ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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20-4568600
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Bedminster One
135 Route 202/206
Bedminster, New Jersey
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07921
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of exchange on which registered
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Common stock, $0.00001
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New York Stock Exchange
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Large accelerated filer
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¨
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Accelerated filer
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ý
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Item 1.
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Business
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Item 1A.
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Risk Factors
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
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Item 6.
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Selected Financial Data
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 7A.
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Quantitative and Qualitative Disclosures about Market Risk
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Item 8.
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Financial Statements and Supplementary Data
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information
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PART
III
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Item 10.
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Directors, Executive Officers and Corporate Governance
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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Item 14.
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Principal Accountant Fees and Services
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PART
IV
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Item 15.
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Exhibits and Financial Statement Schedules
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EXHIBIT INDEX
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ITEM 1.
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BUSINESS
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Key Financial Data
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||||||||||||||||||
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(in millions)
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||||||||||||||||||
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Year Ended December 31,
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||||||||||||||||||
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2013
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2012
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2011
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2010
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2009
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||||||||||
Net Revenue
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$
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266.4
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$
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151.4
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$
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181.5
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$
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189.1
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$
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153.3
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Net income
(1)
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$
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31.3
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$
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2.6
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$
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15.7
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$
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36.943
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$
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28.0
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Adjusted net income
(2)
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$
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33.9
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$
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4.3
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$
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15.7
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$
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37.8
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$
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28.0
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Key Operating Metrics
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||||||||||||||||||
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(Unaudited)
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||||||||||||||||||
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Year Ended December 31,
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2013
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2012
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2011
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2010
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2009
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Retail
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Funded Accounts
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133,056
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85,099
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76,485
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85,562
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60,168
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Active OTC Accounts
(3)
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98,696
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60,219
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63,435
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64,313
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52,755
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Futures DARTs
(4)
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13,785
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13,581
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—
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—
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—
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OTC Trading Volume (billions)
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$
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1,796.7
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$
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1,303.4
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$
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1,574.0
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$
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1,324.8
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$
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1,246.7
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Average Daily Volume (billions)
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$
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6.9
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$
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5.0
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$
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6.0
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$
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5.1
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$
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4.8
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Client Assets (millions)
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$
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739.3
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$
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446.3
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$
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310.4
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$
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256.7
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$
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199.8
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Institutional
(5)
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Trading Volume (billions)
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$
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3,961.0
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$
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1,952.6
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$
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853.9
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$
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239.3
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—
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Average Daily Volume (billions)
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$
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15.2
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$
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7.5
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$
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3.3
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$
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0.9
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—
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(1)
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For the periods prior to the closing of our initial public offering in December 2010, our net income/(loss) was affected by the changes in our embedded derivative liability attributable to the redemption feature of our previously outstanding preferred stock. This redemption feature and the associated embedded derivative liability was no longer required to be recognized following the conversion of all of our preferred stock into common stock in connection with the completion of our initial public offering in December 2010.
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(2)
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Adjusted net income is a non-GAAP financial measure and represents our net income excluding restructuring, acquisition and integration-related expenses, impairment on investment and gain on extinguishment of debt. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Key Income Statement Line Items and Key Operating Metrics” and “Reconciliation of Non-GAAP Financial Metrics,” for discussion and reconciliation of non-GAAP financial metrics.
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(3)
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Represents accounts which executed a transaction over the last 12 months.
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(4)
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Daily average revenue trades, or DARTs, represent the number of futures or options on futures trades in a given period over the number of trading days in that period.
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(5)
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Our institutional channel includes our GTX business which was launched in March 2010, as well as additional institutional customers that trade through our other platforms.
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•
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Continue to enhance our proprietary trading platforms and innovative trading tools in order to attract customers and increase our market share;
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•
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Strategically expand our operations and customer base through business acquisitions, investments and partnerships;
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•
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Expand our product offerings to include other financial products to enable our customers to access an expanding range of products and to execute trading strategies across various products, potentially leading to more revenue per customer;
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Identify and enter high-growth markets in order to expand our presence globally in markets where we believe there are large revenue opportunities; and
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Capture additional market share by taking advantage of consolidation within the forex industry and by capitalizing on increasing confidence in retail forex as an asset class.
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•
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The acquisition of Global Futures & Forex, Ltd., or GFT, which provided new partnerships in OTC trading, significantly expanded our non-forex product offerings, and deepened our global footprint, providing us with an increased presence in key European, Middle Eastern and Asian markets. Please see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - GFT Transaction" for more information on our acquisition of GFT;
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•
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The acquisition of the US-based retail forex business of FX Solutions LLC, a division of City Index Group;
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•
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Enhancements to our mobile trading applications, including the ability for prospective customer to initiate account opening and for existing customers to fund their accounts via a mobile device, to support the rapid adoption of our mobile trading tools by our customers; and
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•
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The launch of an innovative new third party platform, tradable, to our retail customers in the United States.
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•
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Regulated Forex Firms, such as Forex Capital Markets LLC and OANDA Corporation. Like us, these firms have also expanded globally over the past several years, and we consider them to be competitors in the United States, as well as in several of our key international markets.
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•
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Global Multi-Product OTC Trading Firms, including firms such as Interactive Brokers, IG Group Holdings plc, City Index Group and CMC Group. These firms generally offer a broad set of asset classes and earn a significant percentage of their revenue from non-forex products, including CFD trading on equity indices and commodities and exchange-traded products, such as futures, options and listed equities.
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•
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sales and marketing activities, including our interaction with, and solicitation of, customers;
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•
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trading practices, including the types of products and services we may offer;
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•
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treatment of customer assets, including custody, control, safekeeping and, in certain countries, segregation of our customer funds and securities;
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•
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maintaining specified minimum amounts of capital and limiting withdrawals of funds from our regulated operating subsidiaries;
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•
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continuing education requirements for our employees;
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•
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anti-money laundering practices;
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•
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recordkeeping and reporting; and
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•
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supervision regarding the conduct of directors, officers and employees.
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•
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creating “retail foreign exchange dealers,” or RFEDs, a new regulated category of forex brokers focused on retail investors that are permitted to act as counterparty to retail forex transactions;
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•
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imposing an initial minimum security deposit amount of 2.0% of the notional value for retail forex transactions in “major currency” pairs and 5.0% of the notional value for all other retail forex transactions;
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•
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providing that introducing brokers must either (i) register with the CFTC and become members of the NFA or apply for an exemption from registration and (ii) meet the minimum net capital requirements applicable to futures and commodity options introducing brokers or enter into a guarantee agreement with a CFTC-regulated forex dealer member and permitting only one such guarantee agreement per introducing broker;
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•
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requiring that a risk disclosure statement be provided to every retail forex customer, including disclosure of the number of profitable and unprofitable non-discretionary accounts maintained by the forex broker during the four most recent calendar quarters;
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•
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prohibiting RFEDs, FCMs and introducing brokers from including statements in sales and marketing materials that would appear to convey to potential retail forex customers that there is a guaranty against loss, and requiring that FCMs, RFEDs and introducing brokers provide retail forex customers with enhanced written disclosure statements that, among other things, inform customers of the risk of loss; and
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•
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requiring RFEDs to maintain net capital of at least $20.0 million, plus 5.0% of the RFED’s customer obligations in excess of $10.0 million. In addition, in the event an RFED’s net capital position falls below 110.0% of the minimum net capital requirement, the RFED would be subject to additional reporting requirements.
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•
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rules that, beginning in October 2010, require us to ensure that our customers residing in the United States have accounts open only with our NFA-member operating entity, GAIN Capital Group, LLC;
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•
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amendments to the Commodity Exchange Act that, beginning on July 15, 2011, required essentially all retail transactions in any commodity other than foreign currency to be executed on an exchange, rather than OTC;
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•
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a requirement that federal banking regulators adopt new rules regarding the conduct and operation of retail forex businesses by banks; and
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•
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a requirement that the SEC adopt rules regarding the conduct and operation of retail forex businesses by broker-dealers.
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•
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price changes in foreign currencies;
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•
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lack of liquidity in foreign currencies in which we have positions; and
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•
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inaccuracies in our proprietary pricing mechanism, or rate engine, which evaluates, monitors and assimilates market data and reevaluates our outstanding currency quotes, and is designed to publish prices reflective of prevailing market conditions throughout the trading day.
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•
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diversion of management time and focus from operating our business to address challenges that may arise in integrating the acquired business;
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•
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transition of operations, users and customers onto our existing platforms or onto platforms of the acquired company;
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•
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failure to successfully further develop the acquired business;
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•
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failure to realize anticipated operational or financial synergies;
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•
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implementation or remediation of controls, procedures, and policies at the acquired company;
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•
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in the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political, and regulatory risks associated with specific countries;
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•
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liability for activities of the acquired company before the acquisition, such as violations of laws, commercial disputes, tax liabilities, and other known and unknown liabilities; and
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•
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integration of the acquired business’ accounting, human resource and other administrative systems, and coordination of trading and sales and marketing functions.
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•
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develop products and services that are similar to ours, or that are more attractive to customers than ours in one or more of our markets;
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•
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provide products and services we do not offer;
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•
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provide execution and clearing services that are more rapid, reliable, efficient or less expensive than ours;
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•
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offer products and services at prices below ours to gain market share and to promote other businesses, such as forex options, futures, listed securities, CFDs, precious metals and OTC derivatives;
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•
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adapt at a faster rate to market conditions, new technologies and customer demands;
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•
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offer better, faster and more reliable technology;
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•
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outbid us for desirable acquisition targets;
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•
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more efficiently engage in and expand existing relationships with strategic alliances;
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•
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market, promote and sell their products and services more effectively; and
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•
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develop stronger relationships with customers.
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•
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changing customer demands;
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•
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the need to enhance existing services and products or introduce new services and products;
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•
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evolving industry practices; and
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•
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rapidly evolving technology solutions.
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•
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less developed or mature local technological infrastructure and higher costs, which could make our products and services less attractive or accessible in emerging markets;
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•
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difficulty in complying with the diverse regulatory requirements of multiple jurisdictions, which may be more burdensome, not clearly defined and subject to unexpected changes, potentially exposing us to significant compliance costs and regulatory penalties;
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•
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less developed and established local financial and banking infrastructure, which could make our products and services less accessible;
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•
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reduced protection of intellectual property rights;
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•
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inability to enforce contracts;
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•
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difficulties and costs associated with staffing and managing foreign operations, including reliance on newly hired local personnel;
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•
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tariffs and other trade barriers;
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•
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currency and tax laws that may prevent or restrict the transfer of capital and profits among our various operations around the world; and
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•
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time zone, language and cultural differences among personnel in different areas of the world.
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•
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sales and marketing activities, including our interaction with, and solicitation of, customers;
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•
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trading practices, including the types of investment products we may offer;
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•
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treatment of customer assets, including custody, control, safekeeping and, in certain countries, segregation of our customer funds and securities;
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•
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maintaining specified minimum amounts of capital and limiting withdrawals of funds from our regulated operating subsidiaries;
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•
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continuing education requirements for our employees;
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•
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anti-money laundering practices;
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•
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record keeping and reporting; and
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•
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supervision regarding the conduct of directors, officers and employees.
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•
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our sales and marketing activities;
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•
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the use of a website specifically targeted to potential customers in a particular country;
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•
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the minimum income level or financial sophistication of potential customers we may contact;
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•
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our ability to have a physical presence in a particular country; or
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•
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the types of services we may offer customers physically present in each country.
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•
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future announcements concerning us or our competitors, including the announcement of acquisitions;
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•
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changes in government regulations or in the status of our regulatory approvals or licensure;
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•
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public perceptions of risks associated with our services or operations;
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•
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developments in our industry; and
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•
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general economic, market and political conditions and other factors that may be unrelated to our operating performance or the operating performance of our competitors.
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•
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support more rapid expansion;
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•
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develop new or enhanced services and products;
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•
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respond to competitive pressures;
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•
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acquire complementary businesses, products or technologies; or
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•
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respond to unanticipated requirements.
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2013
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2012
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||||||||
Quarter
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High
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Low
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High
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Low
|
||||
First Quarter
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4.61
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4.06
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$
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6.87
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$
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5.02
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Second Quarter
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6.45
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4.27
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$
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5.36
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$
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4.37
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Third Quarter
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14.31
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5.44
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$
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5.30
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$
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4.42
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Fourth Quarter
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12.32
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7.15
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$
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4.89
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$
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3.94
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Total
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Maximum Number
|
||||
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Number of Shares
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(or Approximate
|
||||
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|
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Purchased as
|
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Dollar Value) of
|
||||
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Part of Publicly
|
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Shares that May
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||||
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Total Number
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Announced
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Yet Be Purchased
|
||||
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of Shares
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Average Price
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Plans or
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Under the Plans or
|
||||
Period
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Purchased
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Paid per Share
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Programs
(1)
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Programs
(1)(2)
|
||||
January 2013
|
75,000
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|
|
4.20
|
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75,000
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|
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1,404,755
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February 2013
|
12,706
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|
|
4.24
|
|
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12,706
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|
|
1,348,417
|
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March 2013
|
63,390
|
|
|
4.20
|
|
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63,390
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|
|
873,896
|
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April 2013
|
14,999
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|
|
4.23
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|
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14,999
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|
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810,114
|
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May 2013
|
31,398
|
|
|
4.69
|
|
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31,398
|
|
|
15,662,206
|
|
June 2013
|
—
|
|
|
—
|
|
|
—
|
|
|
15,662,206
|
|
July 2013
|
—
|
|
|
—
|
|
|
—
|
|
|
15,662,206
|
|
August 2013
|
24,311
|
|
|
5.67
|
|
|
24,311
|
|
|
15,523,884
|
|
September 2013
|
—
|
|
|
—
|
|
|
—
|
|
|
15,523,884
|
|
October 2013
|
—
|
|
|
—
|
|
|
—
|
|
|
15,523,884
|
|
November 2013
|
612,430
|
|
|
8.87
|
|
|
612,430
|
|
|
10,084,757
|
|
December 2013
|
100,000
|
|
|
7.62
|
|
|
100,000
|
|
|
9,321,167
|
|
(1)
|
In May of 2013, the Company announced that its Board of Directors approved a share repurchase plan, which authorizes the expenditure of up to $15.0 million for the purchase of the Company’s common stock.
|
|
|
|
|
|
Number of
|
||||
|
|
|
|
|
securities remaining
|
||||
|
Number of
|
|
Weighted-average
|
|
available for future
|
||||
|
securities to be
|
|
exercise price
|
|
issuance under
|
||||
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issued upon exercise
|
|
of
|
|
equity compensation
|
||||
|
of outstanding
|
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outstanding
|
|
plans (excluding
|
||||
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options, warrants
|
|
options, warrants
|
|
securities reflected
|
||||
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and rights
|
|
and rights
|
|
in column (a)
|
||||
Plan category
|
(a)
|
|
(b)
|
|
(c)
(1)
|
||||
Equity compensation plans approved by security holders
|
3,763,959
|
|
|
$
|
4.36
|
|
|
2,825,080
|
|
(1)
|
In accordance with the 2010 Omnibus Incentive Compensation Plan, an additional 1.3 million shares were made available for issuance on the first trading day of 2014; these shares are excluded from this calculation.
|
Selected Consolidated Statement of Operations
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(in thousands, except share and per share data)
|
||||||||||||||||||
|
Year Ended December 31,
|
||||||||||||||||||
|
2013
|
|
2012
|
|
2011
(1)
|
|
2010
(1)(4)
|
|
2009
(1)
|
||||||||||
Consolidated Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Revenue
|
$
|
266,391
|
|
|
$
|
151,360
|
|
|
$
|
181,465
|
|
|
$
|
189,098
|
|
|
$
|
153,319
|
|
Total expense
|
$
|
223,286
|
|
|
$
|
150,218
|
|
|
$
|
158,221
|
|
|
$
|
131,646
|
|
|
$
|
113,090
|
|
Income before income tax expense and equity in earnings of equity method investment
|
$
|
45,105
|
|
|
$
|
1,142
|
|
|
$
|
23,244
|
|
|
$
|
57,452
|
|
|
$
|
40,229
|
|
Net Income applicable to GAIN Capital Holdings, Inc.
|
$
|
31,311
|
|
|
$
|
2,621
|
|
|
$
|
15,698
|
|
|
$
|
36,988
|
|
|
$
|
27,994
|
|
Earnings/(loss) per common share:
(2)
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.85
|
|
|
$
|
0.08
|
|
|
$
|
0.46
|
|
|
$
|
8.42
|
|
|
$
|
9.47
|
|
Diluted
|
$
|
0.79
|
|
|
$
|
0.07
|
|
|
$
|
0.40
|
|
|
$
|
0.98
|
|
|
$
|
0.75
|
|
Weighted average common shares outstanding used in computing earnings/(loss) per common share
(2)
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
36,551,246
|
|
|
34,940,800
|
|
|
34,286,840
|
|
|
4,392,798
|
|
|
2,956,377
|
|
|||||
Diluted
(3)
|
39,632,878
|
|
|
37,880,208
|
|
|
38,981,792
|
|
|
37,742,902
|
|
|
37,282,069
|
|
|||||
Cash dividends per share
|
$
|
0.20
|
|
|
$
|
0.20
|
|
|
$
|
0.05
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Selected Consolidated Balance Sheet
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(in thousands unless otherwise stated)
|
||||||||||||||||||
|
Year Ended December 31,
|
||||||||||||||||||
|
2013
|
|
2012
(4)
|
|
2011
(4)
|
|
2010
(4)
|
|
2009
|
||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
39,871
|
|
|
$
|
36,820
|
|
|
$
|
60,221
|
|
|
$
|
27,536
|
|
|
$
|
22,770
|
|
Cash and cash equivalents held for customers
|
$
|
739,318
|
|
|
$
|
446,311
|
|
|
$
|
310,447
|
|
|
$
|
256,674
|
|
|
$
|
199,754
|
|
Receivables from banks and brokers
|
$
|
227,630
|
|
|
$
|
89,916
|
|
|
$
|
85,401
|
|
|
$
|
98,135
|
|
|
$
|
76,391
|
|
Total assets
|
$
|
1,111,135
|
|
|
$
|
629,262
|
|
|
$
|
504,930
|
|
|
$
|
442,420
|
|
|
$
|
351,940
|
|
Payables to customers, brokers, dealers, FCMs and other regulated entities
|
$
|
739,318
|
|
|
$
|
446,311
|
|
|
$
|
310,447
|
|
|
$
|
256,674
|
|
|
$
|
199,754
|
|
Convertible redeemable preferred stock embedded derivative
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
81,098
|
|
Notes payable
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,875
|
|
|
$
|
18,375
|
|
|
$
|
28,875
|
|
Convertible senior notes
|
$
|
65,360
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total GAIN Capital Holdings, Inc. shareholders' equity
|
$
|
234,401
|
|
|
$
|
162,830
|
|
|
$
|
163,974
|
|
|
$
|
148,993
|
|
|
$
|
(139,890
|
)
|
(1)
|
For each of the periods indicated, in accordance with ASC 815,
Derivatives and Hedging
, we accounted for an embedded derivative liability attributable to the redemption feature of our then outstanding preferred stock. This redemption feature and the associated embedded derivative liability is no longer required to be recognized due to the conversion of all of our outstanding preferred stock in connection with the completion of our initial public offering of common stock in December 2010.
|
(2)
|
In connection with the completion of our IPO, our board of directors approved a 2.29-for-1 stock split of our common stock to be effective immediately prior to the completion of the IPO. The 2.29-for-1 stock split, after giving effect to the receipt by us of 407,692 shares of common stock from all of our pre-IPO common stockholders (on a pro-rata basis) in satisfaction of previously outstanding obligations owed by such stockholders to us, resulted in an effective
|
(3)
|
For the year ended December 31, 2008 through the year ended December 31, 2010, all outstanding preferred stock is assumed to be converted for the calculation of diluted shares outstanding.
|
(4)
|
In the year ended December 31, 2010 there was an immaterial error in the income tax provision (see Note 1 on the Consolidated Financial Statements). Accordingly, the net income and earnings per share have been retroactively restated for that year. In addition total assets and total shareholders' equity have been retroactively restated for the subsequent years through December 31, 2012 inclusive.
|
•
|
for trades that are naturally hedged against an offsetting trade from another customer, we receive the entire retail bid/offer spread we offer our customers on the two offsetting transactions;
|
•
|
for trades that are hedged with one of our wholesale trading partners, we receive the difference between the retail bid/offer spread we offer our customers and the wholesale bid/offer spread we receive from the wholesale trading partners; and
|
•
|
with respect to the remaining customer trades, which we refer to as our net exposure, we receive the net gains or losses generated through changes in the market value of the currencies held in our net exposure.
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net income applicable to GAIN Capital Holdings, Inc.
|
$
|
31,311
|
|
|
$
|
2,621
|
|
|
$
|
15,698
|
|
Restructuring, net of tax
|
1,090
|
|
|
1,455
|
|
|
—
|
|
|||
Other non-recurring items, net of tax
|
1,544
|
|
|
195
|
|
|
$
|
—
|
|
||
Adjusted net income
|
$
|
33,945
|
|
|
$
|
4,271
|
|
|
$
|
15,698
|
|
Adjusted earnings per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.93
|
|
|
$
|
0.12
|
|
|
$
|
0.46
|
|
Diluted
|
$
|
0.86
|
|
|
$
|
0.11
|
|
|
$
|
0.40
|
|
|
Key Operating Metrics
|
||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||
|
Year Ended December 31,
|
||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
Retail
|
|
|
|
|
|
|
|
|
|
||||||||||
Funded Accounts
|
133,056
|
|
|
85,099
|
|
|
76,485
|
|
|
85,562
|
|
|
60,168
|
|
|||||
Active OTC Accounts
|
98,696
|
|
|
60,219
|
|
|
63,435
|
|
|
64,313
|
|
|
52,755
|
|
|||||
Futures DARTS
|
13,785
|
|
|
13,581
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
OTC Trading Volume (billions)
|
$
|
1,796.7
|
|
|
$
|
1,303.4
|
|
|
$
|
1,574.0
|
|
|
$
|
1,324.8
|
|
|
$
|
1,246.7
|
|
Average Daily Volume (billions)
|
$
|
6.9
|
|
|
$
|
5.0
|
|
|
$
|
6.0
|
|
|
$
|
5.1
|
|
|
$
|
4.8
|
|
Client Assets (millions)
|
$
|
739.3
|
|
|
$
|
446.3
|
|
|
$
|
310.4
|
|
|
$
|
256.7
|
|
|
$
|
199.8
|
|
Institutional
|
|
|
|
|
|
|
|
|
|
||||||||||
Trading Volume (billions)
|
$
|
3,961.0
|
|
|
$
|
1,952.6
|
|
|
$
|
853.9
|
|
|
$
|
239.3
|
|
|
—
|
|
|
Average Daily Volume (billions)
|
$
|
15.2
|
|
|
$
|
7.5
|
|
|
$
|
3.3
|
|
|
$
|
0.9
|
|
|
—
|
|
•
|
overall economic conditions and outlook;
|
•
|
volatility of financial markets;
|
•
|
legislative changes; and
|
•
|
regulatory changes.
|
•
|
the effectiveness of our sales activities;
|
•
|
the competitiveness of our products and services;
|
•
|
the effectiveness of our customer service team; and
|
•
|
the effectiveness of our marketing activities.
|
|
Year Ended December 31,
|
||||
|
2013
|
|
2012
|
||
REVENUE:
|
|
|
|
||
Trading revenue
|
205,133
|
|
|
127,520
|
|
Commission revenue
|
60,727
|
|
|
21,373
|
|
Other revenue
|
1,099
|
|
|
2,331
|
|
Total non-interest revenue
|
266,959
|
|
|
151,224
|
|
Interest revenue
|
821
|
|
|
627
|
|
Interest expense
|
1,389
|
|
|
491
|
|
Total net interest (expense) / revenue
|
(568
|
)
|
|
136
|
|
Net Revenue
|
266,391
|
|
|
151,360
|
|
|
Year Ended December 31,
|
||||
|
2013
|
|
2012
|
||
Total expenses (amounts in thousands)
|
223,286
|
|
|
150,218
|
|
As a percentage of net revenue
|
83.8
|
%
|
|
99.2
|
%
|
|
Year Ended December 31,
|
||||
|
2013
|
|
2012
|
||
Employee compensation and benefits (amounts in thousands)
|
67,134
|
|
|
47,469
|
|
As a percentage of net revenue
|
25.2
|
%
|
|
31.4
|
%
|
|
Year Ended December 31,
|
||||
|
2013
|
|
2012
|
||
Selling and marketing (amounts in thousands)
|
22,337
|
|
|
26,969
|
|
As a percentage of net revenue
|
8.4
|
%
|
|
17.8
|
%
|
|
Year Ended December 31,
|
||||
|
2013
|
|
2012
|
||
Trading expenses and commissions (amounts in thousands)
|
77,718
|
|
|
38,047
|
|
As a percentage of net revenue
|
29.2
|
%
|
|
25.1
|
%
|
|
Year Ended December 31,
|
||||
|
2013
|
|
2012
|
||
General and administrative (amounts in thousands)
|
26,813
|
|
|
19,865
|
|
As a percentage of net revenue
|
10.1
|
%
|
|
13.1
|
%
|
|
Year Ended December 31,
|
||||
|
2013
|
|
2012
|
||
Depreciation and amortization (amounts in thousands)
|
7,768
|
|
|
4,921
|
|
As a percentage of net revenue
|
2.9
|
%
|
|
3.3
|
%
|
|
Year Ended December 31,
|
||||
|
2013
|
|
2012
|
||
Purchased intangible amortization (amounts in thousands)
|
2,906
|
|
|
4,134
|
|
As a percentage of net revenue
|
1.1
|
%
|
|
2.7
|
%
|
|
Year Ended December 31,
|
||||
|
2013
|
|
2012
|
||
Communication and technology (amounts in thousands)
|
11,315
|
|
|
7,736
|
|
As a percentage of net revenue
|
4.2
|
%
|
|
5.1
|
%
|
|
Year Ended December 31,
|
||||
|
2013
|
|
2012
|
||
Restructuring (amounts in thousands)
|
1,570
|
|
|
634
|
|
As a percentage of net revenue
|
0.6
|
%
|
|
0.4
|
%
|
|
Year Ended December 31,
|
||||
|
2013
|
|
2012
|
||
Acquisition expense (amounts in thousands)
|
1,824
|
|
|
85
|
|
As a percentage of net revenue
|
0.7
|
%
|
|
0.1
|
%
|
|
Year Ended December 31,
|
||||
|
2013
|
|
2012
|
||
Integration (amounts in thousands)
|
1,950
|
|
|
—
|
|
As a percentage of net revenue
|
0.7
|
%
|
|
—
|
%
|
|
Year Ended December 31,
|
||||||
|
2013
|
|
2012
|
||||
Income tax expense/(benefit) (amounts in thousands)
|
$
|
13,794
|
|
|
$
|
(1,479
|
)
|
Effective tax rate
|
30.6
|
%
|
|
(129.4
|
)%
|
|
Year Ended December 31,
|
||||||
|
2012
|
|
2011
|
||||
REVENUE:
|
|
|
|
|
|
||
Trading revenue
|
$
|
127,520
|
|
|
$
|
175,854
|
|
Commission revenue
|
21,373
|
|
|
4,691
|
|
||
Other revenue
|
2,331
|
|
|
1,790
|
|
||
Total non-interest revenue
|
151,224
|
|
|
182,335
|
|
||
Interest revenue
|
627
|
|
|
544
|
|
||
Interest expense
|
491
|
|
|
1,414
|
|
||
Total net interest revenue/(expense)
|
136
|
|
|
(870
|
)
|
||
Net Revenue
|
$
|
151,360
|
|
|
$
|
181,465
|
|
|
Year Ended December 31,
|
||||
|
2012
|
|
2011
|
||
Total expenses (amounts in thousands)
|
150,218
|
|
|
158,221
|
|
As a percentage of net revenue
|
99.2
|
%
|
|
87.2
|
%
|
|
Year Ended December 31,
|
||||
|
2012
|
|
2011
|
||
Employee compensation and benefits (amounts in thousands)
|
47,469
|
|
|
46,362
|
|
As a percentage of net revenue
|
31.4
|
%
|
|
25.5
|
%
|
|
Year Ended December 31,
|
||||
|
2012
|
|
2011
|
||
Selling and marketing (amounts in thousands)
|
26,969
|
|
|
36,195
|
|
As a percentage of net revenue
|
17.8
|
%
|
|
19.9
|
%
|
|
Year Ended December 31,
|
||||
|
2012
|
|
2011
|
||
Trading expenses and commissions (amounts in thousands)
|
38,047
|
|
|
33,040
|
|
As a percentage of net revenue
|
25.1
|
%
|
|
18.2
|
%
|
|
Year Ended December 31,
|
||||
|
2012
|
|
2011
|
||
General and administrative (amounts in thousands)
|
19,865
|
|
|
21,842
|
|
As a percentage of net revenue
|
13.1
|
%
|
|
12.0
|
%
|
|
Year Ended December 31,
|
||||
|
2012
|
|
2011
|
||
Depreciation and amortization (amounts in thousands)
|
4,921
|
|
|
3,898
|
|
As a percentage of net revenue
|
3.3
|
%
|
|
2.1
|
%
|
|
Year Ended December 31,
|
||||
|
2012
|
|
2011
|
||
Purchased intangible amortization (amounts in thousands)
|
4,134
|
|
|
8,893
|
|
As a percentage of net revenue
|
2.7
|
%
|
|
4.9
|
%
|
|
Year Ended December 31,
|
||||
|
2012
|
|
2011
|
||
Communication and technology (amounts in thousands)
|
7,736
|
|
|
7,139
|
|
As a percentage of net revenue
|
5.1
|
%
|
|
3.9
|
%
|
|
Year Ended December 31,
|
||||
|
2012
|
|
2011
|
||
Income tax(benefit)/expense (amounts in thousands)
|
(1,479
|
)
|
|
7,546
|
|
As a percentage of net revenue
|
(1.0
|
)%
|
|
4.2
|
%
|
|
|
|
Undistributed
|
||||
Entity Name
|
Cash Held
|
|
Earnings
|
||||
GAIN Capital-Forex.com U.K., Ltd.
|
$
|
169.0
|
|
|
$
|
53.7
|
|
Forex.com Japan Co., Ltd.
|
53.1
|
|
|
(4.6
|
)
|
||
GAIN Capital Forex.com Australia, Pty. Ltd.
|
8.0
|
|
|
(0.8
|
)
|
||
GAIN Capital-Forex.com Hong Kong, Ltd.
|
3.9
|
|
|
(0.9
|
)
|
||
GAIN Global Markets, Inc.
|
0.1
|
|
|
(1.0
|
)
|
||
GAIN Capital-Forex.com Canada Ltd.
|
3.4
|
|
|
(0.3
|
)
|
||
GAIN Capital-Forex.com Singapore Ltd.
|
0.2
|
|
|
(0.7
|
)
|
||
GAIN GTX Singapore Pte. Ltd.
|
0.3
|
|
|
—
|
|
||
Island Traders (Cayman) Limited
|
—
|
|
|
—
|
|
||
GFT Global Markets UK, Ltd.
|
241.9
|
|
|
(1.9
|
)
|
|
Minimum Regulatory
|
|
Capital Levels
|
|
Excess Net
|
||||||
Entity Name
|
Minimum Regulatory Capital Requirements
|
|
Capital Levels Maintained
|
|
Excess Net Capital
|
||||||
GAIN Capital Group, LLC
|
24.6
|
|
|
39.1
|
|
|
14.5
|
|
|||
GAIN Capital Securities, Inc.
|
0.1
|
|
|
0.5
|
|
|
0.4
|
|
|||
GAIN Global Markets, Inc.
|
0.1
|
|
|
0.3
|
|
|
0.2
|
|
|||
GAIN Capital Forex.com Australia, Pty. Ltd.
|
0.3
|
|
|
2.6
|
|
|
2.3
|
|
|||
GAIN Capital-Forex.com U.K., Ltd.
|
20.5
|
|
|
57.5
|
|
|
37.0
|
|
|||
GAIN Capital-Forex.com Hong Kong, Ltd.
|
1.9
|
|
|
3.8
|
|
|
1.9
|
|
|||
GAIN Capital-Forex.com Canada Ltd.
|
0.2
|
|
|
2.0
|
|
|
1.8
|
|
|||
Forex.com Japan Co., Ltd.
|
3.1
|
|
|
9.5
|
|
|
6.4
|
|
|||
Global Futures & Forex, Ltd.
|
1.0
|
|
|
9.0
|
|
|
8.0
|
|
|||
GFT Global Markets UK Ltd.
|
32.3
|
|
|
57.2
|
|
|
24.9
|
|
|||
GFT Global Markets Asia Pte., Ltd.
|
1.6
|
|
|
1.7
|
|
|
0.1
|
|
|||
Total
|
$
|
85.7
|
|
|
$
|
183.2
|
|
|
$
|
97.5
|
|
|
As of
|
|
As of
|
||
|
December 31,
|
|
December 31,
|
||
|
2013
|
|
2012
|
||
Cash and cash equivalents
|
39.9
|
|
|
36.8
|
|
Cash and cash equivalents held for customers
|
739.3
|
|
|
446.3
|
|
Short term investments
(1)
|
0.8
|
|
|
1.4
|
|
Receivable from bank and brokers
(2)
|
227.6
|
|
|
89.9
|
|
Total operating cash
|
1,007.6
|
|
|
574.4
|
|
Less: Cash and cash equivalents held for customers
|
(739.3
|
)
|
|
(446.3
|
)
|
Net operating cash
|
268.3
|
|
|
128.1
|
|
Less: Minimum regulatory requirements
|
(85.7
|
)
|
|
(45.6
|
)
|
Convertible Senior Notes
(3)
|
(80.0
|
)
|
|
—
|
|
Free cash available
(4)
|
102.6
|
|
|
82.5
|
|
Add: Available credit facility
(5)
|
—
|
|
|
17.0
|
|
Available Liquidity
|
102.6
|
|
|
99.5
|
|
(1)
|
Reflects cash that would be received upon the liquidation of short term investments. We estimate that all short term investments as of the date indicated could be liquidated within 1 to 2 business days.
|
(2)
|
Reflects cash that would be received from brokers following the close-out of all open positions. We estimate that liquidation of all open positions as of the date indicated could be completed within 1 to 2 business days.
|
(3)
|
The note payable amount reflects the aggregate principal amount of the notes outstanding, rather than solely the debt portion that is carried on our consolidated balance sheets at December 31, 2013.
|
(4)
|
Excludes current liabilities of $62.8 million and capital charges associated with open positions.
|
(5)
|
The revolving line of credit was terminated in September 2013.
|
|
Year ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Cash (used for) / provided by operating activities
|
$
|
(18,329
|
)
|
|
$
|
12,149
|
|
|
$
|
59,596
|
|
Cash used for investing activities
|
(9,807
|
)
|
|
(19,217
|
)
|
|
(7,065
|
)
|
|||
Cash provided / (used for) by financing activities
|
33,633
|
|
|
(17,983
|
)
|
|
(17,616
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(2,446
|
)
|
|
1,650
|
|
|
(2,229
|
)
|
|||
Net increase / (decrease) in cash and cash equivalents
|
$
|
3,051
|
|
|
$
|
(23,401
|
)
|
|
$
|
32,686
|
|
•
|
The volatility of our stock price;
|
•
|
The expected life of the option;
|
•
|
Risk free interest rates; and
|
•
|
Expected dividend yield.
|
•
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets;
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of management and directors of the Company; and
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance Sheets as of December 31, 2013 and 2012 (revised)
|
F-3
|
Consolidated Statements of Operations and Comprehensive Income for the Years Ended December 31, 2013, 2012 and 2011
|
F-4
|
Consolidated Statements of Shareholders' Equity for the Years Ended December 31, 2013, 2012 and 2011
|
F-5
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2013, 2012 and 2011 (revised)
|
F-6
|
Notes to Consolidated Financial Statements
|
F-8
|
Schedule I - Consolidated Financial Information of GAIN Capital Holdings, Inc.
(Parent Company Only) as of December 31, 2013 and 2012 and for each of the three
years in the period ended December 31, 2013
|
F-36
|
Exhibit
No.
|
|
Description
|
|
|
|
|
|
|
|
2.1†
|
|
Asset Purchase Agreement dated as of April 20, 2011 by and among GAIN Capital Group, LLC and Deutsche Bank AG, acting through is London Branch (Incorporated by reference to Exhibit 2.1 of the Registrant’s Form 10-Q for the quarter ended March 31, 2011, filed on May 16, 2011, No. 001-35008).
|
|
|
|
|
|
|
|
2.2
|
|
Stock Purchase Agreement, dated as of April 24, 2013, by and among GAIN Capital Holdings, Inc., Gary J. Tilkin and Global Futures & Forex, Ltd. (Incorporated by reference to Exhibit 2.1 of the Registrant’s Form 10-Q for the quarter ended March 31, 2013, filed on May 10, 2013, No 001-35008).
|
|
|
|
|
|
|
|
2.3
|
|
Amended and Restated Stock Purchase Agreement, dated as of September 24, 2013, by and among GAIN Capital Holdings, Inc., Gary J. Tilkin and Global Futures & Forex, Ltd. (Incorporated by reference to Exhibit 2.1 to the Registrant's Current Report on Form 8-K, filed on September 25, 2013, No. 001-35008).
|
|
|
|
|
|
|
|
3.1
|
|
Third Amended and Restated Certificate of Incorporation (Incorporated by reference to Exhibit 3.3 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
3.2
|
|
Certificate of Designation of Series A Participating Cumulative Preferred Stock of GAIN Capital Holdings, Inc. (Incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K, filed on April 10, 2013, No. 001-35008).
|
|
|
|
|
|
|
|
3.3
|
|
Amended and Restated By-laws (Incorporated by reference to Exhibit 3.2 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
4.1
|
|
Specimen Certificate evidencing shares of common stock (Incorporated by reference to Exhibit 4.1 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
4.2
|
|
Investor Rights Agreement, dated January 11, 2008, by and among the Company, the Investors and the Founding Stockholders, as defined therein (Incorporated by reference to Exhibit 4.2 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
4.3*
|
|
Amendment to Investor Rights Agreement, dated as of November 18, 2013, by and among the Company, the Investors named therein and the Founding Stockholder, as defined therein.
|
|
|
|
|
|
|
|
4.4
|
|
Rights Agreement, dated as of April 9, 2013, between GAIN Capital Holdings, Inc. and Broadridge Corporate Issuer Solutions, Inc., as Rights Agent (Incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K, filed on April 10, 2013, No. 001-35008).
|
|
|
|
|
|
|
|
4.5
|
|
Indenture, dated as of November 27, 2013, between GAIN Capital Holdings, Inc. and The Bank of New York Mellon (Incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K, filed on November 27, 2013, No. 001-35008).
|
|
|
|
|
|
|
|
10.1
|
|
2010 Omnibus Incentive Compensation Plan (Incorporated by reference to Exhibit 10.2 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).**
|
|
|
|
|
|
|
10.2
|
|
2011 Employee Stock Purchase Plan (Incorporated by reference to Exhibit 10.3 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).**
|
|
|
|
|
|
|
|
10.3
|
|
Nonqualified Deferred Compensation Plan (Incorporated by reference to Exhibit 10.3 of the Registrant’s Form 10-K for the year ended December 31, 2010, filed on March 30, 2011, No. 001-35008).**
|
|
|
|
|
|
|
|
10.4
|
|
Form of Incentive Stock Option Agreement (Incorporated by reference to Exhibit 10.4 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632). **
|
|
|
|
|
|
|
|
10.5
|
|
Form of Nonqualified Stock Option Agreement (Incorporated by reference to Exhibit 10.5 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632). **
|
|
|
|
|
|
|
|
10.6
|
|
Form of Restricted Stock Agreement (Incorporated by reference to Exhibit 10.6 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632). **
|
|
|
|
|
|
|
|
10.7
|
|
Form of Restricted Stock Unit Agreement (Time Vesting) (Incorporated by reference to Exhibit 10.7 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).**
|
|
|
|
|
|
|
|
10.8
|
|
Form of Restricted Stock Unit Agreement (Performance Vesting) (Incorporated by reference to Exhibit 10.8 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).**
|
|
|
|
|
|
|
|
10.9
|
|
Form of Indemnification Agreement with the Company’s Non-Employee Directors (Incorporated by reference to Exhibit 10.10 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).**
|
|
|
|
|
|
|
|
10.10
|
|
Amended and Restated 2006 Equity Compensation Plan, effective December 31, 2006 (Incorporated by reference to Exhibit 10.60 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).**
|
|
|
|
|
|
|
|
10.11
|
|
Amendment No. 2007-1 to the GAIN Capital Holdings, Inc. 2006 Equity Compensation Plan (Incorporated by reference to Exhibit 10.61 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).**
|
|
|
|
|
|
|
|
10.12
|
|
Amendment No. 2008-1 to the GAIN Capital Holdings, Inc. 2006 Equity Compensation Plan (Incorporated by reference to Exhibit 10.62 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).**
|
|
|
|
|
|
|
|
10.13
|
|
Amendment No. 2010-1 to the GAIN Capital Holdings, Inc. 2006 Equity Compensation Plan (Incorporated by reference to Exhibit 10.63 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).**
|
|
|
|
|
|
|
|
10.14
|
|
Unconditional Guaranty, dated as of March 29, 2006, by and among GAIN Holdings, LLC, Silicon Valley Bank and JPMorgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.13 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.15
|
|
Separation Agreement, dated as of January 11, 2008, by and between Mark Galant and GAIN Capital Holdings, Inc. (Incorporated by reference to Exhibit 10.23 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
10.16†
|
|
FX Prime Brokerage Master Agreement, dated as of December 6, 2006, by and between GAIN Capital Group, LLC and The Royal Bank of Scotland, plc. (Incorporated by reference to Exhibit 10.24 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.17†
|
|
FX Prime Brokerage Agreement, dated as of July 8, 2005, by and between UBS AG and GAIN Capital, Inc. (Incorporated by reference to Exhibit 10.25 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.18†
|
|
Foreign Exchange Prime Brokerage Agency Agreement, dated as of July 12, 2006, by and between GAIN Capital Group, LLC and The Royal Bank of Scotland, plc. (Incorporated by reference to Exhibit 10.26 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.19†
|
|
Foreign Exchange Prime Brokerage Agreement, dated October 18, 2005, by and between Deutsche Bank AG, London Branch and GCAM, LLC (Incorporated by reference to Exhibit 10.27 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.20
|
|
Amendment to Foreign Exchange Prime Brokerage Agreement, dated January 26, 2006, by and between Deutsche Bank AG, London Branch and GCAM, LLC (Incorporated by reference to Exhibit 10.28 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.21
|
|
Form of ISDA Master Agreement, 1992 edition (Incorporated by reference to Exhibit 10.29 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.22
|
|
Form of Introducing Broker Agreement (Incorporated by reference to Exhibit 10.30 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.23
|
|
Form of Agreement for White Label Services (Incorporated by reference to Exhibit 10.31 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.24
|
|
Lease and Lease Agreement, dated August 18, 2009, by and between S/K Bed One Associates LLC and GAIN Capital Holdings, Inc. (Incorporated by reference to Exhibit 10.37 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.25†
|
|
License Agreement, dated August 9, 2007, by and between GAIN Capital Group, LLC and MetaQuotes Software Corp. (Incorporated by reference to Exhibit 10.43 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.26†
|
|
Agreement, dated November 22, 2004, by and between esignal, a division of Interactive Data Corporation, and GAIN Capital, Inc. (Incorporated by reference to Exhibit 10.44 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.27
|
|
Form of ISDA Master Agreement, 2002 edition (Incorporated by reference to Exhibit 10.49 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.28
|
|
Executive Employment Agreement, dated April 14, 2012, by and between GAIN Capital Holdings, Inc. and Glenn Stevens (Incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, filed on May 10, 2012, No. 001-35008).**
|
|
|
|
|
|
|
10.29
|
|
Executive Employment Agreement, dated April 14, 2012, by and between GAIN Capital Holdings, Inc. and Timothy O’ Sullivan (Incorporated by reference to Exhibit 10.2 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, filed on May 10, 2012, No. 001-35008).**
|
|
|
|
|
|
|
|
10.30
|
|
Executive Employment Agreement, dated April 14, 2012, by and between GAIN Capital Holdings, Inc. and Jeffrey A. Scott (Incorporated by reference to Exhibit 10.3 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, filed on May 10, 2012, No. 001-35008).**
|
|
|
|
|
|
|
|
10.31
|
|
Executive Employment Agreement, dated April 14, 2012, by and between GAIN Capital Holdings, Inc. and Diego Rotsztain (Incorporated by reference to Exhibit 10.4 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, filed on May 10, 2012, No. 001-35008).**
|
|
|
|
|
|
|
|
10.32
|
|
Executive Employment Agreement, dated as of November 23, 2010, by and between GAIN Capital Holdings, Inc. and Samantha Roady (Incorporated by reference to Exhibit 10.56 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).**
|
|
|
|
|
|
|
|
10.33*
|
|
Employment Agreement, dated as of September 9, 2013, by and between GAIN Capital Holdings, Inc. and Jason Emerson. **
|
|
|
|
|
|
|
|
10.34
|
|
Asset Purchase Agreement, dated as of October 5, 2010, by and among GAIN Capital Group, LLC, GAIN Capital-Forex.com U.K., and GAIN Capital Forex.com Japan, Co. Ltd., and Capital Market Services, LLC, Capital Market Services UK Ltd., Capital Market Services International - BM, Ltd., and CMS Japan K.K. (Incorporated by reference to Exhibit 10.64 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.35
|
|
Amendment No. 1 to Asset Purchase Agreement, dated as of November 23, 2010, by and among GAIN Capital Group, LLC, GAIN Capital-Forex.com U.K., and GAIN Capital Forex.com Japan, Co. Ltd., and Capital Market Services, LLC, Capital Market Services UK Ltd., Capital Market Services International - BM, Ltd., and CMS Japan K.K. (Incorporated by reference to Exhibit 10.65 of the Registrant’s Registration Statement on Form S-1, as amended, No. 333-161632).
|
|
|
|
|
|
|
|
10.36
|
|
Amended and Restated Loan and Security Agreement, dated as of September 16, 2011, by and among the Company, Silicon Valley Bank, as collateral agent for the lenders listed on Schedule 1.1 of the Agreement and as administrative agent for the Lenders, including, without limitation, SVB and JPMorgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.1 of the Registrant’s 8-K report filed on September 22, 2011, No. 001-35008).
|
|
|
|
|
|
|
|
10.37
|
|
First Amendment to Unconditional Guaranty, dated as of September 16, 2011, by and among Gain Holdings, LLC, the Company, Silicon Valley Bank and JPMorgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.3 of the Registrant’s 8-K report filed on September 22, 2011, No. 001-35008).
|
|
|
|
|
|
|
|
10.38
|
|
Stock Purchase Agreement between optionsXpress Holdings, Inc. and GAIN Capital Group, LLC dated as of June 27, 2012 (Incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, filed August 9, 2012, No. 001-35008).
|
|
|
|
|
|
|
|
10.39
|
|
Stockholders’ Agreement, dated as of April 24, 2013, by and among GAIN Capital Holdings, Inc. and Gary J. Tilkin (Incorporated by reference to Exhibit 10.1 of the Registrant’s Form 10-Q for the quarter ended March 31, 2013, filed on May 10, 2013, No 001-35008).
|
|
|
|
|
|
|
**
|
Compensation related contract.
|
†
|
Confidential treatment requested. Confidential materials omitted and filed separately with the Securities and Exchange Commission.
|
+
|
XBRL (Extensible Business Reporting Language) information is furnished and not filed, and is not a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
|
GAIN CAPITAL HOLDINGS, INC.
|
|
By:
|
/s/ Glenn H. Stevens
|
|
Glenn H. Stevens
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Glenn H. Stevens
|
|
President, Chief Executive Officer and Director (Principal Executive Officer)
|
|
March 17, 2014
|
Glenn H. Stevens
|
|
|
|
|
|
|
|
|
|
/s/ Jason Emerson
|
|
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
|
|
March 17, 2014
|
Jason Emerson
|
|
|
|
|
|
|
|
|
|
/s/ Peter Quick
|
|
Chairman of the Board of Directors
|
|
March 17, 2014
|
Peter Quick
|
|
|
|
|
|
|
|
|
|
/s/ Joseph A. Schenk
|
|
Director
|
|
March 17, 2014
|
Joseph A. Schenk
|
|
|
|
|
|
|
|
|
|
/s/ Christopher W. Calhoun
|
|
Director
|
|
March 17, 2014
|
Christopher W. Calhoun
|
|
|
|
|
|
|
|
|
|
/s/ Thomas Bevilacqua
|
|
Director
|
|
March 17, 2014
|
Thomas Bevilacqua
|
|
|
|
|
|
|
|
|
|
/s/ Christopher S. Sugden
|
|
Director
|
|
March 17, 2014
|
Christopher S. Sugden
|
|
|
|
|
|
As of December 31, 2013
|
|
As of December 31, 2012
|
||
ASSETS:
|
|
|
|
||
Cash and cash equivalents
|
39,871
|
|
|
36,820
|
|
Cash and securities held for customers
|
739,318
|
|
|
446,311
|
|
Short term investments, at fair value
|
788
|
|
|
1,437
|
|
Receivables from banks and brokers, net, ($9,784) and $978, respectively, at fair value
|
227,630
|
|
|
89,916
|
|
Property and equipment, net of accumulated depreciation
|
17,118
|
|
|
11,023
|
|
Prepaid assets
|
8,790
|
|
|
7,704
|
|
Goodwill
|
14,183
|
|
|
9,030
|
|
Intangible assets, net
|
34,828
|
|
|
9,868
|
|
Other assets, net
|
28,609
|
|
|
17,153
|
|
Total assets
|
1,111,135
|
|
|
629,262
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY:
|
|
|
|
||
Liabilities
|
|
|
|
||
Payables to customers, brokers, dealers, FCMs and other regulated entities
|
739,318
|
|
|
446,311
|
|
Accrued compensation and benefits
|
12,985
|
|
|
6,055
|
|
Accrued expenses and other liabilities
|
55,268
|
|
|
12,585
|
|
Income tax payable
|
3,803
|
|
|
1,481
|
|
Convertible senior notes
|
65,360
|
|
|
—
|
|
Total liabilities
|
876,734
|
|
|
466,432
|
|
Commitments and contingent liabilities (see Note 11)
|
|
|
|
||
GAIN Capital Holdings, Inc. shareholders’ equity
|
|
|
|
||
Common stock ($0.00001 par value; 60 million shares authorized; 41,921,609 shares issued and 39,425,434 shares outstanding as of December 31, 2013; 36,486,036 shares issued and 34,924,095 shares outstanding as of December 31, 2012)
|
—
|
|
|
—
|
|
Accumulated other comprehensive income
|
2,576
|
|
|
1,249
|
|
Additional paid-in capital
|
138,691
|
|
|
85,089
|
|
Treasury stock, at cost (2,496,175 shares at December 31, 2013 and 1,561,941 at December 31, 2012, respectively)
|
(15,469
|
)
|
|
(8,280
|
)
|
Retained earnings
|
108,603
|
|
|
84,772
|
|
Total GAIN Capital Holdings, Inc. shareholders’ equity
|
234,401
|
|
|
162,830
|
|
Total liabilities and shareholders’ equity
|
1,111,135
|
|
|
629,262
|
|
|
For the Fiscal Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
REVENUE:
|
|
|
|
|
|
||||||
Trading revenue
|
$
|
205,133
|
|
|
$
|
127,520
|
|
|
$
|
175,854
|
|
Commission revenue
|
60,727
|
|
|
21,373
|
|
|
4,691
|
|
|||
Other revenue
|
1,099
|
|
|
2,331
|
|
|
1,790
|
|
|||
Total non-interest revenue
|
266,959
|
|
|
151,224
|
|
|
182,335
|
|
|||
Interest revenue
|
821
|
|
|
627
|
|
|
544
|
|
|||
Interest expense
|
1,389
|
|
|
491
|
|
|
1,414
|
|
|||
Total net interest (expense) / revenue
|
(568
|
)
|
|
136
|
|
|
(870
|
)
|
|||
Net revenue
|
266,391
|
|
|
151,360
|
|
|
181,465
|
|
|||
EXPENSES:
|
|
|
|
|
|
||||||
Employee compensation and benefits
|
67,134
|
|
|
47,469
|
|
|
46,362
|
|
|||
Selling and marketing
|
22,337
|
|
|
26,969
|
|
|
36,195
|
|
|||
Trading expenses and commissions
|
77,718
|
|
|
38,047
|
|
|
33,040
|
|
|||
General and administrative
|
26,813
|
|
|
19,865
|
|
|
21,842
|
|
|||
Depreciation and amortization
|
7,768
|
|
|
4,921
|
|
|
3,898
|
|
|||
Purchased intangible amortization
|
2,906
|
|
|
4,134
|
|
|
8,893
|
|
|||
Communications and technology
|
11,315
|
|
|
7,736
|
|
|
7,139
|
|
|||
Bad debt provision
|
1,501
|
|
|
358
|
|
|
852
|
|
|||
Acquisition expense
|
1,824
|
|
|
85
|
|
|
—
|
|
|||
Restructuring
|
1,570
|
|
|
634
|
|
|
—
|
|
|||
Integration
|
1,950
|
|
|
—
|
|
|
—
|
|
|||
Impairment of investment
|
450
|
|
|
—
|
|
|
—
|
|
|||
Total Operating Expense
|
223,286
|
|
|
150,218
|
|
|
158,221
|
|
|||
OPERATING PROFIT
|
43,105
|
|
|
1,142
|
|
|
23,244
|
|
|||
Gain on extinguishment of debt
|
2,000
|
|
|
—
|
|
|
—
|
|
|||
INCOME BEFORE INCOME TAX EXPENSE
|
45,105
|
|
|
1,142
|
|
|
23,244
|
|
|||
Income tax expense / (benefit)
|
13,794
|
|
|
(1,479
|
)
|
|
7,546
|
|
|||
NET INCOME APPLICABLE TO GAIN CAPITAL HOLDINGS, INC.
|
31,311
|
|
|
2,621
|
|
|
15,698
|
|
|||
Other comprehensive income, net of tax:
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
1,327
|
|
|
933
|
|
|
(112
|
)
|
|||
NET COMPREHENSIVE INCOME APPLICABLE TO GAIN CAPITAL HOLDINGS, INC.
|
$
|
32,638
|
|
|
$
|
3,554
|
|
|
$
|
15,586
|
|
Earnings per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.85
|
|
|
$
|
0.08
|
|
|
$
|
0.46
|
|
Diluted
|
$
|
0.79
|
|
|
$
|
0.07
|
|
|
$
|
0.40
|
|
Weighted average common shares outstanding used in computing earnings per common share:
|
|
|
|
|
|
||||||
Basic
|
36,551,246
|
|
|
34,940,800
|
|
|
34,286,840
|
|
|||
Diluted
|
39,632,878
|
|
|
37,880,208
|
|
|
38,981,792
|
|
Exercise of options
|
1,032,096
|
|
|
—
|
|
|
|
|
1,969
|
|
|
—
|
|
|
—
|
|
|
1,969
|
|
|||||||
Conversion of restricted stock into common stock
|
276,387
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Shares issued under employee stock purchase plan
|
45,188
|
|
|
—
|
|
|
—
|
|
|
216
|
|
|
—
|
|
|
—
|
|
|
216
|
|
||||||
Repurchase of shares
|
(711,820
|
)
|
|
—
|
|
|
(3,263
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,263
|
)
|
||||||
Stock compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
3,325
|
|
|
—
|
|
|
—
|
|
|
3,325
|
|
||||||
Tax benefit of stock options exercises
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
28
|
|
||||||
Dividend declared ($0.20 dividend per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,972
|
)
|
|
—
|
|
|
(6,972
|
)
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
933
|
|
|
933
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,621
|
|
|
—
|
|
|
2,621
|
|
||||||
BALANCE—January 1, 2013
|
34,924,095
|
|
|
$
|
—
|
|
|
$
|
(8,280
|
)
|
|
$
|
85,089
|
|
|
$
|
84,772
|
|
|
$
|
1,249
|
|
|
$
|
162,830
|
|
Exercise of options
|
1,394,975
|
|
|
—
|
|
|
—
|
|
|
2,539
|
|
|
—
|
|
|
—
|
|
|
2,539
|
|
||||||
Issuance of common stock
|
3,625,721
|
|
|
—
|
|
|
—
|
|
|
34,771
|
|
|
—
|
|
|
—
|
|
|
34,771
|
|
||||||
Conversion of restricted stock into common stock
|
339,686
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Shares issued under employee stock purchase plan
|
75,191
|
|
|
—
|
|
|
—
|
|
|
302
|
|
|
—
|
|
|
—
|
|
|
302
|
|
||||||
Repurchase of shares
|
(934,234
|
)
|
|
—
|
|
|
(7,189
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,189
|
)
|
||||||
Stock compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
2,896
|
|
|
—
|
|
|
—
|
|
|
2,896
|
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,327
|
|
|
1,327
|
|
||||||
Tax benefit of stock options exercises
|
—
|
|
|
—
|
|
|
—
|
|
|
1,026
|
|
|
—
|
|
|
—
|
|
|
1,026
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(79
|
)
|
|
(154
|
)
|
|
—
|
|
|
(233
|
)
|
||||||
Convertible note issuance
|
—
|
|
|
—
|
|
|
—
|
|
|
12,147
|
|
|
—
|
|
|
—
|
|
|
12,147
|
|
||||||
Dividend declared ($0.20 dividend per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,326
|
)
|
|
—
|
|
|
(7,326
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,311
|
|
|
—
|
|
|
31,311
|
|
||||||
BALANCE—December 31, 2013
|
39,425,434
|
|
|
$
|
—
|
|
|
$
|
(15,469
|
)
|
|
$
|
138,691
|
|
|
$
|
108,603
|
|
|
$
|
2,576
|
|
|
$
|
234,401
|
|
|
For the Fiscal Years Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income
|
$
|
31,311
|
|
|
$
|
2,621
|
|
|
$
|
15,698
|
|
Adjustments to reconcile net income to cash provided by operating activities
|
|
|
|
|
|
||||||
Loss/(gain) on foreign currency exchange rates
|
3,641
|
|
|
1,315
|
|
|
(145
|
)
|
|||
Depreciation and amortization
|
11,837
|
|
|
9,055
|
|
|
12,791
|
|
|||
Deferred taxes
|
39
|
|
|
(1,013
|
)
|
|
(2,107
|
)
|
|||
Interest income
|
—
|
|
|
—
|
|
|
60
|
|
|||
Amortization of deferred financing costs
|
—
|
|
|
51
|
|
|
87
|
|
|||
Bad debt provision
|
1,501
|
|
|
358
|
|
|
852
|
|
|||
Impairment of cost method investment
|
450
|
|
|
—
|
|
|
—
|
|
|||
Convertible note discount amortization
|
175
|
|
|
—
|
|
|
—
|
|
|||
Loss on disposal of fixed assets
|
—
|
|
|
33
|
|
|
3
|
|
|||
Gain on extinguishment of debt
|
(2,000
|
)
|
|
—
|
|
|
—
|
|
|||
Stock compensation expense
|
2,896
|
|
|
3,325
|
|
|
4,018
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Cash and securities held for customers
|
(74,608
|
)
|
|
(31,285
|
)
|
|
(53,617
|
)
|
|||
Trading securities
|
—
|
|
|
—
|
|
|
19,993
|
|
|||
Receivables from banks and brokers
|
(78,336
|
)
|
|
(5,333
|
)
|
|
12,734
|
|
|||
Prepaid assets
|
318
|
|
|
2,372
|
|
|
39
|
|
|||
Other assets
|
(383
|
)
|
|
1,065
|
|
|
(5,428
|
)
|
|||
Payables to customers, brokers, dealers, FCMs and other regulated entities
|
74,608
|
|
|
31,285
|
|
|
52,765
|
|
|||
Accrued compensation and benefits
|
7,118
|
|
|
1,047
|
|
|
(151
|
)
|
|||
Accrued expenses and other liabilities
|
973
|
|
|
(1,444
|
)
|
|
1,976
|
|
|||
Income tax payable
|
2,131
|
|
|
(1,303
|
)
|
|
28
|
|
|||
Cash (used for) / provided by operating activities
|
(18,329
|
)
|
|
12,149
|
|
|
59,596
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
(6,187
|
)
|
|
(8,358
|
)
|
|
(4,018
|
)
|
|||
Purchases of treasury bills
|
—
|
|
|
(1,355
|
)
|
|
—
|
|
|||
Sale of treasury bills
|
599
|
|
|
—
|
|
|
—
|
|
|||
Purchase of intangible assets
|
—
|
|
|
—
|
|
|
(2,547
|
)
|
|||
Purchase of cost method investment
|
—
|
|
|
—
|
|
|
(500
|
)
|
|||
Acquisition and funding of OEC, net of cash acquired
|
—
|
|
|
(9,504
|
)
|
|
—
|
|
|||
Acquisition and funding of GFT, net of cash acquired
|
(4,219
|
)
|
|
—
|
|
|
—
|
|
|||
Cash used for investing activities
|
(9,807
|
)
|
|
(19,217
|
)
|
|
(7,065
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Contractual payments for acquired assets
|
(2,419
|
)
|
|
(2,030
|
)
|
|
(3,050
|
)
|
|||
Proceeds from issuance of convertible senior note, net
|
77,900
|
|
|
—
|
|
|
—
|
|
|||
Principal payment on notes payable
|
(31,200
|
)
|
|
(7,875
|
)
|
|
(10,500
|
)
|
|||
Proceeds from exercise of stock options
|
2,539
|
|
|
1,969
|
|
|
853
|
|
|||
Proceeds from exercise of warrants
|
—
|
|
|
—
|
|
|
1,270
|
|
|||
Proceeds from employee stock purchase plan
|
302
|
|
|
216
|
|
|
165
|
|
|||
Purchase of treasury stock
|
(7,189
|
)
|
|
(3,263
|
)
|
|
(5,017
|
)
|
|||
Tax benefit from employee stock option exercises
|
1,026
|
|
|
(28
|
)
|
|
421
|
|
|||
Dividend payment
|
(7,326
|
)
|
|
(6,972
|
)
|
|
(1,758
|
)
|
|||
Cash provided by / (used for) financing activities
|
33,633
|
|
|
(17,983
|
)
|
|
(17,616
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(2,446
|
)
|
|
1,650
|
|
|
(2,229
|
)
|
|||
INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS
|
3,051
|
|
|
(23,401
|
)
|
|
32,686
|
|
|||
CASH AND CASH EQUIVALENTS—Beginning of period
|
36,820
|
|
|
60,221
|
|
|
27,535
|
|
|||
CASH AND CASH EQUIVALENTS—End of period
|
$
|
39,871
|
|
|
$
|
36,820
|
|
|
$
|
60,221
|
|
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION:
|
|
|
|
|
|
||||||
Cash (paid) / received during the year for:
|
|
|
|
|
|
||||||
Interest
|
$
|
(655
|
)
|
|
$
|
(230
|
)
|
|
$
|
(1,037
|
)
|
Taxes
|
$
|
(8,376
|
)
|
|
$
|
260
|
|
|
$
|
(14,090
|
)
|
Non-cash investing activities:
|
|
|
|
|
|
||||||
Purchase of fixed assets in accrued expense and other liabilities
|
—
|
|
|
95
|
|
|
121
|
|
|||
Non-cash financing for the GFT acquisition:
|
|
|
|
|
|
||||||
Senior loan issued by seller
|
$
|
33,200
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Common stock issued as consideration for GFT
|
$
|
34,771
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
As of December 31,
|
|||
|
Restated 2012
|
As reported 2012
|
||
Other assets, net
|
17,153
|
|
17,804
|
|
Income tax payable
|
1,481
|
|
1,275
|
|
Retained earnings
|
84,772
|
|
85,629
|
|
•
|
Valuation of assets and liabilities requiring fair value estimates;
|
•
|
The allowance for doubtful accounts;
|
•
|
The realization of deferred taxes;
|
•
|
The carrying amount of goodwill and other intangible assets;
|
•
|
The amortization period of intangible assets and other long-lived assets with finite lives;
|
•
|
Incentive based compensation accruals and valuation of share-based payment arrangements;
|
•
|
Transfer pricing; and
|
•
|
Other matters that affect the reported amounts and disclosure of contingencies in the consolidated financial statements.
|
Balance as of January 1, 2011
|
$
|
(74
|
)
|
Addition to provision
|
(852
|
)
|
|
Amounts written off
|
871
|
|
|
Balance as of December 31, 2011
|
(55
|
)
|
|
Addition to provision
|
(358
|
)
|
|
Amounts written off
|
265
|
|
|
Balance as of December 31, 2012
|
(148
|
)
|
|
Addition to provision
|
(1,501
|
)
|
|
Amounts written off
|
491
|
|
|
Balance as of December 31, 2013
|
$
|
(1,158
|
)
|
|
Fair Value Measurements on a Recurring Basis
as of December 31, 2013 |
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Financial Assets/(Liabilities):
|
|
|
|
|
|
|
|
||||||||
Money market accounts
|
$
|
21,019
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,019
|
|
Open contracts and other positions
|
—
|
|
|
(9,904
|
)
|
|
—
|
|
|
(9,904
|
)
|
||||
CIBC treasury bills
|
706
|
|
|
—
|
|
|
—
|
|
|
706
|
|
||||
Certificates of deposit
|
82
|
|
|
—
|
|
|
—
|
|
|
82
|
|
||||
Investment in gold
|
120
|
|
|
—
|
|
|
—
|
|
|
120
|
|
||||
Customer and broker open contracts and other positions
|
—
|
|
|
129,224
|
|
|
—
|
|
|
129,224
|
|
||||
Total
|
$
|
21,927
|
|
|
$
|
119,320
|
|
|
$
|
—
|
|
|
$
|
141,247
|
|
|
Fair Value Measurements on a Recurring Basis
as of December 31, 2012
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Financial Assets:
|
|
|
|
|
|
|
|
||||||||
Money market accounts
|
$
|
12,064
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,064
|
|
Open contracts and other positions
|
810
|
|
|
—
|
|
|
—
|
|
|
810
|
|
||||
U.S. treasury bills
|
29,998
|
|
|
—
|
|
|
—
|
|
|
29,998
|
|
||||
CIBC treasury bills
|
1,355
|
|
|
—
|
|
|
—
|
|
|
1,355
|
|
||||
Certificates of deposit
|
82
|
|
|
—
|
|
|
—
|
|
|
82
|
|
||||
Investment in gold
|
168
|
|
|
—
|
|
|
—
|
|
|
168
|
|
||||
Customer and broker open contracts and other positions
|
74,943
|
|
|
—
|
|
|
—
|
|
|
74,943
|
|
||||
Total
|
$
|
119,420
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
119,420
|
|
|
As of December 31, 2013
|
|
Fair Value Measurements using:
|
|||||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|||||||||
Financial Assets:
|
|
|
|
|
|
|
|
|
|
|||||||||
Receivables from banks and brokers
|
$
|
237,414
|
|
|
$
|
237,414
|
|
|
—
|
|
|
$
|
237,414
|
|
|
—
|
|
|
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
|||||||||
Payables to customers, brokers, dealers, FCMs and other regulated entities
|
868,542
|
|
|
868,542
|
|
|
—
|
|
|
868,542
|
|
|
—
|
|
||||
Convertible senior notes
|
$
|
65,360
|
|
|
$
|
64,372
|
|
|
|
|
$
|
64,372
|
|
|
|
|||
Accrued expense and other liabilities
|
$
|
20,000
|
|
|
$
|
20,000
|
|
|
|
|
$
|
20,000
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||||||||
|
As of December 31, 2012
|
|
Fair Value Measurements using:
|
|||||||||||||||
|
Carrying Value
|
|
Fair Value
|
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|||||||||
Financial Assets:
|
|
|
|
|
|
|
|
|
|
|||||||||
Receivables from banks and brokers
|
$
|
88,938
|
|
|
$
|
88,938
|
|
|
—
|
|
|
$
|
88,938
|
|
|
—
|
|
|
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
|||||||||
Payables to customers, brokers, dealers, FCMs and other regulated entities
|
$
|
371,368
|
|
|
$
|
371,368
|
|
|
—
|
|
|
$
|
371,368
|
|
|
—
|
|
|
Payable to dbFX
|
$
|
2,386
|
|
|
$
|
2,392
|
|
|
—
|
|
|
—
|
|
|
$
|
2,392
|
|
|
December 31, 2013
|
|
December 31, 2012
|
||||
Required collateral
|
$
|
148,731
|
|
|
$
|
47,595
|
|
Excess from futures broker - Restricted
|
4,575
|
|
|
—
|
|
||
Cash in excess of required collateral
|
84,108
|
|
|
41,343
|
|
||
Open positions
|
(9,904
|
)
|
|
810
|
|
||
Investment in spot gold
|
120
|
|
|
168
|
|
||
|
$
|
227,630
|
|
|
$
|
89,916
|
|
|
December 31, 2013
|
||||||||||
|
Gross amounts of
assets for
derivative open
positions at fair
value
|
|
Gross amount of
liabilities for
derivative open
positions at fair
value
|
|
Net amounts of
assets/liabilities
for derivative
open positions at
fair value
|
||||||
Derivative Instruments:
|
|
|
|
|
|
||||||
Foreign currency exchange contracts
|
$
|
152,326
|
|
|
$
|
47,631
|
|
|
$
|
104,695
|
|
CFD contracts
|
50,169
|
|
|
45,735
|
|
|
4,434
|
|
|||
Metals contracts
|
16,485
|
|
|
6,294
|
|
|
10,190
|
|
|||
Total
|
$
|
218,980
|
|
|
$
|
99,660
|
|
|
$
|
119,320
|
|
|
|
|
|
|
|
||||||
|
December 31, 2013
|
||||||||||
|
Cash Collateral
|
|
Net amounts of
assets/liabilities
for derivative
open positions at
fair value
|
|
Net amounts of
assets/liabilities
presented in the
balance sheet
|
||||||
Derivative Assets/Liabilities:
|
|
|
|
|
|
||||||
Receivables from bank and brokers
|
$
|
237,414
|
|
|
$
|
(9,904
|
)
|
|
$
|
227,630
|
|
Payables to customers, brokers, dealers, FCMs and other regulated entities
|
$
|
868,542
|
|
|
$
|
129,224
|
|
|
$
|
739,318
|
|
|
December 31, 2013
|
||||
|
Total contracts in long positions
|
|
Total contracts in short positions
|
||
Derivative Instruments:
|
|
|
|
||
Foreign currency exchange contracts
|
3,031,742
|
|
|
4,000,937
|
|
CFD contracts
|
514,058
|
|
|
19,201
|
|
Metals contracts
|
1,069
|
|
|
680
|
|
Total
|
3,546,869
|
|
|
4,020,818
|
|
Derivative Instruments:
|
|
||
Foreign currency exchange contracts
|
$
|
130,668
|
|
CFD contracts
|
21,162
|
|
|
Metals contracts
|
53,303
|
|
|
Total
|
$
|
205,133
|
|
|
December 31, 2013
|
|
December 31, 2012
|
||||
Software
|
$
|
25,913
|
|
|
$
|
19,757
|
|
Computer equipment
|
6,649
|
|
|
5,248
|
|
||
Leasehold improvements
|
6,560
|
|
|
1,863
|
|
||
Telephone equipment
|
714
|
|
|
725
|
|
||
Office equipment
|
1,994
|
|
|
1,471
|
|
||
Furniture and fixtures
|
1,108
|
|
|
241
|
|
||
Web site development costs
|
626
|
|
|
654
|
|
||
|
43,564
|
|
|
29,959
|
|
||
Less: Accumulated depreciation and amortization
|
(26,446
|
)
|
|
(18,936
|
)
|
||
Property and equipment, net
|
$
|
17,118
|
|
|
$
|
11,023
|
|
|
December 31, 2013
|
|
December 31, 2012
|
||||||||||||
|
Cost
|
|
Accumulated
Amortization
|
|
Cost
|
|
Accumulated
Amortization
|
||||||||
Customer list
|
$
|
21,556
|
|
|
$
|
(13,594
|
)
|
|
$
|
19,356
|
|
|
$
|
(12,138
|
)
|
Technology
|
26,930
|
|
|
(910
|
)
|
|
1,560
|
|
|
(37
|
)
|
||||
Trademark
|
650
|
|
|
(173
|
)
|
|
430
|
|
|
(14
|
)
|
||||
Non-compete agreement
|
1,859
|
|
|
(1,852
|
)
|
|
1,859
|
|
|
(1,510
|
)
|
||||
|
$
|
50,995
|
|
|
$
|
(16,529
|
)
|
|
$
|
23,205
|
|
|
$
|
(13,699
|
)
|
Balance at January 1, 2011
|
$
|
9,089
|
|
Purchase of dbFX Customer assets and non-compete
|
9,701
|
|
|
Amortization and foreign currency transaction gains/losses
|
(8,019
|
)
|
|
Balance at December 31, 2011
|
$
|
10,771
|
|
Customer list acquired in acquisition of OEC
|
1,580
|
|
|
Trademark acquired
|
430
|
|
|
Technology acquired
|
1,560
|
|
|
Amortization and foreign currency transaction gains/losses
|
(4,473
|
)
|
|
Balance at December 31, 2012
|
$
|
9,868
|
|
Technology acquired
|
25,300
|
|
|
Customer list acquired
|
3,150
|
|
|
Finalization in fair value of OEC intangibles
(1)
|
(660
|
)
|
|
Amortization and foreign currency transaction gains/losses
|
(2,830
|
)
|
|
Balance at December 31, 2013
|
34,828
|
|
|
December 31, 2013
|
|
December 31, 2012
|
||||
Vendor and security deposits
|
$
|
3,344
|
|
|
$
|
3,647
|
|
Current tax receivable
|
4,547
|
|
|
4,898
|
|
||
Deferred tax assets
|
4,922
|
|
|
5,619
|
|
||
Investment in Kapitall, Inc.
|
50
|
|
|
500
|
|
||
Indemnification asset
|
8,596
|
|
|
—
|
|
||
GTX Trade Receivables
|
4,704
|
|
|
1,335
|
|
||
Miscellaneous receivables, net
|
2,446
|
|
|
1,154
|
|
||
|
$
|
28,609
|
|
|
$
|
17,153
|
|
|
|
||
Cash
|
$
|
40,000
|
|
Payment for excess cash adjustment
|
2,160
|
|
|
Loan payable
|
33,200
|
|
|
Common Stock issued
|
34,771
|
|
|
Total purchase price
|
$
|
110,131
|
|
|
|
||
Cash and cash equivalents acquired
|
$
|
15,781
|
|
Cash and cash equivalents held for customers acquired
|
228,419
|
|
|
Receivable from brokers
|
61,028
|
|
|
Property and equipment
|
7,515
|
|
|
Other current assets
|
15,002
|
|
|
Total tangible assets
|
327,745
|
|
|
Total liabilities assumed
|
250,833
|
|
|
Net assets
|
76,912
|
|
|
Consideration less net assets
|
33,219
|
|
|
Identifiable intangible assets:
|
|
||
Software
|
25,300
|
|
|
Customer relationships
|
3,150
|
|
|
Intangible assets, net
|
28,450
|
|
|
Goodwill
|
4,769
|
|
Cash paid
|
$
|
12,000
|
|
Working capital adjustment
|
2,691
|
|
|
Total purchase price
|
$
|
14,691
|
|
Cash and cash equivalents acquired
|
$
|
5,187
|
|
Cash and securities held for customers acquired
|
109,042
|
|
|
Receivables from brokers acquired
|
815
|
|
|
Other assets acquired
|
98
|
|
|
Total tangible assets acquired
|
$
|
115,142
|
|
Total liabilities assumed
|
(109,960
|
)
|
|
Identifiable intangible assets:
|
|
||
Trademark
|
650
|
|
|
Technology
|
1,630
|
|
|
Customer relationships
|
630
|
|
|
Goodwill
|
6,599
|
|
|
For the Twelve Months Ended December 31,
|
||||||
|
2013
|
|
2012
|
||||
REVENUE:
|
$
|
355,489
|
|
|
$
|
256,114
|
|
Total non-interest revenue
|
$
|
355,489
|
|
|
$
|
256,114
|
|
Interest revenue
|
927
|
|
|
1,118
|
|
||
Interest expense
|
1,865
|
|
|
993
|
|
||
Total net interest (expense) / revenue
|
(938
|
)
|
|
125
|
|
||
Net revenue
|
354,551
|
|
|
256,239
|
|
||
EXPENSES:
|
|
|
|
|
|
||
Other expense items
(1)
|
299,658
|
|
|
269,704
|
|
||
Depreciation and amortization
|
11,012
|
|
|
8,354
|
|
||
Purchased intangible amortization
|
5,157
|
|
|
7,488
|
|
||
Acquisition expense
|
1,824
|
|
|
85
|
|
||
Restructuring
|
1,570
|
|
|
634
|
|
||
Integration
|
1,950
|
|
|
—
|
|
||
Total
|
321,172
|
|
|
286,263
|
|
||
INCOME / (LOSS) BEFORE INCOME TAX EXPENSE
|
33,379
|
|
|
(30,024
|
)
|
||
Income tax expense / (benefit)
|
12,517
|
|
|
(11,259
|
)
|
||
Net income / (loss)
|
$
|
20,862
|
|
|
$
|
(18,765
|
)
|
|
For the Twelve Months Ended December 31,
|
|
|
2013
|
|
Restructuring liability as of January 1, 2013
|
—
|
|
2013 restructuring expenses
|
1,570
|
|
Payments made in 2013
|
986
|
|
Liability as of December 31, 2013
|
584
|
|
•
|
During any calendar quarter commencing after the calendar quarter ending on March 31, 2014 (and only during such quarter), the last reported sale price of the Company’s common stock for each of at least
20
of the preceding
30
trading days, ending on and including the last trading day of the quarter exceeds
130%
of the conversion price. These days need not be consecutive;
|
•
|
During the
five
consecutive business day period immediately after any
five
consecutive trading day period, if the aggregate share cap does not apply, or
ten
consecutive trading day period, if the aggregate share cap does apply (such
five
or
ten
consecutive trading day period, as applicable, being referred to as the “measurement period”), in which the trading price (as defined in the offering memorandum) per
$1,000
principal amount of the notes, as determined following a request by a holder of the notes in the manner described in the offering memorandum, for each trading day of the measurement period was less than
98%
of the product of the last reported sale price of our common stock and the conversion rate on such trading day;
|
•
|
Upon the occurrence of specified corporate events (as described in the offering memorandum);
|
•
|
If we have called the notes for redemption (as described in the offering memorandum);
|
|
December 31,
|
||
|
2013
|
||
Liability component - principal
|
$
|
80,000
|
|
Deferred bond discount
|
(14,640
|
)
|
|
Liability component - net carrying value
|
$
|
65,360
|
|
|
|
||
Additional paid in capital
|
$
|
12,572
|
|
Discount attributable to equity
|
(425
|
)
|
|
Equity component
|
$
|
12,147
|
|
|
Twelve Months Ended
|
||
|
December 31,
|
||
|
2013
|
||
Interest expense - stated coupon rate
|
$
|
275
|
|
Interest expense - amortization of deferred bond discount and costs
|
213
|
|
|
Total interest expense - convertible note
|
$
|
488
|
|
|
|
Options Outstanding
|
|
|
|||||||||
|
|
|
|
|
|
Weighted
|
|
|
|||||
|
|
|
|
Weighted
|
|
Average
|
|
|
|||||
|
|
Number of
|
|
Average
|
|
Remaining
|
|
Aggregate
|
|||||
|
|
Options
|
|
Exercise Price
|
|
Life (Years)
|
|
Intrinsic Value
|
|||||
Outstanding January 1, 2013
|
|
3,588,900
|
|
|
$
|
2.32
|
|
|
1.09
|
|
|
||
Granted
|
|
496,000
|
|
|
$
|
5.30
|
|
|
6.17
|
|
|
||
Exercised
|
|
(1,394,977
|
)
|
|
$
|
1.83
|
|
|
1.99
|
|
|
||
Forfeited
|
|
(66,798
|
)
|
|
$
|
4.85
|
|
|
7.84
|
|
|
||
Outstanding December 31, 2013
|
|
2,623,125
|
|
|
$
|
4.10
|
|
|
4.60
|
|
9,111,804
|
|
|
Vested and expected to vest options
|
|
2,554,173
|
|
|
$
|
4.07
|
|
|
4.18
|
|
8,929,214
|
|
|
Exercisable, December 31, 2013
|
|
1,614,240
|
|
|
$
|
3.51
|
|
|
3.92
|
|
6,535,178
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fair market value of common stock at exercise date
|
|
$
|
7,279,641
|
|
|
|
|
|
|
|
|||
Cost to exercise
|
|
2,538,979
|
|
|
|
|
|
|
|
||||
Net value of Stock options exercised
|
|
$
|
4,740,662
|
|
|
|
|
|
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
|
|
|
|
|
|
Weighted
|
|
|
|
|
||||||
|
|
|
|
|
|
Average
|
|
|
|
|
||||||
|
|
|
|
Weighted
|
|
Remaining
|
|
Number of
|
|
Weighted
|
||||||
|
|
Number
|
|
Average
|
|
Contractual
|
|
Options
|
|
Average
|
||||||
Exercise Price
|
|
Outstanding
|
|
Exercise Price
|
|
Life (Years)
|
|
Exercisable
|
|
Exercise Price
|
||||||
$1.11
|
|
11,660
|
|
|
1.11
|
|
|
0.42
|
|
11,660
|
|
|
1.11
|
|
||
$1.55
|
|
374
|
|
|
1.55
|
|
|
1.02
|
|
374
|
|
|
1.55
|
|
||
$1.99
|
|
462,488
|
|
|
1.99
|
|
|
1.41
|
|
462,488
|
|
|
1.99
|
|
||
$2.43
|
|
262,161
|
|
|
2.43
|
|
|
1.86
|
|
262,161
|
|
|
2.43
|
|
||
$2.87
|
|
38,135
|
|
|
2.87
|
|
|
1.81
|
|
38,135
|
|
|
2.87
|
|
||
$3.83
|
|
767,574
|
|
|
3.83
|
|
|
6.31
|
|
603,526
|
|
|
3.83
|
|
||
$4.4
|
|
481,000
|
|
|
4.40
|
|
|
8.90
|
|
—
|
|
|
—
|
|
||
$5.30
|
|
293,563
|
|
|
5.30
|
|
|
7.86
|
|
78,312
|
|
|
5.3
|
|
||
$8.02
|
|
306,170
|
|
|
8.02
|
|
|
6.94
|
|
157,584
|
|
|
8.02
|
|
||
|
|
2,623,125
|
|
|
$
|
4.10
|
|
|
4.60
|
|
1,614,240
|
|
|
$
|
3.51
|
|
|
For the Twelve Months Ended December 31,
|
||||
|
2013
|
|
2012
|
|
2011
|
Valuation Assumptions
|
|
|
|
|
|
Risk-free rate
|
0.80%
|
|
0.90%
|
|
2.30%
|
Expected volatility
|
48.80%
|
|
48.50%
|
|
47.60%
|
Expected term (years)
|
4.8 years
|
|
4.8 years
|
|
4.8 years
|
Dividend yield
|
4.9%
|
|
4.9%
|
|
—%
|
|
|
|
Weighted Average
|
|
|
|
Weighted Average
|
||||||
|
Number
|
|
Grant Date
|
|
Number
|
|
Grant Date
|
||||||
Non-Vested Shares
|
of RSUs
|
|
Fair Value
|
|
of RSAs
|
|
Fair Value
|
||||||
Non-vested at January 1, 2013
|
586,096
|
|
|
$
|
5.8
|
|
|
181,888
|
|
|
$
|
7.2
|
|
Granted
|
812,442
|
|
|
4.40
|
|
|
—
|
|
|
—
|
|
||
Vested
|
(276,466
|
)
|
|
6.00
|
|
|
(63,220
|
)
|
|
7.22
|
|
||
Forfeited
|
(92,677
|
)
|
|
4.75
|
|
|
(7,229
|
)
|
|
6.71
|
|
||
Non-vested at December 31, 2013
|
1,029,395
|
|
|
$
|
4.70
|
|
|
111,439
|
|
|
$
|
7.28
|
|
|
For the years ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net income applicable to GAIN Capital Holdings, Inc.
|
$
|
31,311
|
|
|
$
|
2,621
|
|
|
$
|
15,698
|
|
Series E correction
(1)
|
(154
|
)
|
|
—
|
|
|
—
|
|
|||
Net income after correction
|
31,157
|
|
|
2,621
|
|
|
15,698
|
|
|||
Weighted average common shares outstanding:
|
|
|
|
|
|
||||||
Basic weighted average common shares outstanding
|
36,551,246
|
|
|
34,940,800
|
|
|
34,286,840
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Warrants
|
—
|
|
|
—
|
|
|
160,529
|
|
|||
Stock options
|
1,214,370
|
|
|
1,490,089
|
|
|
2,732,302
|
|
|||
RSUs/RSAs
|
1,867,262
|
|
|
1,449,319
|
|
|
1,802,121
|
|
|||
Diluted weighted average common shares outstanding
|
39,632,878
|
|
|
37,880,208
|
|
|
38,981,792
|
|
|||
Earnings per common share
|
|
|
|
|
|
||||||
Basic
|
$
|
0.85
|
|
|
$
|
0.08
|
|
|
$
|
0.46
|
|
Diluted
|
$
|
0.79
|
|
|
$
|
0.07
|
|
|
$
|
0.40
|
|
(1)
|
During the period an adjustment to retained earnings was made, reflecting the amounts deemed uncollectible associated with previously issued preferred stock, which was converted to common stock immediately prior to the IPO.
|
Years Ended December 31:
|
|
|
||
2014
|
|
$
|
4,193
|
|
2015
|
|
3,550
|
|
|
2016
|
|
2,838
|
|
|
2017
|
|
2,045
|
|
|
2018 and beyond
|
|
9,258
|
|
|
|
|
$
|
21,884
|
|
|
For the Fiscal Year Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
6,651
|
|
|
$
|
(2,880
|
)
|
|
$
|
4,803
|
|
State
|
170
|
|
|
34
|
|
|
1,453
|
|
|||
UK
|
6,917
|
|
|
2,750
|
|
|
3,396
|
|
|||
Japan
|
14
|
|
|
14
|
|
|
—
|
|
|||
Other non-U.S.
|
3
|
|
|
3
|
|
|
1
|
|
|||
|
13,755
|
|
|
(79
|
)
|
|
9,653
|
|
|||
Deferred
|
|
|
|
|
|
||||||
Federal
|
(565
|
)
|
|
(865
|
)
|
|
(1,953
|
)
|
|||
State
|
328
|
|
|
(1
|
)
|
|
(338
|
)
|
|||
Japan
|
121
|
|
|
126
|
|
|
184
|
|
|||
Other non-U.S.
|
(235
|
)
|
|
(30
|
)
|
|
—
|
|
|||
Change in valuation allowance
|
390
|
|
|
(630
|
)
|
|
—
|
|
|||
|
39
|
|
|
(1,400
|
)
|
|
(2,107
|
)
|
|||
Total income tax expense / (benefit)
|
$
|
13,794
|
|
|
$
|
(1,479
|
)
|
|
$
|
7,546
|
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
Deferred tax assets
|
|
|
|
||||
Net foreign exchange operating losses
|
$
|
2,006
|
|
|
$
|
1,893
|
|
Stock-based compensation expense
|
6,334
|
|
|
6,608
|
|
||
Intangible assets
|
2,777
|
|
|
3,414
|
|
||
Other
|
942
|
|
|
588
|
|
||
Total deferred tax assets
|
12,059
|
|
|
12,503
|
|
||
Valuation allowance
|
(493
|
)
|
|
(103
|
)
|
||
Total deferred tax assets after valuation allowance
|
$
|
11,566
|
|
|
$
|
12,400
|
|
|
|
|
|
||||
Deferred tax liabilities
|
|
|
|
||||
Unrealized trading differences
|
$
|
(5,653
|
)
|
|
$
|
(4,867
|
)
|
Unrealized foreign currency
|
—
|
|
|
(152
|
)
|
||
Basis difference in property and equipment
|
(333
|
)
|
|
(1,546
|
)
|
||
State taxes
|
(26
|
)
|
|
(78
|
)
|
||
Other
|
(632
|
)
|
|
(138
|
)
|
||
Total deferred liabilities
|
(6,644
|
)
|
|
(6,781
|
)
|
||
Net deferred tax assets
|
$
|
4,922
|
|
|
$
|
5,619
|
|
|
2013
|
|
2012
|
|
2011
|
|||
Federal income tax at statutory rate
|
35.00
|
%
|
|
35.00
|
%
|
|
35.00
|
%
|
Increase/(decrease) in taxes resulting from:
|
|
|
|
|
|
|||
State income tax
|
0.75
|
%
|
|
2.47
|
%
|
|
3.06
|
%
|
Foreign rate differential
|
(6.45
|
)%
|
|
(121.09
|
)%
|
|
(4.24
|
)%
|
Meals & entertainment
|
0.16
|
%
|
|
5.65
|
%
|
|
0.4
|
%
|
R&D credit
|
—
|
%
|
|
7.47
|
%
|
|
(0.7
|
)%
|
Establishment/(release) of valuation allowance
|
0.87
|
%
|
|
(51.34
|
)%
|
|
—
|
%
|
Uncertain tax positions
|
(0.05
|
)%
|
|
(9.04
|
)%
|
|
—
|
%
|
Other permanent differences
|
0.3
|
%
|
|
1.46
|
%
|
|
(1.06
|
)%
|
Effective Tax Rate
|
30.58
|
%
|
|
(129.42
|
)%
|
|
32.46
|
%
|
|
As of December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Beginning balance as of January 1
|
$
|
78
|
|
|
$
|
189
|
|
|
$
|
126
|
|
Increases based on tax positions related to the current period
|
—
|
|
|
3
|
|
|
39
|
|
|||
Increases based on tax positions related to prior periods
|
—
|
|
|
|
|
|
56
|
|
|||
Decreases based on tax positions related to prior periods
|
(21
|
)
|
|
(20
|
)
|
|
—
|
|
|||
Decreases related to a lapse of applicable statute of limitations
|
—
|
|
|
(94
|
)
|
|
(32
|
)
|
|||
Ending balance as of December 31
|
$
|
57
|
|
|
$
|
78
|
|
|
$
|
189
|
|
Entity Name
|
Minimum Regulatory Capital Requirements
|
|
Capital Levels Maintained
|
|
Excess Net Capital
|
|
Percent of Requirement Maintained
|
|||||||
GFT Global Markets UK Ltd.
|
$
|
32.3
|
|
|
$
|
57.2
|
|
|
$
|
24.9
|
|
|
177
|
%
|
GAIN Capital Group, LLC
|
24.6
|
|
|
39.1
|
|
|
14.5
|
|
|
159
|
%
|
|||
GAIN Capital-Forex.com U.K., Ltd.
|
20.5
|
|
|
57.5
|
|
|
37.0
|
|
|
280
|
%
|
|||
Forex.com Japan Co., Ltd.
|
3.1
|
|
|
9.5
|
|
|
6.4
|
|
|
306
|
%
|
|||
GAIN Capital-Forex.com Hong Kong, Ltd.
|
1.9
|
|
|
3.8
|
|
|
1.9
|
|
|
200
|
%
|
|||
Global Futures & Forex, Ltd.
|
1.0
|
|
|
9.0
|
|
|
8.0
|
|
|
900
|
%
|
|||
GAIN Capital Forex.com Australia, Pty. Ltd.
|
0.3
|
|
|
2.6
|
|
|
2.3
|
|
|
867
|
%
|
|||
GAIN Capital-Forex.com Canada Ltd.
|
0.2
|
|
|
2.0
|
|
|
1.8
|
|
|
1,000
|
%
|
|||
GAIN Capital Securities, Inc.
|
0.1
|
|
|
0.5
|
|
|
0.4
|
|
|
500
|
%
|
|||
GAIN Global Markets, Inc.
|
0.1
|
|
|
0.3
|
|
|
0.2
|
|
|
300
|
%
|
|||
GFT Global Markets Asia Pte., Ltd.
|
1.6
|
|
|
1.7
|
|
|
0.1
|
|
|
106
|
%
|
|||
Total
|
$
|
85.7
|
|
|
$
|
183.2
|
|
|
$
|
97.5
|
|
|
214
|
%
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
||||||||
For the Year Ended December 31, 2013
|
|
|
|
|
|
|
|
||||||||
Gross revenue
|
$
|
49,754
|
|
|
$
|
72,833
|
|
|
$
|
60,571
|
|
|
$
|
83,801
|
|
Net revenue
|
$
|
49,765
|
|
|
$
|
72,995
|
|
|
$
|
60,598
|
|
|
$
|
83,033
|
|
Income before income tax expense
|
$
|
5,140
|
|
|
$
|
24,433
|
|
|
$
|
8,643
|
|
|
$
|
6,889
|
|
Net income
|
$
|
4,279
|
|
|
$
|
17,164
|
|
|
$
|
5,600
|
|
|
$
|
4,268
|
|
Basic net income per share
|
$
|
0.12
|
|
|
$
|
0.48
|
|
|
$
|
0.16
|
|
|
$
|
0.11
|
|
Diluted net income per share
|
$
|
0.11
|
|
|
$
|
0.44
|
|
|
$
|
0.14
|
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
||||||||
For the Year Ended December 31, 2012
|
|
|
|
|
|
|
|
||||||||
Gross revenue
|
$
|
33,309
|
|
|
$
|
45,721
|
|
|
$
|
39,908
|
|
|
$
|
32,286
|
|
Net revenue
|
$
|
33,246
|
|
|
$
|
45,684
|
|
|
$
|
39,985
|
|
|
$
|
32,445
|
|
(Loss) / income before income tax expense
|
$
|
(1,859
|
)
|
|
$
|
5,988
|
|
|
$
|
4,431
|
|
|
$
|
(7,418
|
)
|
Net (loss) / income
|
$
|
(1,247
|
)
|
|
$
|
4,435
|
|
|
$
|
3,221
|
|
|
$
|
(3,787
|
)
|
Basic net (loss) / income per share
|
$
|
(0.04
|
)
|
|
$
|
0.13
|
|
|
$
|
0.09
|
|
|
$
|
(0.11
|
)
|
Diluted net (loss) / income per share
|
$
|
(0.04
|
)
|
|
$
|
0.11
|
|
|
$
|
0.08
|
|
|
$
|
(0.11
|
)
|
|
As of December 31,
|
||||||
|
2013
|
|
2012
|
||||
ASSETS:
|
|||||||
Cash and cash equivalents
|
$
|
39,871
|
|
|
$
|
49
|
|
Equity investments in subsidiaries
|
280,506
|
|
|
153,840
|
|
||
Receivables from affiliates
|
(14,468
|
)
|
|
3,213
|
|
||
Prepaid Assets
|
127
|
|
|
—
|
|
||
Current tax receivable
|
3,493
|
|
|
5,549
|
|
||
Other assets
|
12,529
|
|
|
3,205
|
|
||
Total assets
|
$
|
322,058
|
|
|
$
|
165,856
|
|
LIABILITIES AND SHAREHOLDERS EQUITY:
|
|||||||
Liabilities
|
|
|
|
|
|
||
Accrued expenses and other liabilities
|
23,673
|
|
|
3,025
|
|
||
Accrued compensation and benefits
|
72
|
|
|
—
|
|
||
Convertible senior note
|
65,360
|
|
|
—
|
|
||
Deferred taxes
|
(1,448
|
)
|
|
—
|
|
||
Total liabilities
|
87,657
|
|
|
3,025
|
|
||
Shareholders' Equity
|
|
|
|
||||
Common stock ($0.00001 par value; 60 million shares authorized; 41,921,609 shares issued and 39,425,434 shares outstanding as of December 31, 2013; 36,486,036 shares issued and 34,924,095 shares outstanding as of December 31, 2012)
|
—
|
|
|
—
|
|
||
Accumulated other comprehensive income
|
2,576
|
|
|
1,249
|
|
||
Additional paid-in capital
|
138,691
|
|
|
85,089
|
|
||
Treasury stock, at cost (2,496,175 shares at December 31, 2013 and 1,561,941 at December 31, 2012, respectively)
|
(15,469
|
)
|
|
(8,280
|
)
|
||
Retained earnings
|
108,603
|
|
|
84,773
|
|
||
Total GAIN Capital Holdings, Inc. shareholders' equity
|
234,401
|
|
|
162,831
|
|
||
Total liabilities and shareholders' equity
|
$
|
322,058
|
|
|
$
|
165,856
|
|
|
For the Fiscal Year Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
REVENUES:
|
|
|
|
|
|
||||||
Dividend income from subsidiaries
|
37,099
|
|
|
—
|
|
|
—
|
|
|||
Revenues, interest and other
|
181
|
|
|
—
|
|
|
—
|
|
|||
Total
|
37,280
|
|
|
—
|
|
|
—
|
|
|||
EXPENSES:
|
|
|
|
|
|
||||||
Interest expense
|
$
|
1,199
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Employee compensation and benefits
|
$
|
187
|
|
|
$
|
3,094
|
|
|
$
|
779
|
|
General and administrative
|
6,075
|
|
|
2,913
|
|
|
3,579
|
|
|||
Total
|
7,461
|
|
|
6,007
|
|
|
4,358
|
|
|||
Gain on extinguishment of debt
|
2,000
|
|
|
|
|
|
|
|
|||
INCOME/(LOSS) BEFORE INCOME TAX EXPENSE
|
31,819
|
|
|
(6,007
|
)
|
|
(4,358
|
)
|
|||
Income tax expense / (benefit)
|
6,736
|
|
|
(3,682
|
)
|
|
4,150
|
|
|||
NET INCOME/(LOSS) BEFORE UNDISTRIBUTED EARNINGS OF SUBSIDIARIES
|
25,083
|
|
|
(2,325
|
)
|
|
(8,508
|
)
|
|||
Undistributed earnings of subsidiaries
|
6,228
|
|
|
4,946
|
|
|
24,206
|
|
|||
NET INCOME
|
$
|
31,311
|
|
|
$
|
2,621
|
|
|
$
|
15,698
|
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation adjustment
|
$
|
1,327
|
|
|
$
|
933
|
|
|
$
|
(112
|
)
|
NET COMPREHENSIVE INCOME
|
$
|
32,638
|
|
|
$
|
3,554
|
|
|
$
|
15,586
|
|
Net income applicable to GAIN Capital Holdings, Inc. common shareholders
|
32,638
|
|
|
2,621
|
|
|
15,698
|
|
|
For the Fiscal Year Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income
|
$
|
31,311
|
|
|
$
|
2,621
|
|
|
$
|
15,698
|
|
Adjustments to reconcile net income to cash provided by operating activities
|
|
|
|
|
|
||||||
Equity in income of subsidiaries
|
6,228
|
|
|
5,280
|
|
|
24,426
|
|
|||
Gain on extinguishment of debt
|
(2,000
|
)
|
|
—
|
|
|
—
|
|
|||
(Gain)/Loss on foreign currency exchange rates
|
(274
|
)
|
|
217
|
|
|
(285
|
)
|
|||
Deferred taxes
|
(1,448
|
)
|
|
145
|
|
|
(2,291
|
)
|
|||
Amortization of deferred finance costs
|
175
|
|
|
—
|
|
|
87
|
|
|||
Stock compensation expense
|
2,896
|
|
|
3,325
|
|
|
491
|
|
|||
Tax benefit from employee stock option exercises
|
—
|
|
|
—
|
|
|
—
|
|
|||
Change in fair value of preferred stock embedded derivative
|
—
|
|
|
—
|
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Receivables from affiliates
|
17,681
|
|
|
12,828
|
|
|
(6,100
|
)
|
|||
Prepaid assets
|
(127
|
)
|
|
—
|
|
|
—
|
|
|||
Other assets
|
(7,835
|
)
|
|
(657
|
)
|
|
1,811
|
|
|||
Current tax receivable
|
2,055
|
|
|
1,213
|
|
|
(4,936
|
)
|
|||
Accrued expenses and other liabilities
|
(3,456
|
)
|
|
1,934
|
|
|
(913
|
)
|
|||
Income tax payable
|
—
|
|
|
—
|
|
|
—
|
|
|||
Cash provided by operating activities
|
45,206
|
|
|
26,906
|
|
|
27,988
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Investment and funding of subsidiaries
|
(42,764
|
)
|
|
(12,778
|
)
|
|
(12,304
|
)
|
|||
Purchase of cost method investment
|
—
|
|
|
—
|
|
|
(500
|
)
|
|||
Cash used for investing activities
|
(42,764
|
)
|
|
(12,778
|
)
|
|
(12,804
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Proceeds from convertible note issuance, net
|
77,900
|
|
|
—
|
|
|
—
|
|
|||
Repayment of senior loan
|
(31,200
|
)
|
|
—
|
|
|
—
|
|
|||
Deferred initial public offering costs
|
—
|
|
|
—
|
|
|
—
|
|
|||
Payment on notes payable
|
—
|
|
|
(7,875
|
)
|
|
(10,500
|
)
|
|||
Proceeds from exercise of stock options
|
2,539
|
|
|
1,969
|
|
|
853
|
|
|||
Proceeds from exercise of warrants
|
—
|
|
|
—
|
|
|
1,270
|
|
|||
Proceeds from ESPP Purchase
|
302
|
|
|
216
|
|
|
165
|
|
|||
Repurchase of common shares
|
(7,189
|
)
|
|
(3,263
|
)
|
|
(5,017
|
)
|
|||
Tax benefit from employee stock option exercises
|
1,026
|
|
|
(28
|
)
|
|
421
|
|
|||
Dividends paid
|
(7,326
|
)
|
|
(6,972
|
)
|
|
(1,758
|
)
|
|||
Cash provided by/(used for) financing activities
|
36,052
|
|
|
(15,953
|
)
|
|
(14,566
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
1,328
|
|
|
854
|
|
|
86
|
|
|||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
39,822
|
|
|
(971
|
)
|
|
704
|
|
|||
CASH AND CASH EQUIVALENTS — Beginning of year
|
49
|
|
|
1,020
|
|
|
315
|
|
|||
CASH AND CASH EQUIVALENTS — End of year
|
$
|
39,871
|
|
|
$
|
49
|
|
|
$
|
1,019
|
|
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION:
|
|
|
|
|
|
||||||
Cash paid during the year for:
|
|
|
|
|
|
||||||
Interest (paid)
|
$
|
(556
|
)
|
|
$
|
(153
|
)
|
|
$
|
(460
|
)
|
Taxes (paid)/refunds received, net
|
$
|
(5,562
|
)
|
|
$
|
4,303
|
|
|
$
|
(10,714
|
)
|
Non-cash financing activities related to GFT acquisition:
|
|
|
|
|
|
||||||
Senior loan
|
33,200
|
|
|
—
|
|
|
—
|
|
|||
Stock issued
|
34,771
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
GAIN CAPITAL HOLDINGS, INC.
|
|
|
||
|
|
|
|
|
By:
|
|
/s/ Glenn H. Stevens
|
|
|
Name:
|
|
Glenn H. Stevens
|
|
|
Title:
|
|
President and Chief Executive Officer
|
|
|
|
|
/s/ Jason Emerson
|
|
|
|
|
|
||
Jason Emerson
|
|
|
Entity Name
|
Jurisdiction of Incorporation
|
GCAM, LLC
|
Delaware
|
GAIN Holdings, LLC
|
Delaware
|
GAIN Capital Group, LLC
|
Delaware
|
S.L. Bruce Financial Corporation
|
Ohio
|
GAIN Capital Securities, Inc.
|
Delaware
|
GAIN Capital Holdings International, LLC
|
Delaware
|
GAIN Global Markets, Inc.
|
Cayman Islands
|
Island Traders (Cayman), Limited
|
Cayman Islands
|
GAIN Capital-Forex.com Hong Kong, Ltd.
|
Hong Kong
|
Forex.com Japan Co., Ltd.
|
Japan
|
GAIN Capital Forex.com Australia Pty. Ltd.
|
Australia
|
GAIN Capital-Forex.com Singapore, Ltd.
|
Singapore
|
GAIN Capital-Forex.com U.K., Ltd.
|
England and Wales
|
GAIN Capital-Forex.com Canada, Ltd.
|
Canada
|
GAIN GTX, LLC
|
Delaware
|
GAIN GTX, Singapore Pte. Ltd.
|
Singapore
|
GAIN Capital Service Company, LLC
|
Delaware
|
GAIN Capital Holdings International, B.V.
|
The Netherlands
|
GAIN Capital Holdings International Finance Company, B.V.
|
The Netherlands
|
GAIN Capital GTX International, B.V.
|
The Netherlands
|
GAIN Capital – Forex.com International, B.V.
|
The Netherlands
|
GAIN Global Markets International, B.V.
|
The Netherlands
|
GAIN Capital – Forex.com Cyprus Ltd.
|
Cyprus
|
GTX SEF, LLC
|
Delaware
|
Global Futures & Forex, Ltd.
|
Michigan
|
GFT Global Markets UK, Ltd.
|
England
|
GFT Global Markets Asia PTE, Ltd.
|
Singapore
|
1.
|
I have reviewed this annual report on Form 10-K of GAIN Capital Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
|
|
|
Date: March 17, 2014
|
|
|
|
|
|
/s/ Glenn H. Stevens
|
|
|
|
|
|
|
Glenn H. Stevens
|
|
|
|
|
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this annual report on Form 10-K of GAIN Capital Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
|
|
|
Date: March 17, 2014
|
|
|
|
|
|
/s/ Jason Emerson
|
|
|
|
|
|
|
Jason Emerson
|
|
|
|
|
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
1.
|
The accompanying annual report on Form 10-K for the fiscal year ended December 31, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Glenn H. Stevens
|
Glenn H. Stevens
Chief Executive Officer and President
(Principal Executive Officer)
|
|
1.
|
The accompanying annual report on Form 10-K for the fiscal year ended December 31, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Jason Emerson
|
Jason Emerson
Chief Financial Officer
(Principal Financial and Accounting Officer)
|