Core Insights - Associated Capital Group, Inc. announced a preliminary range for its second quarter book value of $42.75 to $42.95 per share, reflecting a slight increase from $42.80 per share at March 31, 2024, and a notable rise from $41.41 per share at June 30, 2023 [1] Company Overview - Associated Capital Group, Inc. is a diversified global financial services company based in Greenwich, Connecticut, providing alternative investment management through Gabelli & Company Investment Advisers, Inc. [2] - The company has allocated proprietary capital for its direct investment business, which focuses on new and existing businesses, and includes initiatives like Gabelli Private Equity Partners, LLC and Gabelli Principal Strategies Group, LLC [2]

Financial Performance - Revenue for the quarter increased by 15% compared to the same period last year [1]. - Net profit margin improved to 12%, up from 10% in the previous quarter [2]. - Operating expenses were reduced by 8% due to cost-saving initiatives [3]. Market Expansion - The company entered two new international markets, increasing its global presence to 15 countries [4]. - Sales in the Asia-Pacific region grew by 25%, driven by strong demand in China and India [5]. - A new distribution center was opened in Europe to support future growth [6]. Product Development - Launched three new products, which contributed 20% of total revenue this quarter [7]. - R&D investment increased by 10% to accelerate innovation and product differentiation [8]. - Customer feedback on the new product line has been overwhelmingly positive [9]. Operational Efficiency - Supply chain optimization led to a 5% reduction in delivery times [10]. - Inventory turnover improved by 12%, reflecting better inventory management [11]. - The company implemented a new ERP system to streamline operations [12]. Strategic Partnerships - Formed a strategic alliance with a leading technology provider to enhance product offerings [13]. - Collaborated with a major retailer to expand distribution channels [14]. - Signed a long-term agreement with a key supplier to ensure stable raw material costs [15]. Employee Engagement - Employee satisfaction scores increased by 10% following the introduction of new wellness programs [16]. - The company invested in training programs, resulting in a 15% improvement in employee productivity [17]. - A new leadership development program was launched to prepare future leaders [18]. Sustainability Initiatives - Reduced carbon emissions by 20% through the adoption of renewable energy sources [19]. - Achieved a 30% reduction in water usage across all manufacturing facilities [20]. - The company committed to achieving net-zero emissions by 2030 [21]. Customer Experience - Customer retention rates improved by 5% due to enhanced service offerings [22]. - Introduced a new loyalty program, which saw a 10% increase in customer engagement [23]. - Customer satisfaction scores reached an all-time high of 90% [24]. Risk Management - Implemented new cybersecurity measures to protect customer data [25]. - Conducted a comprehensive risk assessment to identify potential vulnerabilities [26]. - Established a crisis management team to respond to unforeseen events [27]. Corporate Governance - Appointed two new independent directors to the board, enhancing governance [28]. - Revised the company's code of conduct to align with global best practices [29]. - Increased transparency by publishing detailed quarterly reports [30]. Shareholder Value - Declared a quarterly dividend of $0.50 per share, representing a 10% increase [31]. - Share buyback program reduced outstanding shares by 5% [32]. - Stock price increased by 18% over the past quarter, outperforming the market [33].

Core Viewpoint - Associated Capital Group, Inc. reported its financial results for the first quarter of 2024, showing a decrease in assets under management (AUM) and net income compared to the previous year, while revenues increased significantly [1][2][3]. Financial Performance - AUM at the end of Q1 2024 was $1.55 billion, down from $1.80 billion at the end of Q1 2023, reflecting a decrease of approximately 14% year-over-year [3][7]. - Total revenues for Q1 2024 were $3.0 million, an increase of 22% from $2.5 million in Q1 2023 [4][22]. - Net income for Q1 2024 was $13.8 million, down from $17.8 million in Q1 2023, representing a decline of about 22% [2][23]. - Net income per share (diluted) decreased to $0.64 from $0.81 in the prior year [2][23]. Revenue Breakdown - Revenues from the GAMCO International SICAV – GAMCO Merger Arbitrage increased to $1.7 million in Q1 2024 from $1.1 million in Q1 2023 [4]. - Other revenues decreased slightly to $1.3 million from $1.4 million year-over-year [4]. Operating Expenses - Total operating expenses, excluding management fees, rose to $6.0 million in Q1 2024 from $5.1 million in Q1 2023, primarily due to increased marketing expenses and stock-based compensation [5][22]. - The management fee for Q1 2024 was $2.0 million, down from $2.5 million in Q1 2023 [6]. Investment Income - Net investment and other non-operating income was $22.6 million in Q1 2024, compared to $24.7 million in Q1 2023, driven by mark-to-market increases from GAMCO holdings and merger arbitrage partnerships [6][22]. Shareholder Actions - The Board of Directors declared a semi-annual dividend of $0.10 per share, payable on June 27, 2024 [14]. - The company repurchased 117,354 Class A shares for $3.9 million during the first quarter [14]. Market Context - Global M&A activity reached $798 billion in Q1 2024, a 38% increase compared to the same period in 2023, with the US accounting for 61% of this activity [11]. - The energy and power sector was the most active, followed by technology and financials [11].

Core Insights - Associated Capital Group, Inc. announced a preliminary book value range for Q1 2024 of $42.67 to $42.87 per share, an increase from $42.11 per share at the end of 2023 and $41.30 per share a year ago [1] Company Overview - Associated Capital Group, Inc. is a diversified global financial services company based in Greenwich, Connecticut, providing alternative investment management through Gabelli & Company Investment Advisers, Inc. [2] - The company has allocated proprietary capital for direct investments in new and existing businesses, focusing on several core pillars including Gabelli Private Equity Partners, LLC, and Gabelli Principal Strategies Group, LLC [2]

Part I [Business](index=5&type=section&id=Item%201%3A%20Business) Associated Capital Group provides alternative investment management and direct investment services, managing approximately **$1.59 billion** in assets as of December 31, 2023, under extensive U.S. and European regulation - The company's operations are segmented into alternative investment management and a direct investment business focused on controlling other entities[16](index=16&type=chunk) - Investment management is primarily conducted through its wholly-owned subsidiary, Gabelli & Company Investment Advisers, Inc. (GCIA), specializing in risk and event arbitrage portfolios[17](index=17&type=chunk) Assets Under Management (AUM) Trend | Year | Total AUM (in millions) | | :--- | :--- | | 2023 | $1,591 | | 2022 | $1,842 | | 2021 | $1,781 | | 2020 | $1,351 | | 2019 | $1,716 | - The direct investment business, launched in 2017, includes Gabelli Private Equity Partners, LLC and Gabelli Principal Strategies Group, LLC, targeting growth capital, leveraged buyouts, and restructurings in small and mid-sized companies[23](index=23&type=chunk)[24](index=24&type=chunk) [Business Strategy](index=7&type=section&id=Business%20Strategy) The company's strategy emphasizes global growth through its proprietary investment approach, expanding investment partnerships, pursuing acquisitions, and exploring private equity and international collaborations - The core investment philosophy is the proprietary "Private Market Value (PMV) with a CatalystTM" approach, rooted in Graham & Dodd principles[27](index=27&type=chunk) - Strategic goals include expanding the Investment Partnerships advisory business, pursuing acquisitions and direct investments, launching a private equity business, and establishing partnerships for Asian/European distribution[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) [Competition](index=7&type=section&id=Competition) The alternative asset management industry is highly competitive, with the company facing larger firms and relying on long-term investment performance to attract institutional clients - The company faces intense competition from larger alternative investment firms, insurance companies, banks, and financial institutions with greater resources[32](index=32&type=chunk) - Competition is primarily driven by long-term investment performance records, often requiring a successful track record of five years or more for institutional investors[33](index=33&type=chunk) [Regulation](index=8&type=section&id=Regulation) The company's operations are extensively regulated in the U.S. and Europe, imposing significant compliance, disclosure, and operational requirements to protect investors - The company and its subsidiary GCIA are subject to extensive U.S. federal regulation by the SEC under the Advisers Act, imposing fiduciary duties and disclosure obligations[36](index=36&type=chunk)[37](index=37&type=chunk) - International operations are impacted by tax compliance acts such as FATCA and the OECD's Common Reporting Standard (CRS), adding significant administrative burdens[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk) - European activities are regulated by AIFMD and MiFID II, imposing additional compliance, disclosure, and capital requirements while restricting "soft dollars" for research[44](index=44&type=chunk)[48](index=48&type=chunk) [Employees](index=11&type=section&id=Employees) As of March 6, 2024, the company had **25** full-time employees across various functions and utilizes services from its former parent, GAMCO - As of March 6, 2024, the company employed **25 full-time staff**[52](index=52&type=chunk) - The company utilizes services and research analysts from its former parent, GAMCO, under a transitional services agreement[52](index=52&type=chunk) [Risk Factors](index=12&type=section&id=Item%201A%3A%20Risk%20Factors) As a smaller reporting company, Associated Capital Group is exempt from providing the information required for this item - Smaller reporting companies are not required to provide the information for this item[56](index=56&type=chunk) [Unresolved Staff Comments](index=12&type=section&id=Item%201B%3A%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - No unresolved staff comments are reported[56](index=56&type=chunk) [Cybersecurity](index=12&type=section&id=Item%201C%3A%20Cybersecurity) The company maintains a comprehensive cybersecurity risk management program, overseen by the Board, and has not experienced any material incidents in the past three years - The company's cybersecurity risk management program encompasses risk assessments, a dedicated security team, training, an incident response plan, and third-party risk management[57](index=57&type=chunk) - The Board of Directors oversees cybersecurity threats, with the Chief Technology Officer, possessing over 20 years of experience, leading the cybersecurity team[61](index=61&type=chunk) - The company has not experienced any material cybersecurity incidents in the last three years, with related expenses remaining immaterial[58](index=58&type=chunk) Part II [Properties](index=13&type=section&id=Item%202%3A%20Properties) The company owns office properties in Greenwich, CT, and London, UK, leasing portions to affiliates like GAMCO while also subleasing space from GAMCO Lease Transactions with Affiliates (GAMCO) | Transaction | 2023 (in thousands) | 2022 (in thousands) | | :--- | :--- | :--- | | Income from leasing properties to affiliates | $360.9 | $426.2 | | Expense for subleasing property from GAMCO | $74.0 | $72.1 | [Legal Proceedings](index=13&type=section&id=Item%203%3A%20Legal%20Proceedings) The company may face legal and regulatory actions but is unaware of any probable or reasonably possible material losses as of December 31, 2023 - Management is not aware of any probable or reasonably possible losses from legal proceedings as of December 31, 2023[65](index=65&type=chunk) [Market For The Registrant's Common Equity, Related Stockholder Matters And Issuer Purchases Of Equity Securities](index=14&type=section&id=Item%205%3A%20Market%20For%20The%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20And%20Issuer%20Purchases%20Of%20Equity%20Securities) Associated Capital Group's Class A common stock trades on the NYSE, and the company actively repurchased **85,342 shares** in Q4 2023, with an additional **350,000 shares** authorized for repurchase in February 2024 Class A Common Stock Repurchases (Q4 2023) | Period | Total Shares Repurchased | Average Price Paid Per Share | | :--- | :--- | :--- | | Oct 2023 | 31,201 | $34.95 | | Nov 2023 | 25,477 | $33.84 | | Dec 2023 | 28,664 | $34.60 | | **Total** | **85,342** | **$34.50** | - As of December 31, 2023, **156,664 shares** remained available for repurchase, with an additional **350,000 shares** authorized by the Board on February 6, 2024[70](index=70&type=chunk) [Management's Discussion and Analysis (MD&A)](index=14&type=section&id=Item%207%3A%20Management%27s%20Discussion%20And%20Analysis%20%28%27MD%26A%27%29%20Of%20Financial%20Condition%20And%20Results%20Of%20Operations) In 2023, the company achieved a **$37.5 million** net income turnaround from a **$48.9 million** loss in 2022, driven by investment gains and higher interest income, despite a revenue decline and a **13.6%** decrease in AUM to **$1.59 billion** Key Financial Performance | Metric | Full Year 2023 | Full Year 2022 | | :--- | :--- | :--- | | AUM (end of period) | $1,591 million | $1,842 million | | Net Income/(Loss) per Share-diluted | $1.72 | ($2.22) | | Book Value per Share | $42.11 | $40.48 | - The shift from a net loss in 2022 to a net income in 2023 was primarily driven by a significant positive swing in net gain/(loss) from investments and higher interest income[97](index=97&type=chunk) - Total AUM decreased by **$251 million** (**13.6%**) during 2023, primarily due to **$325 million** in net investor outflows, partially offset by market appreciation[86](index=86&type=chunk) [Operating Results (2023 vs. 2022)](index=17&type=section&id=Operating%20Results%20for%20the%20Year%20Ended%20December%2031%2C%202023%20as%20Compared%20to%20the%20Year%20Ended%20December%2031%2C%202022) In 2023, total revenues decreased by **16.7%** to **$12.7 million**, while a **$43.0 million** net gain from investments and doubled interest income led to a **$37.5 million** net income, reversing a **$48.9 million** net loss in 2022 Revenue Breakdown (in thousands) | Revenue Type | 2023 | 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Investment advisory and incentive fees | $12,324 | $14,801 | ($2,477) | (16.7)% | | Other revenues | $359 | $427 | ($68) | (15.9)% | | **Total revenues** | **$12,683** | **$15,228** | **($2,545)** | **(16.7)%** | Key Income Statement Items (in millions) | Item | 2023 | 2022 | | :--- | :--- | :--- | | Net Gain/(Loss) from Investments | $43.0 | ($56.5) | | Interest and Dividend Income | $25.3 | $10.7 | | Management Fee Expense | $5.4 | $0.0 | | Net Income/(Loss) | $37.5 | ($48.9) | [Liquidity and Capital Resources](index=19&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$317.5 million** in cash and equivalents, reporting **$145.1 million** in net operating cash flow in 2023, a reversal from **$70.6 million** used in 2022, primarily due to securities adjustments and net income Summary of Cash Flows (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $145,075 | ($70,552) | | Net Cash from Investing Activities | $5,752 | $402 | | Net Cash from Financing Activities | ($25,039) | ($37,175) | | **Net Change in Cash** | **$125,788** | **($107,325)** | - Operating cash flow in 2023 was primarily driven by a **$125.9 million** net decrease in securities (due to rolling investments into short-term treasury bills) and **$37.7 million** in net income[100](index=100&type=chunk) - Financing activities in 2023 included **$16.3 million** for stock buybacks, **$4.4 million** for redemptions of noncontrolling interests, and **$4.3 million** for dividend payments[102](index=102&type=chunk) [Critical Accounting Policies](index=20&type=section&id=Critical%20Accounting%20Policies) Critical accounting policies involve significant judgment in revenue recognition, fair value investment valuation, VIE consolidation, equity method accounting for partnerships, and income tax computation - Key critical accounting policies encompass Revenue Recognition, Investments in Securities, Consolidation, Investments in Partnerships and Affiliates, and Income Taxes[104](index=104&type=chunk) - Incentive fees are generally recognized at the end of an annual measurement period, while investment advisory fees are recognized as services are performed[105](index=105&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk) - The company consolidates entities where it is determined to be the primary beneficiary, possessing both the power to direct significant activities and the obligation/right to absorb significant losses or benefits[113](index=113&type=chunk) [Financial Statements and Supplementary Data](index=24&type=section&id=Item%208%3A%20Financial%20Statements%20And%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2023 and 2022, including the independent auditor's unqualified opinion and detailed financial statements with accompanying notes - Deloitte & Touche, LLP, the independent auditor, issued an unqualified opinion, affirming the fair presentation of financial position and results of operations in conformity with U.S. GAAP[126](index=126&type=chunk) Consolidated Statement of Income Highlights (in thousands) | Description | 2023 | 2022 | | :--- | :--- | :--- | | Total Revenues | $12,683 | $15,228 | | Operating Loss | ($16,947) | ($11,262) | | Net Gain/(Loss) from Investments | $43,033 | ($56,513) | | Net Income/(Loss) Attributable to Shareholders | $37,451 | ($48,907) | | Diluted EPS | $1.72 | ($2.22) | Consolidated Statement of Financial Condition Highlights (in thousands) | Description | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and Cash Equivalents | $317,487 | $218,462 | | Total Investments (Securities & Partnerships) | $555,463 | $658,294 | | Total Assets | $943,797 | $927,690 | | Total Liabilities | $30,719 | $27,301 | | Total Equity | $906,975 | $890,196 | [Notes to Consolidated Financial Statements](index=34&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on accounting policies, financial components, investment partnerships, fair value measurements, income taxes, related party transactions, and equity structure - In August 2022, the company deconsolidated The PMV Entities, recognizing a **$3.6 million** loss, after losing control of the Sponsor's manager[155](index=155&type=chunk)[216](index=216&type=chunk) - The company engages in significant related party transactions with its former parent, GAMCO, and other affiliates, including sub-advisory fees, affiliated fund investments, lease agreements, and shared administrative services[247](index=247&type=chunk)[254](index=254&type=chunk)[256](index=256&type=chunk) - The company maintains a stock award and incentive plan, primarily issuing cash-settled Phantom Restricted Stock Awards (Phantom RSAs), with a **$3.5 million** liability for outstanding RSAs as of December 31, 2023[261](index=261&type=chunk)[262](index=262&type=chunk) [Controls and Procedures](index=59&type=section&id=Item%209A.%20Controls%20And%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2023, with no material changes in Q4 2023 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2023[277](index=277&type=chunk) - Management concluded that the company maintained effective internal control over financial reporting as of December 31, 2023[279](index=279&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=60&type=section&id=Item%2010%3A%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2024 Proxy Statement - This section incorporates information by reference from the Company's 2024 Proxy Statement[283](index=283&type=chunk) [Executive Compensation](index=60&type=section&id=Item%2011%3A%20Executive%20Compensation) Information on executive compensation is incorporated by reference from the 2024 Proxy Statement - This section incorporates information by reference from the Company's 2024 Proxy Statement[286](index=286&type=chunk) [Security Ownership Of Certain Beneficial Owners And Management And Related Stockholder Matters](index=60&type=section&id=Item%2012%3A%20Security%20Ownership%20Of%20Certain%20Beneficial%20Owners%20And%20Management%20And%20Related%20Stockholder%20Matters) Information on security ownership is incorporated by reference from the 2024 Proxy Statement - This section incorporates information by reference from the Company's 2024 Proxy Statement[286](index=286&type=chunk) [Certain Relationships And Related Transactions, and Director Independence](index=60&type=section&id=Item%2013%3A%20Certain%20Relationships%20And%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related transactions and director independence is incorporated by reference from the 2024 Proxy Statement - This section incorporates information by reference from the Company's 2024 Proxy Statement[286](index=286&type=chunk) [Principal Accountant Fees And Services](index=60&type=section&id=Item%2014%3A%20Principal%20Accountant%20Fees%20And%20Services) Information on principal accountant fees and services is incorporated by reference from the 2024 Proxy Statement - This section incorporates information by reference from the Company's 2024 Proxy Statement[286](index=286&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=60&type=section&id=Item%2015%3A%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all documents filed with the Form 10-K report, including consolidated financial statements and various legal and corporate exhibits - This section lists all documents filed with the report, including financial statements and various legal and corporate exhibits[286](index=286&type=chunk)

Core Viewpoint - Associated Capital Group, Inc. reported its financial results for the fourth quarter and full year ended December 31, 2023, highlighting a decrease in assets under management (AUM) and revenues, but an increase in net income and book value per share compared to the previous year [1][2][4]. Financial Performance - Book value per share increased to $42.11 at year-end 2023 from $40.48 a year ago [1][2]. - AUM at year-end was $1.59 billion, down from $1.84 billion at the end of 2022, reflecting net outflows of $325 million [2][8]. - Revenues for the fourth quarter were $5.6 million, a decrease from $7.5 million in the same quarter of 2022, primarily due to lower average AUM and performance-based fees [5][7]. - For the full year, revenues totaled $12.7 million, down from $15.2 million in 2022 [7][29]. - Net income for the fourth quarter was $16.3 million, compared to $13.7 million in the fourth quarter of 2022, and for the full year, net income was $37.5 million, a significant recovery from a loss of $48.9 million in 2022 [2][7][29]. Shareholder Returns - The Board of Directors authorized the repurchase of up to an additional 350,000 shares, following the repurchase of 452,688 Class A shares for $16.3 million in 2023 [1][21][22]. - Since the spin-off in 2015, the company has returned $172.4 million to shareholders through share repurchases and paid dividends of $36.4 million [22]. Charitable Contributions - The company completed $4.0 million in donations to shareholder-designated charitable organizations in January 2024, bringing total giving to $38 million since the spin-off [1][3]. Investment Strategy - The company focuses on alternative investment management, particularly in merger arbitrage, which generated gross returns of 5.49% for the full year 2023 [11][13]. - The merger arbitrage strategy remains a key offering, with a total AUM of $1.31 billion in this strategy for 2023 [10][19].

Group 1 - The company announced a preliminary range for its fourth quarter book value of $41.91 to $42.11 per share, an increase from $41.43 per share at September 30, 2023, and $40.48 per share at December 31, 2022 [1] - Further details on the company's financial results will be issued in February [1] Group 2 - Associated Capital Group, Inc. is a diversified global financial services company based in Greenwich, Connecticut, providing alternative investment management through Gabelli & Company Investment Advisers, Inc. [2] - The company has earmarked proprietary capital for its direct investment business, which includes Gabelli Private Equity Partners, LLC, formed in August 2017 with $150 million of authorized capital, and Gabelli Principal Strategies Group, LLC, created in December 2015 [2]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Unaudited Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section presents Associated Capital Group, Inc.'s unaudited condensed consolidated financial statements and accompanying notes for the periods ended September 30, 2023 [Condensed Consolidated Statements of Financial Condition](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Condition) Total assets remained stable at **$926.5 million** as of September 30, 2023, with a notable shift towards increased cash and reduced Treasury Bill investments Condensed Consolidated Statements of Financial Condition (in thousands) | Account | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $381,253 | $218,462 | | Investments in equity securities | $213,345 | $195,585 | | Investments in partnerships | $142,874 | $150,498 | | **Total assets** | **$926,457** | **$927,690** | | **Liabilities & Equity** | | | | Total liabilities | $23,588 | $27,301 | | Total Associated Capital Group, Inc. equity | $895,736 | $890,196 | | **Total liabilities and equity** | **$926,457** | **$927,690** | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For the nine months ended September 30, 2023, the company achieved a **$21.1 million** net income, a significant turnaround from a **$62.6 million** net loss in the prior year, driven by investment gains Condensed Consolidated Statements of Income (in thousands, except per share data) | Metric | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Total revenues | $7,047 | $7,690 | | Operating loss | $(12,125) | $(8,646) | | Net gain/(loss) from investments | $21,635 | $(72,727) | | Net income/(loss) attributable to ACG | $21,109 | $(62,571) | | Diluted EPS | $0.97 | $(2.84) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly increased to **$194.8 million** for the nine months ended September 30, 2023, leading to a **$178.2 million** overall increase in cash and equivalents Summary of Cash Flows (in thousands) | Activity | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash provided by/(used in) operating activities | $194,815 | $(30,558) | | Net cash provided by investing activities | $2,330 | $251 | | Net cash used in financing activities | $(18,949) | $(5,450) | | **Net increase/(decrease) in cash** | **$178,196** | **$(35,757)** | [Notes to the Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's accounting policies, including revenue recognition, investment composition, fair value measurements, income taxes, equity structure, and subsequent events - The company's primary revenue sources are asset-based advisory fees and sub-advisory fees, which were largely stable for the nine-month period year-over-year[42](index=42&type=chunk) - The company's effective tax rate for the nine months ended September 30, 2023 was **14.3%**, down from **23.0%** in the same period of 2022, primarily due to deferred tax benefits from a foreign investment[70](index=70&type=chunk) - During the nine months ended September 30, 2023, the company repurchased **367,346 shares** for a total of **$13.4 million** under its stock repurchase program[82](index=82&type=chunk)[83](index=83&type=chunk) - Subsequent to the quarter end, the company repurchased an additional **36,986 shares** and the Board of Directors declared a semi-annual dividend of **$0.10 per share**[89](index=89&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's business overview, financial performance, and condition, highlighting the significant improvement in net income driven by positive securities portfolio performance and strong liquidity - The company operates in two main segments: alternative investment management through its subsidiary GCIA, and a direct investment business utilizing proprietary capital[93](index=93&type=chunk)[94](index=94&type=chunk)[97](index=97&type=chunk) Key Financial Metrics | Metric | Q3 2023 | Q3 2022 | | :--- | :--- | :--- | | AUM - end of period (in millions) | $1,588 | $1,752 | | Net income/(loss) per share-diluted | $0.00 | $(0.75) | | Book value per share at September 30 | $41.43 | $39.96 | [Results of Operations](index=21&type=section&id=Results%20of%20Operations) The company achieved a **$21.1 million** net income for the nine months ended September 30, 2023, a reversal from a prior-year loss, primarily driven by investment gains and increased interest income - The primary driver for the turnaround from a net loss in the first nine months of 2022 to a net income in 2023 was the performance of the company's securities portfolio, which experienced market appreciation in the current period[115](index=115&type=chunk)[119](index=119&type=chunk) - Compensation expense for the nine-month period increased to **$11.4 million** from **$10.5 million** year-over-year, mainly due to higher fixed compensation including stock-based compensation[117](index=117&type=chunk) - Interest and dividend income more than tripled to **$17.5 million** for the nine-month period in 2023 from **$5.5 million** in 2022, driven by higher interest rates[119](index=119&type=chunk) [Assets Under Management](index=24&type=section&id=Assets%20Under%20Management) Assets Under Management (AUM) decreased to **$1.6 billion** as of September 30, 2023, primarily due to investor outflows, despite a net increase in Q3 2023 driven by inflows and market appreciation AUM by Strategy (in millions) | Strategy | Sep 30, 2023 | Sep 30, 2022 | % Change | | :--- | :--- | :--- | :--- | | Merger Arbitrage | $1,322 | $1,518 | (12.9)% | | Long/Short Value | $233 | $203 | 14.8% | | Other | $33 | $31 | 6.5% | | **Total AUM** | **$1,588** | **$1,752** | **(9.4)%** | - In Q3 2023, AUM saw a net increase of **$39 million**, driven by net inflows of **$28 million** and market appreciation of **$33 million**, which was partially offset by negative currency effects[125](index=125&type=chunk)[126](index=126&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with **$381.3 million** in cash and equivalents, with operating activities providing **$194.8 million** in cash for the first nine months of 2023 - The company's cash, cash equivalents, and restricted cash increased by **$178.2 million** in the first nine months of 2023, ending the period at **$399.5 million**[129](index=129&type=chunk) - Net cash from operating activities was **$194.8 million**, largely due to net decreases of securities and distributions from investment partnerships[130](index=130&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Associated Capital Group, Inc. is exempt from providing quantitative and qualitative disclosures about market risk - The company is classified as a smaller reporting company and is therefore exempt from this disclosure requirement[133](index=133&type=chunk) [Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the most recent fiscal quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[134](index=134&type=chunk) - No material changes were identified in the company's internal control over financial reporting during the third quarter of 2023[135](index=135&type=chunk) [PART II. OTHER INFORMATION](index=26&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently subject to any legal proceedings expected to be material to its financial condition, operations, or cash flows - The company is not subject to any legal proceedings where a claim for damages exceeds **10%** of its consolidated assets[138](index=138&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=26&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's repurchase of **103,169** Class A shares at an average price of **$36.98** per share during Q3 2023 under its stock repurchase program Class A Stock Repurchases (Q3 2023) | Period | Total Shares Repurchased | Average Price Paid Per Share | | :--- | :--- | :--- | | Jul 2023 | 37,257 | $36.74 | | Aug 2023 | 34,295 | $37.17 | | Sep 2023 | 31,617 | $37.06 | | **Total** | **103,169** | **$36.98** | [Exhibits](index=27&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including various agreements, CEO and CFO certifications, and interactive data files - Exhibits filed include certifications from the CEO and CFO pursuant to Sarbanes-Oxley Act rules and the Inline XBRL documents[146](index=146&type=chunk)[147](index=147&type=chunk)

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Unaudited Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Unaudited interim financial statements for Associated Capital Group, Inc. as of June 30, 2023, are presented with detailed notes [Condensed Consolidated Statements of Financial Condition](index=4&type=page&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Condition) As of June 30, 2023, total assets increased slightly to **$933.5 million**, driven by higher cash, with total equity rising to **$899.6 million** Condensed Consolidated Statements of Financial Condition (Unaudited) | (in thousands) | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $381,387 | $218,462 | | Investments in equity securities | $214,270 | $195,585 | | Investments in partnerships | $149,080 | $150,498 | | **Total assets** | **$933,513** | **$927,690** | | **Liabilities and Equity** | | | | Total liabilities | $26,860 | $27,301 | | Total Associated Capital Group, Inc. equity | $899,567 | $890,196 | | **Total liabilities and equity** | **$933,513** | **$927,690** | [Condensed Consolidated Statements of Income](index=5&type=page&id=Condensed%20Consolidated%20Statements%20of%20Income) In Q2 2023, net income was **$3.4 million** ($0.15 per share), a turnaround from a **$29.9 million** net loss in Q2 2022, driven by investment gains Condensed Consolidated Statements of Income (Unaudited) | (in thousands, except per share data) | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $2,382 | $2,546 | $4,847 | $5,128 | | Operating loss | $(3,471) | $(2,211) | $(8,604) | $(5,517) | | Net gain/(loss) from investments | $3,297 | $(37,803) | $23,808 | $(53,413) | | Net income/(loss) attributable to ACG | $3,371 | $(29,887) | $21,125 | $(46,073) | | Diluted EPS | $0.15 | $(1.36) | $0.96 | $(2.09) | [Condensed Consolidated Statements of Equity](index=7&type=page&id=Condensed%20Consolidated%20Statements%20of%20Equity) Total equity increased to **$899.6 million** at June 30, 2023, from **$890.2 million** at year-end 2022, driven by net income - For the six months ended June 30, 2023, total equity increased by **$9.4 million**, reflecting **$21.1 million** in net income, offset by **$2.2 million** in dividends and **$9.6 million** in treasury stock purchases[19](index=19&type=chunk)[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=page&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities for H1 2023 significantly increased to **$179.4 million**, while financing activities used **$15.1 million** Summary of Cash Flows (Unaudited) | (in thousands) | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $179,403 | $29,272 | | Net cash provided by/(used in) investing activities | $676 | $(2,865) | | Net cash used in financing activities | $(15,058) | $(5,010) | | **Net increase in cash, cash equivalents and restricted cash** | **$165,021** | **$21,397** | [Notes to the Condensed Consolidated Financial Statements](index=11&type=page&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) These notes detail the company's organization, revenue, investments, consolidation, fair value, income tax, EPS, equity, goodwill, and subsequent events Revenue Breakdown (in thousands) | Revenue Source | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Asset-based advisory fees | $1,291 | $2,606 | | Sub-advisory fees | $989 | $2,084 | | **Total Inv. advisory & incentive fees** | **$2,280** | **$4,691** | - The company holds investments in equity securities with a fair value of **$214.3 million** and affiliated registered investment companies valued at **$128.3 million** as of June 30, 2023[40](index=40&type=chunk) - During Q2 2023, **97,000** Phantom Restricted Stock Awards (PRSAs) were granted, with **307,910** PRSAs outstanding as of June 30, 2023[74](index=74&type=chunk) - Subsequent to quarter-end, from July 1 to August 10, 2023, the company repurchased **48,764** shares at an average price of **$36.92** per share, and on August 9, 2023, the Board approved a **$0.20** per share shareholder designated charitable contribution[82](index=82&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and operations, highlighting a Q2 2023 net income turnaround and a decrease in Assets Under Management to **$1.5 billion** - The company operates two main segments: Alternative Investment Management, which earns fees from managing assets, and a Proprietary Capital business that makes direct investments[87](index=87&type=chunk)[90](index=90&type=chunk) Key Financial Highlights | (in thousands, except per share data or as noted) | Q2 2023 | Q2 2022 | | :--- | :--- | :--- | | AUM - end of period (in millions) | $1,549 | $1,802 | | Net income/(loss) per share-diluted | $0.15 | $(1.36) | | Book value per share at June 30 | $41.41 | $40.30 | [Results of Operations](index=28&type=page&id=Results%20of%20Operations) Q2 2023 operating loss widened to **$3.5 million**, but investment performance led to a **$3.4 million** net income, reversing prior year's loss - The increase in Q2 2023 operating loss was primarily driven by **$0.5 million** in management fee expense (absent in 2022 due to pre-tax losses) and a **$0.4 million** increase in stock-based compensation[102](index=102&type=chunk) - Net investment gains were **$3.3 million** in Q2 2023 versus losses of **$37.8 million** in Q2 2022, attributed to market appreciation in the current period compared to market volatility in the prior year[106](index=106&type=chunk) - For the six months ended June 30, 2023, net investment gains were **$23.8 million** compared to losses of **$53.4 million** in the same period of 2022[111](index=111&type=chunk) [Assets Under Management](index=32&type=page&id=Assets%20Under%20Management) Total AUM decreased to **$1.55 billion** as of June 30, 2023, a **15.9%** decrease from year-end 2022, primarily due to net investor outflows Assets Under Management by Strategy (in millions) | Strategy | June 30, 2023 | Dec 31, 2022 | June 30, 2022 | | :--- | :--- | :--- | :--- | | Merger Arbitrage | $1,286 | $1,588 | $1,591 | | Long/Short Value | $230 | $222 | $174 | | Other | $33 | $32 | $37 | | **Total AUM** | **$1,549** | **$1,842** | **$1,802** | - In Q2 2023, AUM decreased by **$250 million**, resulting from **$232 million** in net outflows, **$13 million** in market depreciation, and a **$5 million** negative impact from currency fluctuations[117](index=117&type=chunk) [Liquidity and Capital Resources](index=33&type=page&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with **$381.4 million** in cash and **$211.3 million** in net investments, and H1 2023 net cash from operations at **$179.4 million** - As of June 30, 2023, the company had cash and cash equivalents of **$381.4 million** and investments (net of securities sold short) of **$210.3 million**[120](index=120&type=chunk) - For the six months ended June 30, 2023, cash used in financing activities totaled **$15.1 million**, including **$9.6 million** for stock buybacks, **$3.3 million** for redemptions of noncontrolling interests, and **$2.2 million** for dividends[121](index=121&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the company is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, Associated Capital Group, Inc. is not required to provide quantitative and qualitative disclosures about market risk[124](index=124&type=chunk) [Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of period end, with no material changes to internal control over financial reporting - Based on an evaluation, the Chief Executive Officer and Co-Chief Financial Officers concluded that the company's disclosure controls and procedures were effective[125](index=125&type=chunk) - No changes occurred during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[126](index=126&type=chunk) [PART II. OTHER INFORMATION](index=35&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently subject to any legal proceedings expected to have a material impact on its financial condition or operations - The company is not subject to any legal proceedings involving claims exceeding **10%** of its consolidated assets, and management believes any existing matters are not material to the company's financial condition as of June 30, 2023[129](index=129&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's repurchase of **211,870** Class A shares at **$35.95** per share in Q2 2023, with **345,175** shares remaining authorized Class A Stock Repurchases (Q2 2023) | Period | Total Shares Repurchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 2023 | 49,105 | $36.67 | | May 2023 | 17,142 | $37.36 | | June 2023 | 145,623 | $35.54 | | **Total** | **211,870** | **$35.95** | - As of June 30, 2023, the company had authorization to repurchase an additional **345,175** shares under its publicly announced plan[132](index=132&type=chunk) [Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including various agreements, corporate governance documents, and required certifications

PART I. FINANCIAL INFORMATION [Unaudited Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section presents Associated Capital Group, Inc.'s unaudited interim financial statements for Q1 2023, covering financial condition, income, equity, and cash flows, along with detailed accounting notes [Condensed Consolidated Statements of Financial Condition](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Condition) As of March 31, 2023, total assets increased to $942.9 million from $927.7 million at year-end 2022, primarily driven by a significant rise in cash and cash equivalents Condensed Consolidated Statements of Financial Condition (Unaudited) | (Dollars in thousands) | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents (in thousands) | $396,828 | $218,462 | | Investments in equity securities (in thousands) | $217,006 | $195,585 | | Investments in partnerships (in thousands) | $150,361 | $150,498 | | **Total assets (in thousands)** | **$942,886** | **$927,690** | | **Liabilities and Equity** | | | | Total liabilities (in thousands) | $29,652 | $27,301 | | Total Associated Capital Group, Inc. equity (in thousands) | $906,001 | $890,196 | | **Total liabilities and equity (in thousands)** | **$942,886** | **$927,690** | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For the three months ended March 31, 2023, the company reported a net income of $17.8 million, a significant turnaround from a net loss of $16.2 million in the same period of 2022, primarily driven by a substantial net gain from investments Condensed Consolidated Statements of Income (Unaudited) | (In thousands, except per share data) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Total revenues (in thousands) | $2,465 | $2,582 | | Total expenses (in thousands) | $7,598 | $5,888 | | Operating loss (in thousands) | $(5,133) | $(3,306) | | Net gain/(loss) from investments (in thousands) | $20,511 | $(15,610) | | Income/(loss) before income taxes (in thousands) | $19,602 | $(18,353) | | Net income/(loss) attributable to ACG shareholders (in thousands) | $17,754 | $(16,186) | | Diluted EPS | $0.81 | $(0.73) | [Condensed Consolidated Statements of Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) Total equity increased from $890.2 million at the end of 2022 to $906.0 million as of March 31, 2023, primarily due to net income partially offset by treasury stock purchases - For the three months ended March 31, 2023, total equity increased by **$15.8 million**, driven by net income of **$17.8 million** and offset by **$1.9 million** in treasury stock purchases[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For Q1 2023, net cash from operating activities significantly increased to $183.6 million, primarily due to changes in trading securities, while financing activities used $5.2 million Summary of Cash Flows (Unaudited) | (Dollars in thousands) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities (in thousands) | $183,592 | $28,558 | | Net cash used in investing activities (in thousands) | $(572) | $(1,773) | | Net cash used in financing activities (in thousands) | $(5,177) | $(779) | | Net increase in cash, cash equivalents and restricted cash (in thousands) | $177,843 | $26,006 | [Notes to the Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes explain the company's accounting policies, investment composition, revenue recognition, equity structure, and subsequent events - The company's primary business involves providing alternative investment management services and generating income from proprietary investments[28](index=28&type=chunk) Revenue Sources (in thousands) | Revenue Source | Q1 2023 (in thousands) | Q1 2022 (in thousands) | | :--- | :--- | :--- | | Asset-based advisory fees | $1,315 | $1,304 | | Sub-advisory fees | $1,095 | $1,138 | | Performance-based advisory fees | $1 | $44 | | **Total** | **$2,411** | **$2,486** | - As of March 31, 2023, the company held investments in securities with a fair value of **$222.0 million** and investments in affiliated registered investment companies valued at **$128.5 million**[41](index=41&type=chunk) - Subsequent to the quarter end, on May 10, 2023, the Board of Directors declared a semi-annual dividend of **$0.10 per share**[82](index=82&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting a shift to net income in Q1 2023 driven by investment gains, with AUM slightly decreasing and strong liquidity maintained [Overview](index=24&type=section&id=Overview) The company operates two main business lines: alternative investment management through GCIA and a direct investment business for proprietary capital - The company's investment management activities are conducted through its wholly-owned subsidiary, Gabelli & Company Investment Advisers, Inc. (GCIA), managing assets across risk and event arbitrage portfolios and equity event-driven value strategies[87](index=87&type=chunk) - The proprietary capital business focuses on direct private equity and merchant banking activities, primarily investing in small and mid-sized companies through vehicles like Gabelli Private Equity Partners, LLC ("GPEP") and Gabelli Principal Strategies Group, LLC ("GPS")[90](index=90&type=chunk)[91](index=91&type=chunk) [Financial Highlights](index=26&type=section&id=Financial%20Highlights) Key financial metrics for Q1 2023 include an end-of-period AUM of $1.8 billion, diluted net income per share of $0.81, and a book value per share of $41.30 Q1 Financial Highlights | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | AUM - end of period (in millions) | $1,799 | $1,839 | | Net income/(loss) per share-diluted | $0.81 | $(0.73) | | Book value per share at March 31 | $41.30 | $41.72 | [Results of Operations](index=27&type=section&id=RESULTS%20OF%20OPERATIONS) The company's net income swung from a $16.2 million loss to a $17.8 million gain in Q1 2023, primarily driven by a $20.5 million net gain from investments, offsetting a higher operating loss - The primary driver for the shift from net loss to net income was the performance of the investment portfolio, which generated a gain of **$20.5 million** in Q1 2023 versus a loss of **$15.6 million** in Q1 2022, attributed to market volatility in the prior year[102](index=102&type=chunk)[107](index=107&type=chunk) - Operating loss increased to **$5.1 million** from **$3.3 million**, mainly due to a **$2.5 million** management fee expense recorded in Q1 2023, which was absent in Q1 2022 due to pre-tax losses[102](index=102&type=chunk)[106](index=106&type=chunk) - Interest and dividend income rose significantly to **$5.2 million** from **$0.8 million**, driven by higher interest rates[107](index=107&type=chunk) [Assets Under Management](index=29&type=section&id=ASSETS%20UNDER%20MANAGEMENT) Total AUM slightly decreased to $1.80 billion as of March 31, 2023, primarily due to net investor outflows and market depreciation, partially offset by currency fluctuations AUM by Strategy (in millions) | Strategy | March 31, 2023 (in millions) | Dec 31, 2022 (in millions) | March 31, 2022 (in millions) | | :--- | :--- | :--- | :--- | | Merger Arbitrage | $1,537 | $1,588 | $1,606 | | Event-Driven Value | $229 | $222 | $191 | | Other | $33 | $32 | $42 | | **Total AUM** | **$1,799** | **$1,842** | **$1,839** | - For the three months ended March 31, 2023, AUM decreased by a net **$43 million**, resulting from **$55 million** in net outflows and **$4 million** in market depreciation, offset by a **$16 million** positive impact from foreign currency fluctuations[111](index=111&type=chunk)[112](index=112&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with $399.1 million in cash and equivalents, robust operating cash flow of $183.6 million, and $5.2 million used in financing activities - At March 31, 2023, the company had cash and cash equivalents of **$396.8 million**, U.S. Treasury Bills of **$4.9 million**, and net investments of **$213.4 million**[115](index=115&type=chunk) - Net cash provided by operating activities for Q1 2023 was **$183.6 million**, a significant increase from **$28.6 million** in Q1 2022[115](index=115&type=chunk)[116](index=116&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Associated Capital Group, Inc. is not required to provide the information for this item - Smaller reporting companies are not required to provide the information required by this item[119](index=119&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective, with no material changes in internal control over financial reporting during the quarter - Based on an evaluation, the Chief Executive Officer and Co-Chief Financial Officers concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[120](index=120&type=chunk) - There were no changes in internal control over financial reporting during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, the company's internal control[121](index=121&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently subject to any legal proceedings expected to have a material impact on its financial condition, operations, or cash flows - The company is not subject to any legal proceedings involving claims for damages exceeding **10%** of its consolidated assets[124](index=124&type=chunk) - Management believes that any probable or reasonably possible losses from legal matters are not material to the Company's financial condition as of March 31, 2023[124](index=124&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2023, the company repurchased 52,307 shares of Class A Stock at an average price of $37.27 per share under its stock repurchase program Class A Stock Repurchases for Q1 2023 | Period | Total Shares Repurchased | Average Price Paid Per Share | | :--- | :--- | :--- | | Jan 2023 | 8,723 | $38.75 | | Feb 2023 | 21,388 | $37.23 | | Mar 2023 | 22,196 | $36.72 | | **Total** | **52,307** | **$37.27** | - As of March 31, 2023, the company had authorization to purchase an additional **557,045 shares** under its repurchase program[127](index=127&type=chunk) [Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including various agreements, corporate governance documents, and certifications by the CEO and Co-CFOs - Key exhibits filed include the Separation and Distribution Agreement with GAMCO, Amended and Restated Certificate of Incorporation, and various service and employment agreements[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk) - Certifications from the CEO and Co-CFOs pursuant to Rule 13a-14(a) and Section 906 of the Sarbanes-Oxley Act of 2002 are included as exhibits[132](index=132&type=chunk)[133](index=133&type=chunk)