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 Securities
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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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2015
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2014
(As Restated) |
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2013
(As Restated) |
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2012
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2011
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Net Revenue
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$
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435.3
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$
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369.2
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$
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267.7
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$
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151.8
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$
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182
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Net income applicable to Gain Capital Holdings, Inc.
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$
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10.3
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$
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24.9
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$
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28.1
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$
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2.6
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$
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15.7
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Adjusted net income
(1)
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$
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34.3
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$
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30.9
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$
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29.8
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$
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4.3
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$
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15.7
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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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2015
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2014
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2013
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2012
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2011
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Retail
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OTC Trading Volume (billions)
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$
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3,985.8
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$
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2,430.5
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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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OTC Average Daily Volume (billions)
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$
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15.4
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$
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9.4
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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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Active OTC Accounts
(2)
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146,977
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94,895
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98,696
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60,219
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63,435
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Client Assets (millions)
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$
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920.6
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$
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759.6
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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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Institutional
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Volume (billions)
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$
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2,671.9
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$
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3,183.7
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$
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2,599.6
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$
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1,493.8
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$
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445.7
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Average Daily Volume (billions)
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$
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10.3
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$
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12.7
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$
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10.0
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$
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5.7
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$
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1.7
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Futures
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Futures Contracts
(3)
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8,623,392
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7,027,008
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5,386,383
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1,507,425
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—
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|||||
Futures Average Daily Contracts
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34,356
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28,108
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21,460
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18,383
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—
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(1)
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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 Measures,” for discussion and reconciliation of non-GAAP financial measures.
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(2)
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Represents accounts which executed a transaction over the last 12 months.
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(3)
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Futures contracts represent the total number of contracts transacted by customers of our futures business.
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•
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Continue to enhance our proprietary trading platforms and innovative trading tools in our retail, institutional and futures segments 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, such as our purchase of the entire issued and outstanding share capital of City Index (Holdings) Limited ("City Index"), a global online trading firm specializing in CFDs, forex and spread betting, which we completed on April 1, 2015;
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•
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Expand our product offerings in order to facilitate clients' trading of our wide range of financial products and to generate more revenue per customer; and
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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.
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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-Asset Trading Firms, including firms such as Interactive Brokers, IG Group Holdings plc and CMC Group. These firms generally offer a broad set of asset classes and earn a significant percentage of their revenue from CFDs, equities and other exchange-traded products.
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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, money managers and fund managers 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 retail 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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maintain adequate segregation of client funds;
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•
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maintain adequate records in order to be able to meet future obligations when we hold client assets as collateral and be able to identify details of those assets to clients;
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•
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comply with custody rules when holding financial instruments (as defined by MiFID I) or other investments belonging to a client in the course of our business, including the safeguarding of those investments and holding all dividends and fees (e.g., stock lending fees) in accordance with the client money rules;
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•
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have adequate organizational arrangements in place to minimize the risk that client money may be paid for the account of a client whose money has not yet been received by us;
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•
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undertake daily internal client money reconciliation; and
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•
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appoint an individual who is responsible for CASS oversight.
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•
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report all derivative contracts and their lifecycle events (concluded, modified and terminated) to which we are a party to a trade repository either by ourselves or through a third party;
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•
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keep all records relating to concluding of derivative contracts and any subsequent modification for 5 years;
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•
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comply with the risk management requirements for OTC bilateral derivatives, including portfolio reconciliation, portfolio compression, record keeping, dispute resolution and margining (some of these requirements will be phased in from September 2016); and
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•
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clear through central counterparties all OTC derivatives which will be subject to the mandatory clearing obligation.
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•
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the types of services, transactions and financial instruments with which the retail client is familiar;
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•
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the nature, volume, and frequency of the retail client’s transactions in financial instruments and the period over which they have been carried out; and
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•
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the level of education, and profession or relevant former profession of the retail client or potential retail client.
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•
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expand the number of financial instruments for which firms are required to carry out an appropriateness assessment before providing an execution only service to retail clients;
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•
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extend the pre- and post-trade transparency regime to derivatives traded on regulated markets, multi-lateral trading facilities, or MTFs, and organized trading facilities, or OTFs;
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•
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expand transaction reporting to those financial instruments traded on MTFs, OTFs, and those financial instruments where the underlying instrument is traded on a Trading Venue; and
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•
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give E.U. Member State regulators the new power to ban or restrict the marketing, distribution or sale of a financial instrument or types of financial practice where there is a threat to investor protection, the orderly functioning and integrity of markets or to financial stability. The European Banking Authority and the European Securities and Markets Authority have similar powers to impose a ban on an EU-wide basis or in relation to a particular E.U. Member State.
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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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the methods by which customers can fund accounts with us, including the recently implemented NFA ban on the use of credit cards to fund accounts in the United States;
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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 new businesses, products or technologies; or
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•
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respond to unanticipated requirements.
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2015
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|
2014
|
||||||||||||
Quarter
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High
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|
Low
|
|
High
|
|
Low
|
||||||||
First Quarter
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$
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10.24
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$
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7.98
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$
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11.81
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$
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7.82
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Second Quarter
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$
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10.38
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$
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9.29
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$
|
11.14
|
|
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$
|
7.58
|
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Third Quarter
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$
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9.69
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$
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6.98
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|
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$
|
7.71
|
|
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$
|
6.01
|
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Fourth Quarter
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$
|
8.41
|
|
|
$
|
7.14
|
|
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$
|
9.11
|
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$
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6.18
|
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|
|
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|
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Total
|
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Maximum Number
|
||||||
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|
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|
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Number of Shares
|
|
(or Approximate
|
||||||
|
|
|
|
|
Purchased as
|
|
Dollar Value) of
|
||||||
|
|
|
|
|
Part of Publicly
|
|
Shares that May
|
||||||
|
Total Number
|
|
|
|
Announced
|
|
Yet Be Purchased
|
||||||
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of Shares
|
|
Average Price
|
|
Plans or
|
|
Under the Plans or
|
||||||
Period
|
Purchased
(1)
|
|
Paid per Share
(1)
|
|
Programs
(1)
|
|
Programs
(1)(2)
|
||||||
January 2015
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
8,528,167
|
|
|
February 2015
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
8,528,167
|
|
|
March 2015
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
8,528,167
|
|
|
April 2015
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
8,528,167
|
|
|
May 2015
|
21,132
|
|
|
$
|
9.46
|
|
|
21,132
|
|
|
$
|
8,327,753
|
|
June 2015
|
20,801
|
|
|
9.61
|
|
|
20,801
|
|
|
$
|
8,127,346
|
|
|
July 2015
|
24,334
|
|
|
8.94
|
|
|
24,334
|
|
|
$
|
7,909,320
|
|
|
August 2015
|
49,977
|
|
|
7.42
|
|
|
49,977
|
|
|
$
|
7,537,261
|
|
|
September 2015
|
150,023
|
|
|
7.67
|
|
|
150,023
|
|
|
$
|
6,384,123
|
|
|
October 2015
|
100,000
|
|
|
7.33
|
|
|
100,000
|
|
|
$
|
5,648,902
|
|
|
November 2015
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
5,648,902
|
|
|
December 2015
|
288,095
|
|
|
7.65
|
|
|
288,095
|
|
|
$
|
3,439,347
|
|
(1)
|
In May 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
|
||||
|
issued upon exercise
|
|
of
|
|
equity compensation
|
||||
|
of outstanding
|
|
outstanding
|
|
plans (excluding
|
||||
|
options, warrants
|
|
options, warrants
|
|
securities reflected
|
||||
|
and rights
|
|
and rights
|
|
in column (a)
|
||||
Plan category
|
(a)
|
|
(b)
|
|
(c)
|
||||
Equity compensation plans approved by security holders
|
2,540,052
|
|
|
$
|
5.76
|
|
|
5,821,424
|
|
Selected Consolidated Statement of Income and Comprehensive Income
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(in thousands, except share and per share data)
|
||||||||||||||||||
|
Year Ended December 31,
|
||||||||||||||||||
|
2015
(1)
|
|
2014
(As Restated) |
|
2013
(1)
(As Restated) |
|
2012
|
|
2011
|
||||||||||
Consolidated Statement of Income and Comprehensive Income Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Revenue
|
$
|
435,347
|
|
|
$
|
369,189
|
|
|
$
|
267,691
|
|
|
$
|
151,804
|
|
|
$
|
182,009
|
|
Total operating expense
|
$
|
417,698
|
|
|
$
|
317,592
|
|
|
$
|
222,968
|
|
|
$
|
150,218
|
|
|
$
|
158,221
|
|
Income before income tax expense
|
$
|
8,427
|
|
|
$
|
45,450
|
|
|
$
|
45,490
|
|
|
$
|
1,142
|
|
|
$
|
23,244
|
|
Net Income applicable to GAIN Capital Holdings, Inc.
|
$
|
10,279
|
|
|
$
|
24,877
|
|
|
$
|
28,107
|
|
|
$
|
2,621
|
|
|
$
|
15,698
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.22
|
|
|
$
|
0.56
|
|
|
$
|
0.76
|
|
|
$
|
0.08
|
|
|
$
|
0.46
|
|
Diluted
|
$
|
0.22
|
|
|
$
|
0.53
|
|
|
$
|
0.71
|
|
|
$
|
0.07
|
|
|
$
|
0.40
|
|
Weighted average common shares outstanding used in computing earnings per common share
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
47,601,979
|
|
|
40,561,644
|
|
|
36,551,246
|
|
|
34,940,800
|
|
|
34,286,840
|
|
|||||
Diluted
|
48,379,051
|
|
|
43,214,895
|
|
|
39,632,878
|
|
|
37,880,208
|
|
|
38,981,792
|
|
|||||
Cash dividends per share
|
$
|
0.20
|
|
|
$
|
0.20
|
|
|
$
|
0.20
|
|
|
$
|
0.20
|
|
|
$
|
0.05
|
|
Selected Consolidated Balance Sheet
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(in thousands unless otherwise stated)
|
||||||||||||||||||
|
Year Ended December 31,
|
||||||||||||||||||
|
2015
(1)
|
|
2014
(As Restated)
|
|
2013
(1)
|
|
2012
|
|
2011
|
||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
171,888
|
|
|
$
|
139,351
|
|
|
$
|
39,871
|
|
|
$
|
36,820
|
|
|
$
|
60,221
|
|
Cash and securities held for customers
|
$
|
920,621
|
|
|
$
|
759,559
|
|
|
$
|
739,318
|
|
|
$
|
446,311
|
|
|
$
|
310,447
|
|
Receivables from brokers
|
$
|
121,153
|
|
|
$
|
134,908
|
|
|
$
|
227,630
|
|
|
$
|
89,916
|
|
|
$
|
85,401
|
|
Total assets
|
$
|
1,424,815
|
|
|
$
|
1,183,301
|
|
|
$
|
1,112,560
|
|
|
$
|
629,262
|
|
|
$
|
504,930
|
|
Payables to customers
|
$
|
920,621
|
|
|
$
|
759,559
|
|
|
$
|
739,318
|
|
|
$
|
446,311
|
|
|
$
|
310,447
|
|
Notes payable
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,875
|
|
Convertible senior notes
|
$
|
121,996
|
|
|
$
|
68,367
|
|
|
$
|
65,360
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total shareholders' equity
|
$
|
306,084
|
|
|
$
|
249,920
|
|
|
$
|
226,723
|
|
|
$
|
162,568
|
|
|
$
|
163,974
|
|
(1)
|
There were material business combinations that occurred in 2013 and 2015, respectively. See Note
11
for further discussion.
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
(As Restated) |
|
2013
(As Restated) |
||||||
Net income applicable to GAIN Capital Holdings, Inc.
|
$
|
10,279
|
|
|
$
|
24,877
|
|
|
$
|
28,107
|
|
Add Back, net of tax:
|
|
|
|
|
|
||||||
Acquisition expense
|
2,199
|
|
|
2,539
|
|
|
1,171
|
|
|||
Restructuring
|
2,716
|
|
|
1,680
|
|
|
289
|
|
|||
Integration
|
21,510
|
|
|
1,792
|
|
|
1,252
|
|
|||
Other items
(1)
|
—
|
|
|
36
|
|
|
(995
|
)
|
|||
Adjustment to fair value of contingent consideration
|
(4,369
|
)
|
|
—
|
|
|
—
|
|
|||
Bad Debt related to SNB event in January 2015
|
1,950
|
|
|
—
|
|
|
—
|
|
|||
Adjusted net income
|
$
|
34,285
|
|
|
$
|
30,924
|
|
|
$
|
29,824
|
|
Adjusted earnings per common share
|
|
|
|
|
|
||||||
Basic
|
$
|
0.72
|
|
|
$
|
0.76
|
|
|
$
|
0.82
|
|
Diluted
|
$
|
0.71
|
|
|
$
|
0.72
|
|
|
$
|
0.75
|
|
|
Key Operating Metrics
|
||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||
|
Year Ended December 31,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Retail
|
|
|
|
|
|
|
|
|
|
||||||||||
OTC Trading Volume (billions)
|
$
|
3,985.8
|
|
|
$
|
2,430.5
|
|
|
$
|
1,796.7
|
|
|
$
|
1,303.4
|
|
|
$
|
1,574.0
|
|
OTC Average Daily Volume (billions)
|
$
|
15.4
|
|
|
$
|
9.4
|
|
|
$
|
6.9
|
|
|
$
|
5.0
|
|
|
$
|
6.0
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Active OTC Accounts
|
146,977
|
|
|
94,895
|
|
|
98,696
|
|
|
60,219
|
|
|
63,435
|
|
|||||
Client Assets (millions)
|
$
|
920.6
|
|
|
$
|
759.6
|
|
|
$
|
739.3
|
|
|
$
|
446.3
|
|
|
$
|
310.4
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Institutional
|
|
|
|
|
|
|
|
|
|
||||||||||
Volume (billions)
|
$
|
2,671.9
|
|
|
$
|
3,183.7
|
|
|
$
|
2,599.6
|
|
|
$
|
1,493.8
|
|
|
$
|
445.7
|
|
Average Daily Volume (billions)
|
$
|
10.3
|
|
|
$
|
12.7
|
|
|
$
|
10
|
|
|
$
|
5.7
|
|
|
$
|
1.7
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Futures
|
|
|
|
|
|
|
|
|
|
||||||||||
Futures Contracts
|
8,623,392
|
|
|
7,027,008
|
|
|
5,386,383
|
|
|
1,507,425
|
|
|
—
|
|
|||||
Futures Average Daily Contracts
|
34,356
|
|
|
28,108
|
|
|
21,460
|
|
|
18,383
|
|
|
—
|
|
•
|
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,
|
||||||
|
2015
|
|
2014
|
||||
REVENUE:
|
|
|
|
||||
Retail revenue
|
$
|
347,489
|
|
|
$
|
292,778
|
|
Institutional revenue
|
33,773
|
|
|
34,518
|
|
||
Futures revenue
|
45,427
|
|
|
36,160
|
|
||
Other revenue
|
8,487
|
|
|
4,904
|
|
||
Total non-interest revenue
|
435,176
|
|
|
368,360
|
|
||
Interest revenue
|
1,220
|
|
|
1,428
|
|
||
Interest expense
|
1,049
|
|
|
599
|
|
||
Total net interest revenue
|
171
|
|
|
829
|
|
||
Net Revenue
|
$
|
435,347
|
|
|
$
|
369,189
|
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Total operating expenses (amounts in thousands)
|
$
|
417,698
|
|
|
$
|
317,592
|
|
As a percentage of net revenue
|
95.9
|
%
|
|
86.0
|
%
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Employee compensation and benefits (amounts in thousands)
|
$
|
106,581
|
|
|
$
|
99,233
|
|
As a percentage of net revenue
|
24.5
|
%
|
|
26.9
|
%
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Selling and marketing (amounts in thousands)
|
$
|
27,168
|
|
|
$
|
20,213
|
|
As a percentage of net revenue
|
6.2
|
%
|
|
5.5
|
%
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Referral fees (amounts in thousands)
|
$
|
103,523
|
|
|
$
|
90,972
|
|
As a percentage of net revenue
|
23.8
|
%
|
|
24.6
|
%
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Trading expenses (amounts in thousands)
|
$
|
31,914
|
|
|
$
|
26,168
|
|
As a percentage of net revenue
|
7.3
|
%
|
|
7.1
|
%
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
General and administrative (amounts in thousands)
|
$
|
55,067
|
|
|
$
|
38,651
|
|
As a percentage of net revenue
|
12.6
|
%
|
|
10.5
|
%
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Depreciation and amortization (amounts in thousands)
|
$
|
11,111
|
|
|
$
|
6,610
|
|
As a percentage of net revenue
|
2.6
|
%
|
|
1.8
|
%
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Purchased intangible amortization (amounts in thousands)
|
$
|
16,550
|
|
|
$
|
8,080
|
|
As a percentage of net revenue
|
3.8
|
%
|
|
2.2
|
%
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Communications and technology (amounts in thousands)
|
$
|
18,929
|
|
|
$
|
15,567
|
|
As a percentage of net revenue
|
4.3
|
%
|
|
4.2
|
%
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Bad debt (amounts in thousands)
|
$
|
7,462
|
|
|
$
|
3,699
|
|
As a percentage of net revenue
|
1.7
|
%
|
|
1.0
|
%
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Restructuring (amounts in thousands)
|
$
|
3,482
|
|
|
$
|
2,334
|
|
As a percentage of net revenue
|
0.8
|
%
|
|
0.6
|
%
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Integration (amounts in thousands)
|
$
|
33,092
|
|
|
$
|
2,489
|
|
As a percentage of net revenue
|
7.6
|
%
|
|
0.7
|
%
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Acquisition expense (amounts in thousands)
|
$
|
2,819
|
|
|
$
|
3,526
|
|
As a percentage of net revenue
|
0.6
|
%
|
|
1.0
|
%
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Interest on long term borrowings (amounts in thousands)
|
$
|
9,222
|
|
|
$
|
6,147
|
|
As a percentage of net revenue
|
2.1
|
%
|
|
1.7
|
%
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Income tax expense (amounts in thousands)
|
$
|
(3,512
|
)
|
|
$
|
19,140
|
|
Effective tax rate
|
(41.7
|
)%
|
|
42.1
|
%
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Net revenue
|
$
|
351,472
|
|
|
$
|
296,941
|
|
|
|
|
|
||||
Employee compensation and benefits
|
67,515
|
|
|
61,989
|
|
||
Selling and marketing
|
26,129
|
|
|
19,574
|
|
||
Referral fees
|
87,175
|
|
|
78,553
|
|
||
Other operating expenses
|
76,301
|
|
|
51,561
|
|
||
Segment profit
|
$
|
94,352
|
|
|
$
|
85,264
|
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Net revenue
|
35,072
|
|
|
35,413
|
|
||
|
|
|
|
||||
Employee compensation and benefits
|
15,305
|
|
|
13,963
|
|
||
Selling and marketing
|
138
|
|
|
120
|
|
||
Other operating expenses
|
9,573
|
|
|
10,939
|
|
||
Segment profit
|
$
|
10,056
|
|
|
$
|
10,391
|
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Net revenue
|
$
|
45,797
|
|
|
$
|
36,016
|
|
|
|
|
|
||||
Employee compensation and benefits
|
10,634
|
|
|
8,918
|
|
||
Selling and marketing
|
901
|
|
|
519
|
|
||
Referral fees
|
16,348
|
|
|
12,419
|
|
||
Other operating expenses
|
13,960
|
|
|
11,585
|
|
||
Segment profit
|
$
|
3,954
|
|
|
$
|
2,575
|
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Other revenue
|
$
|
(3,716
|
)
|
|
$
|
819
|
|
|
|
|
|
||||
Employee compensation and benefits
|
13,127
|
|
|
14,362
|
|
||
Other operating expenses
|
11,038
|
|
|
10,001
|
|
||
Loss
|
$
|
(27,881
|
)
|
|
$
|
(23,544
|
)
|
|
Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
REVENUE:
|
|
|
|
|
|
||
Retail revenue
|
$
|
292,778
|
|
|
$
|
215,734
|
|
Institutional revenue
|
34,518
|
|
|
28,005
|
|
||
Futures revenue
|
36,160
|
|
|
22,188
|
|
||
Other revenue
|
4,904
|
|
|
1,099
|
|
||
Total non-interest revenue
|
368,360
|
|
|
267,026
|
|
||
Interest revenue
|
1,428
|
|
|
821
|
|
||
Interest expense
|
599
|
|
|
156
|
|
||
Total net interest revenue
|
829
|
|
|
665
|
|
||
Net Revenue
|
$
|
369,189
|
|
|
$
|
267,691
|
|
|
Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
Total operating expenses (amounts in thousands)
|
$
|
317,592
|
|
|
$
|
222,968
|
|
As a percentage of net revenue
|
86.0
|
%
|
|
83.3
|
%
|
|
Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
Employee compensation and benefits (amounts in thousands)
|
$
|
99,233
|
|
|
$
|
74,607
|
|
As a percentage of net revenue
|
26.9
|
%
|
|
27.9
|
%
|
|
Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
Selling and marketing (amounts in thousands)
|
$
|
20,213
|
|
|
$
|
22,337
|
|
As a percentage of net revenue
|
5.5
|
%
|
|
8.3
|
%
|
|
Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
Referral fees (amounts in thousands)
|
$
|
90,972
|
|
|
$
|
52,623
|
|
As a percentage of net revenue
|
24.6
|
%
|
|
19.7
|
%
|
|
Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
Trading expenses (amounts in thousands)
|
$
|
26,168
|
|
|
$
|
18,164
|
|
As a percentage of net revenue
|
7.1
|
%
|
|
6.8
|
%
|
|
Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
General and administrative (amounts in thousands)
|
$
|
38,651
|
|
|
$
|
26,558
|
|
As a percentage of net revenue
|
10.5
|
%
|
|
9.9
|
%
|
|
Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
Depreciation and amortization (amounts in thousands)
|
$
|
6,610
|
|
|
$
|
8,283
|
|
As a percentage of net revenue
|
1.8
|
%
|
|
3.1
|
%
|
|
Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
Purchased intangible amortization (amounts in thousands)
|
$
|
8,080
|
|
|
$
|
2,906
|
|
As a percentage of net revenue
|
2.2
|
%
|
|
1.1
|
%
|
|
Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
Communication and technology (amounts in thousands)
|
$
|
15,567
|
|
|
$
|
11,315
|
|
As a percentage of net revenue
|
4.2
|
%
|
|
4.2
|
%
|
|
Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
Bad debt provision (amounts in thousands)
|
$
|
3,699
|
|
|
$
|
1,501
|
|
As a percentage of net revenue
|
1.0
|
%
|
|
0.6
|
%
|
|
Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
Restructuring (amounts in thousands)
|
$
|
2,334
|
|
|
$
|
450
|
|
As a percentage of net revenue
|
0.6
|
%
|
|
0.2
|
%
|
|
Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
Acquisition expense (amounts in thousands)
|
$
|
3,526
|
|
|
$
|
1,824
|
|
As a percentage of net revenue
|
1.0
|
%
|
|
0.7
|
%
|
|
Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
Integration (amounts in thousands)
|
$
|
2,489
|
|
|
$
|
1,950
|
|
As a percentage of net revenue
|
0.7
|
%
|
|
0.7
|
%
|
|
Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
Interest on long term borrowings (amounts in thousands)
|
$
|
6,147
|
|
|
$
|
1,233
|
|
As a percentage of net revenue
|
1.7
|
%
|
|
0.5
|
%
|
|
Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
Income tax expense/(benefit) (amounts in thousands)
|
$
|
19,140
|
|
|
$
|
17,383
|
|
Effective tax rate
|
42.1
|
%
|
|
38.2
|
%
|
|
Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
Net revenue
|
$
|
296,941
|
|
|
$
|
218,848
|
|
|
|
|
|
||||
Employee compensation and benefits
|
61,989
|
|
|
44,924
|
|
||
Selling and marketing
|
19,574
|
|
|
21,761
|
|
||
Referral fees
|
78,553
|
|
|
41,459
|
|
||
Other operating expenses
|
51,561
|
|
|
33,148
|
|
||
Segment profit
|
$
|
85,264
|
|
|
$
|
77,556
|
|
|
Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
Net revenue
|
35,413
|
|
|
29,213
|
|
||
|
|
|
|
||||
Employee compensation and benefits
|
13,963
|
|
|
13,006
|
|
||
Selling and marketing
|
120
|
|
|
244
|
|
||
Other operating expenses
|
10,939
|
|
|
8,170
|
|
||
Segment profit
|
$
|
10,391
|
|
|
$
|
7,793
|
|
|
Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
Net revenue
|
$
|
36,016
|
|
|
$
|
23,360
|
|
|
|
|
|
||||
Employee compensation and benefits
|
8,918
|
|
|
3,399
|
|
||
Selling and marketing
|
519
|
|
|
332
|
|
||
Referral fees
|
12,419
|
|
|
11,164
|
|
||
Other operating expenses
|
11,585
|
|
|
8,948
|
|
||
Segment profit
|
$
|
2,575
|
|
|
$
|
(483
|
)
|
|
Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
Other revenue
|
$
|
819
|
|
|
$
|
(3,729
|
)
|
|
|
|
|
||||
Employee compensation and benefits
|
14,362
|
|
|
13,279
|
|
||
Other operating expenses
|
10,001
|
|
|
7,272
|
|
||
Loss
|
$
|
(23,544
|
)
|
|
$
|
(24,280
|
)
|
Entity Name
|
Cash
|
|
Accumulated
Earnings
|
||||
GAIN Capital-Forex.com U.K., Ltd.
|
$
|
230.6
|
|
|
$
|
67.2
|
|
GAIN Capital UK Limited
|
307.9
|
|
|
17.3
|
|
||
GAIN Capital Japan Co., Ltd.
|
48.8
|
|
|
—
|
|
||
GAIN Capital Forex.com Australia, Pty. Ltd.
|
9.0
|
|
|
—
|
|
||
GAIN Capital-Forex.com Hong Kong, Ltd.
|
4.4
|
|
|
—
|
|
||
GAIN Capital-Forex.com Canada Ltd.
|
6.5
|
|
|
—
|
|
||
GAIN Capital Singapore Pte. Ltd.
|
28.4
|
|
|
0.9
|
|
||
GAIN Capital Australia Pty Ltd.
|
20.0
|
|
|
1.3
|
|
||
Galvan Research and Trading Ltd.
|
0.7
|
|
|
4.7
|
|
||
GAIN Global Markets, Inc.
|
0.3
|
|
|
—
|
|
||
Faraday Research LLP
|
0.3
|
|
|
0.6
|
|
||
GTX Bermuda Ltd.
|
6.5
|
|
|
8.0
|
|
||
Gain Global Markets Bermuda, Ltd.
|
2.8
|
|
|
—
|
|
||
Total
|
$
|
666.2
|
|
|
$
|
100.0
|
|
Entity Name
|
Minimum
Regulatory Capital Requirements |
|
Capital
Levels Maintained |
|
Excess
Net Capital |
||||||
GAIN Capital Group, LLC
|
$
|
26.1
|
|
|
$
|
36.3
|
|
|
$
|
10.2
|
|
GAIN Capital Securities, Inc.
|
0.1
|
|
|
0.4
|
|
|
0.3
|
|
|||
GAIN Global Markets, Inc.
|
0.2
|
|
|
0.3
|
|
|
0.1
|
|
|||
GAIN Capital Forex.com Australia, Pty. Ltd.
|
0.7
|
|
|
2.4
|
|
|
1.7
|
|
|||
GAIN Capital Forex.com U.K., Ltd.
|
27.8
|
|
|
61.6
|
|
|
33.8
|
|
|||
GAIN Capital-Forex.com Hong Kong, Ltd.
|
1.9
|
|
|
3.9
|
|
|
2.0
|
|
|||
GAIN Capital-Forex.com Canada Ltd.
|
0.2
|
|
|
1.4
|
|
|
1.2
|
|
|||
Forex.com Japan., Ltd.
|
0.9
|
|
|
9.6
|
|
|
8.7
|
|
|||
GAIN Capital UK, Ltd.
|
54.5
|
|
|
127.9
|
|
|
73.4
|
|
|||
GAIN Capital Singapore Pte, Ltd.
|
0.6
|
|
|
7.4
|
|
|
6.8
|
|
|||
GAIN Capital Australia Pty Ltd.
|
0.7
|
|
|
2.8
|
|
|
2.1
|
|
|||
Galvan Research and Trading, Ltd.
|
0.7
|
|
|
4.3
|
|
|
3.6
|
|
|||
Global Assets Advisors, LLC
|
0.1
|
|
|
1.2
|
|
|
1.1
|
|
|||
Total
|
$
|
114.5
|
|
|
$
|
259.5
|
|
|
$
|
145.0
|
|
|
As of
|
|
As of
|
||||
|
December 31,
|
|
December 31,
|
||||
|
2015
|
|
2014
|
||||
Cash and cash equivalents
|
$
|
171.9
|
|
|
$
|
139.4
|
|
Receivables from brokers
|
121.2
|
|
|
134.9
|
|
||
Net operating cash
|
293.1
|
|
|
274.3
|
|
||
Less: Minimum regulatory requirements
|
(114.5
|
)
|
|
(76.3
|
)
|
||
Free Cash Available
(1)
|
$
|
38.6
|
|
|
$
|
118.0
|
|
(1)
|
Our Convertible Senior Notes due 2018 and 2020 are excluded given their long-dated maturity
|
|
Year ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cash provided by / (used for) operating activities
|
$
|
77,213
|
|
|
$
|
136,788
|
|
|
$
|
(18,887
|
)
|
Cash used for investing activities
|
(16,081
|
)
|
|
(35,463
|
)
|
|
(9,807
|
)
|
|||
Cash (used for) / provided by financing activities
|
(25,840
|
)
|
|
(5,938
|
)
|
|
33,633
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(2,755
|
)
|
|
4,093
|
|
|
(1,888
|
)
|
|||
INCREASE IN CASH AND CASH EQUIVALENTS
|
$
|
32,537
|
|
|
$
|
99,480
|
|
|
$
|
3,051
|
|
|
|
|
Less than
|
|
1-3
|
|
3-5
|
|
More than
|
||||||||||
|
Total
|
|
1 Year
|
|
Years
|
|
Years
|
|
5 Years
|
||||||||||
Purchase Obligations
|
$
|
14,039
|
|
|
$
|
12,781
|
|
|
$
|
1,258
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating Leases
|
39,538
|
|
|
8,587
|
|
|
10,575
|
|
|
8,158
|
|
|
12,218
|
|
|||||
Total
|
$
|
53,577
|
|
|
$
|
21,368
|
|
|
$
|
11,833
|
|
|
$
|
8,158
|
|
|
$
|
12,218
|
|
•
|
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.
|
Reports of Independent Registered Public Accounting Firms
|
F-2
|
Consolidated Balance Sheets as of December 31, 2015 and 2014 (As Restated)
|
F-4
|
Consolidated Statements of Income and Comprehensive Income for the Years Ended December 31, 2015, 2014 and 2013 (As Restated)
|
F-5
|
Consolidated Statements of Changes in Shareholders' Equity for the Years Ended December 31, 2015, 2014 and 2013 (As Restated)
|
F-6
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2015, 2014 and 2013 (As Restated)
|
F-8
|
Notes to Consolidated Financial Statements
|
F-10
|
Schedule I - Condensed Financial Information of GAIN Capital Holdings, Inc, (Parent Company Only) as of December 31, 2015 and 2014 and for each of the three years in the period ended December 31, 2015 (As Restated)
|
F-58
|
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).
|
|
|
|
|
|
|
|
2.4
|
|
Share Purchase Agreement, dated as of October 31, 2014, by and among GAIN Capital Holdings, Inc., City Index Group Limited, INCAP Gaming B.V. and IPGL Limited (Incorporated by reference to Exhibit 2.1 of the Registrant's Current Report on Form 8-K/A, filed on January 12, 2015, 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 (Incorporated by reference to Exhibit 4.3 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 2013, as filed on March 17, 2014, No. 001-35008).
|
|
|
|
|
|
|
|
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).
|
|
|
|
|
|
|
4.6
|
|
Indenture, dated as of April 1, 2015, between GAIN Capital Holdings, Inc. and The Bank of New York Mellon (Incorporated by reference to Exhibit 4.11 of the Registrant's Registration Statement on Form S-3, as amended, No. 333-208175).
|
|
|
|
|
|
|
|
10.1
|
|
2015 Omnibus Incentive Compensation Plan (Incorporated by reference to Annex A of the Registrant’s Definitive Proxy Statement on Schedule 14A, filed on October 15, 2015, No. 001-35008).**
|
|
|
|
|
|
|
|
10.2
|
|
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).**
|
|
|
|
|
|
|
|
10.3
|
|
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).**
|
|
|
|
|
|
|
|
10.4
|
|
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).**
|
|
|
|
|
|
|
|
10.5
|
|
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). **
|
|
|
|
|
|
|
|
10.6
|
|
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). **
|
|
|
|
|
|
|
|
10.7
|
|
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). **
|
|
|
|
|
|
|
|
10.8
|
|
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).**
|
|
|
|
|
|
|
|
10.9
|
|
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).**
|
|
|
|
|
|
|
|
10.10
|
|
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).**
|
|
|
|
|
|
|
|
10.11
|
|
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).**
|
|
|
|
|
|
|
|
10.12
|
|
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).**
|
|
|
|
|
|
|
|
10.13
|
|
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).**
|
|
|
|
|
|
|
10.14
|
|
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).**
|
|
|
|
|
|
|
|
10.15†
|
|
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).
|
|
|
|
|
|
|
|
10.16†
|
|
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).
|
|
|
|
|
|
|
|
10.17†
|
|
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).
|
|
|
|
|
|
|
|
10.18†
|
|
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).
|
|
|
|
|
|
|
|
10.19
|
|
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).
|
|
|
|
|
|
|
|
10.20
|
|
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).
|
|
|
|
|
|
|
|
10.21
|
|
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).
|
|
|
|
|
|
|
|
10.22
|
|
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).
|
|
|
|
|
|
|
|
10.23
|
|
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).
|
|
|
|
|
|
|
|
10.24†
|
|
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).
|
|
|
|
|
|
|
|
10.25†
|
|
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).
|
|
|
|
|
|
|
|
10.26
|
|
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).
|
|
|
|
|
|
|
10.27
|
|
Executive Employment Agreement, dated May 5, 2015, 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 June 30, 2015, filed on August 10, 2015, No. 001-35008).**
|
|
|
|
|
|
|
|
10.28
|
|
Executive Employment Agreement, dated May 5, 2015, by and between GAIN Capital Holdings, Inc. and Samantha Roady (Incorporated by reference to Exhibit 10.2 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed on August 10, 2015, No. 001-35008).**
|
|
|
|
|
|
|
|
10.29
|
|
Executive Employment Agreement, dated May 5, 2015, by and between GAIN Capital Holdings, Inc. and Diego Rotsztain (Incorporated by reference to Exhibit 10.3 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed on August 10, 2015, No. 001-35008).**
|
|
|
|
|
|
|
|
10.30
|
|
Executive Employment Agreement, dated May 5, 2015, by and between GAIN Capital Holdings, Inc. and Jeffrey Scott (Incorporated by reference to Exhibit 10.4 of the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed on August 10, 2015, No. 001-35008).**
|
|
|
|
|
|
|
|
10.31*
|
|
Service Agreement, dated as of March 9, 2011, by and between City Index Limited and Nigel Rose.**
|
|
|
|
|
|
|
|
10.32
|
|
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).
|
|
|
|
|
|
|
|
10.33
|
|
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).
|
|
|
|
|
|
|
|
10.34
|
|
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).
|
|
|
|
|
|
|
|
10.35
|
|
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).
|
|
|
|
|
|
|
|
10.36
|
|
Amended and Restated Stockholders’ Agreement, dated as of September 24, 2013, by and between 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 September 30, 2013, filed on November 12, 2013, No. 001-35008).
|
|
|
|
|
|
|
|
10.37
|
|
Loan and Security Agreement, dated as of September 24, 2013, by and between GAIN Capital Holdings, Inc. and Gary J. Tilkin (Incorporated by reference to Exhibit 10.2 of the Registrant’s Form 10-Q for the quarter ended September 30, 2013, filed on November 12, 2013, No. 001-35008).
|
|
|
|
|
|
|
10.38
|
|
Membership Interest Purchase Agreement, dated as of March 7, 2014, by and among GAIN Capital Holdings, Inc., Global Asset Advisors, LLC, Lucky Good Dog, L.L.C., Glenn A. Swanson and Andrew W. Daniels (Incorporated by reference to Exhibit 10.1 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, filed on May 12, 2014, No. 001-35008).
|
|
|
|
|
|
|
|
10.39
|
|
Membership Interest Purchase Agreement, dated as of March 7, 2014, by and among GAIN Capital Holdings, Inc., Top Third Ag Marketing LLC, Global Asset Advisors, LLC, Lucky Good Dog, L.L.C., Glenn A. Swanson and Mark Gold (Incorporated by reference to Exhibit 10.2 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, filed on May 12, 2014, No. 001-35008).
|
|
|
|
|
|
|
|
10.40
|
|
Asset Purchase Agreement, dated as of July 10, 2014, between GAIN GTX Bermuda, Ltd., GAIN Capital Holdings, Inc. and Valaquenta Intellectual Properties Limited (Incorporated by reference to Exhibit 10.1 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed on November 11, 2014, No. 001-35008).
|
|
|
|
|
|
|
|
10.41
|
|
Asset Purchase Agreement, dated as of July 10, 2014, between GAIN GTX Bermuda, Ltd., GAIN Capital Holdings, Inc. and Forexster Limited (Incorporated by reference to Exhibit 10.2 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, filed on November 11, 2014, No. 001-35008).
|
|
|
|
|
|
|
|
10.42
|
|
Stockholders' Agreement, effective as of October 31, 2104, among GAIN Capital Holdings, Inc., City Index Group Limited and the other parties identified as "Stockholders" therein (Incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K/A, filed on January 12, 2015, No. 001-35008).
|
|
|
|
|
|
|
|
10.43
|
|
Form of Registration Rights Agreement among GAIN Capital Holdings, Inc., City Index Group Limited, INCAP Gaming B.V. and the other parties identified as "Investors" therein (Incorporated by reference to Exhibit 10.2 of the Registrant's Current Report on Form 8-K/A, filed on January 12, 2015, No. 001-35008).
|
|
|
|
|
|
|
|
10.44
|
|
Letter Agreement, dated as of December 10, 2014, by and among GAIN Capital Holdings, Inc., VantagePoint Venture Partners IV (Q), L.P., VantagePoint Venture Partners IV, L.P., VantagePoint Venture Partners IV Principals Fund, L.P. and VP New York Venture Partners, L.P.
|
|
|
|
|
|
|
|
10.45*
|
|
Separation and Release Agreement, dated as of October 1, 2015, by and between GAIN Capital Holdings, Inc. and Jason Emerson.**
|
|
|
|
|
|
|
|
21.1*
|
|
Subsidiaries of the Registrant.
|
|
|
|
|
|
|
|
23.1*
|
|
Consent of Deloitte & Touche LLP
|
|
|
|
|
|
|
|
23.2*
|
|
Consent of BDO LLP
|
|
|
|
|
|
|
|
31.1*
|
|
Certification of Chief Executive Officer pursuant to rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
|
|
|
|
|
|
|
|
31.2*
|
|
Certification of Chief Financial Officer pursuant to rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.
|
|
|
|
|
|
|
|
32.1*
|
|
Certification of Chief Executive Officer as required by section 906 of the Sarbanes-Oxley Act of 2002.
|
|
**
|
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, 2016
|
Glenn H. Stevens
|
|
|
|
|
|
|
|
|
|
/s/ Nigel Rose
|
|
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
|
|
March 17, 2016
|
Nigel Rose
|
|
|
|
|
|
|
|
|
|
/s/ Peter Quick
|
|
Chairman of the Board of Directors
|
|
March 17, 2016
|
Peter Quick
|
|
|
|
|
|
|
|
|
|
/s/ Joseph A. Schenk
|
|
Director
|
|
March 17, 2016
|
Joseph A. Schenk
|
|
|
|
|
|
|
|
|
|
/s/ Christopher W. Calhoun
|
|
Director
|
|
March 17, 2016
|
Christopher W. Calhoun
|
|
|
|
|
|
|
|
|
|
/s/ Thomas Bevilacqua
|
|
Director
|
|
March 17, 2016
|
Thomas Bevilacqua
|
|
|
|
|
|
|
|
|
|
/s/ Christopher S. Sugden
|
|
Director
|
|
March 17, 2016
|
Christopher S. Sugden
|
|
|
|
|
Consolidated Financial Statements:
|
|
Reports of Independent Registered Public Accounting Firms
|
F-2
|
Consolidated Balance Sheets as of December 31, 2015 and 2014 (As Restated)
|
F-4
|
Consolidated Statements of Income and Comprehensive Income for the Years Ended December 31, 2015, 2014 and 2013 (As Restated)
|
F-5
|
Consolidated Statements of Changes in Shareholders' Equity for the Years Ended December 31, 2015, 2014 and 2013 (As Restated)
|
F-6
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2015, 2014 and 2013 (As Restated)
|
F-8
|
Notes to Consolidated Financial Statements
|
F-10
|
|
|
Financial Statement Schedule:
|
|
Schedule I - Condensed Financial Information of GAIN Capital Holdings, Inc. (Parent Company Only) as of December 31, 2015 and 2014 and for each of the three years in the period ended December 31, 2015 (As Restated)
|
F-58
|
|
As of December 31, 2015
|
|
As of December 31, 2014
(As Restated)
|
||||
ASSETS:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
171,888
|
|
|
$
|
139,351
|
|
Cash and securities held for customers
|
920,621
|
|
|
759,559
|
|
||
Receivables from brokers, of which ($12,568) and $717, respectively, are open contracts at fair value
|
121,153
|
|
|
134,908
|
|
||
Prepaid assets
|
7,835
|
|
|
2,537
|
|
||
Property and equipment, net of accumulated depreciation of ($44,750) and ($31,544), respectively
|
30,367
|
|
|
18,796
|
|
||
Intangible assets, net of accumulated amortization of ($47,906) and ($12,670), respectively
|
91,512
|
|
|
60,806
|
|
||
Goodwill
|
34,017
|
|
|
33,579
|
|
||
Other assets, net of allowance for doubtful accounts of ($6,832) and ($4,555), respectively
|
47,422
|
|
|
33,765
|
|
||
Total assets
|
$
|
1,424,815
|
|
|
$
|
1,183,301
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY:
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Payables to customers, of which ($143,918) and ($102,722), respectively, are open contracts at fair value
|
$
|
920,621
|
|
|
$
|
759,559
|
|
Accrued compensation and benefits
|
12,362
|
|
|
16,912
|
|
||
Accrued expenses and other liabilities
|
51,638
|
|
|
76,195
|
|
||
Income tax payable
|
1,068
|
|
|
1,010
|
|
||
Convertible senior notes
|
121,996
|
|
|
68,367
|
|
||
Total liabilities
|
$
|
1,107,685
|
|
|
$
|
922,043
|
|
Commitments and contingent liabilities (See Note 18)
|
|
|
|
||||
Redeemable non-controlling interests
|
$
|
11,046
|
|
|
$
|
11,338
|
|
Shareholders’ equity
|
|
|
|
|
|
||
Common stock ($0.00001 par value; 120 million shares authorized, 52,072,884 shares issued and 48,771,015 shares outstanding as of December 31, 2015; 60 million shares authorized, 45,582,066 shares issued and 42,934,559 shares outstanding as of December 31, 2014)
|
$
|
—
|
|
|
$
|
—
|
|
Accumulated other comprehensive loss
|
(5,865
|
)
|
|
(1,513
|
)
|
||
Additional paid-in capital
|
212,981
|
|
|
148,378
|
|
||
Treasury stock, at cost (3,301,869 shares at December 31, 2015 and 2,647,507 at December 31, 2014, respectively)
|
(21,808
|
)
|
|
(16,720
|
)
|
||
Retained earnings
|
120,776
|
|
|
119,775
|
|
||
Total shareholders’ equity
|
306,084
|
|
|
249,920
|
|
||
Total liabilities and shareholders’ equity
|
$
|
1,424,815
|
|
|
$
|
1,183,301
|
|
|
For the Fiscal Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
(As Restated)
|
|
(As Restated)
|
||||||
REVENUE:
|
|
|
|
|
|
||||||
Retail revenue
|
$
|
347,489
|
|
|
$
|
292,778
|
|
|
$
|
215,734
|
|
Institutional revenue
|
33,773
|
|
|
34,518
|
|
|
28,005
|
|
|||
Futures revenue
|
45,427
|
|
|
36,160
|
|
|
22,188
|
|
|||
Other revenue
|
8,487
|
|
|
4,904
|
|
|
1,099
|
|
|||
Total non-interest revenue
|
435,176
|
|
|
368,360
|
|
|
267,026
|
|
|||
Interest revenue
|
1,220
|
|
|
1,428
|
|
|
821
|
|
|||
Interest expense
|
1,049
|
|
|
599
|
|
|
156
|
|
|||
Total net interest revenue
|
171
|
|
|
829
|
|
|
665
|
|
|||
Net revenue
|
$
|
435,347
|
|
|
$
|
369,189
|
|
|
$
|
267,691
|
|
EXPENSES:
|
|
|
|
|
|
||||||
Employee compensation and benefits
|
$
|
106,581
|
|
|
$
|
99,233
|
|
|
$
|
74,607
|
|
Selling and marketing
|
27,168
|
|
|
20,213
|
|
|
22,337
|
|
|||
Referral fees
|
103,523
|
|
|
90,972
|
|
|
52,623
|
|
|||
Trading expenses
|
31,914
|
|
|
26,168
|
|
|
18,164
|
|
|||
General and administrative
|
55,067
|
|
|
38,651
|
|
|
26,558
|
|
|||
Depreciation and amortization
|
11,111
|
|
|
6,610
|
|
|
8,283
|
|
|||
Purchased intangible amortization
|
16,550
|
|
|
8,080
|
|
|
2,906
|
|
|||
Communications and technology
|
18,929
|
|
|
15,567
|
|
|
11,315
|
|
|||
Bad debt provision
|
7,462
|
|
|
3,699
|
|
|
1,501
|
|
|||
Acquisition expenses
|
2,819
|
|
|
3,526
|
|
|
1,824
|
|
|||
Restructuring expenses
|
3,482
|
|
|
2,334
|
|
|
450
|
|
|||
Integration expenses
|
33,092
|
|
|
2,489
|
|
|
1,950
|
|
|||
Impairment of investment
|
—
|
|
|
50
|
|
|
450
|
|
|||
Total operating expense
|
417,698
|
|
|
317,592
|
|
|
222,968
|
|
|||
OPERATING PROFIT
|
17,649
|
|
|
51,597
|
|
|
44,723
|
|
|||
Interest expense on long term borrowings
|
9,222
|
|
|
6,147
|
|
|
1,233
|
|
|||
Gain on extinguishment of debt
|
—
|
|
|
—
|
|
|
2,000
|
|
|||
INCOME BEFORE INCOME TAX EXPENSE
|
8,427
|
|
|
45,450
|
|
|
45,490
|
|
|||
Income tax (benefit)/expense
|
(3,512
|
)
|
|
19,140
|
|
|
17,383
|
|
|||
NET INCOME
|
11,939
|
|
|
26,310
|
|
|
28,107
|
|
|||
Net income attributable to non-controlling interest
|
1,660
|
|
|
1,433
|
|
|
—
|
|
|||
NET INCOME APPLICABLE TO GAIN CAPITAL HOLDINGS, INC.
|
10,279
|
|
|
24,877
|
|
|
28,107
|
|
|||
Other comprehensive (loss)/income:
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
(4,352
|
)
|
|
(4,089
|
)
|
|
1,327
|
|
|||
NET COMPREHENSIVE INCOME APPLICABLE TO GAIN CAPITAL HOLDINGS, INC.
|
$
|
5,927
|
|
|
$
|
20,788
|
|
|
$
|
29,434
|
|
Earnings per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.22
|
|
|
$
|
0.56
|
|
|
$
|
0.76
|
|
Diluted
|
$
|
0.22
|
|
|
$
|
0.53
|
|
|
$
|
0.71
|
|
Weighted average common shares outstanding used in computing earnings per common share:
|
|
|
|
|
|
||||||
Basic
|
47,601,979
|
|
|
40,561,644
|
|
|
36,551,246
|
|
|||
Diluted
|
48,379,051
|
|
|
43,214,895
|
|
|
39,632,878
|
|
|
Common Stock |
|
Treasury
Stock |
|
Additional
Paid in Capital |
|
Retained
Earnings |
|
Accumulated
Other Comprehensive Income/(Loss) |
|
Total
|
|||||||||||||||
|
Shares
(1)
|
|
Amount
|
|
||||||||||||||||||||||
BALANCE—January 1, 2013 (As Restated)
|
34,924,095
|
|
|
$
|
—
|
|
|
$
|
(8,280
|
)
|
|
$
|
85,009
|
|
|
$
|
84,590
|
|
|
$
|
1,249
|
|
|
$
|
162,568
|
|
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
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Employee stock purchase plan
|
75,191
|
|
|
—
|
|
|
—
|
|
|
302
|
|
|
—
|
|
|
—
|
|
|
302
|
|
||||||
Repurchase of shares
|
(934,234
|
)
|
|
—
|
|
|
(7,189
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,189
|
)
|
||||||
Stock compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
2,975
|
|
|
—
|
|
|
—
|
|
|
2,975
|
|
||||||
Tax benefit of stock options exercises
|
—
|
|
|
—
|
|
|
—
|
|
|
1,026
|
|
|
—
|
|
|
—
|
|
|
1,026
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(62
|
)
|
|
(154
|
)
|
|
—
|
|
|
(216
|
)
|
||||||
Convertible senior note issuance
|
—
|
|
|
—
|
|
|
—
|
|
|
12,147
|
|
|
—
|
|
|
—
|
|
|
12,147
|
|
||||||
Tax effect of convertible senior note
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,308
|
)
|
|
—
|
|
|
—
|
|
|
(4,308
|
)
|
||||||
Dividends declared ($0.20 dividend per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,326
|
)
|
|
—
|
|
|
(7,326
|
)
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,327
|
|
|
1,327
|
|
||||||
Net income applicable to Gain Capital Holdings, Inc.
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,107
|
|
|
—
|
|
|
28,107
|
|
||||||
BALANCE—January 1, 2014 (As Restated)
|
39,425,434
|
|
|
$
|
—
|
|
|
$
|
(15,469
|
)
|
|
$
|
134,399
|
|
|
$
|
105,217
|
|
|
$
|
2,576
|
|
|
$
|
226,723
|
|
Exercise of options
|
719,719
|
|
|
—
|
|
|
—
|
|
|
2,087
|
|
|
—
|
|
|
—
|
|
|
2,087
|
|
||||||
Issuance of common stock
|
978,736
|
|
|
—
|
|
|
—
|
|
|
6,493
|
|
|
—
|
|
|
—
|
|
|
6,493
|
|
||||||
Conversion of restricted stock into common stock
|
1,863,396
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Employee stock purchase plan
|
98,606
|
|
|
—
|
|
|
—
|
|
|
740
|
|
|
—
|
|
|
—
|
|
|
740
|
|
||||||
Repurchase of shares
|
(151,332
|
)
|
|
—
|
|
|
(1,251
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,251
|
)
|
||||||
Stock compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
3,452
|
|
|
—
|
|
|
—
|
|
|
3,452
|
|
||||||
Tax benefit of stock options exercises
|
—
|
|
|
—
|
|
|
—
|
|
|
1,221
|
|
|
—
|
|
|
—
|
|
|
1,221
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
(73
|
)
|
|
—
|
|
|
(87
|
)
|
||||||
Adjustment to the redemption value of non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,107
|
)
|
|
—
|
|
|
(2,107
|
)
|
||||||
Dividends declared ($0.20 dividend per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,139
|
)
|
|
—
|
|
|
(8,139
|
)
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,089
|
)
|
|
(4,089
|
)
|
||||||
Net income applicable to Gain Capital Holdings, Inc.
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,877
|
|
|
—
|
|
|
24,877
|
|
||||||
BALANCE—January 1, 2015 (As Restated)
|
42,934,559
|
|
|
$
|
—
|
|
|
$
|
(16,720
|
)
|
|
$
|
148,378
|
|
|
$
|
119,775
|
|
|
$
|
(1,513
|
)
|
|
$
|
249,920
|
|
Exercise of options
|
638,241
|
|
|
—
|
|
|
—
|
|
|
2,386
|
|
|
—
|
|
|
—
|
|
|
2,386
|
|
||||||
Issuance of common stock
|
5,319,149
|
|
|
—
|
|
|
—
|
|
|
45,100
|
|
|
—
|
|
|
—
|
|
|
45,100
|
|
||||||
Conversion of restricted stock into common stock
|
440,651
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Employee stock purchase plan
|
92,777
|
|
|
—
|
|
|
—
|
|
|
789
|
|
|
—
|
|
|
—
|
|
|
789
|
|
||||||
Repurchase of shares
|
(654,362
|
)
|
|
—
|
|
|
(5,088
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,088
|
)
|
||||||
Stock compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
3,680
|
|
|
—
|
|
|
—
|
|
|
3,680
|
|
||||||
Tax benefit of stock options exercises
|
—
|
|
|
—
|
|
|
—
|
|
|
1,140
|
|
|
—
|
|
|
—
|
|
|
1,140
|
|
||||||
Convertible senior note issuance
|
—
|
|
|
—
|
|
|
—
|
|
|
15,348
|
|
|
—
|
|
|
—
|
|
|
15,348
|
|
||||||
Tax effect of convertible senior note
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,840
|
)
|
|
—
|
|
|
—
|
|
|
(3,840
|
)
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
(56
|
)
|
|
—
|
|
|
(56
|
)
|
|||||||
Adjustment to the redemption value of put options related to non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
308
|
|
|
—
|
|
|
308
|
|
||||||
Dividends declared ($0.20 dividend per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,530
|
)
|
|
—
|
|
|
(9,530
|
)
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,352
|
)
|
|
(4,352
|
)
|
||||||
Net income applicable to Gain Capital Holdings, Inc.
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,279
|
|
|
—
|
|
|
10,279
|
|
||||||
BALANCE—December 31, 2015
|
48,771,015
|
|
|
$
|
—
|
|
|
$
|
(21,808
|
)
|
|
$
|
212,981
|
|
|
$
|
120,776
|
|
|
$
|
(5,865
|
)
|
|
$
|
306,084
|
|
|
For the Fiscal Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
(As Restated) |
|
2013
(As Restated) |
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income
|
$
|
11,939
|
|
|
$
|
26,310
|
|
|
$
|
28,107
|
|
Adjustments to reconcile net income to cash provided by / (used for) operating activities
|
|
|
|
|
|
||||||
Loss / (gain) on foreign currency exchange rates
|
2,432
|
|
|
(1,618
|
)
|
|
3,641
|
|
|||
Depreciation and amortization
|
27,661
|
|
|
14,690
|
|
|
11,189
|
|
|||
Non-cash integration costs
|
26,827
|
|
|
1,162
|
|
|
1,163
|
|
|||
Deferred tax (benefit)/expense
|
(12,355
|
)
|
|
5,108
|
|
|
(5,431
|
)
|
|||
Amortization of deferred financing costs
|
354
|
|
|
354
|
|
|
—
|
|
|||
Bad debt provision
|
7,462
|
|
|
3,699
|
|
|
1,501
|
|
|||
Impairment of cost method investment
|
—
|
|
|
50
|
|
|
450
|
|
|||
Convertible senior note discount amortization
|
3,624
|
|
|
2,150
|
|
|
175
|
|
|||
Gain on extinguishment of debt
|
—
|
|
|
—
|
|
|
(2,000
|
)
|
|||
Stock compensation expense
|
3,680
|
|
|
3,452
|
|
|
2,975
|
|
|||
Adjustment to fair value of contingent consideration
|
(6,722
|
)
|
|
—
|
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Cash and securities held for customers
|
101,325
|
|
|
(9,260
|
)
|
|
(74,769
|
)
|
|||
Receivables from brokers
|
45,576
|
|
|
94,933
|
|
|
(78,556
|
)
|
|||
Prepaid assets
|
(1,445
|
)
|
|
2,730
|
|
|
318
|
|
|||
Other assets
|
(6,229
|
)
|
|
(8,495
|
)
|
|
(1,075
|
)
|
|||
Payables to customers
|
(101,325
|
)
|
|
9,260
|
|
|
74,769
|
|
|||
Accrued compensation and benefits
|
(7,454
|
)
|
|
4,497
|
|
|
6,375
|
|
|||
Accrued expenses and other liabilities
|
(18,748
|
)
|
|
(2,422
|
)
|
|
7,867
|
|
|||
Income tax payable
|
611
|
|
|
(9,812
|
)
|
|
4,414
|
|
|||
Cash provided by / (used for) operating activities
|
77,213
|
|
|
136,788
|
|
|
(18,887
|
)
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
(19,676
|
)
|
|
(8,759
|
)
|
|
(6,187
|
)
|
|||
Sale of treasury bills
|
—
|
|
|
614
|
|
|
599
|
|
|||
Intangible asset purchases
|
—
|
|
|
(12,400
|
)
|
|
—
|
|
|||
Funding of acquisitions, net of cash acquired
|
(3,258
|
)
|
|
(14,918
|
)
|
|
(4,219
|
)
|
|||
Cash received relating to acquisitions
|
7,612
|
|
|
—
|
|
|
—
|
|
|||
Purchase of investment
|
(759
|
)
|
|
—
|
|
|
—
|
|
|||
Cash used for investing activities
|
(16,081
|
)
|
|
(35,463
|
)
|
|
(9,807
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Contractual payments for acquisitions
|
(13,893
|
)
|
|
—
|
|
|
(2,419
|
)
|
|||
Proceeds from issuance of convertible senior note, net
|
—
|
|
|
—
|
|
|
77,900
|
|
|||
Principal payment on notes payable
|
—
|
|
|
—
|
|
|
(31,200
|
)
|
|||
Proceeds from exercise of stock options
|
2,386
|
|
|
2,087
|
|
|
2,539
|
|
|||
Proceeds from employee stock purchase plan
|
789
|
|
|
740
|
|
|
302
|
|
|||
Purchase of treasury stock
|
(5,088
|
)
|
|
(1,251
|
)
|
|
(7,189
|
)
|
|||
Tax benefit from employee stock option exercises
|
1,140
|
|
|
1,221
|
|
|
1,026
|
|
|||
Dividend payments
|
(9,530
|
)
|
|
(8,139
|
)
|
|
(7,326
|
)
|
|||
Distributions to non-controlling interest holders
|
(1,644
|
)
|
|
(596
|
)
|
|
—
|
|
Cash (used for) / provided by financing activities
|
$
|
(25,840
|
)
|
|
$
|
(5,938
|
)
|
|
$
|
33,633
|
|
Effect of exchange rate changes on cash and cash equivalents
|
(2,755
|
)
|
|
4,093
|
|
|
(1,888
|
)
|
|||
INCREASE IN CASH AND CASH EQUIVALENTS
|
32,537
|
|
|
99,480
|
|
|
3,051
|
|
|||
CASH AND CASH EQUIVALENTS—Beginning of year
|
$
|
139,351
|
|
|
$
|
39,871
|
|
|
$
|
36,820
|
|
CASH AND CASH EQUIVALENTS—End of year
|
$
|
171,888
|
|
|
$
|
139,351
|
|
|
$
|
39,871
|
|
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION:
|
|
|
|
|
|
||||||
Cash (paid) / received during the year for:
|
|
|
|
|
|
||||||
Interest
|
(5,065
|
)
|
|
(3,373
|
)
|
|
(655
|
)
|
|||
Taxes
|
$
|
(9,861
|
)
|
|
$
|
(13,151
|
)
|
|
$
|
(8,376
|
)
|
Non-cash investing activities:
|
|
|
|
|
|
||||||
Purchase of fixed assets included in accrued expense and other liabilities
|
$
|
—
|
|
|
$
|
701
|
|
|
$
|
—
|
|
Non-cash financing activities:
|
|
|
|
|
|
||||||
Convertible senior notes issued as consideration for business acquisitions
|
$
|
65,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Deferred taxes related to convertible senior notes
|
$
|
(3,840
|
)
|
|
$
|
—
|
|
|
$
|
(4,308
|
)
|
Senior loan issued by seller
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33,200
|
|
Common stock issued as consideration for asset and business acquisitions
|
$
|
45,100
|
|
|
$
|
6,493
|
|
|
$
|
34,771
|
|
Adjustment to redemption value of non-controlling interests
|
$
|
308
|
|
|
$
|
(2,107
|
)
|
|
$
|
—
|
|
•
|
Valuation of assets and liabilities requiring fair value estimates;
|
•
|
Certain accruals;
|
•
|
The allowance for doubtful accounts;
|
•
|
The realization of deferred taxes;
|
•
|
The carrying amount of goodwill and other intangible assets;
|
•
|
The useful lives of intangible assets and other long-lived assets with finite lives;
|
•
|
Incentive based compensation accruals and valuation of share-based payment arrangements;
|
•
|
Transfer pricing;
|
•
|
The recognition and measurement of uncertain tax positions; and
|
•
|
Other matters that affect the reported amounts and disclosure of contingencies in the consolidated financial statements.
|
Balance as of January 1, 2013
|
$
|
(148
|
)
|
Addition to provision
|
(1,501
|
)
|
|
Amounts written off
|
491
|
|
|
Balance as of December 31, 2013
|
(1,158
|
)
|
|
Addition to provision
|
(3,699
|
)
|
|
Amounts written off
|
302
|
|
|
Balance as of December 31, 2014
|
(4,555
|
)
|
|
Addition to provision
|
(7,462
|
)
|
|
Amounts written off
|
5,185
|
|
|
Balance as of December 31, 2015
|
$
|
(6,832
|
)
|
|
As of December 31, 2014
|
||||||||||||||
|
As Reported
|
|
Tax Adjustment
|
|
Other Adjustments
|
|
As Restated
|
||||||||
ASSETS:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
139,403
|
|
|
$
|
—
|
|
|
$
|
(52
|
)
|
|
$
|
139,351
|
|
Goodwill
|
34,567
|
|
|
(988
|
)
|
|
—
|
|
|
33,579
|
|
||||
Other assets, net of allowance for doubtful accounts
(1)
|
35,311
|
|
|
917
|
|
|
(2,463
|
)
|
|
33,765
|
|
||||
Total assets
|
$
|
1,185,887
|
|
|
$
|
(71
|
)
|
|
$
|
(2,515
|
)
|
|
$
|
1,183,301
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY:
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Accrued expenses and other liabilities
|
64,476
|
|
|
12,170
|
|
|
(451
|
)
|
|
76,195
|
|
||||
Income tax payable
|
1,470
|
|
|
1,603
|
|
|
(2,063
|
)
|
|
1,010
|
|
||||
Total liabilities
|
$
|
910,784
|
|
|
$
|
13,773
|
|
|
$
|
(2,514
|
)
|
|
$
|
922,043
|
|
Redeemable non-controlling interests
|
10,209
|
|
|
—
|
|
|
1,129
|
|
|
11,338
|
|
||||
Shareholders’ equity
|
|
|
|
|
|
|
|
||||||||
Accumulated other comprehensive loss
|
(2,054
|
)
|
|
541
|
|
|
—
|
|
|
(1,513
|
)
|
||||
Additional paid-in capital
|
152,684
|
|
|
(4,306
|
)
|
|
—
|
|
|
148,378
|
|
||||
Retained earnings
|
130,984
|
|
|
(10,079
|
)
|
|
(1,130
|
)
|
|
119,775
|
|
||||
Total shareholders’ equity
|
264,894
|
|
|
(13,844
|
)
|
|
(1,130
|
)
|
|
249,920
|
|
||||
Total liabilities and shareholders’ equity
|
$
|
1,185,887
|
|
|
$
|
(71
|
)
|
|
$
|
(2,515
|
)
|
|
$
|
1,183,301
|
|
|
For the Fiscal Year Ended December 31, 2014
|
||||||||||||||
|
As Reported
|
|
Tax Adjustment
|
|
Other Adjustments
|
|
Restated
|
||||||||
REVENUE:
|
|
|
|
|
|
|
|
||||||||
Retail revenue
(1)
|
$
|
293,122
|
|
|
$
|
—
|
|
|
$
|
(344
|
)
|
|
$
|
292,778
|
|
Institutional revenue
(1)
|
34,518
|
|
|
—
|
|
|
—
|
|
|
34,518
|
|
||||
Futures revenue
(1)
|
36,160
|
|
|
—
|
|
|
—
|
|
|
36,160
|
|
||||
Total non-interest revenue
|
368,704
|
|
|
—
|
|
|
(344
|
)
|
|
368,360
|
|
||||
Net revenue
|
$
|
369,533
|
|
|
$
|
—
|
|
|
$
|
(344
|
)
|
|
$
|
369,189
|
|
EXPENSES:
|
|
|
|
|
|
|
|
||||||||
Employee compensation and benefits
|
$
|
99,485
|
|
|
$
|
—
|
|
|
$
|
(252
|
)
|
|
$
|
99,233
|
|
Referral fees
|
91,092
|
|
|
—
|
|
|
(120
|
)
|
|
90,972
|
|
||||
Trading expenses
|
26,285
|
|
|
—
|
|
|
(117
|
)
|
|
26,168
|
|
||||
General and administrative
|
38,509
|
|
|
—
|
|
|
142
|
|
|
38,651
|
|
||||
Depreciation and amortization
|
7,125
|
|
|
—
|
|
|
(515
|
)
|
|
6,610
|
|
||||
Restructuring expenses
|
1,214
|
|
|
—
|
|
|
1,120
|
|
|
2,334
|
|
||||
Total operating expense
|
317,334
|
|
|
—
|
|
|
258
|
|
|
317,592
|
|
||||
OPERATING PROFIT
|
52,199
|
|
|
—
|
|
|
(602
|
)
|
|
51,597
|
|
||||
INCOME BEFORE INCOME TAX EXPENSE
|
46,052
|
|
|
—
|
|
|
(602
|
)
|
|
45,450
|
|
||||
Income tax (benefit)/expense
|
12,993
|
|
|
6,200
|
|
|
(53
|
)
|
|
19,140
|
|
||||
NET INCOME
|
33,059
|
|
|
(6,200
|
)
|
|
(549
|
)
|
|
26,310
|
|
||||
NET INCOME APPLICABLE TO GAIN CAPITAL HOLDINGS, INC.
|
31,626
|
|
|
(6,200
|
)
|
|
(549
|
)
|
|
24,877
|
|
||||
Other comprehensive (loss)/income:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
(4,630
|
)
|
|
541
|
|
|
|
|
|
(4,089
|
)
|
||||
NET COMPREHENSIVE INCOME APPLICABLE TO GAIN CAPITAL HOLDINGS, INC.
|
$
|
26,996
|
|
|
$
|
(5,659
|
)
|
|
$
|
(549
|
)
|
|
$
|
20,788
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.76
|
|
|
$
|
(0.16
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
0.56
|
|
Diluted
|
$
|
0.71
|
|
|
$
|
(0.14
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
0.53
|
|
|
For the Fiscal Year Ended December 31, 2013
|
||||||||||||||
|
As Reported
|
|
Tax Adjustment
|
|
Other Adjustments
|
|
As Restated
|
||||||||
REVENUE:
|
|
|
|
|
|
|
|
||||||||
Retail revenue
(1)
|
$
|
215,667
|
|
|
$
|
—
|
|
|
$
|
67
|
|
|
$
|
215,734
|
|
Institutional revenue
(1)
|
28,005
|
|
|
—
|
|
|
—
|
|
|
28,005
|
|
||||
Futures revenue
(1)
|
22,188
|
|
|
—
|
|
|
—
|
|
|
22,188
|
|
||||
Total non-interest revenue
|
266,959
|
|
|
—
|
|
|
67
|
|
|
267,026
|
|
||||
Net revenue
|
$
|
267,624
|
|
|
$
|
—
|
|
|
$
|
67
|
|
|
$
|
267,691
|
|
EXPENSES:
|
|
|
|
|
|
|
|
||||||||
Employee compensation and benefits
|
$
|
74,185
|
|
|
$
|
—
|
|
|
$
|
422
|
|
|
$
|
74,607
|
|
Referral fees
|
52,503
|
|
|
—
|
|
|
120
|
|
|
52,623
|
|
||||
General and administrative
|
26,813
|
|
|
—
|
|
|
(255
|
)
|
|
26,558
|
|
||||
Depreciation and amortization
|
7,768
|
|
|
—
|
|
|
515
|
|
|
8,283
|
|
||||
Restructuring expenses
|
1,570
|
|
|
—
|
|
|
(1,120
|
)
|
|
450
|
|
||||
Total operating expense
|
223,286
|
|
|
—
|
|
|
(318
|
)
|
|
222,968
|
|
||||
OPERATING PROFIT
|
44,338
|
|
|
—
|
|
|
385
|
|
|
44,723
|
|
||||
INCOME BEFORE INCOME TAX EXPENSE
|
45,105
|
|
|
—
|
|
|
385
|
|
|
45,490
|
|
||||
Income tax (benefit)/expense
|
13,794
|
|
|
3,589
|
|
|
—
|
|
|
17,383
|
|
||||
NET INCOME
|
31,311
|
|
|
(3,589
|
)
|
|
385
|
|
|
28,107
|
|
||||
NET INCOME APPLICABLE TO GAIN CAPITAL HOLDINGS, INC.
|
31,311
|
|
|
(3,589
|
)
|
|
385
|
|
|
28,107
|
|
||||
NET COMPREHENSIVE INCOME APPLICABLE TO GAIN CAPITAL HOLDINGS, INC.
|
$
|
32,638
|
|
|
$
|
(3,589
|
)
|
|
$
|
385
|
|
|
$
|
29,434
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.85
|
|
|
$
|
(0.10
|
)
|
|
$
|
0.01
|
|
|
$
|
0.76
|
|
Diluted
|
$
|
0.79
|
|
|
$
|
(0.09
|
)
|
|
$
|
0.01
|
|
|
$
|
0.71
|
|
|
Additional Paid in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income/(Loss)
|
|
Total
|
||||||||||||||||||||||||
|
As Reported
|
|
As Restated
|
|
As Reported
|
|
As Restated
|
|
As Reported
|
|
As Restated
|
|
As Reported
|
|
As Restated
|
||||||||||||||||
BALANCE—January 1, 2013
|
$
|
85,089
|
|
|
$
|
85,009
|
|
|
$
|
84,772
|
|
|
$
|
84,590
|
|
|
$
|
1,249
|
|
|
$
|
1,249
|
|
|
$
|
162,830
|
|
|
$
|
162,568
|
|
BALANCE—January 1, 2014
|
$
|
138,691
|
|
|
$
|
134,399
|
|
|
$
|
108,603
|
|
|
$
|
105,217
|
|
|
$
|
2,576
|
|
|
$
|
2,576
|
|
|
$
|
234,401
|
|
|
$
|
226,723
|
|
BALANCE—December 31, 2014
|
$
|
152,684
|
|
|
$
|
148,378
|
|
|
$
|
130,984
|
|
|
$
|
119,775
|
|
|
$
|
(2,054
|
)
|
|
$
|
(1,513
|
)
|
|
$
|
264,894
|
|
|
$
|
249,920
|
|
|
For the Fiscal Year Ended December 31, 2014
|
||||||||||
|
As Reported
|
|
Adjustments
|
|
As Restated
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income
|
$
|
33,059
|
|
|
$
|
(6,749
|
)
|
|
$
|
26,310
|
|
Adjustments to reconcile net income to cash provided by / (used for) operating activities
|
|
|
|
|
|
||||||
Depreciation and amortization
|
16,367
|
|
|
(1,677
|
)
|
|
14,690
|
|
|||
Non-cash integration costs
|
—
|
|
|
1,162
|
|
|
1,162
|
|
|||
Deferred tax (benefit)/expense
|
2,536
|
|
|
2,572
|
|
|
5,108
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Cash and securities held for customers
|
(9,679
|
)
|
|
419
|
|
|
(9,260
|
)
|
|||
Receivables from brokers
|
94,657
|
|
|
276
|
|
|
94,933
|
|
|||
Prepaid assets
|
2,729
|
|
|
1
|
|
|
2,730
|
|
|||
Other assets
|
(11,536
|
)
|
|
3,041
|
|
|
(8,495
|
)
|
|||
Payables to customers
|
9,679
|
|
|
(419
|
)
|
|
9,260
|
|
|||
Accrued compensation and benefits
|
3,671
|
|
|
826
|
|
|
4,497
|
|
|||
Accrued expenses and other liabilities
|
(8,565
|
)
|
|
6,143
|
|
|
(2,422
|
)
|
|||
Income tax payable
|
(2,832
|
)
|
|
(6,980
|
)
|
|
(9,812
|
)
|
|||
Cash provided by / (used for) operating activities
|
138,173
|
|
|
(1,385
|
)
|
|
136,788
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
2,760
|
|
|
1,333
|
|
|
4,093
|
|
|||
INCREASE/ (DECREASE) IN CASH AND CASH EQUIVALENTS
|
99,532
|
|
|
(52
|
)
|
|
99,480
|
|
|||
CASH AND CASH EQUIVALENTS—End of year
|
$
|
139,403
|
|
|
$
|
(52
|
)
|
|
$
|
139,351
|
|
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION:
|
|
|
|
|
|
||||||
Adjustment to redemption value of non-controlling interests
|
$
|
(978
|
)
|
|
$
|
(1,129
|
)
|
|
$
|
(2,107
|
)
|
|
Fair Value Measurements on a Recurring Basis
as of December 31, 2015 |
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Financial Assets (Liabilities):
|
|
|
|
|
|
|
|
||||||||
Customer derivative positions
|
$
|
—
|
|
|
$
|
143,918
|
|
|
$
|
—
|
|
|
$
|
143,918
|
|
Broker derivative contracts
|
—
|
|
|
(12,568
|
)
|
|
—
|
|
|
(12,568
|
)
|
||||
Money market accounts
|
25,167
|
|
|
—
|
|
|
—
|
|
|
25,167
|
|
||||
Certificates of deposit
|
174
|
|
|
—
|
|
|
—
|
|
|
174
|
|
||||
Investment in gold
|
107
|
|
|
—
|
|
|
—
|
|
|
107
|
|
||||
Total
|
$
|
25,448
|
|
|
$
|
131,350
|
|
|
$
|
—
|
|
|
$
|
156,798
|
|
|
Fair Value Measurements on a Recurring Basis
as of December 31, 2014
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Financial Assets (Liabilities):
|
|
|
|
|
|
|
|
||||||||
Customer derivative contracts
|
$
|
—
|
|
|
$
|
102,722
|
|
|
$
|
—
|
|
|
$
|
102,722
|
|
Broker derivative contracts
|
—
|
|
|
717
|
|
|
—
|
|
|
717
|
|
||||
Money market accounts
|
20,537
|
|
|
—
|
|
|
—
|
|
|
20,537
|
|
||||
Certificates of deposit
|
174
|
|
|
—
|
|
|
—
|
|
|
174
|
|
||||
Investment in gold
|
118
|
|
|
—
|
|
|
—
|
|
|
118
|
|
||||
Contingent consideration
|
—
|
|
|
—
|
|
|
(9,974
|
)
|
|
(9,974
|
)
|
||||
Total
|
$
|
20,829
|
|
|
$
|
103,439
|
|
|
$
|
(9,974
|
)
|
|
$
|
114,294
|
|
Liabilities
|
|
Contingent Consideration
|
||
Balance at January 1, 2014
|
|
$
|
—
|
|
Issuance of contingent payment obligation
|
|
10,540
|
|
|
Gains included in earnings - currency revaluation
|
|
(984
|
)
|
|
Losses included in earnings - discount amortization
|
|
418
|
|
|
Balance at January 1, 2015
|
|
9,974
|
|
|
Gains included in earnings - adjustment to fair value of contingent consideration
|
|
(6,722
|
)
|
|
Contingent consideration payments
|
|
(2,063
|
)
|
|
Gains included in earnings - currency revaluation
|
|
(212
|
)
|
|
Losses included in earnings - discount amortization
|
|
570
|
|
|
Settlement of contingent payment obligation
|
|
(1,547
|
)
|
|
Balance at December 31, 2015
|
|
$
|
—
|
|
|
As of December 31, 2015
|
|
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 brokers
|
$
|
133,721
|
|
|
$
|
133,721
|
|
|
$
|
—
|
|
|
$
|
133,721
|
|
|
$
|
—
|
|
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Payables to customers
|
$
|
1,064,539
|
|
|
$
|
1,064,539
|
|
|
$
|
—
|
|
|
$
|
1,064,539
|
|
|
$
|
—
|
|
Convertible senior notes
|
$
|
121,996
|
|
|
$
|
122,264
|
|
|
$
|
—
|
|
|
$
|
122,264
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
As of December 31, 2014
|
|
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 brokers
|
$
|
134,191
|
|
|
$
|
134,191
|
|
|
$
|
—
|
|
|
$
|
134,191
|
|
|
$
|
—
|
|
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Payables to customers
|
$
|
862,281
|
|
|
$
|
862,281
|
|
|
$
|
—
|
|
|
$
|
862,281
|
|
|
$
|
—
|
|
Convertible senior notes
|
$
|
68,367
|
|
|
$
|
66,440
|
|
|
$
|
—
|
|
|
$
|
66,440
|
|
|
$
|
—
|
|
Accrued expenses and other liabilities
|
$
|
20,000
|
|
|
$
|
20,000
|
|
|
$
|
—
|
|
|
$
|
20,000
|
|
|
$
|
—
|
|
|
December 31, 2015
|
||||||||||
|
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
|
$
|
138,140
|
|
|
$
|
(59,468
|
)
|
|
$
|
78,672
|
|
CFD contracts
|
111,844
|
|
|
(70,429
|
)
|
|
41,415
|
|
|||
Metals contracts
|
18,866
|
|
|
(7,603
|
)
|
|
11,263
|
|
|||
Total
|
$
|
268,850
|
|
|
$
|
(137,500
|
)
|
|
$
|
131,350
|
|
|
|
|
|
|
|
||||||
|
December 31, 2015
|
||||||||||
|
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 brokers
|
$
|
133,721
|
|
|
$
|
(12,568
|
)
|
|
$
|
121,153
|
|
Payables to customers
|
$
|
(1,064,539
|
)
|
|
$
|
143,918
|
|
|
$
|
(920,621
|
)
|
|
December 31, 2014
|
||||||||||
|
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
|
$
|
168,034
|
|
|
$
|
(93,057
|
)
|
|
$
|
74,977
|
|
CFD contracts
|
44,329
|
|
|
(24,420
|
)
|
|
19,909
|
|
|||
Metals contracts
|
16,146
|
|
|
(7,593
|
)
|
|
8,553
|
|
|||
Total
|
$
|
228,509
|
|
|
$
|
(125,070
|
)
|
|
$
|
103,439
|
|
|
|
|
|
|
|
||||||
|
December 31, 2014
|
||||||||||
|
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 brokers
|
$
|
134,191
|
|
|
$
|
717
|
|
|
$
|
134,908
|
|
Payables to customers
|
$
|
(862,281
|
)
|
|
$
|
102,722
|
|
|
$
|
(759,559
|
)
|
|
December 31, 2015
|
||||
|
Total contracts in long positions
|
|
Total contracts in short positions
|
||
Derivative Instruments:
|
|
|
|
||
Foreign currency exchange contracts
|
3,106,885
|
|
|
2,931,109
|
|
CFD contracts
|
139,465
|
|
|
285,640
|
|
Metals contracts
|
1,278
|
|
|
308
|
|
Total
|
3,247,628
|
|
|
3,217,057
|
|
|
December 31, 2014
|
||||
|
Total contracts in long positions
|
|
Total contracts in short positions
|
||
Derivative Instruments:
|
|
|
|
||
Foreign currency exchange contracts
|
3,147,518
|
|
|
2,679,041
|
|
CFD contracts
|
873,070
|
|
|
10,753
|
|
Metals contracts
|
835
|
|
|
335
|
|
Total
|
4,021,423
|
|
|
2,690,129
|
|
|
For the Years Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Derivative Instruments:
|
|
|
|
||||
Foreign currency exchange contracts
|
$
|
163,315
|
|
|
$
|
136,546
|
|
CFD contracts
|
151,553
|
|
|
105,174
|
|
||
Metals contracts
|
28,918
|
|
|
48,608
|
|
||
Total
|
$
|
343,786
|
|
|
$
|
290,328
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||
Required Collateral
|
$
|
129,042
|
|
|
$
|
95,599
|
|
Excess from futures broker - Restricted
|
4,679
|
|
|
38,592
|
|
||
Open foreign exchange positions
|
(12,568
|
)
|
|
717
|
|
||
Total
|
$
|
121,153
|
|
|
$
|
134,908
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||
Software
|
$
|
44,194
|
|
|
$
|
30,351
|
|
Computer equipment
|
14,300
|
|
|
8,516
|
|
||
Leasehold improvements
|
11,200
|
|
|
6,719
|
|
||
Telephone equipment
|
881
|
|
|
719
|
|
||
Office equipment
|
2,113
|
|
|
2,345
|
|
||
Furniture and fixtures
|
1,761
|
|
|
1,044
|
|
||
Web site development costs
|
668
|
|
|
646
|
|
||
Gross property and equipment
|
75,117
|
|
|
50,340
|
|
||
Less: Accumulated depreciation and amortization
|
(44,750
|
)
|
|
(31,544
|
)
|
||
Property and equipment, net
|
$
|
30,367
|
|
|
$
|
18,796
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
Intangibles
|
Gross
|
|
Accumulated
Amortization |
|
Net
|
|
Gross
|
|
Accumulated
Amortization |
|
Net
|
||||||||||||
Customer list
|
$
|
56,388
|
|
|
$
|
(14,111
|
)
|
|
$
|
42,277
|
|
|
$
|
22,944
|
|
|
$
|
(7,152
|
)
|
|
$
|
15,792
|
|
Technology
|
74,378
|
|
|
(32,117
|
)
|
|
42,261
|
|
|
48,376
|
|
|
(4,671
|
)
|
|
43,705
|
|
||||||
Trademark
|
8,289
|
|
|
(1,678
|
)
|
|
6,611
|
|
|
1,793
|
|
|
(847
|
)
|
|
946
|
|
||||||
Total finite lived intangibles
|
$
|
139,055
|
|
|
$
|
(47,906
|
)
|
|
$
|
91,149
|
|
|
$
|
73,113
|
|
|
$
|
(12,670
|
)
|
|
$
|
60,443
|
|
Trademarks not subject to amortization
(1)
|
363
|
|
|
—
|
|
|
363
|
|
|
363
|
|
|
—
|
|
|
363
|
|
||||||
Total intangibles assets
(2)
|
$
|
139,418
|
|
|
$
|
(47,906
|
)
|
|
$
|
91,512
|
|
|
$
|
73,476
|
|
|
$
|
(12,670
|
)
|
|
$
|
60,806
|
|
Intangible Asset
|
Amount (in thousands)
|
|
Weighted average amortization period
|
||
Customer list
|
$
|
56,388
|
|
|
7.6 years
|
Technology
|
74,378
|
|
|
8.9 years
|
|
Trademark
(1)
|
8,652
|
|
|
6.7 years
|
|
Total intangible assets
|
$
|
139,418
|
|
|
|
|
Retail
|
Institutional
|
Futures
|
Total
|
||||||||
Carrying amount of goodwill as of December 31, 2015
|
$
|
26,722
|
|
$
|
4,788
|
|
$
|
2,507
|
|
$
|
34,017
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||
Vendor and security deposits
|
$
|
11,486
|
|
|
$
|
3,373
|
|
Income tax receivable
|
9,482
|
|
|
5,163
|
|
||
Deferred tax assets, net
|
17,827
|
|
|
6,308
|
|
||
Indemnification asset
|
—
|
|
|
8,792
|
|
||
GTX Trade Receivables
|
4,881
|
|
|
4,190
|
|
||
Customer Debit Positions
|
7,340
|
|
|
6,594
|
|
||
Allowance on customer debit positions
|
(6,832
|
)
|
|
(4,555
|
)
|
||
Miscellaneous receivables
|
2,416
|
|
|
3,900
|
|
||
Equity method investment
|
822
|
|
|
—
|
|
||
|
$
|
47,422
|
|
|
$
|
33,765
|
|
Cash
|
$
|
6,103
|
|
Convertible senior notes
|
65,000
|
|
|
Common stock issued
|
45,100
|
|
|
Total purchase price
|
$
|
116,203
|
|
Cash
|
$
|
10,546
|
|
Cash and securities held for customers
|
281,576
|
|
|
Receivable from brokers
|
35,974
|
|
|
Property and equipment
|
10,466
|
|
|
Prepaid assets
|
4,038
|
|
|
Other assets
|
5,119
|
|
|
Total tangible assets
|
347,719
|
|
|
Total liabilities assumed
|
299,000
|
|
|
Net assets acquired
|
48,719
|
|
|
Identifiable intangible assets:
|
|
||
Customer list
|
34,277
|
|
|
Trade name
|
6,645
|
|
|
Technology
|
26,157
|
|
|
Intangible assets, net
|
67,079
|
|
|
Goodwill
|
$
|
405
|
|
Cash
|
$
|
9,732
|
|
Contingent payment
|
10,540
|
|
|
Total purchase price
|
$
|
20,272
|
|
Cash and cash equivalents
|
$
|
2,193
|
|
Receivable from brokers
|
745
|
|
|
Property and equipment
|
12
|
|
|
Prepaid assets
|
94
|
|
|
Other assets
|
64
|
|
|
Total tangible assets
|
3,108
|
|
|
Total liabilities assumed
|
1,931
|
|
|
Net assets acquired
|
1,177
|
|
|
Identifiable intangible assets:
|
|
||
Customer list
|
4,203
|
|
|
Trade name
|
784
|
|
|
Intangible assets, net
|
4,987
|
|
|
Goodwill
|
$
|
14,108
|
|
Cash
|
$
|
4,365
|
|
Common Stock issued
|
1,241
|
|
|
Total purchase price
|
$
|
5,606
|
|
Non-controlling interest
|
$
|
4,509
|
|
|
|
||
Cash and cash equivalents
|
$
|
360
|
|
Receivable from brokers
|
438
|
|
|
Property and equipment
|
148
|
|
|
Prepaid assets
|
153
|
|
|
Other assets
|
3
|
|
|
Total tangible assets
|
1,102
|
|
|
Total liabilities assumed
|
515
|
|
|
Net assets acquired
|
587
|
|
|
Identifiable intangible assets:
|
|
||
Customer list
|
3,100
|
|
|
Trade name
|
270
|
|
|
Intangible assets, net
|
3,370
|
|
|
Goodwill
|
$
|
6,158
|
|
Non-controlling interest
|
$
|
3,885
|
|
|
|
||
Cash and cash equivalents
|
$
|
73
|
|
Receivable from brokers
|
663
|
|
|
Total tangible assets
|
736
|
|
|
Total liabilities assumed
|
1,103
|
|
|
Net liabilities assumed
|
(367
|
)
|
|
Identifiable intangible assets:
|
|
||
Customer list
|
3,900
|
|
|
Trade name
|
90
|
|
|
Intangible assets, net
|
3,990
|
|
|
Goodwill
|
$
|
3,806
|
|
|
|
||
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
|
$
|
15,781
|
|
Cash and cash equivalents held for customers
|
228,419
|
|
|
Receivable from brokers
|
61,028
|
|
|
Property and equipment
|
7,515
|
|
|
Other assets
|
18,942
|
|
|
Total tangible assets
|
331,685
|
|
|
Total liabilities assumed
|
251,691
|
|
|
Net assets acquired
|
79,994
|
|
|
Identifiable intangible assets:
|
|
||
Software
|
25,300
|
|
|
Customer relationships
|
3,150
|
|
|
Intangible assets, net
|
28,450
|
|
|
Goodwill
|
$
|
1,687
|
|
|
For the Fiscal Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
REVENUE:
|
|
|
|
||||
Total non-interest revenue
|
$
|
471,959
|
|
|
$
|
506,228
|
|
Interest revenue
|
1,303
|
|
|
2,288
|
|
||
Interest expense
|
1,049
|
|
|
599
|
|
||
Total net interest revenue
|
254
|
|
|
1,689
|
|
||
Net revenue
|
472,213
|
|
|
507,917
|
|
||
EXPENSES:
|
|
|
|
||||
Depreciation and amortization
|
11,753
|
|
|
16,500
|
|
||
Purchased intangible amortization
|
18,619
|
|
|
17,962
|
|
||
Other expense items
|
424,229
|
|
|
430,263
|
|
||
Total operating expense
|
454,601
|
|
|
464,725
|
|
||
OPERATING PROFIT
|
17,612
|
|
|
43,192
|
|
||
Interest on long term borrowings
|
10,267
|
|
|
9,283
|
|
||
Gain on extinguishment of debt
|
—
|
|
|
—
|
|
||
Impairment of investment
|
—
|
|
|
—
|
|
||
INCOME BEFORE INCOME TAX EXPENSE
|
7,345
|
|
|
33,909
|
|
||
Income tax expense
|
126
|
|
|
16,399
|
|
||
NET INCOME
|
7,219
|
|
|
17,510
|
|
||
Net income attributable to non-controlling interests
|
1,660
|
|
|
1,433
|
|
||
Net income applicable to Gain Capital Holdings, Inc.
|
$
|
5,559
|
|
|
$
|
16,077
|
|
|
For the Fiscal Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
REVENUE:
|
|
|
|
||||
Total non-interest revenue
|
$
|
376,362
|
|
|
$
|
289,810
|
|
Interest revenue
|
1,435
|
|
|
856
|
|
||
Interest expense
|
599
|
|
|
156
|
|
||
Total net interest revenue
|
836
|
|
|
700
|
|
||
Net revenue
|
377,198
|
|
|
290,510
|
|
||
EXPENSES:
|
|
|
|
||||
Depreciation and amortization
|
6,626
|
|
|
8,407
|
|
||
Purchased intangible amortization
|
9,044
|
|
|
4,834
|
|
||
Other expense items
|
308,607
|
|
|
227,273
|
|
||
Total operating expense
|
324,277
|
|
|
240,514
|
|
||
OPERATING PROFIT
|
52,921
|
|
|
49,996
|
|
||
Interest on long term borrowings
|
(6,147
|
)
|
|
(1,232
|
)
|
||
Gain on extinguishment of debt
|
—
|
|
|
2,000
|
|
||
INCOME BEFORE INCOME TAX EXPENSE
|
46,774
|
|
|
50,764
|
|
||
Income tax expense
|
19,316
|
|
|
18,750
|
|
||
NET INCOME
|
27,458
|
|
|
32,014
|
|
||
Net income attributable to non-controlling interests
|
1,308
|
|
|
691
|
|
||
Net income applicable to Gain Capital Holdings, Inc.
|
$
|
26,150
|
|
|
$
|
31,323
|
|
|
For the Fiscal Year Ended December 31,
|
||||||
|
2013
|
|
2012
|
||||
REVENUE:
|
|
|
|
||||
Total non-interest revenue
|
$
|
353,556
|
|
|
$
|
248,592
|
|
Interest revenue
|
927
|
|
|
1,096
|
|
||
Interest expense
|
634
|
|
|
537
|
|
||
Total net interest revenue
|
293
|
|
|
559
|
|
||
Net revenue
|
353,849
|
|
|
249,151
|
|
||
EXPENSES:
|
|
|
|
||||
Other expense items
(1)
|
299,945
|
|
|
261,679
|
|
||
Depreciation and amortization
|
11,527
|
|
|
7,958
|
|
||
Purchased intangible amortization
|
5,157
|
|
|
7,250
|
|
||
Acquisition expense
|
1,824
|
|
|
85
|
|
||
Restructuring
|
451
|
|
|
634
|
|
||
Integration
|
1,950
|
|
|
—
|
|
||
Total expense
|
320,854
|
|
|
277,606
|
|
||
OPERATING PROFIT/(LOSSES)
|
32,995
|
|
|
(28,455
|
)
|
||
Interest expense on long term borrowings
|
1,232
|
|
|
444
|
|
||
Gain on extinguishment of debt
|
2,000
|
|
|
—
|
|
||
INCOME BEFORE INCOME TAX EXPENSE/(BENEFIT)
|
33,763
|
|
|
(28,899
|
)
|
||
Income tax expense
|
16,106
|
|
|
(10,837
|
)
|
||
NET INCOME/(LOSS)
|
$
|
17,657
|
|
|
$
|
(18,062
|
)
|
|
Redeemable non-controlling interests
|
||
December 31, 2013
|
$
|
—
|
|
Non-controlling interests related to 2014 acquisitions
|
8,394
|
|
|
Adjustment to the redemption value of non-controlling interests
|
2,107
|
|
|
Net income attributable to non-controlling interests
|
1,433
|
|
|
Distributions to non-controlling interest holders
|
(596
|
)
|
|
December 31, 2014
|
$
|
11,338
|
|
Adjustment to the redemption value of non-controlling interests
|
(308
|
)
|
|
Net income attributable to non-controlling interests
|
1,660
|
|
|
Distributions to non-controlling interest holders
|
(1,644
|
)
|
|
December 31, 2015
|
$
|
11,046
|
|
•
|
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 (such
five
consecutive trading day period 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 the Company's common stock and the conversion rate on such trading day;
|
•
|
Upon the occurrence of specified corporate events (as described in the offering memorandum); or
|
•
|
If the Company has called the notes for redemption (as described in the offering memorandum).
|
|
December 31,
|
|
December 31,
|
||||
|
2015
|
|
2014
|
||||
Liability component - principal
|
$
|
140,000
|
|
|
$
|
80,000
|
|
Deferred bond discount
|
18,004
|
|
|
11,633
|
|
||
Liability component - net carrying value
|
$
|
121,996
|
|
|
$
|
68,367
|
|
|
|
|
|
||||
Additional paid in capital
|
$
|
27,920
|
|
|
$
|
12,572
|
|
Discount attributable to equity
|
(412
|
)
|
|
(425
|
)
|
||
Equity component
|
$
|
27,508
|
|
|
$
|
12,147
|
|
|
For the Fiscal Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Interest expense - stated coupon rate
|
$
|
5,156
|
|
|
$
|
3,300
|
|
Interest expense - amortization of deferred bond discount and costs
|
3,712
|
|
|
2,593
|
|
||
Total interest expense - convertible note
|
$
|
8,868
|
|
|
$
|
5,893
|
|
|
For the Years Ended December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Employee compensation and benefits
|
3,680
|
|
|
3,452
|
|
|
2,975
|
|
|
|
Options Outstanding
|
|
|
||||||||||
|
|
|
|
|
|
Weighted
|
|
|
||||||
|
|
|
|
Weighted
|
|
Average
|
|
|
||||||
|
|
Number of
|
|
Average
|
|
Remaining
|
|
Aggregate
|
||||||
|
|
Options
|
|
Exercise Price
|
|
Life (Years)
|
|
Intrinsic Value
|
||||||
Outstanding January 1, 2015
|
|
1,908
|
|
|
$
|
4.83
|
|
|
3.30
|
|
|
|||
Granted
|
|
137
|
|
|
9.51
|
|
|
6.40
|
|
|
||||
Exercised
|
|
(638
|
)
|
|
3.74
|
|
|
1.86
|
|
|
||||
Forfeited/Expired
|
|
(49
|
)
|
|
6.62
|
|
|
5.00
|
|
|
||||
Outstanding December 31, 2015
|
|
1,358
|
|
|
$
|
5.76
|
|
|
4.16
|
|
$
|
3,544
|
|
|
Vested and expected to vest options
|
|
1,340
|
|
|
$
|
5.71
|
|
|
4.13
|
|
$
|
3,525
|
|
|
Exercisable, December 31, 2015
|
|
938
|
|
|
$
|
5.17
|
|
|
3.83
|
|
$
|
2,792
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fair market value of common stock at exercise date
|
|
$
|
5,869
|
|
|
|
|
|
|
|
||||
Cost to exercise
|
|
2,388
|
|
|
|
|
|
|
|
|||||
Net value of stock options exercised
|
|
$
|
3,481
|
|
|
|
|
|
|
|
|
|
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
|
||||||
$3.83
|
|
481
|
|
|
$
|
3.83
|
|
|
1.64
|
|
481
|
|
|
$
|
3.83
|
|
$4.40
|
|
238
|
|
|
4.40
|
|
|
4.22
|
|
90
|
|
|
$
|
4.40
|
|
|
$5.30
|
|
208
|
|
|
5.30
|
|
|
3.31
|
|
136
|
|
|
$
|
5.30
|
|
|
$8.02
|
|
210
|
|
|
8.02
|
|
|
2.29
|
|
210
|
|
|
$
|
8.02
|
|
|
$9.51
|
|
137
|
|
|
9.51
|
|
|
9.51
|
|
—
|
|
|
$
|
9.51
|
|
|
$9.95
|
|
84
|
|
|
9.95
|
|
|
5.18
|
|
21
|
|
|
$
|
9.95
|
|
|
|
|
1,358
|
|
|
$
|
5.76
|
|
|
4.16
|
|
938
|
|
|
$
|
5.17
|
|
|
For the Fiscal Year Ended December 31,
|
||||
|
2015
|
|
2014
|
|
2013
|
Valuation Assumptions
|
|
|
|
|
|
Risk-free rate
|
1.47%
|
|
1.40%
|
|
0.80%
|
Expected volatility
|
49.08%
|
|
51.80%
|
|
48.80%
|
Expected term (years)
|
4.75
|
|
4.80
|
|
4.80
|
Dividend yield
|
2.1%
|
|
2.0%
|
|
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, 2015
|
1,073
|
|
|
$
|
6.69
|
|
|
54
|
|
|
$
|
7.31
|
|
Granted
|
601
|
|
|
9.42
|
|
|
—
|
|
|
—
|
|
||
Vested
|
(387
|
)
|
|
6.46
|
|
|
(53
|
)
|
|
7.32
|
|
||
Forfeited
|
(104
|
)
|
|
8.08
|
|
|
(1
|
)
|
|
6.48
|
|
||
Non-vested at December 31, 2015
|
1,183
|
|
|
$
|
8.03
|
|
|
—
|
|
|
$
|
—
|
|
|
For the years ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net income applicable to GAIN Capital Holdings, Inc.
|
$
|
10,279
|
|
|
$
|
24,877
|
|
|
$
|
28,107
|
|
Adjustment
(1)(2)
|
308
|
|
|
(2,107
|
)
|
|
(154
|
)
|
|||
Net income available to GAIN common shareholders
|
$
|
10,587
|
|
|
$
|
22,770
|
|
|
$
|
27,953
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
||||||
Basic weighted average common shares outstanding
|
47,601,979
|
|
|
40,561,644
|
|
|
36,551,246
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Stock options
|
424,087
|
|
|
763,068
|
|
|
1,214,370
|
|
|||
RSUs/RSAs
|
352,985
|
|
|
1,890,183
|
|
|
1,867,262
|
|
|||
Diluted weighted average common shares outstanding
|
48,379,051
|
|
|
43,214,895
|
|
|
39,632,878
|
|
|||
Earnings per common share
|
|
|
|
|
|
||||||
Basic
|
$
|
0.22
|
|
|
$
|
0.56
|
|
|
$
|
0.76
|
|
Diluted
|
$
|
0.22
|
|
|
$
|
0.53
|
|
|
$
|
0.71
|
|
(1)
|
During the years ending December 31, 2015 and 2014, the Company concluded that the carrying value of the Company's redeemable non-controlling interests was less than its redemption value. The adjustment to increase carrying value reduces earnings available to the Company's shareholders.
|
(2)
|
During the year ending December 31, 2013, 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 Company's IPO in 2010.
|
|
For the Fiscal Year Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
U.S.
|
$
|
(39,761
|
)
|
|
$
|
17,439
|
|
|
$
|
18,546
|
|
Non-U.S.
|
48,188
|
|
|
28,011
|
|
|
26,944
|
|
|||
Total income before tax (benefit) / expense
|
$
|
8,427
|
|
|
$
|
45,450
|
|
|
$
|
45,490
|
|
|
For the Fiscal Year Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
1,136
|
|
|
$
|
8,658
|
|
|
$
|
15,201
|
|
State
|
172
|
|
|
(199
|
)
|
|
321
|
|
|||
UK
|
7,239
|
|
|
5,322
|
|
|
7,275
|
|
|||
Japan
|
127
|
|
|
173
|
|
|
14
|
|
|||
Other non-U.S.
|
169
|
|
|
78
|
|
|
3
|
|
|||
Total current income tax expense
|
8,843
|
|
|
14,032
|
|
|
22,814
|
|
|||
Deferred
|
|
|
|
|
|
||||||
Federal
|
(9,889
|
)
|
|
4,966
|
|
|
(5,883
|
)
|
|||
State
|
(1,375
|
)
|
|
(99
|
)
|
|
205
|
|
|||
UK
|
(337
|
)
|
|
(122
|
)
|
|
—
|
|
|||
Japan
|
(148
|
)
|
|
159
|
|
|
121
|
|
|||
Other non-U.S.
|
(545
|
)
|
|
20
|
|
|
(316
|
)
|
|||
Change in valuation allowance
|
(61
|
)
|
|
184
|
|
|
442
|
|
|||
Total deferred tax (benefit) / expense
|
(12,355
|
)
|
|
5,108
|
|
|
(5,431
|
)
|
|||
Total income tax (benefit) / expense
|
$
|
(3,512
|
)
|
|
$
|
19,140
|
|
|
$
|
17,383
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Deferred tax assets
|
|
|
|
||||
Foreign net operating losses
|
$
|
13,286
|
|
|
$
|
1,909
|
|
Unrealized trading losses
|
—
|
|
|
1,293
|
|
||
Stock-based compensation expense
|
1,437
|
|
|
1,474
|
|
||
Intangible assets
|
3,012
|
|
|
6,698
|
|
||
Basis difference in property and equipment
|
4,950
|
|
|
—
|
|
||
Other
|
2,962
|
|
|
2,126
|
|
||
Total deferred tax assets
|
25,647
|
|
|
13,500
|
|
||
Valuation allowance
|
(853
|
)
|
|
(913
|
)
|
||
Total deferred tax assets after valuation allowance
|
$
|
24,794
|
|
|
$
|
12,587
|
|
|
|
|
|
||||
Deferred tax liabilities
|
|
|
|
||||
Basis difference in property and equipment
|
$
|
—
|
|
|
$
|
(1,717
|
)
|
Discount on convertible note
|
(6,186
|
)
|
|
(3,778
|
)
|
||
Other
|
(781
|
)
|
|
(784
|
)
|
||
Total deferred liabilities
|
(6,967
|
)
|
|
(6,279
|
)
|
||
Net deferred tax assets
|
$
|
17,827
|
|
|
$
|
6,308
|
|
|
2015
|
|
2014
|
|
2013
|
|||
Federal income tax at statutory rate
|
35.00
|
%
|
|
35.00
|
%
|
|
35.00
|
%
|
Increase/(decrease) in effective tax rate resulting from:
|
|
|
|
|
|
|||
State income tax
|
(9.25
|
)%
|
|
(0.57
|
)%
|
|
0.76
|
%
|
Foreign rate differential
|
(96.96
|
)%
|
|
(9.71
|
)%
|
|
(5.22
|
)%
|
Deemed dividends
|
55.30
|
%
|
|
—
|
%
|
|
—
|
%
|
Non deductible transaction costs
|
11.71
|
%
|
|
1.42
|
%
|
|
—
|
%
|
Impact of non-controlling interests
|
(6.89
|
)%
|
|
(1.10
|
)%
|
|
—
|
%
|
Contingent liability
|
(27.92
|
)%
|
|
—
|
%
|
|
—
|
%
|
Foreign losses
|
(19.20
|
)%
|
|
—
|
%
|
|
—
|
%
|
162 (m)
|
3.44
|
%
|
|
—
|
%
|
|
—
|
%
|
GFT Carryback
|
(6.58
|
)%
|
|
—
|
%
|
|
—
|
%
|
Uncertain tax positions
|
19.67
|
%
|
|
14.04
|
%
|
|
5.88
|
%
|
Other permanent differences
|
—
|
%
|
|
3.03
|
%
|
|
1.79
|
%
|
Effective Tax Rate
|
(41.68
|
)%
|
|
42.11
|
%
|
|
38.21
|
%
|
•
|
The Company had outstanding intercompany balances between U.S. and non-U.S. entities, which resulted in a taxable deemed dividend of
$37.2 million
. This is represented by the deemed dividend adjustment in the table above.
|
•
|
The Company adjusted the fair value of contingent consideration relating to the Galvan acquisition. This resulted in non-taxable earnings of
$6.7 million
. This is represented by the contingent liability adjustment in the table above.
|
•
|
The Company received a favorable tax ruling on the utilization of historic foreign operating losses and was able to record a deferred tax asset of
$1.6 million
. This is represented by the foreign losses adjustment in the table above.
|
|
As of December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Beginning balance as of January 1
|
$
|
10,517
|
|
|
$
|
8,345
|
|
|
$
|
78
|
|
Increases based on tax positions related to the current period
|
885
|
|
|
2,197
|
|
|
8,287
|
|
|||
Increases based on tax positions related to prior periods
|
429
|
|
|
—
|
|
|
—
|
|
|||
Decreases related to a lapse of applicable statute of limitations
|
(30
|
)
|
|
(25
|
)
|
|
(20
|
)
|
|||
Ending balance as of December 31
|
$
|
11,801
|
|
|
$
|
10,517
|
|
|
$
|
8,345
|
|
Entity Name
|
Minimum
Regulatory Capital Requirements |
|
Capital
Levels Maintained |
|
Excess
Net Capital |
|
Percent of
Requirement Maintained |
|||||||
GAIN Capital Group, LLC
|
$
|
26.1
|
|
|
$
|
36.3
|
|
|
$
|
10.2
|
|
|
139
|
%
|
GAIN Capital Forex.com U.K., Ltd.
|
27.8
|
|
|
61.6
|
|
|
33.8
|
|
|
222
|
%
|
|||
Forex.com Japan., Ltd.
|
0.9
|
|
|
9.6
|
|
|
8.7
|
|
|
1,067
|
%
|
|||
GAIN Capital-Forex.com Hong Kong, Ltd.
|
1.9
|
|
|
3.9
|
|
|
2.0
|
|
|
205
|
%
|
|||
GAIN Capital Forex.com Australia, Pty. Ltd.
|
0.7
|
|
|
2.4
|
|
|
1.7
|
|
|
343
|
%
|
|||
Galvan Research and Trading, Ltd.
|
0.7
|
|
|
4.3
|
|
|
3.6
|
|
|
614
|
%
|
|||
GAIN Capital-Forex.com Canada Ltd.
|
0.2
|
|
|
1.4
|
|
|
1.2
|
|
|
700
|
%
|
|||
GAIN Capital Securities, Inc.
|
0.1
|
|
|
0.4
|
|
|
0.3
|
|
|
400
|
%
|
|||
GAIN Global Markets, Inc.
|
0.2
|
|
|
0.3
|
|
|
0.1
|
|
|
150
|
%
|
|||
GAIN Capital UK, Ltd.
|
54.5
|
|
|
127.9
|
|
|
73.4
|
|
|
235
|
%
|
|||
GAIN Capital Singapore Pte, Ltd.
|
0.6
|
|
|
7.4
|
|
|
6.8
|
|
|
1,233
|
%
|
|||
GAIN Capital Australia Pty Ltd.
|
0.7
|
|
|
2.8
|
|
|
2.1
|
|
|
400
|
%
|
|||
Global Assets Advisors, LLC
|
0.1
|
|
|
1.2
|
|
|
1.1
|
|
|
1,200
|
%
|
|||
Total
|
$
|
114.5
|
|
|
$
|
259.5
|
|
|
$
|
145.0
|
|
|
227
|
%
|
Retail
|
|||||||||||
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net revenue
|
$
|
351,472
|
|
|
$
|
296,941
|
|
|
$
|
218,848
|
|
|
|
|
|
|
|
||||||
Employee compensation and benefits
|
67,515
|
|
|
61,989
|
|
|
44,924
|
|
|||
Selling and marketing
|
26,129
|
|
|
19,574
|
|
|
21,761
|
|
|||
Referral fees
|
87,175
|
|
|
78,553
|
|
|
41,459
|
|
|||
Other operating expenses
|
76,301
|
|
|
51,561
|
|
|
33,148
|
|
|||
Segment profit
|
$
|
94,352
|
|
|
$
|
85,264
|
|
|
$
|
77,556
|
|
|
|
|
|
|
|
||||||
Institutional
|
|||||||||||
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net revenue
|
$
|
35,072
|
|
|
$
|
35,413
|
|
|
$
|
29,213
|
|
|
|
|
|
|
|
||||||
Employee compensation and benefits
|
15,305
|
|
|
13,963
|
|
|
13,006
|
|
|||
Selling and marketing
|
138
|
|
|
120
|
|
|
244
|
|
|||
Referral fees
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other operating expenses
|
9,573
|
|
|
10,939
|
|
|
8,170
|
|
|||
Segment profit
|
$
|
10,056
|
|
|
$
|
10,391
|
|
|
$
|
7,793
|
|
|
|
|
|
|
|
||||||
Futures
|
|||||||||||
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||
Net revenue
|
$
|
45,797
|
|
|
36,016
|
|
|
23,360
|
|
||
|
|
|
|
|
|
||||||
Employee compensation and benefits
|
10,634
|
|
|
8,918
|
|
|
3,399
|
|
|||
Selling and marketing
|
901
|
|
|
519
|
|
|
332
|
|
|||
Referral fees
|
16,348
|
|
|
12,419
|
|
|
11,164
|
|
|||
Other operating expenses
|
13,960
|
|
|
11,585
|
|
|
8,948
|
|
|||
Segment profit
|
$
|
3,954
|
|
|
$
|
2,575
|
|
|
$
|
(483
|
)
|
|
|
|
|
|
|
||||||
Corporate and Other
|
|||||||||||
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Other revenue
|
$
|
(3,716
|
)
|
|
$
|
819
|
|
|
$
|
(3,729
|
)
|
|
|
|
|
|
|
||||||
Employee compensation and benefits
|
13,127
|
|
|
14,362
|
|
|
13,279
|
|
|||
Selling and marketing
|
—
|
|
|
—
|
|
|
—
|
|
|||
Referral fees
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other operating expenses
|
11,038
|
|
|
10,001
|
|
|
7,272
|
|
|||
Loss
|
$
|
(27,881
|
)
|
|
$
|
(23,544
|
)
|
|
$
|
(24,280
|
)
|
|
For the Fiscal Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Retail segment
|
$
|
94,352
|
|
|
$
|
85,264
|
|
|
$
|
77,556
|
|
Institutional segment
|
10,056
|
|
|
10,391
|
|
|
7,793
|
|
|||
Futures segment
|
3,954
|
|
|
2,575
|
|
|
(483
|
)
|
|||
Corporate and other
|
(27,881
|
)
|
|
(23,544
|
)
|
|
(24,280
|
)
|
|||
SEGMENT PROFIT
|
80,481
|
|
|
74,686
|
|
|
60,586
|
|
|||
Depreciation and amortization
|
11,111
|
|
|
6,610
|
|
|
8,283
|
|
|||
Purchased intangible amortization
|
16,550
|
|
|
8,080
|
|
|
2,906
|
|
|||
Acquisition expenses
|
2,819
|
|
|
3,526
|
|
|
1,824
|
|
|||
Restructuring expenses
|
3,482
|
|
|
2,334
|
|
|
450
|
|
|||
Integration expenses
|
33,092
|
|
|
2,489
|
|
|
1,950
|
|
|||
Impairment of investment
|
—
|
|
|
50
|
|
|
450
|
|
|||
Change in fair value to contingent consideration
|
(6,722
|
)
|
|
—
|
|
|
—
|
|
|||
SNB bad debt provision
|
2,500
|
|
|
—
|
|
|
—
|
|
|||
OPERATING PROFIT
|
17,649
|
|
|
51,597
|
|
|
44,723
|
|
|||
Interest expense on long term borrowings
|
9,222
|
|
|
6,147
|
|
|
1,233
|
|
|||
Gain on extinguishment of debt
|
—
|
|
|
—
|
|
|
2,000
|
|
|||
INCOME BEFORE INCOME TAX EXPENSE
|
$
|
8,427
|
|
|
$
|
45,450
|
|
|
$
|
45,490
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net Revenue
(1)
:
|
|
|
|
|
|
||||||
North America
(2)
|
$
|
107,534
|
|
|
$
|
133,103
|
|
|
$
|
153,449
|
|
Europe
(3)
|
307,087
|
|
|
237,391
|
|
|
33,347
|
|
|||
Other
|
20,726
|
|
|
(1,305
|
)
|
|
80,895
|
|
|||
Total Net Revenue
|
$
|
435,347
|
|
|
$
|
369,189
|
|
|
$
|
267,691
|
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
||||||||
For the Year Ended December 31, 2015 (As Restated)
|
|
|
|
|
|
|
|
||||||||
Total non-interest revenue
|
$
|
92,967
|
|
|
$
|
111,452
|
|
|
$
|
128,045
|
|
|
$
|
102,712
|
|
Net revenue
|
$
|
92,986
|
|
|
$
|
111,457
|
|
|
$
|
128,111
|
|
|
$
|
102,793
|
|
Income/(loss) before income tax expense
|
$
|
11,554
|
|
|
$
|
(12,741
|
)
|
|
$
|
9,418
|
|
|
$
|
196
|
|
Net income/(loss)
|
$
|
5,809
|
|
|
$
|
(12,481
|
)
|
|
$
|
2,784
|
|
|
$
|
15,827
|
|
Net income attributable to non-controlling interest
|
$
|
344
|
|
|
$
|
416
|
|
|
$
|
583
|
|
|
$
|
317
|
|
Net income/(loss) applicable to GAIN Capital Holdings, Inc.
|
$
|
5,465
|
|
|
$
|
(12,897
|
)
|
|
$
|
2,201
|
|
|
$
|
15,510
|
|
Basic net income/(loss) per share
|
$
|
0.11
|
|
|
$
|
(0.28
|
)
|
|
$
|
0.07
|
|
|
$
|
0.32
|
|
Diluted net income/(loss) per share
|
$
|
0.11
|
|
|
$
|
(0.28
|
)
|
|
$
|
0.07
|
|
|
$
|
0.32
|
|
|
|
|
|
|
|
|
|
||||||||
For the Year Ended December 31, 2014 (As Restated)
|
|
|
|
|
|
|
|
||||||||
Total non-interest revenue
|
$
|
80,412
|
|
|
$
|
70,005
|
|
|
$
|
102,786
|
|
|
$
|
115,157
|
|
Net revenue
|
$
|
80,722
|
|
|
$
|
70,264
|
|
|
$
|
102,956
|
|
|
$
|
115,275
|
|
Income/(loss) before income tax expense
|
$
|
3,835
|
|
|
$
|
(6,421
|
)
|
|
$
|
20,888
|
|
|
$
|
27,149
|
|
Net income/(loss)
|
$
|
577
|
|
|
$
|
(7,583
|
)
|
|
$
|
10,348
|
|
|
$
|
22,966
|
|
Net income attributable to non-controlling interest
|
$
|
38
|
|
|
$
|
164
|
|
|
$
|
785
|
|
|
$
|
446
|
|
Net income/(loss) applicable to GAIN Capital Holdings, Inc.
|
$
|
539
|
|
|
$
|
(7,747
|
)
|
|
$
|
9,563
|
|
|
$
|
22,520
|
|
Basic net income/(loss) per share
|
$
|
0.01
|
|
|
$
|
(0.20
|
)
|
|
$
|
0.19
|
|
|
$
|
0.54
|
|
Diluted net income/(loss) per share
|
$
|
0.01
|
|
|
$
|
(0.20
|
)
|
|
$
|
0.18
|
|
|
$
|
0.51
|
|
|
As Reported
|
|
Tax Adjustments
|
|
Other Adjustments
|
|
As Restated
|
||||||||
For the three months ended September 30, 2015
|
|
|
|
|
|
|
|
||||||||
Total non-interest revenue
|
$
|
127,865
|
|
|
$
|
—
|
|
|
$
|
180
|
|
|
$
|
128,045
|
|
Net revenue
|
$
|
127,931
|
|
|
$
|
—
|
|
|
$
|
180
|
|
|
$
|
128,111
|
|
Income/(loss) before income tax expense
|
$
|
9,215
|
|
|
$
|
—
|
|
|
$
|
203
|
|
|
$
|
9,418
|
|
Net income/(loss)
|
$
|
8,887
|
|
|
$
|
(6,306
|
)
|
|
$
|
203
|
|
|
$
|
2,784
|
|
Net income attributable to non-controlling interest
|
$
|
583
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
583
|
|
Net income/(loss) applicable to GAIN Capital Holdings, Inc.
|
$
|
8,304
|
|
|
$
|
(6,306
|
)
|
|
$
|
203
|
|
|
$
|
2,201
|
|
Basic net income/(loss)per share
|
$
|
0.20
|
|
|
|
|
|
|
$
|
0.07
|
|
||||
Diluted net income/(loss) per share
|
$
|
0.20
|
|
|
|
|
|
|
$
|
0.07
|
|
|
As Reported
|
|
Tax Adjustments
|
|
Other Adjustments
|
|
As Restated
|
||||||||
For the three months ended June 30, 2015
|
|
|
|
|
|
|
|
||||||||
Total non-interest revenue
|
$
|
111,559
|
|
|
$
|
—
|
|
|
$
|
(107
|
)
|
|
$
|
111,452
|
|
Net revenue
|
$
|
111,564
|
|
|
$
|
—
|
|
|
$
|
(107
|
)
|
|
$
|
111,457
|
|
Income/(loss) before income tax expense
|
$
|
(12,538
|
)
|
|
$
|
—
|
|
|
$
|
(203
|
)
|
|
$
|
(12,741
|
)
|
Net income/(loss)
|
$
|
(8,414
|
)
|
|
$
|
(3,864
|
)
|
|
$
|
(203
|
)
|
|
$
|
(12,481
|
)
|
Net income attributable to non-controlling interest
|
$
|
416
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
416
|
|
Net income/(loss) applicable to GAIN Capital Holdings, Inc.
|
$
|
(8,830
|
)
|
|
$
|
(3,864
|
)
|
|
$
|
(203
|
)
|
|
$
|
(12,897
|
)
|
Basic net income/(loss)per share
|
$
|
(0.23
|
)
|
|
|
|
|
|
$
|
(0.28
|
)
|
||||
Diluted net income/(loss) per share
|
$
|
(0.23
|
)
|
|
|
|
|
|
$
|
(0.28
|
)
|
|
As Reported
|
|
Tax Adjustments
|
|
Other Adjustments
|
|
As Restated
|
||||||||
For the three months ended March 31, 2015
|
|
|
|
|
|
|
|
||||||||
Total non-interest revenue
|
$
|
92,933
|
|
|
$
|
—
|
|
|
$
|
34
|
|
|
$
|
92,967
|
|
Net revenue
|
$
|
92,952
|
|
|
$
|
—
|
|
|
$
|
34
|
|
|
$
|
92,986
|
|
Income/(loss) before income tax expense
|
$
|
11,498
|
|
|
$
|
—
|
|
|
$
|
56
|
|
|
$
|
11,554
|
|
Net income/(loss)
|
$
|
8,680
|
|
|
$
|
(2,927
|
)
|
|
$
|
56
|
|
|
$
|
5,809
|
|
Net income attributable to non-controlling interest
|
$
|
344
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
344
|
|
Net income/(loss) applicable to GAIN Capital Holdings, Inc.
|
$
|
8,336
|
|
|
$
|
(2,927
|
)
|
|
$
|
56
|
|
|
$
|
5,465
|
|
Basic net income/(loss)per share
|
$
|
0.19
|
|
|
|
|
|
|
$
|
0.11
|
|
||||
Diluted net income/(loss) per share
|
$
|
0.18
|
|
|
|
|
|
|
$
|
0.11
|
|
|
As Reported
|
|
Tax Adjustments
|
|
Other Adjustments
|
|
As Restated
|
||||||||
For the three months ended December 31, 2014
|
|
|
|
|
|
|
|
||||||||
Total non-interest revenue
|
$
|
114,725
|
|
|
$
|
—
|
|
|
$
|
432
|
|
|
$
|
115,157
|
|
Net revenue
|
$
|
114,751
|
|
|
$
|
—
|
|
|
$
|
524
|
|
|
$
|
115,275
|
|
Income/(loss) before income tax expense
|
$
|
26,456
|
|
|
$
|
—
|
|
|
$
|
693
|
|
|
$
|
27,149
|
|
Net income/(loss)
|
$
|
18,058
|
|
|
$
|
4,162
|
|
|
$
|
746
|
|
|
$
|
22,966
|
|
Net income attributable to non-controlling interest
|
$
|
446
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
446
|
|
Net income/(loss) applicable to GAIN Capital Holdings, Inc.
|
$
|
17,612
|
|
|
$
|
4,162
|
|
|
$
|
746
|
|
|
$
|
22,520
|
|
Basic net income/(loss)per share
|
$
|
0.44
|
|
|
|
|
|
|
$
|
0.54
|
|
||||
Diluted net income/(loss) per share
|
$
|
0.42
|
|
|
|
|
|
|
$
|
0.51
|
|
|
As Reported
|
|
Tax Adjustments
|
|
Other Adjustments
|
|
As Restated
|
||||||||
For the three months ended September 30, 2014
|
|
|
|
|
|
|
|
||||||||
Total non-interest revenue
|
$
|
103,388
|
|
|
$
|
—
|
|
|
$
|
(602
|
)
|
|
$
|
102,786
|
|
Net revenue
|
$
|
103,650
|
|
|
$
|
—
|
|
|
$
|
(694
|
)
|
|
$
|
102,956
|
|
Income/(loss) before income tax expense
|
$
|
21,470
|
|
|
$
|
—
|
|
|
$
|
(582
|
)
|
|
$
|
20,888
|
|
Net income/(loss)
|
$
|
16,130
|
|
|
$
|
(5,199
|
)
|
|
$
|
(583
|
)
|
|
$
|
10,348
|
|
Net income attributable to non-controlling interest
|
$
|
785
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
785
|
|
Net income/(loss) applicable to GAIN Capital Holdings, Inc.
|
$
|
15,345
|
|
|
$
|
(5,199
|
)
|
|
$
|
(583
|
)
|
|
$
|
9,563
|
|
Basic net income/(loss)per share
|
$
|
0.35
|
|
|
|
|
|
|
$
|
0.19
|
|
||||
Diluted net income/(loss) per share
|
$
|
0.33
|
|
|
|
|
|
|
$
|
0.18
|
|
|
As Reported
|
|
Tax Adjustments
|
|
Other Adjustments
|
|
As Restated
|
||||||||
For the three months ended June 30, 2014
|
|
|
|
|
|
|
|
||||||||
Total non-interest revenue
|
$
|
69,504
|
|
|
$
|
—
|
|
|
$
|
501
|
|
|
$
|
70,005
|
|
Net revenue
|
$
|
69,763
|
|
|
$
|
—
|
|
|
$
|
501
|
|
|
$
|
70,264
|
|
Income/(loss) before income tax expense
|
$
|
(7,013
|
)
|
|
$
|
—
|
|
|
$
|
592
|
|
|
$
|
(6,421
|
)
|
Net income/(loss)
|
$
|
(4,992
|
)
|
|
$
|
(3,183
|
)
|
|
$
|
592
|
|
|
$
|
(7,583
|
)
|
Net income attributable to non-controlling interest
|
$
|
164
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
164
|
|
Net income/(loss) applicable to GAIN Capital Holdings, Inc.
|
$
|
(5,156
|
)
|
|
$
|
(3,183
|
)
|
|
$
|
592
|
|
|
$
|
(7,747
|
)
|
Basic net income/(loss)per share
|
$
|
(0.13
|
)
|
|
|
|
|
|
$
|
(0.20
|
)
|
||||
Diluted net income/(loss) per share
|
$
|
(0.13
|
)
|
|
|
|
|
|
$
|
(0.20
|
)
|
|
As Reported
|
|
Tax Adjustments
|
|
Other Adjustments
|
|
As Restated
|
||||||||
For the three months ended March 31, 2014
|
|
|
|
|
|
|
|
||||||||
Total non-interest revenue
|
$
|
81,087
|
|
|
$
|
—
|
|
|
$
|
(675
|
)
|
|
$
|
80,412
|
|
Net revenue
|
$
|
81,397
|
|
|
$
|
—
|
|
|
$
|
(675
|
)
|
|
$
|
80,722
|
|
Income/(loss) before income tax expense
|
$
|
5,140
|
|
|
$
|
—
|
|
|
$
|
(1,305
|
)
|
|
$
|
3,835
|
|
Net income/(loss)
|
$
|
3,863
|
|
|
$
|
(1,980
|
)
|
|
$
|
(1,305
|
)
|
|
$
|
577
|
|
Net income attributable to non-controlling interest
|
$
|
38
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
38
|
|
Net income/(loss) applicable to GAIN Capital Holdings, Inc.
|
$
|
3,826
|
|
|
$
|
(1,980
|
)
|
|
$
|
(1,305
|
)
|
|
$
|
539
|
|
Basic net income/(loss)per share
|
$
|
0.10
|
|
|
$
|
—
|
|
|
|
|
$
|
0.01
|
|
||
Diluted net income/(loss) per share
|
$
|
0.09
|
|
|
|
|
|
|
$
|
0.01
|
|
|
As of December 31,
|
||||||
|
2015
|
|
2014
(As Restated) |
||||
ASSETS:
|
|||||||
Cash and cash equivalents
|
$
|
451
|
|
|
$
|
1,184
|
|
Equity investments in subsidiaries
|
447,732
|
|
|
380,110
|
|
||
Receivables from affiliates
|
2,442
|
|
|
17,545
|
|
||
Prepaid assets
|
4
|
|
|
2
|
|
||
Income tax receivable
|
9,482
|
|
|
4,994
|
|
||
Deferred tax assets, net
|
13,563
|
|
|
5,911
|
|
||
Other assets
|
495
|
|
|
7,736
|
|
||
Total assets
|
$
|
474,169
|
|
|
$
|
417,482
|
|
LIABILITIES AND SHAREHOLDERS EQUITY:
|
|||||||
Liabilities
|
|
|
|
|
|
||
Accrued compensation and benefits
|
$
|
211
|
|
|
$
|
51
|
|
Accrued expenses and other liabilities
|
20,438
|
|
|
37,154
|
|
||
Payable to affiliates
|
25,440
|
|
|
61,990
|
|
||
Convertible senior notes
|
121,996
|
|
|
68,367
|
|
||
Total liabilities
|
168,085
|
|
|
167,562
|
|
||
Commitments and contingent liabilities (see Note 3)
|
|
|
|
||||
Shareholders' Equity
|
|
|
|
||||
Common stock ($0.00001 par value; 120 million shares authorized, 52,072,884 shares issued and 48,771,015 shares outstanding as of December 31, 2015; 60 million shares authorized, 45,582,066 shares issued and 42,934,559 shares outstanding as of December 31, 2014)
|
—
|
|
|
—
|
|
||
Accumulated other comprehensive income
|
(5,865
|
)
|
|
(1,513
|
)
|
||
Additional paid-in capital
|
212,981
|
|
|
148,378
|
|
||
Treasury stock, at cost (3,301,869 shares at December 31, 2015 and 2,647,507 at December 31, 2014, respectively)
|
(21,808
|
)
|
|
(16,720
|
)
|
||
Retained earnings
|
120,776
|
|
|
119,775
|
|
||
Total shareholders' equity
|
306,084
|
|
|
249,920
|
|
||
Total liabilities and shareholders' equity
|
$
|
474,169
|
|
|
$
|
417,482
|
|
|
For the Fiscal Year Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2015
|
|
2014
(As Restated) |
|
2013
(As Restated) |
||||||
REVENUE:
|
|
|
|
|
|
||||||
Dividends from subsidiaries
|
$
|
38,642
|
|
|
$
|
—
|
|
|
$
|
37,099
|
|
Interest and other
|
178
|
|
|
90
|
|
|
181
|
|
|||
Total revenue
|
$
|
38,820
|
|
|
$
|
90
|
|
|
$
|
37,280
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
||||||
Interest expense
|
63
|
|
|
64
|
|
|
63
|
|
|||
Employee compensation and benefits
|
10,096
|
|
|
11,578
|
|
|
187
|
|
|||
General and administrative
|
6,775
|
|
|
8,208
|
|
|
6,075
|
|
|||
Total operating expenses
|
16,934
|
|
|
19,850
|
|
|
6,325
|
|
|||
Interest expense on long term borrowings
|
9,222
|
|
|
6,147
|
|
|
1,233
|
|
|||
Gain on extinguishment of debt
|
—
|
|
|
—
|
|
|
2,000
|
|
|||
INCOME/(LOSS) BEFORE INCOME TAX EXPENSE
|
12,664
|
|
|
(25,907
|
)
|
|
31,722
|
|
|||
Income tax (benefit) / expense
|
(10,875
|
)
|
|
(2,584
|
)
|
|
10,325
|
|
|||
NET INCOME/(LOSS) BEFORE UNDISTRIBUTED EARNINGS OF SUBSIDIARIES
|
23,539
|
|
|
(23,323
|
)
|
|
21,397
|
|
|||
Undistributed earnings of subsidiaries
|
(13,260
|
)
|
|
48,200
|
|
|
6,710
|
|
|||
NET INCOME
|
10,279
|
|
|
24,877
|
|
|
$
|
28,107
|
|
||
Other comprehensive (loss) / income
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation adjustment
|
(4,352
|
)
|
|
(4,089
|
)
|
|
$
|
1,327
|
|
||
NET COMPREHENSIVE INCOME
|
$
|
5,927
|
|
|
$
|
20,788
|
|
|
$
|
29,434
|
|
Interest paid
|
$
|
(4,538
|
)
|
|
$
|
(3,373
|
)
|
|
$
|
(556
|
)
|
Taxes refunds received/taxes (paid)
|
$
|
733
|
|
|
$
|
(3,711
|
)
|
|
$
|
(5,562
|
)
|
Non-cash financing activities related to acquisitions:
|
|
|
|
|
|
||||||
Seller provided financing
|
—
|
|
|
—
|
|
|
$
|
33,200
|
|
||
Common stock issued as consideration for asset and business acquisitions
|
$
|
45,100
|
|
|
$
|
6,493
|
|
|
$
|
34,771
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2014
|
||||||||||||||
|
As Reported
|
|
Tax Adjustment
|
|
Other Adjustments
|
|
As Restated
|
||||||||
ASSETS:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
1,235
|
|
|
$
|
—
|
|
|
$
|
(51
|
)
|
|
$
|
1,184
|
|
Equity investments in subsidiaries
|
381,240
|
|
|
—
|
|
|
(1,130
|
)
|
|
380,110
|
|
||||
Receivables from affiliates
|
18,533
|
|
|
(988
|
)
|
|
—
|
|
|
17,545
|
|
||||
Current tax receivable
|
5,084
|
|
|
(90
|
)
|
|
—
|
|
|
4,994
|
|
||||
Deferred tax assets, net
|
—
|
|
|
5,911
|
|
|
—
|
|
|
5,911
|
|
||||
Other assets
|
15,703
|
|
|
(5,504
|
)
|
|
(2,463
|
)
|
|
7,736
|
|
||||
Total assets
|
$
|
421,797
|
|
|
$
|
(671
|
)
|
|
$
|
(3,644
|
)
|
|
$
|
417,482
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY:
|
|
|
|||||||||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Accrued expenses and other liabilities
|
25,435
|
|
|
12,170
|
|
|
(451
|
)
|
|
37,154
|
|
||||
Income tax payable
|
1,060
|
|
|
1,003
|
|
|
(2,063
|
)
|
|
—
|
|
||||
Total liabilities
|
156,903
|
|
|
13,173
|
|
|
(2,514
|
)
|
|
167,562
|
|
||||
Commitments and contingent liabilities
|
|
|
|
|
|
|
|
||||||||
Shareholders’ equity
|
|
|
|
|
|
|
|
||||||||
Accumulated other comprehensive income
|
(2,054
|
)
|
|
541
|
|
|
—
|
|
|
(1,513
|
)
|
||||
Additional paid-in capital
|
152,684
|
|
|
(4,306
|
)
|
|
—
|
|
|
148,378
|
|
||||
Retained earnings
|
130,984
|
|
|
(10,079
|
)
|
|
(1,130
|
)
|
|
119,775
|
|
||||
Total shareholders' equity
|
264,894
|
|
|
(13,844
|
)
|
|
(1,130
|
)
|
|
249,920
|
|
||||
Total liabilities and shareholders’ equity
|
$
|
421,797
|
|
|
$
|
(671
|
)
|
|
$
|
(3,644
|
)
|
|
$
|
417,482
|
|
|
For the Fiscal Year Ended December 31, 2014
|
||||||||||||||
|
As Reported
|
|
Tax Adjustment
|
|
Other Adjustments
|
|
As Restated
|
||||||||
Interest expense on long term borrowings
|
$
|
5,893
|
|
|
$
|
—
|
|
|
$
|
254
|
|
|
$
|
6,147
|
|
INCOME/(LOSS) BEFORE INCOME TAX EXPENSE
|
(25,653
|
)
|
|
—
|
|
|
(254
|
)
|
|
(25,907
|
)
|
||||
Income tax (benefit) / expense
|
(8,784
|
)
|
|
6,200
|
|
|
—
|
|
|
(2,584
|
)
|
||||
NET INCOME/(LOSS) BEFORE UNDISTRIBUTED EARNINGS OF SUBSIDIARIES
|
(16,869
|
)
|
|
(6,200
|
)
|
|
(254
|
)
|
|
(23,323
|
)
|
||||
Undistributed earnings of subsidiaries
|
48,495
|
|
|
|
|
(295
|
)
|
|
48,200
|
|
|||||
NET INCOME
|
$
|
31,626
|
|
|
$
|
(6,200
|
)
|
|
$
|
(549
|
)
|
|
$
|
24,877
|
|
Other comprehensive (loss) / income, net of tax
|
|
|
|
|
|
|
|
|
|||||||
Foreign currency translation adjustment
|
(4,630
|
)
|
|
541
|
|
|
—
|
|
|
(4,089
|
)
|
||||
NET COMPREHENSIVE INCOME
|
$
|
26,996
|
|
|
$
|
(5,659
|
)
|
|
$
|
(549
|
)
|
|
$
|
20,788
|
|
|
For the Fiscal Year Ended December 31, 2013
|
||||||||||||||
|
As Reported
|
|
Tax Adjustment
|
|
Other Adjustments
|
|
As Restated
|
||||||||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
1,199
|
|
|
—
|
|
|
(1,136
|
)
|
|
63
|
|
||||
Total operating expense
|
7,461
|
|
|
—
|
|
|
(1,136
|
)
|
|
6,325
|
|
||||
Interest expense on long term borrowings
|
—
|
|
|
—
|
|
|
1,233
|
|
|
1,233
|
|
||||
INCOME/(LOSS) BEFORE INCOME TAX EXPENSE
|
31,819
|
|
|
—
|
|
|
(97
|
)
|
|
31,722
|
|
||||
Income tax (benefit) / expense
|
6,736
|
|
|
3,589
|
|
|
—
|
|
|
10,325
|
|
||||
NET INCOME/(LOSS) BEFORE UNDISTRIBUTED EARNINGS OF SUBSIDIARIES
|
25,083
|
|
|
(3,589
|
)
|
|
(97
|
)
|
|
21,397
|
|
||||
Undistributed earnings of subsidiaries
|
6,228
|
|
|
|
|
482
|
|
|
6,710
|
|
|||||
NET INCOME
|
31,311
|
|
|
(3,589
|
)
|
|
385
|
|
|
28,107
|
|
||||
Other comprehensive (loss) / income, net of tax
|
|
|
|
|
|
|
|
|
|||||||
NET COMPREHENSIVE INCOME
|
$
|
32,638
|
|
|
$
|
(3,589
|
)
|
|
$
|
385
|
|
|
$
|
29,434
|
|
|
For the Fiscal Year Ended December 31, 2014
|
||||||||||
|
As Reported
|
|
Adjustments
|
|
As Restated
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income
|
$
|
31,626
|
|
|
$
|
(6,749
|
)
|
|
$
|
24,877
|
|
Adjustments to reconcile net income to cash provided by operating activities
|
|
|
|
|
|
||||||
Undistributed earnings of subsidiaries
|
(48,495
|
)
|
|
295
|
|
|
(48,200
|
)
|
|||
Deferred taxes
|
2,508
|
|
|
2,359
|
|
|
4,867
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Receivables from affiliates
|
(18,533
|
)
|
|
(15,294
|
)
|
|
(33,827
|
)
|
|||
Other assets
|
(5,188
|
)
|
|
(4,935
|
)
|
|
(10,123
|
)
|
|||
Current tax receivable
|
(1,591
|
)
|
|
820
|
|
|
(771
|
)
|
|||
Accrued compensation and benefits
|
(21
|
)
|
|
72
|
|
|
51
|
|
|||
Accrued expenses and other liabilities
|
1,762
|
|
|
8,664
|
|
|
10,426
|
|
|||
Payable to affiliates
|
47,522
|
|
|
14,468
|
|
|
61,990
|
|
|||
Cash provided by operating activities
|
15,673
|
|
|
(300
|
)
|
|
15,373
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Investment and funding of subsidiaries
|
(46,726
|
)
|
|
(4,381
|
)
|
|
(51,107
|
)
|
|||
Cash used for investing activities
|
(46,818
|
)
|
|
(4,381
|
)
|
|
(51,199
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(4,630
|
)
|
|
4,630
|
|
|
—
|
|
|||
(DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS
|
(41,117
|
)
|
|
(51
|
)
|
|
(41,168
|
)
|
|||
CASH AND CASH EQUIVALENTS — Beginning of year
|
42,352
|
|
|
—
|
|
|
42,352
|
|
|||
CASH AND CASH EQUIVALENTS — End of year
|
$
|
1,235
|
|
|
$
|
(51
|
)
|
|
$
|
1,184
|
|
|
For the Fiscal Year Ended December 31, 2013
|
||||||||||
|
As Reported
|
|
Adjustments
|
|
As Restated
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income
|
$
|
31,311
|
|
|
$
|
(3,204
|
)
|
|
$
|
28,107
|
|
Adjustments to reconcile net income to cash provided by operating activities
|
|
|
|
|
|
||||||
Undistributed earnings of subsidiaries
|
6,228
|
|
|
(12,938
|
)
|
|
(6,710
|
)
|
|||
Deferred taxes
|
(1,448
|
)
|
|
2,896
|
|
|
1,448
|
|
|||
Amortization of deferred finance costs
|
30
|
|
|
(30
|
)
|
|
—
|
|
|||
Stock compensation expense
|
2,896
|
|
|
79
|
|
|
2,975
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|||||
Receivables from affiliates
|
17,681
|
|
|
1,597
|
|
|
19,278
|
|
|||
Prepaid assets
|
(127
|
)
|
|
—
|
|
|
(127
|
)
|
|||
Other assets
|
(5,354
|
)
|
|
5,645
|
|
|
291
|
|
|||
Current tax receivable
|
2,055
|
|
|
(11,797
|
)
|
|
(9,742
|
)
|
|||
Accrued expenses and other liabilities
|
(3,486
|
)
|
|
4,964
|
|
|
1,478
|
|
|||
Cash provided by operating activities
|
47,687
|
|
|
(12,788
|
)
|
|
34,899
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Investment and funding of subsidiaries
|
(42,764
|
)
|
|
14,116
|
|
|
(28,648
|
)
|
|||
Cash used for investing activities
|
(42,764
|
)
|
|
14,116
|
|
|
(28,648
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
1,328
|
|
|
(1,328
|
)
|
|
—
|
|
(1)
|
CITY INDEX LIMITED
incorporated and registered in England and Wales with company number 1761813 whose registered office is at Park House, 16 Finsbury Circus, London EC2M 7EB (the
Company)
; and
|
(2)
|
NIGEL ROSE
(the
Executive
).
|
1.
|
DEFINITIONS
|
1.1.
|
In this agreement the following words shall have the following meanings:
|
1.2.
|
The headings in this agreement are inserted for convenience only and shall not affect its construction.
|
1.3.
|
A reference to a particular law is a reference to it as it is in force for the time being taking account of any amendment, extension or re-enactment and includes any subordinate legislation for the time being in force made under it.
|
1.4.
|
A reference to one gender includes a reference to the other gender.
|
2.
|
TERM OF APPOINTMENT
|
2.1.
|
The Company shall employ the Executive and the Executive shall serve the Company on the terms of this agreement. The Executive's appointment under this agreement shall commence on the Commencement Date and shall continue unless and until terminated by either party giving to the other not less than twelve months' prior notice in writing. The Executive's period of continuous employment commenced on
1
st
March 2010
.
|
2.2.
|
The Company's normal retirement age is 65.
|
2.3.
|
The Executive warrants that he is entitled to work in the United Kingdom without any additional approvals and will notify the Company immediately if he ceases to be so entitled.
|
3.
|
DUTIES
|
3.1.
|
The Executive shall serve the Company as
Group
Chief Financial Officer
or in such other role as the Company considers appropriate from time to time.
|
3.2.
|
This role is at
Executive Director
level within the City Index Group.
|
3.3.
|
During the period of this agreement the Executive shall:
|
(a)
|
unless prevented by Incapacity, devote the whole of his time, attention and abilities to the business of the Company;
|
(b)
|
diligently exercise such powers and perform such duties as may from time to time be assigned to him by the Board;
|
(c)
|
comply with all reasonable and lawful directions given to him by the Company;
|
(d)
|
promptly make such reports to the Board in connection with the affairs of the Company on such matters and at such times as are reasonably required;
|
(e)
|
report his own wrongdoing and any wrongdoing or proposed wrongdoing of any other employee or director of the Company to the Board immediately on becoming aware of it; and
|
(f)
|
use his best endeavours to promote, protect, develop and extend the business of the Company.
|
3.4.
|
The Executive shall comply with any rules, policies and procedures set out in the Staff Handbook, a copy of which is available from the Human Resources Department. The Company may amend the policies and procedures at any time. .
|
3.5.
|
All documents, manuals, hardware and software provided for the Executive's use by the Company and any data or documents (including copies) produced, maintained or stored on the Company's computer systems or other electronic equipment (including mobile phones) remain the property of the Company.
|
3.6.
|
The Executive shall at all times comply with, and not use the Company or any Group Company to breach or contravene any rules, regulations or requirements of any regulatory body, code of conduct or statutory provision to which the Executive, the Company and/or any Group Company is/are subject, including, without limitation, the Financial Services and Markets Act 2000 and any rules, regulations or procedures made by the Company and/or any Group Company.
|
3.7.
|
If, for the performance of the Executive's duties, the Executive is, in the Company's opinion, required to be registered individually with the FSA (or any successor) as a 'registered person' (or otherwise) in any one or more categories (or other equivalent or necessary registration or licence) the Executive undertakes that he shall:
|
(a)
|
supply the Company or any Group Company with all such information which the Company or Group Company is required to supply to its regulators in relation to such registration or licence and the Executive shall ensure that such information is complete (including disclosure of any belief why such registration might be delayed or refused), true, accurate and not misleading; and
|
(b)
|
comply in all respects with the rules and requirements of such regulator regarding "registered persons".
|
4.
|
PLACE OF WORK
|
4.1.
|
The Executive's normal place of work is at the Company's London office, Park House, 16 Finsbury Circus, London EC2M 7EB or such other place as the Company may from time to time reasonably require.
|
4.2.
|
The Executive agrees to travel on Company business (both within the United Kingdom or abroad) as may be required for the proper performance of his duties under this agreement.
|
4.3.
|
During this agreement the Executive shall not be required to work outside the United Kingdom for any continuous period of more than one month.
|
5.
|
HOURS OF WORK
|
5.1.
|
The Executive's normal working hours shall be 37.5 hours per week, specific start and finishing times to be determined in accordance with departmental requirements. The Executive may be required to work such additional hours as may be necessary for the proper performance of his duties without extra remuneration.
|
5.2.
|
The Executive agrees that regulation 4 of the Working Time Regulations 1998 shall not apply to your employment by the Company. The Executive may terminate his agreement to this provision on giving three months notice in writing to the Company.
|
6.
|
SALARY
|
6.1.
|
The Executive shall be paid an initial salary of
£165,000
per annum, increasing to
£200,000
effective 1
st
November 2010, less appropriate PAYE deductions, which shall accrue from day to day and be payable monthly in arrears on or about the 21
st
of each month directly into the Executive's bank or building society. During your final month of employment the Executive’s salary will only be paid in arrears and on the final day of the Executive’s employment.
|
6.2.
|
The Executive's salary shall be reviewed by the Board annually, the first such review to take place in April 2011. The Company is under no obligation to award an increase following a salary review.
|
6.3.
|
The Company may deduct from the salary or any other sums owed to the Executive, any money owed to the Company by the Executive.
|
7.
|
BONUS
|
7.1.
|
The executive shall be entitled to a guaranteed bonus payment of not less than
£100,000
, payable in March 2011. Any additional payments will be determined by the company in its absolute discretion, based on company and individual performance. The executive will not be eligible for consideration to receive any additional payments over and above the guaranteed bonus if the executive is not in employment for any reason, is under notice of termination of employment or is not performing his duties on the date any bonus is due to be paid, subject to clause 17.1.
|
8.
|
PENSION AND OTHER BENEFITS
|
8.1.
|
A contracting out certificate under the Pensions Schemes Act 1993 is not currently in force in respect of your employment.
|
8.2.
|
The Company may offer to make contributions to an individual personal pension arrangement of your choice. If the Company does not choose to make contributions at the level required by law from time to time, the Company will instead provide access to a designated stakeholder pension scheme as required by law. The Company will not make any contributions to such stakeholder scheme.
|
8.3.
|
The Company is prepared to make contributions to an individual personal pension arrangement of your choice at 12
%
of your basic annual salary from
1
st
June 2010.
|
8.4.
|
The Company shall not contribute to your personal pension arrangements during the first 3 months of your employment or during any period of notice, whether given, received, worked or not.
|
8.5.
|
You shall be entitled to participate in the Company’s benefit schemes, which the Company reserves the right to vary or withdraw.
|
9.
|
EXPENSES
|
9.1.
|
The Company shall reimburse all reasonable expenses wholly, properly and necessarily incurred by the Executive in the course of carrying out his duties under this agreement, subject to production of receipts or other appropriate evidence of payment as required by the Company.
|
9.2.
|
The Executive shall abide by the Company's policies on expenses as communicated to him from time to time.
|
10.
|
HOLIDAYS
|
10.1.
|
The Executive is entitled to 25 days' holiday during each holiday year, in addition to the usual public holidays in England and Wales. The Executive will be paid his normal basic remuneration during such holidays. The Company's holiday year runs between 1 January and 31 December. If the Executive's employment commences or finishes part way through the holiday year, the holiday entitlement during that year shall be calculated on a pro-rata basis.
|
10.2.
|
The Company may require the Executive to take holiday on specific days as notified to him.
|
10.3.
|
The Executive shall be entitled to carry forward up to 5 accrued but untaken holiday days holiday which must be used by 31
st
March of the following holiday year.
|
10.4.
|
The Executive shall not be entitled to receive holiday pay in lieu of untaken holiday except as set out in clause 11.5.
|
10.5.
|
On termination of employment the Executive will be entitled to a payment in lieu of any accrued but untaken holiday as at the date of termination. The amount of the payment in lieu shall be calculated on the basis that each day of paid holiday is equal to 1/260 of the Executive's salary. The Company reserves the right to require the Executive to take any unused holiday entitlement during his notice period, whether or not on Garden Leave.
|
10.6.
|
If the Executive has taken more holiday than his accrued entitlement at the date the Executive's employment terminates, the Company shall be entitled to deduct from the Executive's final salary payment one day's pay for each excess day.
|
11.
|
INCAPACITY
|
11.1.
|
If the Executive is absent from work for any reason, he must notify the Company of the reason for absence in accordance with the sickness absence procedure in the Employee Handbook.
|
11.2.
|
The Executive agrees to consent to a medical examination (at the Company's expense) by a doctor nominated by the Company should the Company so require. The Executive agrees that any report produced in connection with any such examination may be disclosed to the Company and the Company may discuss the contents of the report with the relevant doctor.
|
11.3.
|
Subject to the Executive complying with the Company's notification and certification procedures above the Executive will be entitled to receive his full salary (inclusive of any SSP due) for the first thirteen (13) weeks of absence in any 12-month period.
|
11.4.
|
Should the Executive remain absent after the expiry of the thirteen week period referred to above his entitlement will be to statutory sick pay only unless the Company, in its absolute discretion, decides to extend the continuation of the Executive's full salary or part thereof. The Company is not, however, under any obligation to make any payment of salary in these circumstances.
|
11.5.
|
The Company reserves the right to withhold sick pay if the Executive is certified as fit to work by the Company's doctor.
|
11.6.
|
For statutory sick pay purposes qualifying days shall be the Executive's normal working days.
|
11.7.
|
If the Incapacity is or appears to be occasioned by actionable negligence, nuisance or breach of any statutory duty on the part of a third party in respect of which damages are or may be recoverable, the Executive shall immediately notify the Board of that fact and of any claim, compromise, settlement or judgment made or awarded in connection with it and all relevant particulars that the Board may reasonably require. The Executive shall if required by the Board, refund to the Company that part of any damages or compensation recovered by him relating to the loss of earnings for the period of the Incapacity as the Board may reasonably determine less any costs borne by him in connection with the recovery of such damages or compensation, provided that the amount to be refunded shall not exceed the total amount paid to the Executive by the Company in respect of the period of Incapacity.
|
12.
|
CONFIDENTIAL INFORMATION
|
12.1.
|
The Executive acknowledges that in the course of his employment under this agreement he will obtain access to and use Confidential Information which is critical to the Company's present and future commercial interests and continued operation. The Executive agrees and acknowledges that all such Confidential
|
12.2.
|
The Executive shall not (except in the proper course of his duties), either during his employment under this agreement or at any time after its termination (howsoever arising), use or disclose to any person, company or other organisation whatsoever (and shall use his best endeavours to prevent the publication or disclosure of) any Confidential Information. This restriction does not apply to:
|
(a)
|
any use or disclosure authorised by the Board or required by law; or
|
(b)
|
any information which is in the public domain other than through the Executive's unauthorised disclosure; or
|
(c)
|
prevent the Executive from making a protected disclosure within the meaning of section 43A Employment Rights Act 1996.
|
13.
|
GARDEN LEAVE
|
13.1.
|
Following service of notice to terminate this agreement by either party, or if the Executive purports to terminate this agreement in breach of contract, the Company may by written notice require the Executive not to perform any services (or to perform only specified services) for the Company until the termination of this agreement or a specified date (
the Garden Leave Period
).
|
13.2.
|
During the Garden Leave Period the Company shall be under no obligation to provide any work to, or vest any powers in, the Executive, who shall have no right to perform any services for the Company.
|
13.3.
|
During the Garden Leave Period the Executive shall:
|
(a)
|
continue to receive his salary and all contractual benefits in the usual way;
|
(b)
|
remain an employee of the Company and bound by the terms of this agreement;
|
(c)
|
not, without the prior written consent of the Board, attend his place of work or any other premises of the Company;
|
(d)
|
not, without the prior written consent of the Board, contact or deal with (or attempt to contact or deal with) any officer, employee, consultant, client, customer, supplier, agent, distributor, shareholder, adviser or other business contact of the Company or any Group Company; and
|
(e)
|
(except during any periods taken as holiday in the usual way) ensure that the Board knows where he will be and how he can be contacted during each working day and shall comply with any written requests to contact a specified employee of the Company at specified intervals.
|
14.
|
POST-TERMINATION RESTRICTIONS
|
14.1.
|
The Executive acknowledges that during the course of his employment under this agreement, among other things, he will be privy to Confidential Information and that the Executive will, at the Company's expense, make maintain and develop valuable relationships with clients, customers, staff and third parties. The Executive therefore covenants with the Company that he will not directly or indirectly on his own behalf or on behalf of any other person, concern, undertaking, firm or body corporate either during his employment or for a period of twelve months following the Termination Date less any period spent on Garden Leave pursuant to clause 13 above, in competition with the Restricted Business:
|
(a)
|
be engaged in or concerned in any capacity whatsoever in any business concern, including but not limited to the following: IG Group, Saxobank, CMC Markets, FXCM, London Capital Group, ODL, Gain Financial, Betfair Group, MF Global, GFT, Spreadex, Spread Co, Worldspreads, Alpari, ETX, Gekko Global Markets, Finotec Group, Cantor Index, Delta Index, Macquarie and Capital Spreads. This clause shall not restrain the Executive from being engaged or concerned in any business insofar as the Executive’s duties or work shall relate:
|
(i)
|
solely to geographical areas where the business concern is not in competition with the Restricted Business; or
|
(ii)
|
to services or activities of a kind with which the Executive was not concerned to a material extent and in relation to which he did not have access to any Confidential Information during the Relevant Period.
|
(b)
|
solicit or canvass business from any person, firm or company who at any time during the Relevant Period was a Restricted Customer;
|
(c)
|
solicit or canvass business from any person, firm or company who at any time during the Relevant period was a Prospective Customer;
|
(d)
|
do business with or provide products or services to any person, firm or company who at any time during the Relevant Period was a Restricted Customer;
|
(e)
|
do business with or provide products or services to any person, firm or company who at any time during the Relevant Period was a Prospective Customer;
|
(f)
|
solicit or employ or cause to be employed, whether directly or indirectly, any Employee whether or not this would be a breach of contract on the part of the Employee.
|
14.2.
|
The Executive covenants with the Company that for a period of 12 months following the Termination Date less any period spent on Garden Leave pursuant to clause 13 he will not accept employment with, be engaged in or concerned in any capacity whatsoever in any business concern which intends to compete
|
(i)
|
solely to geographical areas where the business concern is not in competition with the Restricted Business; or
|
(ii)
|
to services or activities of a kind with which the Executive was not concerned to a material extent and in relation to which he did not have access to any Confidential Information during the Relevant Period.
|
14.3.
|
For the purposes of this clause 14 the following expressions shall have the following meanings:
|
14.4.
|
The Executive agrees that the restrictions contained in this clause 14 are reasonable and necessary for the protection of the legitimate interest of the Company and the Group Companies. It is nevertheless agreed that if any of those restrictions shall taken together or separately be held to be void or ineffective for any
|
15.
|
INTELLECTUAL PROPERTY
|
15.1.
|
The Executive shall immediately disclose to the Company any creative work, trade mark, design, copyright (including without limitation the copyright in any software), invention, process or improvement in procedure discovered developed or produced by him alone or with others, to enable the Company to ascertain whether it was discovered developed or produced wholly outside his normal working hours and was wholly unconnected with his employment. The Executive acknowledges and agrees that the copyright, design right, and all and any other intellectual property rights in any works, trademarks, designs, inventions (subject to the provisions of s39 of the Patents Act 1977), processes or improvement in procedure (including without limitation the copyright in any software) (
Copyright Works
) discovered, developed or produced by him alone or with others (except only those originated conceived written or made by him wholly outside his normal working hours which are wholly unconnected with his employment) shall be the absolute property of the Company and until such rights are fully and absolutely vested in the Company, he shall hold them in trust for the Company absolutely.
|
15.2.
|
The Executive assigns to the Company by way of future assignment all copyright, design right and other proprietary rights (if any) for the full terms thereof throughout the World in respect of all copyright works trademarks and designs originated, conceived, written or made by him (except only those works originated, conceived, written or made by him wholly outside his normal working hours which are wholly unconnected with his employment) during the period of his employment by the Company.
|
15.3.
|
The Executive acknowledges and agrees that having regard to his skills and the business of the Company and because of the nature of his duties and responsibilities, he has an obligation to further the Company's and each Group Company's undertaking and accordingly he acknowledges that any invention, process or improvement in procedure (
Invention
) discovered or devised by him which is related directly or indirectly to the business of the Company or any Group Company or which is made directly or indirectly in consequence of his employment by the Company (whether or not during his hours of work or using Company property and whether or not discovered in the course of his duties) shall be immediately disclosed to the Company (including full details thereof, drawings, models and the like). The provisions of s39 of the Patents Act 1977 shall apply in determining whether an Invention is the property of the Company (
a Company Invention
). If the Invention is a Company Invention, he shall hold it in trust for the Company absolutely until such time as the Company Invention shall be fully vested in the Company.
|
15.4.
|
The Executive agrees that he will at the request and expense of the Company complete all necessary deeds and documents and take all action necessary (including joining with the Company in any appropriate application in any country) to vest any Company Invention and Copyright Works and all rights title and interest to the same in the Company and to obtain for the Company the full benefit of all patent trademark copyright and other forms of protection throughout the World. The Executive hereby irrevocably appoints the Company as his attorney to execute any such deeds and documents and to take such action to enable the Company to enjoy the full benefit of any rights granted to it by this clause 15.
|
15.5.
|
The Executive recognises the Company's need to be able to deal without fetter any copyright work in the creation of which he may have been involved as a result of his employment and he hereby irrevocably waives all moral rights as defined in Chapter IV of Part I of the Copyright Designs & Patents Act 1988 in which copyright or design right is vested in the Company whether by Clause 15 or otherwise.
|
16.
|
TERMINATION
|
16.1.
|
Notwithstanding the provisions of clause 2.1, the Company may terminate the Appointment with immediate effect without notice and with no liability to make any further payment to the Executive (other than in respect of amounts accrued due at the date of termination) if the Executive:
|
(a)
|
is guilty of any gross misconduct affecting the business of the Company or any Group Company; or
|
(b)
|
commits any serious or repeated breach or non-observance of any of the provisions of this agreement or refuses or neglects to comply with any reasonable and lawful directions of the Company; or
|
(c)
|
is, in the reasonable opinion of the Board, negligent and incompetent in the performance of his duties; or
|
(d)
|
is declared bankrupt or makes any arrangement with or for the benefit of his creditors; or
|
(e)
|
is convicted of any criminal offence (other than an offence under any road traffic legislation in the United Kingdom or elsewhere for which a fine or non-custodial penalty is imposed) or any offence under any regulation or legislation relating to insider dealing; or
|
(f)
|
fails or ceases to meet the requirements of any regulatory body whose consent is required to enable him to undertake all or any of his duties under this agreement or is guilty of a serious breach of the rules and regulations of such regulatory body or of any compliance manual of the Company; or
|
(g)
|
becomes of unsound mind or a patient under any statute relating to mental health; or
|
(h)
|
ceases to be eligible to work in the United Kingdom; or
|
(i)
|
is guilty of any fraud or dishonesty or acts in any manner which in the opinion of the Board brings or is likely to bring the Executive or the Company into disrepute or is materially adverse to the interests of the Company; or
|
(j)
|
is guilty of a serious breach of any rules issued by the Company from time to time regarding its electronic communications systems; or
|
(k)
|
is unable by reason of Incapacity to perform his duties under this agreement for an aggregate period of 13 weeks in any 52 week period even if, as a result of such termination, the Executive would or might forfeit any entitlement to benefit from sick pay under clause 11 of this agreement.
|
16.2.
|
The rights of the Company under clause 16.1 are without prejudice to any other rights that it might have at law to terminate this agreement or to accept any breach of this agreement by the Executive as having brought the agreement to an end. Any delay by the Company in exercising its rights to terminate shall not constitute a waiver thereof.
|
17.
|
OBLIGATIONS UPON TERMINATION
|
17.1.
|
On termination of this agreement (howsoever arising) the Executive shall:
|
(a)
|
immediately deliver to the Company all documents, books, materials, records, correspondence, papers and information (on whatever media and wherever located) relating to the business or affairs of the Company or its business contacts, any keys, credit card and any other property of the Company which is in his possession or under his control;
|
(b)
|
irretrievably delete any information relating to the business of the Company stored on any magnetic or optical disk or memory and all matter derived from such sources which is in his possession or under his control outside the Company's premises; and
|
(c)
|
provide a signed statement that he has complied fully with his obligations under clause 17.1.
|
17.2.
|
On termination of this agreement howsoever arising the Executive shall not be entitled to any compensation for the loss of any rights or benefits under any share option, bonus, long-term incentive plan or other profit sharing scheme operated by the Company in which he may participate.
|
18.
|
DISCIPLINARY AND GRIEVANCE PROCEDURES
|
18.1.
|
The Executive is subject to the Company's disciplinary and grievance procedures, copies of which are available from the Human Resources Department. These procedures do not form part of the Executive's contract of employment.
|
18.2.
|
The Company may at any time suspend the Executive on full pay during any disciplinary investigation.
|
19.
|
COLLECTIVE AGREEMENT
|
20.
|
RECONSTRUCTION AND AMALGAMATION
|
21.
|
NOTICES
|
21.1.
|
Any notice given under this agreement shall be in writing and signed by or on behalf of the party giving it and shall be served by delivering it personally, or sending it by pre-paid recorded delivery or registered post to the relevant party at (in the case of the Company) its registered office for the time being and (in the case of the Executive) his last known address. Any such notice shall be deemed to have been received:
|
(a)
|
if delivered personally, at the time of delivery;
|
(b)
|
in the case of pre-paid recorded delivery or registered post, 48 hours from the date of posting; and
|
21.2.
|
In proving such service it shall be sufficient to prove that the envelope containing such notice was addressed to the address of the relevant party and delivered either to that address or into the custody of the postal authorities as a pre-paid recorded delivery or registered post.
|
22.
|
VARIATION
|
23.
|
COUNTERPARTS
|
24.
|
THIRD PARTY RIGHTS
|
25.
|
GOVERNING LAW AND JURISDICTION
|
25.1.
|
This agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with English law.
|
25.2.
|
The parties irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this agreement or its subject matter or formation (including non-contractual disputes or claims).
|
26.
|
ENTIRE AGREEMENT
|
(a)
|
this agreement constitutes the entire agreement and understanding between the Executive and the Company and supersedes any previous agreement between them relating to the Appointment (which shall be deemed to have been terminated by mutual consent);
|
(b)
|
in entering into this agreement neither party has relied on any Pre-Contractual Statement; and
|
(c)
|
the only remedy available to each party for breach of this agreement shall be for breach of contract under the terms of this agreement and no party shall have any right of action against any other party in respect of any Pre-Contractual Statement.
|
→
|
You have had an opportunity to consider the terms of this Agreement for at least twenty-one (21) calendar days;
|
→
|
You understand that Gain urges you to consult with an attorney of your choosing, at your expense, regarding this Agreement;
|
→
|
You discussed this Agreement with you lawyer or had a reasonable opportunity to do so, and he or she has answered to your satisfaction any questions you asked with regard to the meaning and significance of any of the provisions of this Agreement;
|
→
|
You fully understand the significance of all of the terms and conditions of this Agreement; and
|
→
|
You are executing this Agreement voluntarily and of your own free will and agree to all the terms and conditions contained in this Agreement.
|
(a)
|
Federal laws, such as:
|
(b)
|
State and municipal laws, such as:
|
·
|
The New York State Human Rights Law; the New York State Executive Law; the New York State Civil Rights Law; the New York State Whistleblower Law; the New York State Legal Recreational Activities Law; the retaliation provisions of the New York State Workers’ Compensation Law; the New York Labor Law; the New York State Worker Adjustment and Retraining Notification Act; the New York State False Claims Act; New York State Wage and Hour Laws; the New York State Equal Pay Law; the New York State Rights of Persons with Disabilities Law; the New York State Nondiscrimination Against Genetic Disorders Law; the New York State Smokers’ Rights Law; the New York State Correction Law; the New York Aids Testing Confidentiality Act; the New York Genetic Testing Confidentiality Law; the New York Discrimination by Employment Agencies Law; the New York Bone Marrow Leave Law; the New York Adoptive Parents Child Care Leave Law; the New York City Human Rights Law, as amended; the New York City Administrative Code; the New York City Earned Sick Time Act; and the New York City Charter; and
|
·
|
The New Jersey Law Against Discrimination; the New Jersey Discrimination in Wages Law; the New Jersey Temporary Disability Benefits and Family Leave Insurance Law; the New Jersey Domestic Partnership Act; the New Jersey Conscientious Employee Protection Act; the New Jersey Family Leave Act; the New Jersey Wage Payment Act; the New Jersey Equal Pay Law; the New Jersey Occupational Safety and Health Law; the New Jersey False Claims Act; the New Jersey Smokers’ Rights Law; the New Jersey Genetic Privacy Act; the New Jersey Fair Credit Reporting Act; the New Jersey Emergency Responder Leave Law; the New Jersey Millville Dallas Airmotive Plant Job Loss Notification Act (a/k/a the New Jersey WARN Act); the New Jersey Security and Financial Empowerment Act; and the retaliation provisions of the New Jersey Workers’ Compensation Law; the Jersey City Earned Sick Time Ordinance; and
|
·
|
The Elliott-Larsen Civil Rights Act; the Persons With Disabilities Civil Rights Act; the Payment of Wages and Fringe Benefits Act; the Whistleblowers’ Protection Act; the Michigan Occupational Safety and Health Act; the Bullard-Plawecki Employee Right to Know Act; the Social Security Number Privacy Act; and the Sales Representatives Commission Act.
|
Entity Name
|
Jurisdiction of Incorporation
|
City Index (Holdings) Ltd.
|
England and Wales
|
GAIN Capital UK Limited
|
England and Wales
|
GAIN Capital Australia Pty. Ltd.
|
Australia
|
GAIN Capital Singapore Pte. Ltd.
|
Singapore
|
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
|
GAIN Capital Japan Co., Ltd.
|
Japan
|
GAIN Capital Forex.com Australia Pty. Ltd.
|
Australia
|
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 Holdings International, B.V.
|
The Netherlands
|
GAIN Capital 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
|
Global Asset Advisors, LLC
|
Illinois
|
Top Third AG Marketing, LLC
|
Delaware
|
GAIN Global Markets Bermuda, Ltd.
|
Bermuda
|
Galvan Research & Trading, Ltd.
|
England
|
Faraday Research LLP
|
England
|
Galvan LLP
|
England
|
GTX Bermuda, Ltd.
|
Bermuda
|
Gain Capital Technology Consulting Hong Kong Limited
|
Hong Kong
|
Gain Capital Payments Ltd.
|
England and Wales
|
City Index Academy Ltd.
|
England and Wales
|
IFX Group Ltd.
|
England and Wales
|
IFX Markets Ltd.
|
England and Wales
|
City Index Inc.
|
Delaware
|
FX Solutions LLC
|
New Jersey
|
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, 2016
|
|
|
|
|
|
/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, 2016
|
|
|
|
|
|
/s/ Nigel Rose
|
|
|
|
|
|
|
Nigel Rose
|
|
|
|
|
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
1.
|
The accompanying annual report on Form 10-K for the fiscal year ended December 31, 2015 (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, 2015 (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/ Nigel Rose
|
Nigel Rose
Chief Financial Officer
(Principal Financial and Accounting Officer)
|