000 (i) a one-year Senior Secured Note in the original principal amount of $1,000,000, at 12% interest, payable quarterly, in arrears (the “Note”) and (ii) a Common Stock Purchase Warrant which expires in five years to purchase 500,000 shares of Merriman common stock at $1.00 per share (the “Warrants”). EGS distributed the Warrants to its members and the Company received 166,666 Warrants which expire in five years. Marshall Geller also received 166,666 Warrants with an exercise price of $1.00 per share that expire in five years. The investment in EGS is being accounted for under the equity method. Under this method, the Company records its share of EGS’s earnings (losses) in the statement of operations with equivalent amount of increases (decreases) to the investment. At April 28, 2015, the Company valued the Warrants at their fair value, or $120,000, using the Black Scholes model, and recorded their value as a reduction in the investment in EGS. The Warrant which permits a cashless exercise, and qualifies as a derivative, is recorded at fair value (based on observable inputs) with change in such value included in earnings. On July 20, 2015, a fourth member joined EGS and invested $333,333, and received a 25% Membership Interest in EGS. EGS advanced the funds to Merriman and increased its investment in the Note and in addition, received 166,666 additional Warrants which it distributed to its new member. This transaction reduced the Company’s interest in EGS to 25%, and changed the expiration date of the Note to July 20, 2016, and extended the exercise date of the warrant to five years from that date. Merriman is a financial services holding company that provided capital markets advisory and research, corporate and investment banking services through its wholly-owned principal operating subsidiary, Merriman Capital, Inc. (“MC”). The Note is secured by 99.998% of the capital stock of MC. The Note, pursuant to the terms of an Intercreditor Agreement entered into with Merriman’s current debt holders, is senior to all of Merriman’s debt. On July 27, 2016 FINRA suspended Merriman’s securities business due to an ongoing dispute over accounting for working capital, and MC filed a Broker Dealer Withdrawal with the SEC to begin the process of terminating its licenses. Substantially all of Merriman’s revenues are derived from MC. Merriman did not make the April 2016 interest payment or the $1,333,333 principal payment due at maturity in July 2016, and is currently in default of the Note with EGS. The above events indicate that EGS may be unable to recover all or a significant portion of the carrying amount of the Note and accordingly, in the quarter ended June 30, 2016, EGS discontinued accruing interest income on the Note and provided a valuation allowance and related provision for loss for the entire carrying amount of the Note, including accrued interest in a prior quarter. Correspondingly, for the three and six months ended June 30, 2016, the Company recorded $328,000 and $294,000 respectively as to its share of EGS’s net loss for such periods, which resulted in a zero carrying value for the Company’s investment in EGS at June 30, 2016. In addition, the warrants were ascribed no value at such date resulting in a loss of $14,000 and $12,000 for the three and six months ended June 30, 2016, respectively. Any future recovery by the Company on its investment in EGS will be recognized as income when received. During the year ended December 31, 2016 and the six months ended June 30, 2017, there were no amounts recovered from the Company’s investment in EGS. |
Incentive stock plans and stock
Incentive stock plans and stock based compensation | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Incentive stock plans and stock based compensation | 7. Incentive stock Common stock options The Company had initially adopted a stock-based compensation plan for employees and non-employee members of its Board of Directors in November 2003 (the “2003 Plan”), which was subsequently amended in March 2007 (the “2003 Plan Amendment”). In December 2007, the Company adopted the National Patent Development Corporation 2007 Incentive Stock Plan (the “2007 NPDC Plan”). The plans provide for up to 3,500,000 and 7,500,000 awards for shares under the 2003 Plan Amendment and 2007 NPDC Plan, respectively, in the form of discretionary grants of stock options, restricted stock shares, restricted stock units (RSUs) and other stock-based awards to employees, directors and outside service providers. The Company’s plans are administered by the Compensation Committee of the Board of Directors, which consists solely of non-employee directors. The term of any option granted under the plans will not exceed ten years from the date of grant and, in the case of incentive stock options granted to a 10% or greater holder of total voting stock of the Company, three years from the date of grant. The exercise price of any option granted under the plans may not be less than the fair market value of the common stock on the date of grant or, in the case of incentive stock options granted to a 10% or greater holder of total voting stock, 110% of such fair market value. The Company recorded compensation expense of $100 and $200, respectively, for the three and six months ended June 30, 2017, and compensation expense of $5,000 for the three and six months ended June 30, 2016 under these plans. As of June 30, 2017, the number of shares reserved and available for award under the 2007 NPDC Plan is 6,141,786 and under the 2003 Plan Amendment is 3,400,000. During the six months ended June 30, 2016, the Company issued 100,000 options to a consultant on March 28, 2016 and 25,000 options to an employee on March 31, 2016. The options issued on March 28, 2016 vest equally over 3 years, and are subject to post vesting restrictions for sale for three years. The options issued on March 31, 2016 vest on the third anniversary of their issuance. The options were issued at an exercise price of $1.29 and $1.34 per share for the options issued on March 28, 2016 and March 31, 2016, respectively, which price was equal to the market value at the date of the grant. The 25,000 options granted on March 31, 2016 were cancelled in the third quarter of 2016, upon termination of the employee. The grant-date fair value of the options were $0.50 and $0.52, respectively, which was estimated on the date of grant using the Black-Scholes option pricing model using the following assumptions: Dividend yield 0 % Expected volatility 48.24 % Risk-free interest rate 1.21 % Expected life (in years) 4 The fair value of the options granted on March 28, 2016 were reduced by an 8% discount for post vesting restrictions. As of June 30, 2017, the unrecognized compensation expense related to non-vested options was $500. The value of the options granted to the consultant are re-measured at each balance sheet date until performance is complete with the final measurement of fair value of the options made on the vesting dates. The revised fair value is amortized over the remaining term of the option. As of June 30, 2017, there were outstanding options to acquire 675,000 common shares, 609,000 of which were vested and exercisable, having a weighted average exercise price of $1.54 per share, a weighted average contractual term of 3 years and zero aggregate intrinsic value. On February 28, 2017, 2,700,000 options expired without being exercised. Restricted stock units (a) 17,738 RSUs were granted to certain employees on February 4, 2013, which vest equally over three years, with the first third vesting on February 4, 2014 The RSUs are valued based on the closing price of the Company’s common stock on February 4, 2013 of $2.40, less an average discount of 11% for post-vesting restrictions on sale until the three-year anniversary of the grant date, or an average price per share of $2.25. The Company recorded no compensation expense for the three and six months ended June 30, 2017 and recorded compensation expense of $0 and $1,000, respectively for the three and six months ended June 30, 2016, related to these RSUs. At June 30, 2017, 11,701 of the RSU’s were fully vested and 6,037 have been forfeited. There was no unrecognized compensation expense related to these RSUs at June 30, 2017. (b) On January 19, 2015 and March 31, 2015, 100,000 RSUs were issued on each date to two newly appointed directors of the Company. The RSUs will vest equally over 3 years. The RSUs are valued based on the closing price of the Company’s common stock on January 19, 2015 and March 31, 2015 of $1.70 and $1.85, respectively, less an average discount of 8% for post-vesting restrictions on sale until the three-year anniversary of the grant date, or an average price per share of $1.56 and $1.70, respectively. The Company recorded compensation expense of $27,000 and $54,000 for the three and six months ended June 30, 2017 and 2016, respectively, related to these RSUs. At June 30, 2017, 133,332 of such RSUs are vested and 66,668 are unvested. The total unrecognized compensation expense related to these unvested RSUs at June 30, 2017 is $70,000, which will be recognized over the remaining vesting period of approximately 0.6 years. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2017 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Intangible Assets | 8. Intangible Assets At June 30, 2017, intangible assets subject to amortization which were recorded in connection with the acquisition of Winthrop consisted of the following (in thousands): Intangible Estimated useful life Gross carrying amount Accumulated Amortization Net carrying amount Investment management and Advisory Contracts 9 years $ 3,181 $ 1,601 $ 1,580 Trademarks 10 years 433 196 237 Proprietary software and technology 4 years 960 960 - $ 4,574 $ 2,757 $ 1,817 For the three months ended June 30, 2017 and 2016, amortization expense was $99,000 and $159,000, respectively. For the six months ended June 30, 2017 and 2016, amortization expense was $198,000 and $318,000, respectively. The weighted-average amortization period for total amortizable intangibles at June 30, 2017 is 4.6 years. Estimated amortization expense for each of the five succeeding years and thereafter is as follows (in thousands): Year ending December 31, 2017 (remainder) $199 2018 397 2019 397 2020 397 2021 386 2022-2023 41 $1,817 |
Related party transactions
Related party transactions | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related party transactions | 9. Related party transactions Wright acts as an investment advisor, its subsidiary acts as a principal underwriter and one officer of Winthrop is also an officer for a family of mutual funds from which investment management and distribution fees are earned based on the net asset values of the respective funds. Such fees, which are included in Other investment advisory services, amounted to $96,000 and $241,000 for the three and six months ended June 30, 2017, respectively, and $207,000 and $413,000 for the three and six months ended June 30, 2016, respectively. |
Income taxes
Income taxes | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income taxes | 10. Income taxes For the three and six months ended June 30, 2017, the Company recorded income tax expense from continuing operations of $17,000 and $29,000, respectively. For the three and six months ended June 30, 2016, the Company recorded an income tax expense of $10,000 and $26,000, respectively. Income tax expense represent minimum state taxes. No tax benefit has been recorded in relation to the pre-tax loss for the three and six months ended June 30, 2017 and 2016, due to a full valuation allowance to offset any deferred tax asset related to net operating loss carry forwards attributable to the loss. |
Retirement plans
Retirement plans | 6 Months Ended |
Jun. 30, 2017 | |
Liability, Retirement and Postemployment Benefits [Abstract] | |
Retirement plans | 11. Retirement plans a) The Company maintains a 401(k) Savings Plan (the “Plan”), for full time employees who have completed at least one hour of service coincident with the first day of each month. The Plan permits pre-tax contributions by participants. Effective January 15, 2013, the employees of Winthrop and its subsidiaries were eligible to participate in the Plan, and the Company ceased matching the participant’s contributions. b) Winthrop maintains an officer retirement bonus plan (the “Bonus Plan”) that is an unfunded deferred compensation program providing retirement benefits equal to 10% of annual compensation, as defined, to those officers upon their retirement. Effective December 1, 1999, the Plan was frozen so that no additional benefits will be earned. The present value of the obligation under the Bonus Plan at June 30, 2017, is $713,000, of which $165,000 is estimated to be payable over the next twelve months. The liability is payable to individual retired employees at the rate of $50,000 per year in equal monthly amounts commencing upon retirement. The liability was recorded at $885,000 at the date of the Company’s acquisition of Winthrop, representing its estimated fair value computed based on its present value, utilizing a discount rate of 14%, which was estimated to be the acquired company’s weighted average cost of capital on such date from the perspective of a market participant. The calculated discount of $1,027,000 at the date of acquisition is being amortized as interest expense over the period the obligation is outstanding by use of the effective interest method. For the three and six months ended June 30, 2017, interest expense amounted to $21,000 and $43,000, respectively. For the three and six months ended June 30, 2016, interest expense amounted to $19,000 and $39,000, respectively. During the second quarter of 2016 an employee left the Company prior to this retirement date, and the Company recognized $23,000 of income related to the elimination of the related liability. At June 30, 2017, the present value of the obligation under the Bonus Plan was $713,000, respectively, net of discount of $411,000. |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | 12. Contingencies a) On July 1, 2014, Winthrop, pursuant to the terms of its Milford facility lease, gave eight months’ notice to their landlord to terminate their lease in Milford, Connecticut. In August 2014, the Company entered into a five-year sublease in Greenwich, Connecticut for 10,000 square feet. Estimated annual rent for the Greenwich, Connecticut space, which expires on September 30, 2019 aggregated $575,000 payable as follows; $124,000 (remainder of 2017), $255,000 (2018), and $196,000 (through September 30, 2019). The Company moved its corporate office from Mount Kisco, New York to the new Greenwich, Connecticut facility in March 2015, which resulted in a consolidation of the Company’s operations. b) On September 26, 2014, the Connecticut Department of Energy and Environmental Protection (“DEEP”) issued two Orders requiring the investigation and repair of two dams in which the Company and its subsidiaries have certain ownership interests. The first Order requires that the Company investigate and make specified repairs to the ACME Pond Dam located in Killingly, Connecticut. The second Order, as subsequently revised by DEEP on October 10, 2014, requires that the Company investigate and make specified repairs to the Killingly Pond Dam located in Killingly, Connecticut. The Company has administratively appealed and contested the allegations in both Orders. On July 27, 2017, the Company entered into a Consent Order with the DEEP relative to Killingly Pond Dam. As the administrative appeal of the Order relative to ACME Pond Dam remains pending, it is not possible at this time to evaluate the likelihood of, or to estimate the range of loss from, an unfavorable outcome. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | 13. Segment information The Company through its wholly-owned subsidiaries has one operating segment which is engaged in the investment management and financial advisory business and which derives its revenue from investment management services, other investment advisory services and financial research. The Company’s corporate operations are not considered an operating segment and the Company does not allocate corporate expense for management and administrative services or income and expense related to other corporate activity to its operating segment to measure its operations. The Company’s management utilizes adjusted EBITDA to measure segment performance. Adjusted EBITDA is a measure defined as EBITDA before corporate expense, equity based compensation, software implementation costs, severance costs and non-operating income (expense). EBITDA is a measure defined as earnings (loss) before interest, taxes, depreciation and amortization. Adjusted EBITDA is a non-GAAP measure and should not be construed as an alternative to operating loss or net loss as an indicator of the Company’s performance, or as an alternative to cash used in operating activities, or as a measure of liquidity, or as any other measure determined in accordance with GAAP. Following is a reconciliation of adjusted EBITDA of the operating segment to loss before income taxes (in thousands): Wright Investors' Service Holdings, Inc. Segment Information Three months ended Six months ended June 30, June 30, 2017 2016 2017 2016 Adjusted EBITDA of operating segment $ 168 $ 157 $ 340 $ 325 Other operating expenses: Corporate (411 ) (380 ) (791 ) (778 ) Depreciation and amortization (109 ) (163 ) (211 ) (326 ) Equity based compensation (55 ) (61 ) (109 ) (115 ) Software implementation costs (38 ) - (38 ) - Severance costs - (27 ) - (99 ) Operating loss (445 ) (474 ) (809 ) (993 ) Non- operating income (expense): Interest expense and other, net (15 ) (30 ) (41 ) (36 ) Share of loss from equity investment in LLC - (328 ) - (294 ) Loss from operations before income taxes $ (460 ) $ (832 ) $ (850 ) $ (1,323 ) Following is a summary of the Company's total assets: June 30, December 31, 2017 2016 Operating segment $ 6,146 $ 6,224 Corporate (1) 6,613 7,431 $ 12,759 $ 13,655 (1) Consists principally of cash and cash equivalents |
Incentive stock plans and sto20
Incentive stock plans and stock based compensation (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Fair Value Assumptions | Dividend yield 0 % Expected volatility 48.24 % Risk-free interest rate 1.21 % Expected life (in years) 4 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Components of Acquired Intangible Assets | Intangible Estimated useful life Gross carrying amount Accumulated Amortization Net carrying amount Investment management and Advisory Contracts 9 years $ 3,181 $ 1,601 $ 1,580 Trademarks 10 years 433 196 237 Proprietary software and technology 4 years 960 960 - $ 4,574 $ 2,757 $ 1,817 |
Amortization Expense Related to Intangible Assets | Year ending December 31, 2017 (remainder) $199 2018 397 2019 397 2020 397 2021 386 2022-2023 41 $1,817 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Three months ended Six months ended June 30, June 30, 2017 2016 2017 2016 Adjusted EBITDA of operating segment $ 168 $ 157 $ 340 $ 325 Other operating expenses: Corporate (411 ) (380 ) (791 ) (778 ) Depreciation and amortization (109 ) (163 ) (211 ) (326 ) Equity based compensation (55 ) (61 ) (109 ) (115 ) Software implementation costs (38 ) - (38 ) - Severance costs - (27 ) - (99 ) Operating loss (445 ) (474 ) (809 ) (993 ) Non- operating income (expense): Interest expense and other, net (15 ) (30 ) (41 ) (36 ) Share of loss from equity investment in LLC - (328 ) - (294 ) Loss from operations before income taxes $ (460 ) $ (832 ) $ (850 ) $ (1,323 ) Following is a summary of the Company's total assets: June 30, December 31, 2017 2016 Operating segment $ 6,146 $ 6,224 Corporate (1) 6,613 7,431 $ 12,759 $ 13,655 (1) Consists principally of cash and cash equivalents |
Basis of presentation and des23
Basis of presentation and description of activities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Compensation and benefits | $ 876 | $ 976 | $ 1,793 | $ 2,019 |
Reclassified [Member] | ||||
Compensation and benefits | $ 32 | $ 17 |
Per share data (Details)
Per share data (Details) - shares | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Weighted average number of common shares outstanding | 19,192,000 | 19,066,000 | 19,161,000 | 19,115,000 | |
Weighted average number of common shares, vested RSUs | 145,303 | 78,367 | 126,256 | 53,989 | |
Employee Stock Option [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 675,000 | 3,375,000 | 675,000 | 3,375,000 | |
Options expired | 2,700,000 | ||||
Restricted Stock Units (RSUs) [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 66,668 | 133,334 | 66,668 | 133,334 |
Capital Stock (Details)
Capital Stock (Details) | 53 Months Ended |
Jun. 30, 2017shares | |
Stockholders' Equity Note [Abstract] | |
Number of shares authorized to be repurchased | 5,000,000 |
Remaining number of shares available for repurchase | 2,958,029 |
Shares repurchased during the period | 2,041,971 |
Short-term investments (Details
Short-term investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |||
Proceeds from sale of short-term investments | $ 148 | $ 148 | |
Realized loss on sale of short-term investments | $ 9 | $ 9 |
Investment in LLC (Details)
Investment in LLC (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jul. 20, 2015 | Apr. 28, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Schedule of Equity Method Investments [Line Items] | ||||||
Share of (loss) income from investment in LLC | $ (328,000) | $ (294,000) | ||||
Change in value of warrant | $ 14,000 | $ 12,000 | ||||
Exercise price of warrants | $ 1 | |||||
Warrants received | 166,666 | |||||
Merriman Holdings, Inc. [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Principal amount | $ 1,000,000 | |||||
Interest rate | 12.00% | |||||
Warrant distributed from LLC | $ 120,000 | |||||
Common Stock Purchase Warrant, amount of shares | 500,000 | |||||
Principal payment due | $ 1,333,333 | |||||
Merriman Holdings, Inc. [Member] | Marshall Geller [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Exercise price of warrants | $ 1 | |||||
Warrants received | 166,666 | |||||
Merriman Capital, Inc. [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Notes secured, percentage of capital stock | 99.998% | 99.998% | ||||
EGS [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Investment amount | $ 333,333 | $ 333,333 | ||||
Units acquired | 333,333 | |||||
Membership Interest | 25.00% | 33.33% | ||||
Warrants received | 166,666 |
Incentive stock plans and sto28
Incentive stock plans and stock based compensation (Common Stock Options) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2016 | Mar. 28, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options granted - Stock Options | 25,000 | 100,000 | ||||
Unrecognized compensation cost | $ 500 | $ 500 | ||||
Weighted average fair value of stock options granted | $ 0.52 | $ 0.50 | ||||
Sharebased Compensation Arrangement By Sharebased Payment Award Exercise Price Of Options Granted Percentage Of Fair Market Value | 110.00% | |||||
Share-based compensation | $ 100 | $ 5,000 | $ 200 | $ 5,000 | ||
Options outstanding | 675,000 | 675,000 | ||||
Options vested and exerisable | 609,000 | 609,000 | ||||
Outstanding options, weighted average exercise price | $ 1.54 | $ 1.54 | ||||
Outstanding options, weighted average contractual term | 3 years | |||||
Outstanding options, aggregate intrinsic value | $ 0 | $ 0 | ||||
Dividend yield | 0.00% | 0.00% | ||||
Expected volatility | 48.24% | 48.24% | ||||
Risk-free interest rate | 1.21% | 1.21% | ||||
Expected life | 4 years | 4 years | ||||
Exercise price | $ 1.34 | $ 1.29 | ||||
Vesting period | 3 years | 3 years | ||||
2003 Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock reserved for issuance | 3,500,000 | 3,500,000 | ||||
Number of shares reserved and available for award | 3,400,000 | 3,400,000 | ||||
2007 NPDC Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock reserved for issuance | 7,500,000 | 7,500,000 | ||||
Number of shares reserved and available for award | 6,141,786 | 6,141,786 |
Incentive stock plans and sto29
Incentive stock plans and stock based compensation (Restricted Stock) (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
Mar. 31, 2016 | Mar. 28, 2016 | Mar. 31, 2015 | Jan. 19, 2015 | Feb. 28, 2013 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period for plan | 3 years | 3 years | |||||||
Restricted Stock Units (RSUs) [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Unrecognized compensation cost | $ 70 | $ 70 | |||||||
Unrecognized compensation recognition period | 7 months 6 days | ||||||||
Options vested | 11,701 | ||||||||
Option forfeited | 6,037 | ||||||||
Employees [Member] | Restricted Stock Units (RSUs) [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
RSUs, Granted | 17,738 | ||||||||
Vesting period for plan | 3 years | ||||||||
RSUs value per share | $ 2.40 | ||||||||
RSU, discount rate | 11.00% | ||||||||
RSUs Value per share, less discount for post vesting restrictions on sale | $ 2.25 | ||||||||
Compensation | $ 0 | $ 1 | |||||||
Two Newly Appointed Directors [Member] | Restricted Stock Units (RSUs) [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
RSUs, Granted | 100,000 | 100,000 | |||||||
Vesting period for plan | 3 years | 3 years | |||||||
RSUs value per share | $ 1.85 | $ 1.70 | |||||||
RSU, discount rate | 8.00% | 8.00% | |||||||
RSUs Value per share, less discount for post vesting restrictions on sale | $ 1.70 | $ 1.56 | |||||||
Compensation | $ 27 | $ 27 | $ 54 | $ 54 | |||||
Options vested | 133,332 | ||||||||
Option unvested | 66,668 | 66,668 |
Intangible Assets (Intangible A
Intangible Assets (Intangible Assets) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Gross carrying amount | $ 4,574 |
Accumulated Amortization | 2,757 |
Net carrying amount | $ 1,817 |
Investment Management and advisory contracts [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 9 years |
Gross carrying amount | $ 3,181 |
Accumulated Amortization | 1,601 |
Net carrying amount | $ 1,580 |
Trademarks [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 10 years |
Gross carrying amount | $ 433 |
Accumulated Amortization | 196 |
Net carrying amount | $ 237 |
Proprietary software and technology [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 4 years |
Gross carrying amount | $ 960 |
Accumulated Amortization | 960 |
Net carrying amount |
Intangible Assets (Estimated Am
Intangible Assets (Estimated Amortization Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||||
2017 (remainder) | $ 199 | $ 199 | ||
2,018 | 397 | 397 | ||
2,019 | 397 | 397 | ||
2,020 | 397 | 397 | ||
2,021 | 386 | 386 | ||
2022-2023 | 41 | 41 | ||
Finite-lived intangible assets, net carrying amount | 1,817 | 1,817 | ||
Amortization expense related to intangible assets | $ 99 | $ 159 | $ 198 | $ 318 |
Weighted-average amortization period | 4 years 7 months 6 days |
Related party transactions (Det
Related party transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Related Party Transaction [Line Items] | ||||
Other investment advisory services | $ 593 | $ 708 | $ 1,262 | $ 1,422 |
Related Party Transaction [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other investment advisory services | $ 96 | $ 207 | $ 241 | $ 413 |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 17 | $ 10 | $ 29 | $ 26 |
Retirement plans (Details)
Retirement plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 19, 2012 | |
Liability, Retirement and Postemployment Benefits [Abstract] | |||||
Employer match of eligible compensation of employees | 10.00% | ||||
Total obligation | $ 713 | $ 713 | |||
Obligation payable in next 12 months | 165 | 165 | |||
Annual liability payable to individual retired employees | 50 | ||||
Liability recorded at date of acquisition | $ 885 | ||||
Present value discount factor | 14.00% | ||||
Amount to be amortized, as interest expense | $ 1,027 | ||||
Interest expense | 21 | $ 19 | $ 43 | $ 39 | |
Present value of obligation | 713 | 713 | |||
Unamortized discount | $ 411 | $ 411 | |||
Income from elimination of retirement liability | $ 23 |
Contingencies and commitments (
Contingencies and commitments (Details) - USD ($) | 1 Months Ended | |
Jul. 01, 2014 | Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Lease term | 5 years | |
Total future minimum payments | $ 575,000 | |
Future minimum payments remainder of 2017 | 124,000 | |
Future minimum payments 2018 | 255,000 | |
Future minimum payments 2019 | $ 196,000 |
Segment Information (Details)
Segment Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | ||
Other operating expenses: | ||||||
Depreciation and amortization | $ (211,000) | $ (326,000) | ||||
Equity based compensation | $ (100) | $ (5,000) | (200) | (5,000) | ||
Operating loss | (445,000) | (474,000) | (809,000) | (993,000) | ||
Non-operating income (expense): | ||||||
Interest expense and other (loss) income, net | 21,000 | 19,000 | 43,000 | 39,000 | ||
Share of loss from equity investment in LLC | (328,000) | (294,000) | ||||
Loss from operations before income taxes | (460,000) | (832,000) | (850,000) | (1,323,000) | ||
Total assets | 12,759,000 | 12,759,000 | $ 13,655,000 | |||
Operating Segment [Member] | ||||||
Non-operating income (expense): | ||||||
Total assets | 6,146,000 | 6,146,000 | 6,224,000 | |||
Operating Segment [Member] | Reclassified [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Adjusted EBITDA of operating segment | 168,000 | 157,000 | 340,000 | 325,000 | ||
Other operating expenses: | ||||||
Corporate | (411,000) | (380,000) | (791,000) | (778,000) | ||
Depreciation and amortization | (109,000) | (163,000) | (211,000) | (326,000) | ||
Equity based compensation | (55,000) | (61,000) | (109,000) | (115,000) | ||
Software implementation costs | (38,000) | (38,000) | ||||
Severance costs | (27,000) | (99,000) | ||||
Operating loss | (445,000) | (474,000) | (809,000) | (993,000) | ||
Non-operating income (expense): | ||||||
Interest expense and other (loss) income, net | (15,000) | (30,000) | (41,000) | (36,000) | ||
Share of loss from equity investment in LLC | (328,000) | (294,000) | ||||
Loss from operations before income taxes | (460,000) | $ (832,000) | (850,000) | $ (1,323,000) | ||
Corporate [Member] | ||||||
Non-operating income (expense): | ||||||
Total assets | [1] | $ 6,613,000 | $ 6,613,000 | $ 7,431,000 | ||
[1] | Consists principally of cash and cash equivalents |