Wright Investors Service Holdings, Inc. 10-K/A

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A ( Amendment No. 1) (Mark One) ☒ ANNUAL REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31 , 2022 ☐ TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to _______ Commission file Number: 000-50587 WRIGHT INVESTORS’ SERVICE HOLDINGS, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 13-4005439 (State or Other Jurisdiction of Incorporation or Organization) (IRS Employer Identification Number) 118 North Bedford Road , Ste. 100 , Mount Kisco , NY 10549 (Address of Principal Executive Offices, including Zip Code) (914) 242-5700 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.01 Par Value (Title of Class) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒ 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. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or, an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company”, in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes ☐ No ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐ The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant, computed by reference to the price at which the common stock was last sold, or the average bid and asked price of such common stock, as of the last business day of the registrant’s most recently completed second quarter, is $ 4,000,000 . As of April 27, 2023, 20,620,711 shares of the registrant’s common stock were outstanding. EXPLANATORY NOTE Wright Investors’ Service Holdings, Inc. (the “Company”) is filing this Amendment No. 1 on Form 10-K/A (this “Form 10-K/A”) pursuant to General Instruction G (3) to Form 10-K, which amends and supplements our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed with the Securities and Exchange Commission (the “SEC”) on March 28, 2023 (the “2022 Form 10-K”). This Form 10-K/A provides the information required to be disclosed in Part III, Items 10 through 14 and updates the information contained in Part IV, Item 15. As a result of this amendment, the Company is filing as exhibits to this Form 10-K/A the certifications required under Section 302 of the Sarbanes-Oxley Act of 2002. Because no financial statements are contained within this Form 10-K/A, the Company is not including certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Except for the amendments described above, this Form 10-K/A does not modify or update the disclosures in, or exhibits to, the 2022 Form 10-K. TABLE OF CONTENTS Page PART III Item 10. Directors, Executive Officers and Corporate Governance 1 Item 11. Executive Compensation 4 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 8 Item 13. Certain Relationships and Related Transactions, and Director Independence 10 Item 14. Principal Accounting Fees and Services 11 PART IV Item 15. Exhibits and Financial Statement Schedules 11 SIGNATURES 12 i Table of Contents PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Directors Set forth below are the names of, and certain biographical information regarding, the directors of the Company. The Board of Directors currently consists of three directors. Harvey P. Eisen , 80, has served as Chairman of the board of directors and Chief Executive Officer of the Company since June 2007 and also has served as its President since July 2007. Mr. Eisen has served as a director of the Company since 2004. Mr. Eisen has served as Chairman and Managing Member of Bedford Oak Advisors, LLC, an investment partnership (“Bedford Oak”), since 1998 and was Chairman and Director of GP Strategies Corporation, a global performance solutions provider (“GP Strategies”) from 2004 to 2018. Mr. Eisen has also served on the board of directors of VerifyMe, Inc., a provider of physical, cyber and biometric security solutions from April 2018 through February 2019. Mr. Eisen was previously Senior Vice President of Travelers, Inc. and held various executive positions with Primerica, SunAmerica Corp., and Integrated Resources Asset Management. Mr. Eisen was president and portfolio manager of Eisen Capital Management for 10 years. He began his career as an analyst with Stifel, Nicolaus & Co. and Wertheim. Mr. Eisen has served on the Strategic Development Board for the Trulaske College of Business, University of Missouri since 1995 where he established the first accredited course on the Warren Buffett Principles of Investing. He also serves on the University’s Investment Advisory Committee. Mr. Eisen is qualified to serve on our board of directors and brings valuable insight to our board of directors as a result of his broad range of business skills and his financial literacy and expertise and executive and management leadership skills. Mr. Eisen developed these skills and expertise during his long and successful business career as Chairman and Managing Member of Bedford Oak, a Senior Vice President of Travelers and Primerica, as well as his service on other public company and institutional boards. Lawrence G. Schafran , 84, is a private investor and has served as a director and chairman of the audit committee of the Company since 2006. Mr. Schafran also serves as a director of Glasstech, Inc., a manufacturer and seller of glass bending and tempering systems. Mr. Schafran also served as director of other public and private companies, such as Cupcake Digital, Inc., a developer of mobile applications focusing on the children’s market from 2013 to June 2019 and VerifyMe, Inc., a provider of physical, cyber and biometric security solutions from 2013 to June 2019. He also served as a Managing Director of Providence Capital, Inc., an investment and advisory firm from March 2003 until December 2012. Mr. Schafran is qualified to serve on our board of directors because of his extensive business skills and experiences and his financial literacy and expertise. Mr. Schafran also possesses a broad range of experiences and skill garnered from the various leadership positions and from his service on other public company boards and committees. Dort A. Cameron III , 78, is currently the managing member of Airlie Enterprises, LLC, a private consulting and principal investments company established in 1995 and has served as a director and chairman of the Compensation and Nominating and Corporate Governance Committee of the Company since February 2019. Mr. Cameron is also the President of the Cameron Family Foundation. Mr. Cameron was a principal of the Investment Manager, a managing director of the General Partner of the Investment Manager and Chief Investment Officer (portfolio manager) of the Airlie Opportunity Fund’s portfolio from 2003 through 2014. Mr. Cameron has over 30 years of investment banking, merchant banking, and investment management experience. His experience encompasses institutional portfolio management, alternative and principal investing, fiduciary oversight, and significant private equity, high yield, and distressed transactions/situations. Mr. Cameron’s professional experience includes a position as the Chairman of the Board of Directors and a majority owner of Entex Information Services, Inc., a computer services company headquartered in Rye Brook, New York (“Entex”). Mr. Cameron was also the General Partner of BMA Limited Partnership, a mezzanine private equity fund, which was the general partner of Investment Limited Partnership (“ILP”), which he co-founded in 1984 with Richard Rainwater of the Bass organization and managed through June of 1996. Mr. Cameron has served as a member of the Board of Directors of First Marblehead Corporation, Greenwich Life Settlements, TLC Beatrice as well as Middlebury College, where he still currently serves, and the Rippowam Cisqua School. Mr. Cameron’s is qualified to serve on our Board because of his senior management roles in investment banking, merchant banking, and investment management and his other professional experience, each of which have required him to balance the demands of clients, employees and investors. 1 Table of Contents Executive Officers Who Are Not a Director Set forth below is the name of, and certain biographical information regarding executive officers of the Company who do not serve as directors of the Company. Harold D. Kahn, 69, is the Acting Chief Financial Officer and Acting Principal Accounting Officer of the Company since March 2019. Mr. Kahn previously served as a consultant to the Company. Mr. Kahn has been the Managing Member of Vela Capital Advisors, LLC, an independent advisory consultancy since February 2007. Mr. Kahn has been a senior principal for several privately-held technology consulting and investment management firms. Earlier in his career, he was a Partner at PricewaterhouseCoopers in New York and Tokyo. Mr. Kahn holds an AB in Economics from Stanford University. 2 Table of Contents Corporate Governance General The Company is committed to establishing sound principles of corporate governance which promote honest, responsible and ethical business practices. The Company’s Board of Directors and Nominating and Corporate Governance Committee review and evaluate the Company’s corporate governance practices. This review includes comparing the Board’s current governance policies and practices with those suggested by corporate governance authorities as well as the practices of other public companies of comparable size. The Board of Directors has adopted those corporate governance policies and practices that its evaluation suggests are the most appropriate for the Company. Audit Committee Our Audit Committee is currently composed of Lawrence G. Schafran (Chairman) and Dort A. Cameron III. The Board of Directors affirmatively determined that Mr. Schafran and Mr. Cameron are independent, in accordance with The Nasdaq Stock Market (“Nasdaq”) independence criteria and for purposes of Section 10A(m)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Board of Directors determined that each of Messrs. Schafran and Cameron are able to read and understand financial statements and that each of Messrs. Schafran and Cameron have accounting or related financial management expertise in accordance with the applicable rules of Nasdaq. The Board of Directors also determined that each of Messrs. Schafran and Cameron, who serve as the Audit Committee financial experts, have the accounting or related financial management expertise necessary to be considered a “financial expert” under SEC rules. The Audit Committee is responsible for maintaining free and open communications among itself, the independent registered public accounting firm and Company management. The Audit Committee assists the Board of Directors in fulfilling its oversight responsibility to the stockholders, potential stockholders, the investment community and others relating to the integrity of the Company’s financial statements and the financial reporting process, the Company’s compliance with legal and regulatory requirements, the independent registered public accounting firm’s qualifications and independence, the Company’s systems of internal accounting and financial controls, the annual independent audit of the Company’s financial statements and the engagement of the independent registered public accounting firm. 3 Table of Contents Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Exchange Act requires the Company’s executive officers and directors to file reports regarding ownership of the Company’s common stock with the SEC, and to furnish the Company with copies of all such reports. Based on a review of these filings, the Company believes that with respect to the most recently concluded fiscal year, all such reports were filed as of April 27, 2023. Code of Ethics The Company has adopted a Code of Ethics for its principal executive officer, senior financial officers, including the principal financial officer and the principal accounting officer, and persons performing similar functions for its subsidiaries. If the Company makes any substantive amendment to the Code of Ethics or grants any waiver from a provision of the Code of Ethics for said executive officers, the Company will disclose the nature of such amendment or waiver in a filing on Form 8-K. The Code of Ethics was originally filed as Exhibit 14.1 to the Company’s Form 10-K for the year ended December 31, 2004, which was filed with the SEC on April 15, 2005 and is incorporated by reference herein. The Company will also provide a copy of such Code of Ethics to any person, without charge, upon written request made to the Company’s Secretary at the following address: Wright Investors’ Service Holdings, Inc., Attn: Secretary, 118 North Bedford Road, Ste. 100, Mount Kisco, NY 10549. ITEM 11. EXECUTIVE COMPENSATION The Company has elected to use the Smaller Reporting Company rules issued by the SEC regarding the disclosure of executive compensation. The Company had two executive officers (our “named executive officers”) including the principal executive officer at the end of the last completed fiscal year. Consequently, we are providing a Summary Compensation Table covering 2022 and 2021 compensation for these two individuals. SUMMARY COMPENSATION TABLE The table below summarizes the total compensation paid to or earned by each of the Company’s Named Executive Officers for the fiscal years ended December 31, 2022 and 2021. Name and Principal Position Year Salary Bonus All Other Compensation Total ($) ($) ($) ($) Harvey P. Eisen, Chairman of the Board and Chief Executive Officer (Principal Executive 2022 300,000 0 0 300,000 Officer) 2021 300,000 0 0 300,000 Harold D. Kahn, Acting Chief Financial Officer and Acting Principal Accounting Officer 2022 2021 60,000 60,000 0 0 0 0 60,000 60,000 The named executive officers did not hold any unexercised and vested options to purchase shares of common stock of the Company at December 31, 2022. 4 Table of Contents Overview of Material Compensation Arrangements with Our Named Executive Officers The following is a summary of the material terms of employment and compensation arrangements pursuant to which compensation was paid to our named executive officers for their service with the Company or its subsidiaries for the fiscal year ended December 31, 2022. Harvey P. Eisen Harvey P. Eisen, the Company’s Chairman, President, and Chief Executive Officer, has an annual salary of $300,000 to reflect his duties in exploring strategic alternatives for the Company. Harold D. Kahn The Board of Directors appointed Harold D. Kahn as Acting Chief Financial Officer and Acting Chief Accounting Officer effective March 25, 2019. Mr. Kahn has an agreed fee of $5,000 per month. 5 Table of Contents DIRECTOR COMPENSATION Only directors who are not employees of the Company or its subsidiaries are entitled to receive compensation for service as a director. The table below summarizes the total compensation paid to or earned by each director of the Company (who is not an employee of the Company) for the fiscal year ended December 31, 2022. The column “Fees Earned or Paid in Cash” includes common stock of the Company issued in lieu of cash. 2022 Director Compensation Name Fees Earned or Paid in Cash Stock Awards All Other Compensation Total ($) ($) ($) ($) Lawrence G. Schafran 2,000 40,000 (1) 0 42,000 Dort Cameron III 2,000 40,000 (2) 0 42,000 (1) Mr. Schafran was issued 34,483 shares of Company common stock in lieu of $10,000 of his annual director’s fee for the first quarter of 2022 on April 28, 2022. Mr. Schafran was issued 142,500 shares of Company common stock in lieu of $30,000 of his annual director’s fee for the second, third, and fourth quarters of 2022 on March 9, 2023. (2) Mr. Cameron was issued 34,483 shares of Company common stock in lieu of $10,000 of his annual director’s fee for the first quarter of 2022 on April 28, 2022. Mr. Cameron will be issued 142,500 shares of Company common stock in lieu of $30,000 of his annual director’s fee for the second, third, and fourth quarters of 2022 on March 9, 2023. 6 Table of Contents Director Compensation Program Directors who are not employees of the Company or its subsidiaries, shall be paid as set forth below: ● annual director compensation to each member of the Board of Directors of $25,000, paid in quarterly installments of $6,250 (a Vice Chairman receives annual director compensation of $35,000, paid in quarterly installments of $8,750, currently the Company does not have a Vice Chairman); ● $1,500 in cash for each meeting of the Board of Directors and for each committee meeting attended in person and $750 in cash for each Board of Directors or Board committee meeting attended by means of conference telephone connection; ● annual director compensation of $5,000, paid in quarterly installments of $1,250, to each member of the Audit Committee (except the Chairman of the Audit Committee who is to receive annual compensation of $10,000), plus $750 in cash for each meeting of the Audit Committee attended in person and $500 in cash for each meeting of the Audit Committee attended by telephone, except that the per meeting attendance fee is reduced to $500 for attendance at any Audit Committee meeting held on the same day as a regular or special meeting of the Board; and ● annual director compensation of $2,500, paid in quarterly installments of $625, to each member of the Compensation Committee and each member of the Nominating and Corporate Governance Committee (except the Chairman of each such Committee, who is to receive annual compensation of $5,000), plus $750 in cash for each meeting of the Audit Committee attended in person and $500 in cash for each meeting of the Audit Committee attended by telephone, except that the per attendance meeting fee is reduced to $500 for attendance at any Nominating and Corporate Governance Committee meeting held on the same day as a regular or special meeting of the Board. As of December 31, 2022, all of the sums designated above as “annual director compensation” were required to be paid in Company common stock; provided that common stock issued in lieu of annual compensation is valued at the average between the closing bid and ask price on the day prior to the date upon which the annual compensation became payable. In March 2023, the Company amended its Directors’ Compensation Program for Directors who are not employees of the Company to provide that effective January 1, 2023 and as long as the Company remains a shell company (i) the issuance of any annual stock compensation for Directors serving as a member of the Board or a committee of the Board shall be terminated, and (ii) the payment of any cash compensation for attendance in person or by telephone of meetings of the Board or committees of the Board shall be terminated. 7 Table of Contents ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Security Ownership of Principal Stockholders The following table sets forth the number of shares of common stock beneficially owned as of April 27, 2023 by each person who is known by the Company to own beneficially more than five percent of outstanding Company common stock other than executive officers or directors of the Company, whose beneficial ownership is reflected in the Security Ownership of Directors and Executive Officers table below. There were 20,620,711 shares of Company common stock outstanding on April 27, 2023. Security Ownership of Principal Stockholders Table Name and Address of Beneficial Owner Amount and Nature of Beneficial Ownership Percent of Class Bedford Oak Advisors, LLC 118 North Bedford Road, Suite 100 Mount Kisco, NY 10549 6,093,669 (1) 29.55% William H. Miller III 3,509,838 (2) 17.02% (1) Based on a Schedule 13D/A filed jointly by Bedford Oak Advisors, LLC (“Bedford Oak”), Bedford Oak Capital, L.P. (“Capital”), Bedford Oak Acorn, L.P. (“Acorn”) and Mr. Eisen with the SEC on January 4, 2021, Mr. Eisen is deemed to have beneficial ownership of such shares by virtue of his position as managing member of Bedford Oak, the investment manager of Capital and Acorn and certain other private investment partnerships. Mr. Eisen beneficially owned at such date an aggregate of 29.55% of the Company’s common stock, which percentage includes the 26.73% beneficially owned by Bedford Oak Advisors, LLC. See Security Ownership of Directors and Executive Officers table below. (2) Based on Form 5 filed by William H. Miller III with the SEC on February 2, 2023. 8 Table of Contents Security Ownership of Directors and Executive Officers The following table sets forth the beneficial ownership of Company outstanding common stock as of April 27, 2023 by each person who is a director or named executive officer of the Company as of such date, naming each such person, and all persons who are directors and executive officers of the Company as of such date, as a group. Security Ownership of Directors and Executive Officers Table Name Amount and Nature of Beneficial Ownership Percent of Class Harvey P. Eisen 6,093,669 (1) 29.55% Dort Cameron III 833,109 (2) 4.04% Lawrence G. Schafran 822,810 3.99% Harold D. Kahn 0 0% Directors and executive officers as a group (4 persons) (3) 7,749,588 37.58% (1) Includes 5,511,169 shares of Company common stock beneficially owned by Bedford Oak, Capital and Acorn. Mr. Eisen is deemed to have beneficial ownership of such shares by virtue of his position as managing member of Bedford Oak, the investment manager of Capital and Acorn. See footnote 1 to Principal Stockholders table above. (2) On February 13, 2019 the Board of Directors of the Corporation appointed Dort A. Cameron III as a director of the Corporation. Includes 100,000 RSU’s which vested in 1/3 increments of 33,333 on each of the one year and two year anniversary and 33,334 on the three year anniversary of the February 13, 2019 date of grant (the “Grant Date”) and were subject to a three year transfer of sale restriction until the three year anniversary of the Grant Date. The shares were issued on February 14, 2022. (3) Includes Messrs. Schafran, and Cameron, each of whom is currently a director of the Company, and Mr. Eisen who is currently a director and a named executive officer of the Company and Mr. Kahn who is a named executive officer of the Company. 9 Table of Contents Equity Compensation Plan Information The Company no longer has any existing equity compensation plans that have been approved by stockholders. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Other Compensation See the narrative disclosure following the Summary Compensation Table and the Outstanding Equity Awards at Fiscal Year-End Table in “Item 11. Executive Compensation” for summaries of the compensation arrangements and agreements in which the Company and its executive officers and directors are participants. Director Independence Since the adoption of the Sarbanes-Oxley Act in July 2002, there has been growing public and regulatory focus on the independence of directors. The Company is not subject to the listing requirements of any securities exchange, including Nasdaq, because the Company’s common stock is traded on the OTC Pink Sheets. However, in July 2007, the Board of Directors adopted the standards for independence for Nasdaq-listed companies, and the independence determinations that follow are based upon the criteria established by Nasdaq for determining director independence and upon the criteria established by Nasdaq and the SEC for determining Audit Committee member independence. The Board of Directors determines the independence of its members through a consideration of all relevant facts and circumstances, including an assessment of the materiality of any relationship between the Company and a director. In making each of these independence determinations, the Board of Directors considered and assessed, from the standpoint of materiality and independence, all of the information provided by each director in response to inquiries concerning his independence and any direct or indirect business, family, employment, transactional or other relationship or affiliation of such director with the Company. Using the objective and subjective independence criteria enumerated in the Nasdaq marketplace rules listing requirements and SEC rules, the Board of Directors has reviewed all relationships between each director and the Company and, based on this review, the Board of Directors has affirmatively determined that, in accordance with Nasdaq independence criteria, (i) Messrs. Cameron and Schafran are independent, and that (ii) Messrs. Eisen is not independent. 10 Table of Contents ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The fees billed for services rendered for 2022 and 2021 by EisnerAmper LLP ( Fort Lauderdale, Florida , PCAOB ID: 274 ), were as follows: 2022 2021 Audit Fees (1) $ 57,000 $ 55,000 (1) Audit fees consisted principally of fees for the audit of the annual financial statements and reviews of the condensed consolidated financial statements included in the Company’s quarterly reports on Form 10-Q and review of the Company’s Forms 10-K and 10K/A containing proxy statement disclosure. Policy on Pre-Approval of Services Provided by Independent Auditor Pursuant to the requirements of the Sarbanes-Oxley Act of 2002, the terms of the engagement of EisnerAmper LLP are subject to specific pre-approval policies. In 2022 and 2021, all audit services and other services to be performed by EisnerAmper LLP were pre-approved by the Audit Committee in accordance with pre-approval policies established by the Board of Directors. The procedures require that all proposed engagements of EisnerAmper LLP for services of any kind be directed to the Audit Committee prior to the beginning of any service. All services provided by the independent registered public accounting firm for 2022 and 2021 were approved in advance by the Audit Committee of the Board of Directors. PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES See accompanying Index to Exhibits. 11 Table of Contents SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. WRIGHT INVESTORS’ SERVICE HOLDINGS, INC. Date: April 27, 2023 By: /s/ HARVEY P. EISEN Name: Harvey P. Eisen Title: Chairman, President, and Chief Executive Officer (Principal Executive Officer) 12 Table of Contents INDEX TO EXHIBITS Number Description 31.1 * Certification of Principal Executive Officer 31.2 * Certification of Principal Financial Officer * Filed herewith 13