FORM
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(Exact name of Registrant as specified in its charter)
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(State of other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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(Address of principle executive offices)
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(Zip Code)
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(
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(Registrant’s telephone number, including area code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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® |
Large accelerated filer ☐
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Accelerated filer ☐
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Smaller reporting company
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Emerging growth company
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Class
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Outstanding at October 31, 2023
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Common Stock, $0.01 par value
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PART I.
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FINANCIAL INFORMATION
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Page
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Item 1.
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Unaudited Condensed Consolidated Financial Statements
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3
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4
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5 |
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6 |
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7 |
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Item 2.
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14 |
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Item 3.
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18 |
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Item 4.
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18 |
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PART II.
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OTHER INFORMATION *
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Item 1.
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19 |
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Item 1A.
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19 |
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Item 6.
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19 |
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20 |
September 30, |
December 31,
2022
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|||||||
2023
(Unaudited)
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||||||||
ASSETS
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||||||||
Cash and cash equivalents
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$
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$
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||||
Receivables from brokers and clearing organizations
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||||||
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Deposits with clearing organizations
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Income taxes receivable (including deferred tax asset of $
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Fixed assets, net of accumulated depreciation of $
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Other assets
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Total assets
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$
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$
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LIABILITIES AND EQUITY
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Compensation payable
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$
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$
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Income tax payable
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Accrued expenses and other liabilities
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Total liabilities
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Commitments and contingencies (Note J)
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Equity
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Common stock, $
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Additional paid-in capital
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Accumulated deficit
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(
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)
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(
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)
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Total equity
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Total liabilities and equity
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$
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$
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Three Months Ended September 30,
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Nine Months Ended September 30,
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|||||||||||||||
2023
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2022
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2023
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2022
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Revenues
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||||||||||||||||
Commissions
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$
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$
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$
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$
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Principal transactions
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(
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)
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(
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)
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Dividends and interest
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Other revenues
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Total revenues
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Expenses
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Compensation and related costs
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Clearing charges
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General and administrative
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Occupancy and equipment
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Total expenses
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Loss before income tax benefit
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(
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)
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(
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)
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(
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)
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(
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)
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Income tax benefit
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||||||||||||
Net loss
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$
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(
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)
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$
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(
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)
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$
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(
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)
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$
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(
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)
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||||
Net loss per share
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||||||||||||||||
Basic and diluted
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$
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(
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)
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$
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(
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)
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$
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(
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)
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$
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(
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)
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||||
Weighted average shares outstanding: | ||||||||||||||||
Basic and diluted
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Additional | ||||||||||||||||||||
Common | Paid-in | Accumulated | ||||||||||||||||||
Shares
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Stock
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Capital
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Deficit
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Total
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||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | ( |
) | $ | ||||||||||||||
Net loss | - | ( |
) | ( |
) | |||||||||||||||
Balance at March 31, 2023
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( |
) | ||||||||||||||||||
Net loss | - |
( |
) | ( |
) | |||||||||||||||
Balance at June 30, 2023
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$ | $ | $ | ( |
) | $ | ||||||||||||||
Net loss | - | ( |
) | ( |
) | |||||||||||||||
Balance at September 30, 2023 | $ | $ | $ | ( |
) | $ |
Additional |
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Common | Paid-in | Accumulated | ||||||||||||||||||
Shares
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Stock
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Capital
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Deficit
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Total
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||||||||||||||||
Balance at December 31, 2021
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$ | $ | $ | ( |
) | $ | ||||||||||||||
Net loss | - | ( |
) | ( |
) | |||||||||||||||
Balance at March 31, 2022
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( |
) | ||||||||||||||||||
Net loss | - |
( |
) | ( |
) | |||||||||||||||
Balance at June 30, 2022
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$
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$
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$
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(
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)
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$
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||||||||||
Net loss | - | ( |
) | ( |
) | |||||||||||||||
Balance at September 30, 2022 | $ | $ | $ | ( |
) | $ |
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Nine
months ended September 30,
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|||||||
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2023
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2022
|
||||||
Cash flows from operating activities:
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||||||||
Net loss
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$
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(
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)
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$
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(
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)
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||
Adjustments to reconcile net loss to net cash used in operating activities:
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||||||||
Depreciation
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||||||
(Increase)/decrease in assets:
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||||||||
Receivables from brokers and clearing organizations
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(
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)
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|||||
Receivables from affiliates
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(
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)
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(
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)
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||||
Income taxes receivable
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(
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)
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|||||
Other assets
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||||||
Increase/(decrease) in liabilities:
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||||||||
Compensation payable
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( |
) | ( |
) | ||||
Payable to affiliates
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||||||
Income taxes payable
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(
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)
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( |
) | ||||
Accrued expenses and other liabilities
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(
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)
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|||||
Total adjustments
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(
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)
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|||||
Net cash used in operating activities
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(
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)
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(
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)
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Net decrease in cash, cash equivalents, and restricted cash
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(
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)
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(
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)
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Cash, cash equivalents, and restricted cash at beginning of period
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||||||
Cash, cash equivalents, and restricted cash at end of period
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$
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$
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||||
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||||||||
Reconciliation to cash, cash equivalents, and restricted cash:
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||||||||
Cash and cash equivalents
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$
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$
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||||
Restricted cash: deposits with clearing organizations
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||||||
Cash, cash equivalents, and restricted cash
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$
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$
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Three months ended September 30,
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Nine months ended September 30,
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|||||||||||||||
2023
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2022
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2023
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2022
|
|||||||||||||
Commissions
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$
|
|
$
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$
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$
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||||||||
Hard dollar payments
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||||||||||||
$ |
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$ |
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$ |
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$ |
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- |
Level
1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 1 assets include cash equivalents.
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- |
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.
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- |
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.
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September 30, 2023 | ||||||||||||||||
Quoted Prices in Active | Significant Other | Significant | ||||||||||||||
Markets for Identical | Observable | Unobservable | ||||||||||||||
Assets
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Assets (Level 1)
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Inputs (Level 2)
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Inputs (Level 3)
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Total
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||||||||||||
Cash equivalents
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$
|
|
$
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|
$
|
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$
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||||||||
Total assets at fair value
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$
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$
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$
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$
|
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December 31, 2022 | ||||||||||||||||
Quoted Prices in Active | Significant Other | Significant | ||||||||||||||
Markets for Identical | Observable | Unobservable | ||||||||||||||
Assets
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Assets (Level 1)
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Inputs (Level 2)
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Inputs (Level 3)
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Total
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||||||||||||
Cash equivalents
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$
|
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$
|
|
$
|
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$
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||||||||
Total assets at fair value
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$
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|
$
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$
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$
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Three months ended September 30,
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Nine months
ended September 30,
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|||||||||||||||
2023
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2022
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2023
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2022
|
|||||||||||||
Basic and diluted:
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||||||||||||||||
Net loss attributable to shareholders
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$
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(
|
)
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$
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(
|
)
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$
|
(
|
)
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$
|
(
|
)
|
||||
Weighted average shares outstanding
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|
|
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|
||||||||||||
Basic and diluted net loss per share
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$
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(
|
)
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$
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(
|
)
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$
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(
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)
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$
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(
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)
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ITEM 2: |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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Three months ended September 30,
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Nine months ended September 30,
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|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Revenues
|
||||||||||||||||
Commissions
|
$
|
462
|
$
|
390
|
$
|
1,366
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$
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1,343
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||||||||
Principal transactions
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(0
|
)
|
0
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(2
|
)
|
8
|
||||||||||
Dividends and interest
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24
|
16
|
87
|
30
|
||||||||||||
Other revenues
|
1
|
7 |
2
|
17
|
||||||||||||
Total revenues
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487
|
413
|
1,453
|
1,397
|
||||||||||||
Expenses
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||||||||||||||||
Compensation and related costs
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294
|
275
|
884
|
895
|
||||||||||||
Clearing charges
|
188
|
116
|
613
|
574
|
||||||||||||
General and administrative
|
199
|
191
|
732
|
653
|
||||||||||||
Occupancy and equipment
|
38
|
20
|
112
|
162
|
||||||||||||
Total expenses
|
719
|
602
|
2,341
|
2,284
|
||||||||||||
Loss before income tax benefit
|
(232
|
)
|
(189
|
)
|
(888
|
)
|
(887
|
)
|
||||||||
Income tax benefit
|
-
|
-
|
-
|
-
|
||||||||||||
Net loss
|
$
|
(232
|
)
|
$
|
(189
|
)
|
$
|
(888
|
)
|
$
|
(887
|
)
|
||||
|
||||||||||||||||
Net loss per share
|
||||||||||||||||
Basic and diluted
|
$
|
(0.39
|
)
|
$
|
(0.31
|
)
|
$
|
(1.48
|
)
|
$
|
(1.48
|
)
|
|
Three Months Ended September 30,
|
Increase (Decrease)
|
||||||||||||||
|
2023
|
2022
|
$ |
%
|
||||||||||||
Commissions
|
$
|
450
|
$
|
369
|
$
|
81
|
21.9
|
%
|
||||||||
Hard dollar payments
|
12
|
21
|
(8
|
)
|
-40.9
|
%
|
||||||||||
Total
|
$
|
462
|
$
|
390
|
$
|
73
|
18.6
|
%
|
|
Nine Months Ended September 30,
|
Increase (Decrease)
|
||||||||||||||
|
2023
|
2022
|
$ |
%
|
||||||||||||
Commissions
|
$
|
1,301
|
$
|
1,250
|
$
|
51
|
4.1
|
%
|
||||||||
Hard dollar payments
|
65
|
94
|
(28
|
)
|
-30.1
|
%
|
||||||||||
Total
|
$
|
1,366
|
$
|
1,343
|
$
|
23
|
1.7
|
%
|
Nine months ended September 30,
|
||||||||
2023
|
2022
|
|||||||
Cash flows provided by (used in) activities:
|
||||||||
Operating activities
|
$
|
(996
|
)
|
$
|
(504
|
)
|
||
Financing activities
|
-
|
-
|
||||||
Net decrease in cash and cash equivalents
|
(996
|
)
|
(504
|
)
|
||||
Cash and cash equivalents, beginning of period
|
2,286
|
2,889
|
||||||
Cash and cash equivalents, end of period
|
$
|
1,290
|
$
|
2,385
|
ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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ITEM 4. |
CONTROLS AND PROCEDURES
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ITEM 1. |
LEGAL PROCEEDINGS
|
ITEM 1A. |
RISK FACTORS
|
ITEM 6. |
EXHIBITS
|
Certification of CEO pursuant to Rule 13a-14(a).
|
||
Certification of CAO pursuant to Rule 13a-14(a).
|
||
Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
||
Certification of CAO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.
|
||
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|