Wright Investors Service Holdings, Inc. 10-Q

Item 1. Financial Statements. WRIGHT INVESTORS' SERVICE HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) March 31, December 31, 2025 2024 (unaudited) Assets Current assets Cash and cash equivalents $ 671 $ 1,440 Investments 1,450 914 Prepaid expenses and other current assets 56 84 Total current assets 2,177 2,438 Other assets 8 8 Total assets $ 2,185 $ 2,446 Liabilities and stockholders’ equity Current liabilities Accounts payable and accrued expenses $ 110 $ 115 Total current liabilities 110 115 Total liabilities $ 110 $ 115 Stockholders’ equity Preferred stock, par value $ 0.01 per share, authorized 10,000,000 shares; none issued - - Common stock, par value $ 0.01 per share, authorized 30,000,000 shares; issued 21,628,680 as of March 31, 2025 and December 31, 2024; outstanding 20,620,711 as of March 31, 2025 and December 31, 2024. 216 216 Additional paid-in capital 34,392 34,392 Accumulated deficit ( 30,786 ) ( 30,530 ) Treasury stock, at cost ( 1,007,969 shares at March 31, 2025 and December 31, 2024) ( 1,747 ) ( 1,747 ) Total stockholders' equity 2,075 2,331 Total liabilities and stockholders’ equity $ 2,185 $ 2,446 See accompanying notes to condensed consolidated financial statements. 1 Table of Contents WRIGHT INVESTORS' SERVICE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except per share amounts) Three Months Ended March 31, 2025 2024 Expenses Compensation and benefits $ 115 $ 113 Other operating 172 172 Total operating expenses 287 285 Loss from operations ( 287 ) ( 285 ) Interest and other income, net 31 66 Net loss $ ( 256 ) $ ( 219 ) Basic and diluted weighted average common shares outstanding 20,620,711 20,620,711 Basic and diluted loss per share $ ( 0.01 ) $ ( 0.01 ) See accompanying notes to condensed consolidated financial statements. 2 Table of Contents WRIGHT INVESTORS' SERVICE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (unaudited) (in thousands) Three Months Ended March 31, 2025 2024 Net loss $ ( 256 ) $ ( 219 ) Other comprehensive loss: Unrealized holding gain on available for sale securities - 16 Reclassification adjustment for gains realized in net loss - ( 56 ) Total other comprehensive loss $ - $ ( 40 ) Comprehensive loss $ ( 256 ) $ ( 259 ) See accompanying notes to condensed consolidated financial statements. 3 Table of Contents WRIGHT INVESTORS' SERVICE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY THREE MONTHS ENDED MARCH 31, 2025 and 2024 (UNAUDITED) (in thousands, except per share data) Accumulated Total Additional other Treasury stock- Common stock (Issued) paid -in Accumulated comprehensive stock, at holders’ shares amount capital deficit income cost equity Balance at December 31, 2023 21,628.6800 $ 216 $ 34,392 $ ( 29,610 ) $ 40 $ ( 1,747 ) $ 3,291 Net loss - - - ( 219 ) - - ( 219 ) Other comprehensive loss - - - - ( 40 ) - ( 40 ) Balance at March 31, 2024 21,628,680 $ 216 $ 34,392 $ ( 29,829 ) $ - $ ( 1,747 ) $ 3,032 Balance at December 31, 2024 21,628,680 $ 216 $ 34,392 $ ( 30,530 ) $ - $ ( 1,747 ) $ 2,331 Net loss - - - ( 256 ) - - ( 256 ) Balance at March 31, 2025 21,628,680 $ 216 $ 34,392 $ ( 30,786 ) $ - $ ( 1,747 ) $ 2,075 See accompanying notes to condensed consolidated financial statements. 4 Table of Contents WRIGHT INVESTORS' SERVICE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) Three Months Ended March 31, 2025 2024 Cash flows from operating activities Net loss $ ( 256 ) $ ( 219 ) Adjustments to reconcile net loss to net cash used in operating activities: Realized gain on investments ( 11 ) ( 56 ) Changes in other operating items: Prepaid expenses and other current assets 28 32 Accounts payable and accrued expenses ( 5 ) ( 3 ) Net cash used in operating activities ( 244 ) ( 246 ) Cash flows from investing activities Proceeds from redemptions and sale of investments 35 3,160 Purchase of investments ( 560 ) ( 550 ) Net cash (used in) provided by investing activities ( 525 ) 2,610 Net (decrease) increase in cash and cash equivalents ( 769 ) 2,364 Cash and cash equivalents at the beginning of the period 1,440 125 Cash and cash equivalents at the end of the period $ 671 $ 2,489 Supplemental disclosures of cash flow information Unrealized loss on available for sale securities $ - $ ( 40 ) See accompanying notes to condensed consolidated financial statements. 5 Table of Contents WRIGHT INVESTORS’ SERVICE HOLDINGS, INC. Notes to Condensed Consolidated Financial Statements Three months ended March 31, 2025 and 2024 (unaudited) 1. Basis of presentation and description of activities Basis of presentation The accompanying interim financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. The information and note disclosures normally included in complete financial statements have been condensed or omitted pursuant to such rules and regulations. The Condensed Consolidated Balance Sheet as of December 31, 2024 has been derived from audited financial statements. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2024 as presented in our Annual Report on Form 10-K. In the opinion of management, this interim information includes all material adjustments, which are of a normal and recurring nature, necessary for a fair presentation. The results for the 2025 interim period are not necessarily indicative of results to be expected for the entire year. Description of activities Wright Investors’ Service Holdings, Inc. (the “Company”) has nominal operations and nominal assets aside from its cash and cash equivalents and investments in U.S. Treasury Bills and mutual funds, and is therefore considered a shell company, as defined in U.S. securities laws and regulations. The Company is not engaged in the business of investing, reinvesting, or trading in securities, and it does not hold itself out as being engaged in those activities. The Company intends to evaluate and explore all available strategic options. The Company will continue to work to maximize stockholder value. Such strategic options may include acquisition of an investment advisory business, acquisition of a financial services business, creating partnerships or joint ventures for those or other businesses and investing in other businesses that provide attractive opportunities for growth. The directors will also consider alternatives for distributing some or all of the Company’s cash and cash equivalents and investments in mutual funds. Until such time as a decision is made as to how the liquid assets of the Company are so deployed, the Company intends to invest its liquid assets in high-grade, short- term investments (such as cash and cash equivalents and Investments in U.S. Treasury Bills and mutual funds) consistent with the preservation of principal, maintenance of liquidity and avoidance of speculation. The Company may be classified as an inadvertent investment company if the Company acquires investment securities in excess of 40% of the Company’s total assets (exclusive of government securities, and cash and certain cash equivalents). As of March 31, 2025, the Company is not considered an inadvertent investment company. 2. Per share data Loss per share for the three months ended March 31, 2025 and 2024 is calculated based on 20,620,711 weighted average outstanding shares of common stock. The Company had not dilutive or potentially dilutive securities during the period presented. 3. Segment Disclosure The Company's operations are reported within one reportable segment and constitutes the Company and its wholly-owned subsidiaries, all of which are inactive, which are reported in the condensed consolidated financial statements. The Company currently has no or nominal operations, no revenues from operations and is considered a shell company, as defined in the U.S. securities laws and regulations. The Company's chief operating decision maker (“CODM”) is the Chief Executive Officer. The CODM evaluates the results and performance of the reporting segment and decides how to allocate resources based on condensed consolidated net loss which is reported on the Condensed Consolidated Statements of Operations. Additionally, the measure of segment assets is reported on the Condensed Consolidated Balance Sheets as total assets. 6 Table of Contents The accounting policies for the reportable segment are the same as those described above in the summary of significant accounting policies. The expenses and net loss for the one reportable segment are the same as those presented on the Condensed Consolidated Statements of Operations. Significant expense categories, including compensation and benefits, other operating expenses, and interest and other income, net are included on the Company's Condensed Consolidated Statements of Operations. 4. New accounting standard In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Improvements to Income Tax Disclosures, which requires entities to disclose disaggregated information about their effective tax rate reconciliations as well as expanded information on income taxes by jurisdiction. The standard is effective for fiscal years beginning after December 15, 2024, on a prospective basis. The Company discloses its income tax rate reconciliation in its annual consolidated financial statements only and does not expect the adoption to have a material impact on its consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting-Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The standard update improves the disclosures about a public business entity’s expenses by requiring more detailed information about the types of expenses (including compensation and benefits and other operating expenses) included within income statement expense captions. The guidance will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The standard will be applied on a prospective basis, with retrospective application permitted. The Company is currently evaluating the impact of adoption of the standard on its financial statement disclosures. 5. Investment valuation The Company’s investments in marketable securities consist of investments in equity securities which are mutual funds. The Company carries its investments at fair value. Fair value is an estimate of the exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (i.e., the exit price at the measurement date). Fair value measurements are not adjusted for transaction costs. A fair value hierarchy provides for prioritizing inputs to valuation techniques used to measure fair value into three levels: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 Inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company. Level 3 Unobservable inputs. Unobservable inputs reflect the assumptions that the Company develops based on available information about what market participants would use in valuing the asset or liability. An asset or liability's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Availability of observable inputs can vary and is affected by a variety of factors. The Company uses judgment in determining fair value of assets and liabilities and Level 3 assets and liabilities involve greater judgment than Level 1 or Level 2 assets or liabilities. As of March 31, 2025 and December 31, 2024, the Company held investments in equity securities which consist of mutual funds of $ 1,450,000 and $ 914,000 , respectively. U.S. government securities are valued using a model that incorporates market observable data, such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations. Mutual funds are valued at the closing price reported by the fund sponsor from an actively traded exchange. Mutual funds are categorized in Level 1 of the fair value hierarchy, depending on the unadjusted quoted prices in active markets for identical assets. The U.S. government debt securities, which have maturities of three months or less at time of purchase, are reported as Cash and cash equivalents on the Condensed Consolidated Balance Sheet as of December 31, 2024. There were no U.S. government debt securities as of March 31, 2025. There were no U.S. government debt securities with maturities of more than three months as of December 31, 2024. 7 Table of Contents Short-term investments in marketable securities have a stated maturity of twelve months or less from the balance sheet date. These securities are considered as available for sale and are reported at fair value. For debt securities, unrealized gains and losses are recorded net of tax as a component of Accumulated other comprehensive income within stockholders' equity. Credit losses related to available-for-sale debt securities are recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. Realized gains and losses are calculated based on the specific identification method and are included in Interest and other income, net, in the Condensed Consolidated Statement of Operations. The Company follows the guidance in ASC 321, “Investments – Equity Securities” (“ASC 321”) for its investments in equity securities with unrealized and realized gains and losses recorded in Interest and other income, net, on the Condensed Consolidated Statements of Operations. The following table presents the Company’s financial instruments at fair value (in thousands): Fair Value Measurements as of March 31, 2025 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Investments in Mutual Funds $ 1,450 $ 1,450 $ - $ - Fair Value Measurements as of December 31, 2024 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Investments in Mutual Funds $ 914 $ 914 $ - $ - Investments in equity securities as of March 31, 2025 are summarized by type below (in thousands). Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Mutual Funds $ 1,450 $ - $ - $ 1,450 Total $ 1,450 $ - $ - $ 1,450 Investments in equity securities as of December 31, 2024 are summarized by type below (in thousands). Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Mutual Funds $ 914 $ - $ - $ 914 Total $ 914 $ - $ - $ 914 8 Table of Contents The Company may be exposed to credit losses through its available-for-sale investments. An available-for-sale security is impaired when its fair value declines below its amortized cost basis. Unrealized losses resulting from the amortized cost basis of any available-for-sale debt security exceeding its fair value are evaluated for identification of credit losses. When evaluating the investments for impairment at each reporting period, the Company reviews factors such as the extent of the unrealized loss, historical losses, current and future economic market conditions, and financial condition of the issuer. As of March 31, 2025, the Company has not recognized an allowance for expected credit losses related to its available-for-sale securities as the Company has not identified any unrealized losses for these investments attributable to credit factors. 6. Income taxes No tax benefit has been recorded in relation to the pre-tax loss for the three months ended March 31, 2025 and 2024, due to a full valuation allowance to offset any deferred tax asset related to net operating loss carry forwards attributable to the losses. As of March 31, 2025, the Company had no material uncertain income tax positions. 7. Capital Stock The Company’s Board of Directors, without any vote or action by the holders of common stock, is authorized to issue preferred stock from time to time in one or more series and to determine the number of shares and to fix the powers, designations, preferences and relative, participating, optional or other special rights of any series of preferred stock. The Board of Directors authorized the Company to repurchase up to 5,000,000 outstanding shares of common stock from time to time either in open market or privately negotiated transactions. The Company did not repurchase any common stock during the three months ended March 31, 2025 and March 31, 2024. At March 31, 2025 and 2024, the Company had repurchased 2,234,721 shares of its common stock and a total of 2,765,279 of the authorized shares, remained available for repurchase as of March 31, 2025. 9 Table of Contents