Wright Investors Service Holdings, Inc.

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. 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 its total assets (exclusive of government securities, and cash and certain cash equivalents). As of December 31, 2024, the Company is not considered an inadvertent investment company.

Principles of consolidation*.*

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, all of which are inactive. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

Cash and cash equivalents

Cash equivalents represent short-term, highly liquid investments, which are readily convertible to cash and have maturities of three months or less at time of purchase. Cash equivalents, which are carried at fair value or amortized cost, as applicable, consist of holdings in U.S. Treasury Bills and a money market fund. Cash and cash equivalents amounted to approximately $1,440,000 and $125,000 at December 31, 2024 and 2023, respectively.

Investment Valuation

The Company’s investments in marketable securities consist of investments in debt securities which are U.S. Treasury bills, and 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:

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 December 31, 2024 and December 31, 2023, the Company held investments in equity securities which consist of mutual funds of $914,000 and $735,000, respectively. As of December 31, 2023, the Company held investments in U.S. government debt securities of $2,409,000. 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 and money market funds are valued at the closing price reported by the fund sponsor from an actively traded exchange. U.S. government securities are categorized in Level 2 of the fair value hierarchy, depending on the inputs used and market activity levels for specific securities. 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, and those with longer maturities are reported as investments, on the Consolidated Balance Sheets as of December 31, 2024 and 2023.

Short-term investments in marketable debt 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 Consolidated Statements 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 as Interest and other income, net, on the Consolidated Statement of Operations.

The following table presents the Company’s financial instruments measured at fair value (in thousands):

Investments in equity securities as of December 31, 2024 are summarized by type below (in thousands).

Investments in debt and equity securities as of December 31, 2023 are summarized by type below (in thousands).

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 December 31, 2024, 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.

Investment in undeveloped land

The Company owns certain non-strategic assets, including an investment in land and certain flowage rights in undeveloped property (the “properties”) primarily located Killingly, Connecticut. The properties were fully impaired as of December 31, 2018.

Per share data

Loss per share for the year ended December 31, 2024 and 2023, respectively, is calculated based on 20,620,711 weighted average outstanding shares of common stock.

Income taxes

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to carryforwards and to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The accounting for uncertain tax positions guidance requires that the Company recognize the financial statement benefit of a tax position only after determining that the Company would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company recognizes interest and penalties on income taxes, including those related to uncertain tax positions as interest and other expenses, respectively. The Company had no income tax uncertainties at December 31, 2024 and 2023.

Concentrations of credit risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and investments. Investments in cash and money market funds are insured up to $250,000 per depositor, per insured bank. Investments in U.S. Treasury Bills and mutual funds are insured up to $500,000. For the years ended December 31, 2024 and 2023, a substantial portion of the Company’s investments in cash, and U.S. Treasury Bills and mutual funds are in excess of these limits.

Segment Disclosure

The Company's operations are reported withinone reportable segment and constitutes the Company and its wholly-owned subsidiaries, all of which are inactive, which are reported in the 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 consolidated net loss which is reported on the Consolidated Statements of Operations. Additionally, the measure of segment assets is reported on the Consolidated Balance Sheets as total assets.

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 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 Consolidated Statements of Operations.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued guidance that expands segment disclosures for public entities, including requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), the title and position of the CODM and an explanation of how the CODM uses reported measures of segment profit or loss in assessing segment performance and allocating resources. The new guidance also expands disclosures about a reportable segment’s profit or loss and assets in interim periods and clarifies that a public entity may report additional measures of segment profit if the CODM uses more than one measure of a segment’s profit or loss. The Company adopted the standard on effective for its annual report for the year ended December 31, 2024 with no impact on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which requires disaggregated information about our effective tax rate reconciliation as well as information on income taxes paid. The guidance will first be effective in our annual disclosures for the year ending December 31, 2025, and should be applied on a prospective basis with the option to apply retrospectively. Early adoption is permitted. The Company is in the process of assessing the impact of ASU 2023-09 on our disclosures.

Accounts payable and accrued expenses consist of the following (in thousands):

For the years ended December 31, 2024 and 2023, the Company recorded no income tax expense.

The difference between the benefit for income taxes computed at the statutory rate and the reported amount of tax benefit from operations is as follows:

The deferred tax assets and liabilities are summarized as follows (in thousands):

A valuation allowance is provided when it is more likely than not that some portion of deferred tax assets will not be realized. The valuation allowance increased by approximately $235,000 and had decreased by approximately $366,000 during the years ended December 31, 2024 and 2023, respectively. The increase in the valuation allowance during the year ended December 31, 2024 was mainly due to increases in the net operating loss carryforward. The decrease in the valuation allowance during the year ended December 31, 2023 was mainly attributable to decreases in the gross deferred tax asset related to the expiration of a capital loss carryforward, net of increases in the net operating loss carryforward.

The Company files a consolidated federal tax return with its subsidiaries. As of December 31, 2024, the Company has a federal net operating loss carryforward of approximately $24,334,000, of which $15,177,000 expires from 2031 through 2037, and $9,157,000 does not expire. The Company also has various state and local net operating loss carryforwards totaling approximately $8,179,000, which expire between 2025 and 2045. The Company’s capital loss carryforward of approximately $2,371,000 expired during 2023.

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 year ended December 31, 2024 and December 31, 2023. At December 31, 2024 and 2023, the Company had repurchased an aggregate of 2,234,721 shares of its common stock and a total of 2,765,279 remained available for repurchase at December 31, 2024 and 2023.

On March 9, 2023, there were 285,000 shares of Company common stock issued to the independent directors of the Company, for payment of quarterly directors’ fees due to them for services in 2022, which were classified as issuable at December 31, 2022. The equity compensation awards were issued pursuant to the exemption from the registration requirements of Section 5 of the Securities Act of 1933 (“1933 Act”) provided by Section 4(a)(2) of the 1933 Act.

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.

Common stock options

The Company adopted a stock-based compensation plan for employees and non-employee members of its Board of Directors in November 2003 (the “2003 Plan”), and the National Patent Development Corporation 2007 Incentive Stock Plan in December 2007 (the “2007 NPDC Plan”). The periods during which additional awards may be granted under the plans have expired and no further awards may be granted under any of these plans after December 20, 2017. As a consequence, any equity compensation awards issued after that time will be on terms determined by the Board of Directors or the Compensation Committee of the Board of Directors and pursuant to exemptions from the registration requirements of the securities laws.

As of December 31, 2024 and 2023, all options were vested and there were no outstanding options under the 2007 NPDC Plan. There were no grants, forfeitures or exercises of options during the years ended December 31,2024 and 2023.

The Company has interests in land and certain flowage rights in undeveloped property (the “properties”) primarily located in Killingly, Connecticut. The properties were fully impaired as of December 31, 2018.

In September 2014, the Connecticut Department of Energy and Environmental Protection (“DEEP”) issued two Consent Orders requiring the investigation and repair of two dams, Acme Pond Dam and Killingly Pond Dam, in which the Company and its subsidiaries have certain ownership interests. Both matters have been fully resolved. In February 2020 and May 2020, DEEP issued to the Company Certificates of Compliance for the Consent Orders relating to Acme Pond Dam and Killingly Pond Dam, respectively.