Exhibit 99.2
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
On April 11, 2018, Wright Investors’ Service Holdings, Inc., a Delaware corporation (the “Company”), Khandwala Capital Management, Inc., a Connecticut corporation (“Purchaser”), and Amit S. Khandwala (“ASK”) entered into a Stock Purchase Agreement (the “Agreement”). Pursuant to the Agreement, upon the terms and subject to the satisfaction or waiver of the conditions therein, the Company agreed to sell, and Purchaser agreed to purchase for cash (the “Sale”), all of the issued and outstanding stock of the Company’s wholly-owned subsidiary, The Winthrop Corporation (“Winthrop”). The purchase price (the “Purchase Price”) for the Stock is $6.0 million. The Sale was subject to the approval of the stockholders of the Company, which was received on July 16, 2018 at the annual meeting of stockholders of the Company. On July 17, 2018 the Company completed the Sale of Winthrop.
The following unaudited pro forma financial information should be read in conjunction with the related notes and with the Company’s historical consolidated financial statements for the years ended December 31, 2017 and December 31, 2016, and for the three months ended March 31, 2018 and 2017, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018.
The unaudited pro forma financial information is derived from the Company’s historical financial statements, adjusted to reflect the Sale as if it had occurred at the end of the most recent period for which the balance sheet is presented, March 31, 2018, and includes adjustments which give effect to (i) events that are directly attributable to the Sale and factually supportable, regardless of whether they have a continuing impact or are nonrecurring. The pro forma statements of income are prepared based on the Company’s historical statements and adjusted as if the Sale occurred on the first day of each period presented and include adjustments which give effect to the events that are (i) directly attributable to the Sale, (ii) expected to have a continuing impact on the Company, and (iii) factually supportable.
The unaudited pro forma financial information is presented for informational purposes only, is based upon estimates by the Company’s management and is not intended to be indicative of actual results of operations or financial position that would have been achieved had the transaction been consummated as of the beginning of each period indicated above or as of March 31, 2018, nor does it purport to indicate results which may be attained in the future.
| WRIGHT INVESTORS' SERVICE HOLDINGS INC. |
| PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS |
| For the three months ended March 31, 2018 |
| (unaudited) |
| (in thousands, except per share amounts) |
| | | | | | Winthrop | | | Pro Forma | | | Pro Forma | |
| | | Historical | | | adjustment | | | adjustment | | | Statement | |
| | | Consolidated | | | inc / (dec) | | | inc / (dec) | | | of Operations | |
| Revenues | | | | | | | | | | | | |
| Investment management services | | $ | 570 | | | $ | (570 | ) | | $ | - | | | $ | - | |
| Other investment advisory services | | | 603 | | | | (603 | ) | | | - | | | | - | |
| Financial research and related data | | | 216 | | | | (216 | ) | | | - | | | | - | |
| | | | 1,389 | | | | (1,389 | ) | | | - | | | | - | |
| Expenses | | | | | | | | | | | | | | | | |
| Compensation and benefits | | | 859 | | | | (681 | ) | | | | | | | 178 | |
| Other operating | | | 782 | | | | (487 | ) | | | 44 | (i) | | | 339 | |
| Transaction costs | | | 132 | | | | - | | | | - | | | | 132 | |
| | | | 1,773 | | | | (1,168 | ) | | | 44 | | | | 649 | |
| | | | | | | | | | | | | | | | | |
| Operating loss | | | (384 | ) | | | (221 | ) | | | (44 | ) | | | (649 | ) |
| Interest expense and other loss, net | | | (20 | ) | | | 23 | | | | | | | | 3 | |
| Loss before income taxes | | | (404 | ) | | | (198 | ) | | | (44 | ) | | | (646 | ) |
| Income tax expense | | | (13 | ) | | | - | | | | - | | | | (13 | ) |
| Net loss | | $ | (417 | ) | | $ | (198 | ) | | | | | | $ | (659 | ) |
| Basic and diluted net loss per share | | $ | (0.02 | ) | | | | | | | | | | $ | (0.03 | ) |
| | | | | | | | | | | | | | | | | |
| Weighted average common shares outstanding: | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Basic and diluted | | | 19,378 | | | | | | | | | | | | 19,378 | |
Pro forma adjustments include:
(i) Add back to Other operating expenses for the portion of rent and facility costs currently incurred by Winthrop
| WRIGHT INVESTORS' SERVICE HOLDINGS INC. |
| PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS |
| For the three months ended March 31, 2017 |
| (unaudited) |
| (in thousands, except per share amounts) |
| | | | | | Winthrop | | | Pro Forma | | | Pro Forma | |
| | | Historical | | | adjustment | | | adjustment | | | Statement | |
| | | Consolidated | | | inc / (dec) | | | inc / (dec) | | | of Operations | |
| Revenues | | | | | | | | | | | | |
| Investment management services | | $ | 492 | | | $ | (492 | ) | | $ | - | | | $ | - | |
| Other investment advisory services | | | 669 | | | | (669 | ) | | | - | | | | - | |
| Financial research and related data | | | 183 | | | | (183 | ) | | | - | | | | - | |
| | | | 1,344 | | | | (1,344 | ) | | | - | | | | - | |
| Expenses | | | | | | | | | | | | | | | | |
| Compensation and benefits | | | 917 | | | | (802 | ) | | | - | | | | 115 | |
| Other operating | | | 791 | | | | (472 | ) | | | 44 | (i) | | | 363 | |
| | | | 1,708 | | | | (1,274 | ) | | | 44 | | | | 478 | |
| | | | | | | | | | | | | | | | | |
| Operating loss | | | (364 | ) | | | (70 | ) | | | (44 | ) | | | (478 | ) |
| Interest expense and other income (loss), net | | | (26 | ) | | | 27 | | | | - | | | | 1 | |
| Loss before income taxes | | | (390 | ) | | | (43 | ) | | | (44 | ) | | | (477 | ) |
| Income tax expense | | | (12 | ) | | | - | | | | - | | | | (12 | ) |
| Net loss | | $ | (402 | ) | | $ | (43 | ) | | | | | | $ | (489 | ) |
| Basic and diluted net loss per share | | $ | (0.02 | ) | | | | | | | | | | $ | (0.03 | ) |
| | | | | | | | | | | | | | | | | |
| Weighted average common shares outstanding: | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Basic and diluted | | | 19,137 | | | | | | | | | | | | 19,137 | |
Pro forma adjustments include:
(i) Add back to Other operating expenses for the portion of rent and facility costs currently incurred by Winthrop
| WRIGHT INVESTORS' SERVICE HOLDINGS INC. |
| PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS |
| YEAR ENDED DECEMBER 31, 2017 |
| (unaudited) |
| (in thousands, except per share amounts) |
| | | | | | Winthrop | | | Pro Forma | | | Pro Forma | |
| | | Historical | | | adjustment | | | adjustment | | | Statement | |
| | | Consolidated | | | inc / (dec) | | | inc / (dec) | | | of Operations | |
| Revenues | | | | | | | | | | | | |
| Investment management services | | $ | 2,213 | | | $ | (2,213 | ) | | $ | - | | | $ | - | |
| Other investment advisory services | | | 2,387 | | | | (2,387 | ) | | | - | | | | - | |
| Financial research and related data | | | 812 | | | | (812 | ) | | | - | | | | - | |
| | | | 5,412 | | | | (5,412 | ) | | | - | | | | - | |
| Expenses | | | | | | | | | | | | | | | | |
| Compensation and benefits | | | 3,364 | | | | (2,896 | ) | | | - | | | | 468 | |
| Other operating | | | 3,338 | | | | (2,032 | ) | | | 177 | (i) | | | 1,483 | |
| | | | 6,702 | | | | (4,928 | ) | | | 177 | | | | 1,951 | |
| | | | | | | | | | | | | | | | | |
| Operating income | | | (1,290 | ) | | | (484 | ) | | | (177 | ) | | | (1,951 | ) |
| Interest expense and other income (loss), net | | | (96 | ) | | | 105 | | | | - | | | | 9 | |
| Loss before income taxes | | | (1,386 | ) | | | (379 | ) | | | (177 | ) | | | (1,942 | ) |
| Income tax benefit | | | 96 | | | | - | | | | - | | | | 96 | |
| Net loss | | $ | (1,290 | ) | | $ | (379 | ) | | | | | | $ | (1,846 | ) |
| Basic and diluted net loss per share | | $ | (0.07 | ) | | | | | | | | | | $ | (0.10 | ) |
| | | | | | | | | | | | | | | | | |
| Weighted average common shares outstanding: | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Basic and diluted | | | 19,216 | | | | | | | | | | | | 19,216 | |
Pro forma adjustments include:
(i) Add back to Other operating expenses for the portion of rent and facility costs currently incurred by Winthrop
| WRIGHT INVESTORS' SERVICE HOLDINGS INC. |
| PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS |
| YEAR ENDED DECEMBER 31, 2016 |
| (unaudited) |
| (in thousands, except per share amounts) |
| | | | | | Winthrop | | | Pro Forma | | | Pro Forma | |
| | | Historical | | | adjustment | | | adjustment | | | Statement | |
| | | Consolidated | | | inc / (dec) | | | inc / (dec) | | | of Operations | |
| Revenues | | | | | | | | | | | | |
| Investment management services | | $ | 2,240 | | | $ | (2,240 | ) | | $ | - | | | $ | - | |
| Other investment advisory services | | | 2,765 | | | | (2,765 | ) | | | - | | | | - | |
| Financial research and related data | | | 706 | | | | (706 | ) | | | - | | | | - | |
| | | | 5,711 | | | | (5,711 | ) | | | - | | | | - | |
| Expenses | | | | | | | | | | | | | | | | |
| Compensation and benefits | | | 3,745 | | | | (3,322 | ) | | | - | | | | 423 | |
| Other operating | | | 3,650 | | | | (2,341 | ) | | | 177 | (i) | | | 1,486 | |
| | | | 7,395 | | | | (5,663 | ) | | | 177 | | | | 1,909 | |
| | | | | | | | | | | | | | | | | |
| Operating income | | | (1,684 | ) | | | (48 | ) | | | (177 | ) | | | (1,909 | ) |
| Share of loss from Investment in LLC | | | (294 | ) | | | | | | | | | | | (294 | ) |
| Interest expense and other income (loss), net | | | (100 | ) | | | 81 | | | | - | | | | (19 | ) |
| Income (loss) before income taxes | | | (2,078 | ) | | | 33 | | | | (177 | ) | | | (2,222 | ) |
| Income tax expense | | | (54 | ) | | | - | | | | - | | | | (54 | ) |
| Net income (loss) | | $ | (2,132 | ) | | $ | 33 | | | | | | | $ | (2,276 | ) |
| Basic and diluted net loss per share | | $ | (0.11 | ) | | | | | | | | | | $ | (0.12 | ) |
| | | | | | | | | | | | | | | | | |
| Weighted average common shares outstanding: | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Basic and diluted | | | 19,085 | | | | | | | | | | | | 19,085 | |
Pro forma adjustments include:
(i) Add back to Other operating expenses for the portion of rent and facility costs currently incurred by Winthrop
| WRIGHT INVESTORS' SERVICE HOLDINGS INC. |
| PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS |
| For the three months ended March 31, 2018 |
| (unaudited) |
| (in thousands) |
| | | | | | Winthrop | | | Pro Forma | | | Pro Forma | |
| | | Historical | | | adjustment | | | adjustment | | | Balance | |
| | | Consolidated | | | inc / (dec) | | | inc / (dec) | | | Sheet | |
| Assets | | | | | | | | | | | | |
| Current assets | | | | | | | | | | | | |
| Cash and cash equivalents | | $ | 5,681 | | | $ | (638 | ) | | $ | 6,000 | (i) | | $ | 11,184 | |
| | | | | | | | | | | | 141 | (ii) | | | | |
| Accounts receivable | | | 161 | | | | (161 | ) | | | - | | | | - | |
| Income tax receivable | | | 148 | | | | - | | | | - | | | | 148 | |
| Prepaid expenses and other current assets | | | 363 | | | | (287 | ) | | | - | | | | 76 | |
| Total current assets | | | 6,353 | | | | (1,086 | ) | | | 6,141 | | | | 11,408 | |
| Property and equipment, net | | | 87 | | | | (87 | ) | | | - | | | | - | |
| Intangible assets, net | | | 1,519 | | | | (1,519 | ) | | | - | | | | - | |
| Goodwill | | | 3,364 | | | | (3,364 | ) | | | - | | | | - | |
| Investment in undeveloped land | | | 355 | | | | - | | | | - | | | | 355 | |
| Other assets | | | 108 | | | | (50 | ) | | | - | | | | 58 | |
| Total assets | | $ | 11,786 | | | $ | (6,106 | ) | | $ | 6,141 | | | $ | 11,821 | |
| | | | | | | | | | | | | | | | | |
| Liabilities and stockholders’ equity | | | | | | | | | | | | | | | | |
| Current liabilities | | | | | | | | | | | | | | | | |
| Accounts payable and accrued expenses | | $ | 628 | | | $ | (493 | ) | | $ | - | | | $ | 135 | |
| Deferred revenue | | | 10 | | | | (10 | ) | | | - | | | | - | |
| Income taxes payable | | | 43 | | | | (12 | ) | | | - | | | | 31 | |
| Due to parent | | | - | | | | (141 | ) | | | 141 | (ii) | | | - | |
| Current portion of officers retirement bonus liability | | | 165 | | | | (165 | ) | | | - | | | | - | |
| Total current liabilities | | | 846 | | | | (821 | ) | | | 141 | | | | 166 | |
| | | | | | | | | | | | | | | | | |
| Officers retirement bonus liability, net of current portion | | | 447 | | | | (447 | ) | | | - | | | | - | |
| Total liabilities | | | 1,293 | | | | (1,268 | ) | | | 141 | | | | 166 | |
| | | | | | | | | | | | | | | | | |
| Stockholders’ equity | | | 10,493 | | | | (4,838 | ) | | | 6,000 | (iii) | | | 11,655 | |
| | | | | | | | | | | | | | | | | |
| Total liabilities and stockholders’ equity | | $ | 11,786 | | | $ | (6,106 | ) | | $ | 6,141 | | | $ | 11,821 | |
Pro forma adjustments include:
| (i) | Stock purchase price of $6 million |
| (ii) | Estimated amount owed by Winthrop to the Company, required to paid at closing |
| (iii) | Represents the increase in equity as a result of the sale of Winthrop |
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