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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2010
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Or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File No. 333-73996
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MORGAN GROUP HOLDING CO.
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(Exact name of small business issuing as specified in its charter)
Delaware 13-4196940
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(State or other jurisdiction of (IRS Employer
Incorporation of organization) Identification Number)
401 Theodore Fremd Avenue, Rye, New York 10580
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(Address of principal executive offices) (Zip Code)
(914) 921-1877
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes [ ] No
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] (Do not check if a Smaller reporting company [X]
smaller reporting
company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
[X] Yes [ ] No
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practical date.
Class Outstanding at April 30, 2010
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Common Stock, $.01 par value 3,055,345
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Unaudited Financial Statements
Condensed Balance Sheets as of
March 31, 2010, December 31, 2009 and March 31, 2009
Condensed Statements of Operations for the
Three Months Ended March 31, 2010 and 2009
Condensed Statements of Cash Flows for the
Three Months Ended March 31, 2010 and 2009
Notes to Condensed Financial
Statements as of March 31, 2010
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Morgan Group Holding Co.
Condensed Balance Sheets
(Unaudited)
March 31, December 31, March 31,
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2010 2009 2009
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ASSETS
Current assets:
Cash and cash equivalents $375,985 $376,684 $404,753
Prepaid expenses -- 7,000 --
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Total curent assets 375,985 383,684 404,753
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Total assets $375,985 $383,684 $404,753
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LIABILITIES AND SHAREHOLDERS'
EQUITY
Accrued Liabilities $7,759 $-- $8,261
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Total current liabilities 7,759 -- 8,261
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SHAREHOLDERS' EQUITY
Preferred stock, $0.01 par value,
1,000,000 shares authorized,
none outstanding -- -- --
Common stock, $0.01 par value,
10,000,000 shares authorized,
3,055,345 outstanding 30,553 30,553 30,553
Additional paid-in-capital 5,611,447 5,611,447 5,611,447
Accumulated deficit (5,273,774) (5,258,316) (5,245,508)
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Shareholders' equity 368,226 383,684 396,492
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Total liabilities and
shareholders' equity $375,985 $383,684 $404,753
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See accompanying notes to condensed financial statements
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Morgan Group Holding Co.
Condensed Statements of Operations
(Unaudited)
Three Months Ended
March 31,
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2010 2009
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Revenues $-- $--
Administrative expenses (15,509) (16,286)
Other income - interest 51 402
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Net loss $(15,458) $(15,884)
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Basic and diluted net loss per share $(0.01) $(0.01)
Weighted average shares outstanding 3,055,345 3,055,345
See accompanying notes to condensed financial statements
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Morgan Group Holding Co.
Condensed Statements of Cash Flows
(Unaudited)
Three Months Ended
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March 31,
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2010 2009
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Cash Flows from Operating activities:
Interest received $51 $402
Cash paid to suppliers (750) (525)
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Net cash used in operating activities (699) (123)
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Cash Flow from Investing Activities -- --
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Cash Flow from Financing Activities -- --
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Net decrease in cash (699) (123)
Cash, Beginning of Period 376,684 404,876
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Cash, End of Period $375,985 $404,753
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Reconciliation of net loss to net
cash used in operating activities:
Net loss $(15,458) $(15,884)
Decrease in prepaid expenses 7,000 7,500
Increase in accrued liabilities 7,759 8261
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Net cash used in operating activities $(699) $(123)
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See accompanying notes to condensed financial statements
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Morgan Group Holding Co.
Notes to Financial Statements
Note 1. Basis of Presentation
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Morgan Group Holding Co. ("Holding" or "the Company") was
incorporated in November 2001 as a wholly-owned subsidiary of LICT
Corporation ("LICT, formerly Lynch Interactive Corporation") to serve,
among other business purposes, as a holding company for LICT's
controlling interest in The Morgan Group, Inc. ("Morgan"). On January
24, 2002, LICT spun off 2,820,051 shares of Holding common stock
through a pro rata distribution ("Spin-Off") to its stockholders and
retained 235,294 shares.
On October 3, 2002, Morgan ceased its operations when its
liability insurance expired and it was unable to secure replacement
insurance. On October 18, 2002, Morgan and two of its operating
subsidiaries filed voluntary petitions under Chapter 11 of the United
States Bankruptcy Code in the United States Bankruptcy Court for the
Northern District of Indiana, South Bend Division for the purpose of
conducting an orderly liquidation of Morgan's assets. On March 31,
2008, the bankruptcy proceeding was concluded and the bankruptcy court
dismissed the proceeding. Holding received no value for its equity
ownership from the bankruptcy proceeding.
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with accounting principles
generally accepted in the United States for interim financial
information and with the instructions to Form 10-Q and Article 8 of
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements. In
the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three months ended March 31,
2010 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2010. The preparation of
consolidated financial statements in conformity with accounting
principles generally accepted in the United States requires management
to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results could
differ from these estimates.
Recently Issued Accounting Pronouncements
In August 2009, the FASB issued Accounting Standards Update
("ASU") No. 2009-05 which amended ASC 820 as it relates to the
measurement of liabilities at fair value, effective for interim
reporting periods beginning after August 26, 2009. More specifically,
this amendment provided clarification for liabilities in which a
quoted price in an active market for an identical liability is not
available. The Company adopted this amendment during the first quarter
of the fiscal year 2010 and its adoption did not have a material
effect on the Company's financial position, results of operations or
cash flows.
The Company adopted the provisions of ASC 855, Subsequent Events
("ASC 855"), during the third quarter of the fiscal year 2009. ASC 855
establishes standards of accounting for and disclosure of transactions
and events that occur after the balance sheet date but before the
financial statements are issued and requires the disclosure, among
other things, of the date through which an entity has evaluated
subsequent events. In February 2010, the FASB issued ASU No. 2010-09
which amended ASC 855. This amendment, which was effective upon
issuance, removed the requirement for SEC registrants to disclose the
date through which such registrants have evaluated subsequent events.
Note 2. Income Taxes
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The Company is a "C" corporation for Federal tax purposes, and
has provided for deferred income taxes for temporary differences
between the financial statement and tax bases of its assets and
liabilities. The Company has recorded a full valuation allowance
against its deferred tax asset of approximately $1.7 million arising
from its temporary basis differences and tax loss carryforward, as its
realization is dependent upon the generation of future taxable income
during the period when such losses would be deductible.
Pursuant to Sections 382 and 383 of the Internal Revenue Code,
annual use of any of the Company's net operating loss carry forwards
may be limited if cumulative changes in ownership of more than 50%
occur during any three year period.
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Note 3. Commitments and Contingencies
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On March 31, 2008, the bankruptcy court dismissed Morgan's
bankruptcy proceeding. Holding had not guaranteed any of the
obligations of Morgan. Management believes that the Company has no
commitment or obligation to fund any creditors of Morgan.
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ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Overview
On October 18, 2002, Morgan adopted the liquidation basis of accounting and
accordingly, Morgan's assets and liabilities have been adjusted to estimate net
realizable value. As the carrying value of Morgan's liabilities exceeded the
fair value of its assets, the liabilities were reduced to equal the estimated
net realizable value of the assets.
The Company currently has no operating businesses and will seek acquisitions as
part of its strategic alternatives. Its only costs are the administrative
expenses required to make the regulatory filings needed to maintain its public
status. These costs are estimated at $30,000 to $40,000 per year.
Results of Operations
For the three months ended March 31, 2010, the Company incurred $15,509 of
expenses down slightly from $16,286 of expenses in the three months ended March
31, 2009. Lower professional fees in 2010 caused the slight decrease in this
quarter.
Investment income was $51 in the three months ended March 31, 2010 as compared
to $402 in the three months ended March 31, 2009 as a result of the Company's
investment in a United States Treasury money market fund. Lower interest rates
were the primary cause of the decrease in 2010.
Liquidity and Capital Resources
As of March 31, 2010, the Company's only assets consisted of approximately
$375,985 in cash and a capital loss carry forward of about $4.5 million which it
expects will substantially expire in 2013. The ability to utilize this carry
forward is dependent on the Company's ability to generate a capital gain prior
to its expiration.
Off Balance Sheet Arrangements
None.
Item 3. Quantitative and Qualitative Analysis of Market Risk
As of March 31, 2010, the Company had no market sensitive assets or liabilities,
and, as a result, management believes that the Company is minimally exposed to
changes in market risk.
Recently Issued Accounting Pronouncements
For a discussion of accounting standards updates that have been adopted or will
be adopted in the future, please read Note 1 of the Notes to Condensed Financial
Statements included under Item 1.
Item 4T. Controls and Procedures
a) Evaluation of Disclosure Controls and Procedures
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Our Chief Executive Officer and Chief Financial Officer have evaluated the
effectiveness of the Company's disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the
"Act")) as of the end of the period covered by this report. Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer have
concluded that the Company's disclosure controls and procedures as of the end of
the period covered by this report were designed and were functioning effectively
to provide reasonable assurance that the information required to be disclosed by
the Company in reports filed under the Act is recorded, processed, summarized
and reported within the time periods specified in the rules and forms of the
Securities and Exchange Commission. The Company believes that a controls
system, no matter how well designed and operated, cannot provide absolute
assurance that the objectives of the controls system are met, and no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within a company have been detected.
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(b) Changes in Internal Controls
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During the period covered by this report, there have been no changes in our
internal control over financial reporting that have materially affected, or are
reasonably likely to materially affect, our financial statements.
Forward Looking Discussion
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This report contains a number of forward-looking statements, including
statements regarding the prospective adequacy of the Company's liquidity and
capital resources in the near term. From time to time, the Company may make
other oral or written forward-looking statements regarding its anticipated
operating revenues, costs and expenses, earnings and other matters affecting its
operations and condition. Such forward-looking statements are subject to a
number of material factors, which could cause the statements or projections
contained therein, to be materially inaccurate. Such factors include the
estimated administrative expenses of the Company on a go forward basis.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 10-Q
Exhibit 3.1 Certificate of Incorporation of the Company*
Exhibit 3.2 By-laws of the Company*
Exhibit 31.1 Chief Executive Officer Rule 15d-14(a) Certification.
Exhibit 31.2 Principal Financial Officer Rule 15d-14(a) Certification.
Exhibit 32.1 Chief Executive Officer Section 1350 Certification.
Exhibit 32.2 Principal Financial Officer Section 1350 Certification.
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* Incorporated by reference to the exhibits to the Company's Registration
Statement on Form S-1 (Registration No. 333-73996).
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
MORGAN GROUP HOLDING CO.
By: /s/ Robert E. Dolan
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ROBERT E. DOLAN
Chief Financial Officer
May 13, 2010
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