MGHL 10-Q Quarterly Report March 31, 2011

MORGAN GROUP HOLDING CO

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DEF 14A

Filed on Oct. 25, 2011

10-Q 1 a6720419.htm MORGAN GROUP HOLDING CO. 10-Q a6720419.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
	EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2011

[ ]	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

MORGAN GROUP HOLDING CO.

(Exact name of small business issuing as specified in its charter)

Delaware		13-4196940
(State or other jurisdiction of		(IRS Employer
Incorporation of organization)		Identification Number)

401 Theodore Fremd Avenue, Rye, New York		10580
(Address of principal executive offices)		(Zip Code)

(914) 921-1877

(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)	Smaller reporting company [X]

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, 2011
Common Stock, $.01 par value		3,055,345

MORGAN GROUP HOLDING CO.

TABLE OF CONTENTS

		Page No.

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements.	3-7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	8

Item 3.	Quantitative and Qualitative Disclosure About Market Risk.	8

Item 4.	Controls and Procedures.	8


	PART II – OTHER INFORMATION

Item 6.	Exhibits.	9

	Signatures	10

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Unaudited Financial Statements

Condensed Balance Sheets as of

March 31, 2011, December 31, 2010 and March 31, 2010

Condensed Statements of Operations for the

Three Months Ended March 31, 2011 and 2010

Condensed Statements of Cash Flows for the

Three Months Ended March 31, 2011 and 2010

Notes to Condensed Financial

Statements as of March 31, 2011

Morgan Group Holding Co.

Condensed Balance Sheets

(Unaudited)

	March 31,		December 31,		March 31,
	2011		2010		2010
ASSETS
Current assets:
Cash	$18,250		$192,033		$375,985
Investment in Marketable Securities	372,558		203,540		--
Total current assets	390,808		395,573		375,985
Total assets	$390,808		$395,573		$375,985

LIABILITIES
Current liabilities:
Accrued liabilities	$7,000		$--		$7,759
Total current liabilities	7,000		--		7,759

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, 3,055,345 outstanding	30,553		30,553		30,553
Additional paid-in-capital	5,611,447		5,611,447		5,611,447
Accumulated deficit	(5,258,192	)	(5,246,427	)	(5,273,774	)
Total shareholders' equity	383,808		395,573		368,226
Total liabilities and shareholders' equity	$390,808		$395,573		$375,985

See accompanying notes to condensed financial statements

Morgan Group Holding Co.

Condensed Statements of Operations

(Unaudited)

	Three Months Ended March 31,
	2011			2010
Revenues		$--			$--

Administrative expenses		(16,439	)		(15,509	)
Other income
Interest and dividends		263			51
Realized and unrealized gains on marketable securities		4,411			--
Net loss before income taxes		(11,765	)		(15,884	)
Income taxes		--			--
Net loss		($11,765	)		($15,884	)

Loss per share, basic and diluted		($0.00	)		($ 0.01	)

Shares outstanding, basic and diluted		3,055,345			3,055,345

See accompanying notes to condensed financial statements

Morgan Group Holding Co.

Condensed Statements of Cash Flows

(Unaudited)

	Year Ended March 31,
	2011			2010
Cash Flows from Operating Activities
Interest received		$35			$51
Cash paid to suppliers		(9,439	)		(750	)
Net Cash Used In Operating Activities		(9,404	)		(699	)

Cash Flows from Investing Activities
Purchases of marketable securities		(370,607	)		--
Proceeds from the sale of marketable		206,000			--
Dividends received		228			--
Net Cash Used In Investing Activities		(164,379	)		--

Cash Flows from Financing Activities		--			--
Net Decrease in Cash		(173,783	)		(699	)
Cash, Beginning of the Year		192,033			376,684
Cash, End of the Year		$18,250			$375,985

Reconciliation of net loss to net cash used in operating activities:
Net loss	($11,765	)	($15,458	)
Realized and unrealized gains on marketable securities	(4,411	)	--
Dividends received	(228	)	--
Decrease in prepaid expenses	--		7,000
Increase in accrued liabilities	7,000		7,759
Net cash used in operating activities	($9,404	)	($699	)

See accompanying notes to condensed financial statements

Morgan Group Holding Co.

Notes to 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, 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, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011. 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.

Note 2. Significant Accounting Policies

The Company invests 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.

Note 3. 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 $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.

Note 4. Commitments and Contingencies

From time to time the Company may be subject to certain asserted and unasserted claims. It is the Company’s 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.

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 $25,000 to $50,000 per year.

Results of Operations

For the three months ended March 31, 2011, the Company incurred $16,439 of expenses up slightly from $15,509 of expenses in the three months ended March 31, 2010. Increased legal fees in 2011 caused the variance.

In the Second Quarter of 2010, the company began to invest in marketable securities that are subject to a publicly disclosed acquisition offer but are trading below the proposed acquisition price. During the three months ended March 31, 2011, the Company recorded $3,513 of net realized and unrealized gains from this activity. There was no activity in marketable securities in the three months ended March 31, 2010. The company also received $228 in dividend income in 2011 also as a result of this marketable security program. Interest income from the Company investment in a United States Treasury money market fund was $35 during the three months ended March 31, 2011 as compared to $51 during 2010 period result of the lower investment balances in the company’s balances in this investment in 2011.

Liquidity and Capital Resources

As of March 31, 2011, the Company’s only assets consisted of $390,808 in cash and marketable securities and had 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

The Company is a smaller reporting company as defined in Item 10(f)(1) of Regulation S-K and thus are not required to report the Quantitative and Qualitative Analysis of Market Risk specified in Item 305 of Regulation S-K.

Item 4. Controls and Procedures

a) Evaluation of Disclosure Controls and Procedures

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.

(b) Changes in Internal Controls

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

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.


	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.



*	Incorporated by reference to the exhibits to the Company’s Registration Statement on Form S-1 (Registration No. 333-73996).

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
	ROBERT E. DOLAN
	Chief Financial Officer

May 12, 2011

TABLE OF CONTENTS

Part I - Financial Information Item 1. Financial Statements Note 1. Basis Of Presentation Note 2. Significant Accounting Policies Note 3. Taxes Note 4. Commitments and Contingencies Item 2. Management S Discussion and Analysis Of Financial Condition and Results Of Operations Item 3. Quantitative and Qualitative Analysis Of Market Risk Item 4. Controls and Procedures Part II - Other Information Item 6. Exhibits

MGHL 10-Q Quarter ended March 31, 2011