Unaudited Financial
Statements
Condensed Balance Sheets as of
June 30, 2014, December 31, 2013 and June 30, 2013
Condensed Statements of Operations for the
Three and Six Months Ended June 30, 2014 and 2013
Condensed Statements of Cash Flows for the
Six Months Ended June 30,
2014 and 2013
Condensed Statement of Shareholders Equity for the
Six Months Ended
June 30, 2014
Notes to Condensed Financial
Statements as of June 30, 2014
3
Morgan Group Holding
Co.
Condensed Balance Sheets
(Unaudited)
|
|
June
30,
|
|
December 31,
|
|
June
30,
|
|
|
2014
|
|
2013
|
|
2013
|
ASSETS
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$211,220
|
|
$8,981
|
|
$312,164
|
Marketable
securities
|
|
--
|
|
275,857
|
|
--
|
Prepaid
expenses
|
|
8,068
|
|
9,081
|
|
6,838
|
Total current assets
|
|
219,288
|
|
293,919
|
|
319,002
|
Equipment net
|
|
899
|
|
1,226
|
|
1,553
|
Total assets
|
|
$220,187
|
|
$295,145
|
|
$320,555
|
|
LIABILITIES
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accrued
liabilities
|
|
$--
|
|
$--
|
|
$1,958
|
Total current liabilities
|
|
--
|
|
--
|
|
1,958
|
Total liabilities
|
|
--
|
|
--
|
|
1,958
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
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, 3,359,055
outstanding
|
|
33,591
|
|
33,591
|
|
33,591
|
Additional paid-in-capital
|
|
5,772,368
|
|
5,772,368
|
|
5,772,368
|
Accumulated deficit
|
|
(5,585,772)
|
|
(5,510,814)
|
|
(5,478,362)
|
Total shareholders' equity
|
|
220,187
|
|
295,145
|
|
318,597
|
Total liabilities and shareholders' equity
|
|
$220,187
|
|
$295,145
|
|
$320,555
|
See accompanying notes
to condensed financial statements
4
Morgan Group Holding
Co.
Condensed Statements of Operations
(Unaudited)
|
|
Three Months Ended
June 30,
|
|
Six Months Ended June
30,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Revenues
|
|
$--
|
|
$--
|
|
$--
|
|
$--
|
|
Administrative expenses
|
|
(26,581)
|
|
(12,050)
|
|
(74,415)
|
|
(38,377)
|
Other income:
|
|
|
|
|
|
|
|
|
Interest and
dividends
|
|
--
|
|
8
|
|
--
|
|
20
|
Realized and unrealized
loss on
|
|
|
|
|
|
|
|
|
marketable securities
|
|
--
|
|
--
|
|
(543)
|
|
--
|
Net loss before income taxes
|
|
(26,581)
|
|
(12,042)
|
|
($74,958)
|
|
(38,357)
|
Income taxes
|
|
--
|
|
--
|
|
--
|
|
--
|
Net loss
|
|
($26,581)
|
|
($12,042)
|
|
($74,958)
|
|
($38,357)
|
|
Net
loss per share, basic and diluted
|
|
($0.01)
|
|
($
0.00)
|
|
($0.02)
|
|
($0.01)
|
|
Shares outstanding, basic and diluted
|
|
3,359,055
|
|
3,359,055
|
|
3,359,055
|
|
3,359,055
|
See accompanying notes
to condensed financial statements
5
Morgan Group Holding
Co.
Condensed Statements of Cash Flows
(Unaudited)
|
|
Six Months Ended
|
|
|
June
30,
|
|
|
2014
|
|
2013
|
Cash
Flows from Operating Activities
|
|
|
|
|
Interest
received
|
|
$--
|
|
$20
|
Cash paid
to suppliers
|
|
(73,075)
|
|
(53,374)
|
Net cash used in operating activities
|
|
(73,075)
|
|
(53.354)
|
|
Cash
Flows from Investing Activities
|
|
|
|
|
Proceeds
from the sale of marketable securities
|
|
275,314
|
|
--
|
Net cash provided by investing activities
|
|
275,314
|
|
--
|
|
Cash
Flows from Financing Activities
|
|
|
|
|
Proceeds
from issuance of warrants
|
|
--
|
|
10,000
|
Net cash provided by financing activities
|
|
--
|
|
10,000
|
Net
increase (decrease) in cash and cash equivalents
|
|
202,239
|
|
(43,354)
|
Cash and cash equivalents, beginning of the period
|
|
8,981
|
|
355,518
|
Cash and cash equivalents, end of the period
|
|
$211,220
|
|
$312,164
|
|
Reconciliation of net loss to net cash used in
operating
|
|
|
|
|
activities:
|
|
|
|
|
Net loss
|
|
($74,958)
|
|
($38,357)
|
Depreciation
|
|
327
|
|
327
|
Realized losses from the sale of marketable securities
|
|
4,781
|
|
--
|
Change in unrealized gains from investment in
|
|
|
|
|
marketable securities
|
|
(4,238)
|
|
--
|
Decrease (increase) in prepaid expenses
|
|
1,013
|
|
(907)
|
Decrease in accrued liabilities
|
|
--
|
|
(14,417)
|
Net
cash used in operating activities
|
|
($73,075)
|
|
($53,354)
|
|
Cash
paid for interest
|
|
$--
|
|
$--
|
|
Cash
paid for income taxes
|
|
$--
|
|
$--
|
See accompanying notes
to condensed financial statements
6
Morgan Group Holding
Co.
Condensed Statement of Shareholders Equity
Six Months Ended June 30,
2014
|
|
Common Stock
|
|
Additional
|
|
|
|
|
|
|
|
|
Par
|
|
Paid
in
|
|
Accumulated
|
|
|
|
|
Shares
|
|
Value
|
|
Capital
|
|
Deficit
|
|
Total
|
Shareholders equity,
|
|
|
|
|
|
|
|
|
|
|
December
31, 2013
|
|
3,359,055
|
|
$33,591
|
|
$5,772,368
|
|
($5,510,814)
|
|
$295,145
|
Net
loss for six months
|
|
|
|
|
|
|
|
|
|
|
ended June
30, 2014
|
|
--
|
|
--
|
|
-
|
|
(74,958)
|
|
(74,958)
|
Shareholders equity, June
|
|
|
|
|
|
|
|
|
|
|
30,
2014
|
|
3,359,055
|
|
$33,591
|
|
$5,772,368
|
|
($5,585,772)
|
|
$220,187
|
See accompanying notes
to condensed financial statements
7
Morgan Group Holding
Co.
Notes to Condensed Financial Statements
Note 1.
Basis of Presentation
Morgan Group Holding Co. (Holding or the Company) was incorporated in
November 2001 as a wholly-owned subsidiary of LICT Corporation (LICT) to
serve, among other business purposes, as a holding company for LICTs
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.
The accompanying unaudited condensed 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 and six months ended June 30, 2014 are not necessarily
indicative of the results that may be expected for the year ending December 31,
2014. The preparation of 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.
Note 2.
Significant Accounting Policies
All highly liquid investments with maturity of three months or less when
purchased are considered to be cash equivalents. The carrying value of a cash
equivalent approximates its fair value based on its nature.
At June 30, 2014, December 31, 2013 and June 30, 2013 all cash and cash
equivalents were invested in a United States Treasury money market fund, of
which an affiliate of the Company serves as the investment manager.
The Company may from time to time invest in marketable securities that
are bought and held principally for the purpose of selling them in the near term
and are classified as trading securities. Trading securities are recorded at
fair value on the balance sheet in current assets, with the change in fair value
during the period included in earnings.
Basic earnings per share is based on the weighted-average number of
common shares outstanding during each period. Diluted earnings per share is
based on basic shares plus the incremental shares that would be issued upon the
assumed exercise of in-the-money stock options and unvested restricted stock
using the treasury stock method and, if dilutive.
Note 3.
Income Taxes
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 $187,725 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 Companys net operating loss carry forwards may be limited if
cumulative changes in ownership of more than 50% occur during any three year
period.
Note 4.
Commitments and Contingencies
From time to time the Company may be subject to certain asserted and
unasserted claims. It is the Companys belief that the resolution of these
matters will not have a material adverse effect on its financial position.
The Company has not guaranteed any of the obligations of Morgan and
believes it currently has no commitment or obligation to fund any
creditors.
8
Note 5.
Shareholders Equity and Stock Options and
Warrants
At the Companys Annual Meeting of Stockholders on May 8, 2014, its
stockholders voted to amend the Companys Certificate of Incorporation (the
Charter Amendment) to increase the number of authorized shares of common
stock, par value $0.01 per share, from 10,000,000 to 100,000,000. The Company
has not yet filed the Amended Certificate of with its state of incorporation,
Delaware, to effectuate the authorization.
On December 21, 2012, the Company and Jonathan P. Evans, currently Chief
Executive Officer of the Company, entered into a Nonqualified Stock Option
Agreement, whereby the Company granted to Mr. Evans an option (the Option) to
purchase 800,000 shares of the Companys Common Stock at an exercise price of
$0.15 per share of Common Stock, which is the closing price of the Common Stock
as quoted on the OTC Markets inter-dealer quotation service on December 20,
2012. The Options are exercisable at any time and the exercise period expires
December 21, 2015. As of June 30, 2014, these are the only options outstanding.
Also on December 21, 2012, the Company issued a warrant to purchase up to
1,000,000 shares of the Companys Common Stock at $1.00 per share to Jonathan P.
Evans in exchange for $10,000, which was received in 2013. In addition, on that
date the Company issued a warrant to purchase up to 200,000 shares of the
Companys Common Stock to Robert E. Dolan, Chief Financial Officer of the
Company, in exchange for $2,000. Both warrants are exercisable currently through
December 21, 2017. As of June 30, 2014, these are the only warrants outstanding.