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)

Part I [Business](index=5&type=section&id=Item%201%3A%20Business) Associated Capital Group, Inc. (AC) manages **$1.84 billion** in assets, focusing on alternative investment management and direct investments - The company operates through two main business lines: Alternative Investment Management, which provides advisory services for fees, and a direct investment business that utilizes the company's proprietary capital[15](index=15&type=chunk)[16](index=16&type=chunk)[21](index=21&type=chunk) Assets Under Management (AUM) Trend (2018-2022) | Strategy | 2022 (in millions) | 2021 (in millions) | 2020 (in millions) | 2019 (in millions) | 2018 (in millions) | | :--- | :--- | :--- | :--- | :--- | :--- | | Merger Arbitrage | $1,588 million | $1,542 million | $1,126 million | $1,525 million | $1,342 million | | Event-Driven Value | $222 million | $195 million | $180 million | $132 million | $118 million | | Other | $32 million | $44 million | $45 million | $59 million | $60 million | | **Total AUM** | **$1,842 million** | **$1,781 million** | **$1,351 million** | **$1,716 million** | **$1,520 million** | - The company's business strategy includes: - Continuing an active fundamental investment approach using the proprietary "Private Market Value (PMV) with a Catalyst" methodology - Growing the Investment Partnerships advisory business, including international expansion - Leveraging research capabilities to pursue acquisitions, alliances, and direct investments in operating businesses - Launching a private equity business to capitalize on market opportunities[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) - The company's operations are subject to extensive regulation in the U.S. by the SEC under the Advisers Act and ERISA, as well as European regulations such as AIFMD and MiFID II[33](index=33&type=chunk)[35](index=35&type=chunk)[42](index=42&type=chunk) - As of March 3, 2023, the company had **24** full-time employees[51](index=51&type=chunk) [Risk Factors](index=12&type=section&id=Item%201A%3A%20Risk%20Factors) As a smaller reporting company, Associated Capital Group is not required to provide the information for this item - The company is a "smaller reporting company" and is exempt from providing Risk Factors disclosure[55](index=55&type=chunk) [Unresolved Staff Comments](index=12&type=section&id=Item%201B%3A%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - There are no unresolved staff comments[55](index=55&type=chunk) [Properties](index=12&type=section&id=Item%202%3A%20Properties) The company owns office properties in Greenwich, CT, and London, UK, leasing to affiliates, and subleases space in Rye, NY Lease Income and Expense with Affiliates (2021-2022) | Transaction Type | 2022 | 2021 | | :--- | :--- | :--- | | **Income from Affiliates** | | | | Greenwich, CT Lease | $116.4 thousand | $118.1 thousand | | London, UK Lease | $309.8 thousand | $275.4 thousand | | **Expense to Affiliates** | | | | Rye, NY Sublease | $72.1 thousand | $73.7 thousand | [Legal Proceedings](index=12&type=section&id=Item%203%3A%20Legal%20Proceedings) As of December 31, 2022, the company is not subject to any material legal proceedings exceeding **10%** of its consolidated assets - The company is not currently subject to any legal proceedings with claims exceeding **10%** of its consolidated assets[58](index=58&type=chunk) Part II [Market For The Registrant's Common Equity, Related Stockholder Matters And Issuer Purchases Of Equity Securities](index=13&type=section&id=Item%205%3A%20Market%20For%20The%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20And%20Issuer%20Purchases%20Of%20Equity%20Securities) The company's Class A common stock trades on the NYSE under 'AC', supported by an active stock repurchase program - Class A common stock trades on the NYSE under the ticker symbol AC[61](index=61&type=chunk) Class A Common Stock Repurchases (Q4 2022) | Period | Total Shares Repurchased | Average Price Paid Per Share ($) | | :--- | :--- | :--- | | Oct 1 - Oct 31, 2022 | 1,305 | $39.16 | | Nov 1 - Nov 30, 2022 | 9,326 | $39.39 | | Dec 1 - Dec 31, 2022 | 2,581 | $40.87 | | **Total** | **13,212** | **$39.66** | - As of the end of Q4 2022, the maximum number of shares that may yet be purchased under the company's plans or programs was **609,352**[63](index=63&type=chunk) [Management's Discussion and Analysis ('MD&A') of Financial Condition and Results of Operations](index=13&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 2022, the company reported a net loss of **$48.9 million** primarily due to investment losses, despite AUM growing to **$1.84 billion** Key Financial Performance Indicators (2021 vs 2022) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | AUM - end of period | $1,842 million | $1,781 million | | Net income/(loss) per share-diluted | $(2.22) | $2.68 | | Book value per share | $40.48 | $42.48 | - Total AUM increased by **$61 million** (**3.4%**) in 2022, driven by net investor inflows of **$100 million** and market appreciation of **$34 million**, which was partially offset by a negative currency impact of **$73 million**[78](index=78&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) Revenue Breakdown (in thousands) | Revenue Type | 2022 (in thousands) | 2021 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Investment advisory and incentive fees | $14,801 | $20,530 | (27.9)% | | Other revenues | $427 | $394 | 8.4% | | **Total revenues** | **$15,228** | **$20,924** | **(27.2)%** | - The net loss in 2022 was primarily due to a net loss from investments of **$56.5 million**, compared to a net gain of **$93.4 million** in 2021, attributed to market volatility from rising interest rates, geo-political factors, and inflation[87](index=87&type=chunk)[90](index=90&type=chunk) - The company identifies revenue recognition, valuation of investments, consolidation of entities, and income tax accounting as its critical accounting policies requiring significant management judgment[97](index=97&type=chunk) [Financial Statements and Supplementary Data](index=23&type=section&id=Item%208%3A%20Financial%20Statements%20And%20Supplementary%20Data) This section provides the company's audited consolidated financial statements for 2022 and 2021, along with the independent auditor's report [Report of Independent Registered Public Accounting Firm](index=24&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Deloitte & Touche, LLP issued an unqualified audit opinion, highlighting the deconsolidation of PMV Consumer Acquisition Corp. as a Critical Audit Matter - The auditor, Deloitte & Touche, LLP, issued an unqualified opinion, stating the financial statements are presented fairly in all material respects[119](index=119&type=chunk) - A Critical Audit Matter was identified concerning the deconsolidation of PMV Consumer Acquisition Corp. This was due to the significant judgment involved in determining whether the company continued to have substantive control over the entity[123](index=123&type=chunk)[125](index=125&type=chunk) [Consolidated Financial Statements](index=26&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements detail the company's financial performance and position for 2022 and 2021, showing a **$48.9 million** net loss in 2022 Consolidated Statement of Income Highlights (in thousands) | Line Item | 2022 (in thousands) | 2021 (in thousands) | | :--- | :--- | :--- | | Total Revenues | $15,228 | $20,924 | | Operating Loss | $(11,262) | $(19,076) | | Net gain/(loss) from investments | $(56,513) | $93,405 | | **Net income/(loss) attributable to AC shareholders** | **$(48,907)** | **$59,203** | | **Diluted EPS** | **$(2.22)** | **$2.68** | Consolidated Statement of Financial Condition Highlights (in thousands) | Line Item | Dec 31, 2022 (in thousands) | Dec 31, 2021 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $218,462 | $319,048 | | Total Investments (various) | $658,294 | $623,091 | | **Total Assets** | **$927,690** | **$1,203,336** | | Total Liabilities | $27,301 | $65,534 | | **Total Associated Capital Group, Inc. equity** | **$890,196** | **$937,102** | Consolidated Statement of Cash Flows Highlights (in thousands) | Line Item | 2022 (in thousands) | 2021 (in thousands) | | :--- | :--- | :--- | | Net cash (used in)/provided by operating activities | $(70,552) | $238,194 | | Net cash provided by investing activities | $402 | $65,285 | | Net cash used in financing activities | $(37,175) | $(14,394) | [Notes to Consolidated Financial Statements](index=35&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the deconsolidation of PMV Consumer Acquisition Corp., revenue recognition, related-party transactions, and stock repurchases - In August 2022, the company deconsolidated PMV Consumer Acquisition Corp. (PMV SPAC) and its sponsor because it no longer had a controlling financial interest, resulting in a recognized loss of **$3.6 million**[151](index=151&type=chunk)[217](index=217&type=chunk) - Performance-based advisory fees, typically **15%-20%** of investment performance, are recognized at the end of the measurement period (usually calendar year) or upon investor redemption[178](index=178&type=chunk) - The company has significant related-party transactions with its former parent, GAMCO, including holding **$36.7 million** in GAMCO stock, receiving **$7.1 million** in sub-advisory fees, and engaging in property lease agreements[252](index=252&type=chunk)[256](index=256&type=chunk)[259](index=259&type=chunk) Stock Repurchase Activity | Period | Shares Repurchased | Average Price/Share ($) | Total Cost ($) | | :--- | :--- | :--- | :--- | | 2022 | 67,792 | $37.98 | $2.6 million | | 2021 | 215,958 | $35.40 | $7.6 million | [Controls and Procedures](index=62&type=section&id=Item%209A.%20Controls%20And%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2022 - The CEO and Co-CFOs concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[279](index=279&type=chunk) - Management concluded that the company maintained effective internal control over financial reporting as of December 31, 2022, based on the COSO framework[280](index=280&type=chunk)[281](index=281&type=chunk) - No changes in internal control over financial reporting occurred during the fourth quarter of 2022 that materially affected, or are reasonably likely to materially affect, these controls[282](index=282&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Compensation, and Related Party Transactions](index=63&type=section&id=Items%2010-14) Information for Items 10-14, including governance, compensation, and related party transactions, is incorporated by reference from the 2023 Proxy Statement - Information regarding Directors, Executive Officers, Corporate Governance (Item 10), Executive Compensation (Item 11), Security Ownership (Item 12), Certain Relationships and Related Transactions (Item 13), and Principal Accountant Fees (Item 14) is incorporated by reference from the Company's 2023 Proxy Statement[284](index=284&type=chunk)[287](index=287&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=63&type=section&id=Item%2015%3A%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists documents filed as part of the Form 10-K, including financial statements, notes, and a detailed list of exhibits - A list of all exhibits filed with the Form 10-K is provided, including the Separation and Distribution Agreement with GAMCO, the company's Certificate of Incorporation and Bylaws, and various executive certifications required by the Sarbanes-Oxley Act[292](index=292&type=chunk)[293](index=293&type=chunk) [Form 10-K Summary](index=65&type=section&id=Item%2016%3A%20Form%2010-K%20Summary) No Form 10-K summary is provided - No Form 10-K summary is provided[294](index=294&type=chunk)

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Unaudited Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Associated Capital Group, Inc. as of September 30, 2022, and for the three and nine-month periods then ended [Condensed Consolidated Statements of Financial Condition](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Condition) The company's total assets decreased to **$986.8 million** as of September 30, 2022, from **$1.20 billion** at December 31, 2021, primarily due to decreased investments and deconsolidation of marketable securities held in trust Condensed Consolidated Statements of Financial Condition (in thousands) | Account | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$986,761** | **$1,203,336** | | Cash and cash equivalents | $288,178 | $319,048 | | Investments in equity securities | $238,974 | $273,087 | | Investments in marketable securities held in trust | $0 | $175,109 | | **Total Liabilities** | **$97,728** | **$65,534** | | **Total Equity** | **$879,255** | **$935,346** | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For Q3 2022, the company reported a net loss of **$16.5 million** or **($0.75)** per share, a significant shift from Q3 2021 net income, primarily due to substantial net losses from investments Q3 Financial Performance (in thousands, except EPS) | Metric | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Total Revenues | $2,562 | $2,112 | | Operating Loss | ($3,129) | ($169) | | Net (Loss)/Gain from Investments | ($19,314) | $5,676 | | Net (Loss)/Income Attributable to Shareholders | **($16,498)** | **$1,503** | | Diluted EPS | **($0.75)** | **$0.07** | Nine Months Financial Performance (in thousands, except EPS) | Metric | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Total Revenues | $7,690 | $6,926 | | Operating Loss | ($8,646) | ($16,945) | | Net (Loss)/Gain from Investments | ($72,727) | $79,303 | | Net (Loss)/Income Attributable to Shareholders | **($62,571)** | **$49,774** | | Diluted EPS | **($2.84)** | **$2.25** | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was **$30.6 million** for the nine months ended September 30, 2022, a significant decrease from the **$488.1 million** provided in the prior year, primarily due to net loss and changes in trading securities Nine-Month Cash Flow Summary (in thousands) | Activity | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Net cash (used in)/provided by operating activities | ($30,558) | $488,071 | | Net cash provided by investing activities | $251 | $53,254 | | Net cash used in financing activities | ($5,450) | ($11,058) | | **Net (decrease)/increase in cash** | **($35,757)** | **$530,267** | [Notes to the Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The notes provide crucial context to the financial statements, detailing the company's organization, revenue recognition, investment composition, fair value measurements, and equity structure - In August 2022, the company deconsolidated PMV Consumer Acquisition Corp. ("PMV") after determining it no longer had a controlling financial interest, resulting in a **$3.6 million** loss[30](index=30&type=chunk)[51](index=51&type=chunk) Revenue Breakdown (in thousands) | Revenue Source | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Asset-based advisory fees | $1,269 | $3,882 | | Sub-advisory fees | $1,201 | $3,481 | | Performance-based advisory fees | $2 | $46 | | **Total Inv. advisory & incentive fees** | **$2,472** | **$7,409** | - The company's stock repurchase program has an authorization for **622,564 shares** remaining as of September 30, 2022, with **54,580 shares** repurchased for a total of **$2.1 million** during the nine months ended September 30, 2022[88](index=88&type=chunk)[89](index=89&type=chunk) - Subsequent to the quarter's end, on November 11, 2022, the Board of Directors declared a semi-annual dividend of **$0.10 per share**[96](index=96&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the significant net loss for Q3 and the first nine months of 2022 primarily to mark-to-market losses in its proprietary securities portfolio, driven by market volatility, rising interest rates, and inflation [Results of Operations](index=31&type=section&id=Results%20of%20Operations) The company's results shifted from a **$1.5 million** net income to a **$16.5 million** net loss in Q3 2022, driven by a **$25 million** negative swing in net investment gains/losses - Q3 2022 operating loss increased to **$3.1 million** from **$0.2 million** in Q3 2021, partly due to a **$2.4 million** one-time credit recorded in Q3 2021[120](index=120&type=chunk) - Net investment loss was **$19.3 million** in Q3 2022 compared to a gain of **$5.7 million** in Q3 2021, attributed to market volatility from rising interest rates, geo-political factors, and inflation[125](index=125&type=chunk) - For the nine months ended Sep 30, 2022, no management fee expense was recorded due to a pre-tax loss, compared to a **$7.2 million** expense in the same period of 2021[130](index=130&type=chunk) [Assets Under Management](index=34&type=section&id=Assets%20Under%20Management) Assets Under Management (AUM) stood at **$1.75 billion** as of September 30, 2022, representing a **1.6%** decrease from year-end 2021 but a **4.3%** increase from September 30, 2021 AUM by Strategy (in millions) | Strategy | Sep 30, 2022 | Dec 31, 2021 | Sep 30, 2021 | | :--- | :--- | :--- | :--- | | Merger Arbitrage | $1,518 | $1,542 | $1,438 | | Event-Driven Value | $203 | $195 | $198 | | Other | $31 | $44 | $44 | | **Total AUM** | **$1,752** | **$1,781** | **$1,680** | Q3 2022 AUM Change (in millions) | Component | Amount | | :--- | :--- | | AUM at June 30, 2022 | $1,802 | | Market Appreciation | $8 | | Foreign Currency | ($39) | | Net Inflows/(Outflows) | ($19) | | **AUM at Sep 30, 2022** | **$1,752** | [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position, ending Q3 2022 with **$288.2 million** in cash and cash equivalents and **$133.8 million** in U.S. Treasury Bills - As of September 30, 2022, the company had cash and cash equivalents of **$288.2 million** and Investments in U.S. Treasury Bills of **$133.8 million**[140](index=140&type=chunk) - Book value per share was **$39.96** as of September 30, 2022, a decrease from **$42.48** at December 31, 2021, largely due to the net loss for the period[111](index=111&type=chunk)[117](index=117&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&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 - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[144](index=144&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and Co-CFOs, evaluated the company's disclosure controls and procedures and concluded they were effective as of the end of the period covered by this report - Based on an evaluation as of the end of the reporting period, the Chief Executive Officer and Co-Chief Financial Officers concluded that the company's disclosure controls and procedures were effective[144](index=144&type=chunk) - No changes in internal control over financial reporting occurred during the most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls[145](index=145&type=chunk) [PART II. OTHER INFORMATION](index=37&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) The company states that it is not currently subject to any legal proceedings that would be material to its consolidated financial condition, operations, or cash flows as of September 30, 2022 - The company is not subject to any legal proceedings that individually or in the aggregate involved a claim for damages in excess of **10%** of its consolidated assets[149](index=149&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's repurchase of its Class A stock during the third quarter of 2022, with **11,752 shares** repurchased at an average price of **$37.52 per share** Q3 2022 Share Repurchases | Period | Total Shares Repurchased | Average Price Paid Per Share | | :--- | :--- | :--- | | July 2022 | 4,100 | $36.42 | | August 2022 | 695 | $39.51 | | September 2022 | 6,957 | $37.97 | | **Total Q3** | **11,752** | **$37.52** | [Item 6. Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and Co-CFOs and interactive data files (XBRL)

PART I. FINANCIAL INFORMATION [Item 1. Unaudited Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Associated Capital Group, Inc. for the periods ended June 30, 2022, including statements of financial condition, income, comprehensive income, equity, and cash flows, along with detailed notes explaining the basis of presentation and significant accounting policies [Condensed Consolidated Statements of Financial Condition](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Condition) The company's total assets decreased to **$1.12 billion** as of June 30, 2022, from **$1.20 billion** at December 31, 2021, primarily driven by a reduction in the value of investments in equity securities and partnerships, while total equity also declined from **$935.3 million** to **$885.9 million** over the same period Condensed Consolidated Statements of Financial Condition (in thousands) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$1,120,015** | **$1,203,336** | | Total Liabilities | $30,831 | $65,534 | | Redeemable noncontrolling interests | $203,327 | $202,456 | | **Total Equity** | **$885,857** | **$935,346** | | **Total Liabilities and Equity** | **$1,120,015** | **$1,203,336** | - The decrease in total assets was mainly due to a decline in the fair value of investments in equity securities, which fell from **$273.1 million** to **$247.8 million**, and investments in partnerships, which decreased from **$154.5 million** to **$146.6 million**[11](index=11&type=chunk) [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) The company reported a significant net loss of **$29.9 million** for Q2 2022, a sharp reversal from a net income of **$29.7 million** in Q2 2021, with the six-month net loss at **$46.1 million** in 2022 compared to a net income of **$48.3 million** in 2021, primarily driven by a substantial net loss from investments in 2022 versus a large gain in 2021 Condensed Consolidated Statements of Income (in thousands) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $2,546 | $2,489 | $5,128 | $4,814 | | Operating Loss | $(2,211) | $(10,411) | $(5,517) | $(16,776) | | Net gain/(loss) from investments | $(37,803) | $42,306 | $(53,413) | $73,627 | | **Net income/(loss) attributable to ACG** | **$(29,887)** | **$29,716** | **$(46,073)** | **$48,271** | | **Diluted EPS** | **$(1.36)** | **$1.34** | **$(2.09)** | **$2.18** | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2022, net cash provided by operating activities was **$29.3 million**, a significant decrease from **$231.7 million** in the same period of 2021, mainly due to a net loss in 2022 compared to net income in 2021 and smaller gains from changes in investments in trading securities, while net cash used in financing activities was **$5.0 million**, primarily for dividends and stock repurchases Summary of Cash Flows (Six Months Ended June 30, in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $29,272 | $231,661 | | Net cash provided by/(used in) investing activities | $(2,865) | $5,602 | | Net cash used in financing activities | $(5,010) | $(7,501) | | **Net increase in cash** | **$21,397** | **$229,762** | [Notes to the Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on the company's organization, revenue streams, investment composition, consolidation of entities like the PMV SPAC, fair value measurements, income taxes, equity structure, and other commitments, including the consolidation of PMV Consumer Acquisition Corp. (a VIE), the breakdown of investment securities, and the status of the stock repurchase program - The company's business includes alternative investment management through its subsidiary GCIA and proprietary investment activities. It also consolidates PMV Consumer Acquisition Corp. (PMV), a special purpose acquisition corporation (SPAC)[24](index=24&type=chunk)[25](index=25&type=chunk)[27](index=27&type=chunk) - The company consolidates several Variable Interest Entities (VIEs) and Voting Interest Entities (VOEs). The consolidation of PMV and its sponsor resulted in the inclusion of **$162.0 million** of assets and **$165.0 million** of redeemable noncontrolling interests as of June 30, 2022[28](index=28&type=chunk)[46](index=46&type=chunk) - The company's investments in equity securities include a significant holding of GAMCO Investors, Inc. (GBL) stock, valued at **$50.5 million** as of June 30, 2022[11](index=11&type=chunk) Stock Repurchase Activity (Q2 2022) | Period | Total Shares Repurchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 2022 | 9,332 | $39.17 | | May 2022 | 8,166 | $38.13 | | June 2022 | 17,794 | $35.97 | | **Total Q2** | **35,292** | **$37.32** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's performance, highlighting a shift from net income in 2021 to a net loss in 2022, primarily driven by mark-to-market losses on its investment portfolio amid market uncertainty, with Assets Under Management (AUM) increasing to **$1.8 billion** and the company maintaining a strong liquidity position with approximately **$885 million** in cash and investments - The company's business is divided into two main segments: Alternative Investment Management and Proprietary Capital, which includes direct investments and sponsoring SPACs like PMV Consumer Acquisition Corp[90](index=90&type=chunk)[91](index=91&type=chunk)[95](index=95&type=chunk) - The company ended Q2 2022 with a strong liquidity position, holding approximately **$885 million** in cash and investments, net of securities sold short. This provides flexibility for strategic objectives like acquisitions, seeding new strategies, and shareholder returns[107](index=107&type=chunk) Key Financial Metrics (Q2) | Metric | Q2 2022 | Q2 2021 | | :--- | :--- | :--- | | AUM - end of period (in millions) | $1,802 | $1,611 | | Net income/(loss) per share-diluted | $(1.36) | $1.34 | | Book value per share at June 30 | $40.30 | $42.21 | [Results of Operations](index=32&type=section&id=Results%20of%20Operations) The company's results swung from a net income of **$29.7 million** in Q2 2021 to a net loss of **$29.9 million** in Q2 2022, primarily caused by a net investment loss of **$37.8 million** compared to a gain of **$42.3 million** in the prior-year quarter, reflecting market volatility, while operating loss narrowed due to the absence of management fee expense and lower compensation costs in Q2 2022 - The primary driver of the net loss in Q2 2022 was a **$(37.8) million** net loss from investments, a stark contrast to the **$42.3 million** gain in Q2 2021, attributed to market uncertainty, rising interest rates, and inflation[111](index=111&type=chunk)[116](index=116&type=chunk) - Compensation expense decreased to **$3.0 million** in Q2 2022 from **$5.0 million** in Q2 2021, mainly due to lower variable compensation tied to performance and a credit from mark-to-market changes on stock-based compensation[114](index=114&type=chunk) - No management fee expense was recorded in Q2 2022 due to a pre-tax loss for the period, compared to **$4.3 million** of expense in Q2 2021[115](index=115&type=chunk) [Assets Under Management](index=35&type=section&id=Assets%20Under%20Management) Assets Under Management (AUM) stood at **$1.802 billion** as of June 30, 2022, representing an increase of **1.2%** from year-end 2021 and **11.9%** from June 30, 2021, though during the second quarter, AUM decreased by a net **$37 million** as market depreciation and negative currency effects outweighed net inflows AUM by Strategy (in millions) | Strategy | June 30, 2022 | Dec 31, 2021 | June 30, 2021 | | :--- | :--- | :--- | :--- | | Merger Arbitrage | $1,591 | $1,542 | $1,364 | | Event-Driven Value | $174 | $195 | $201 | | Other | $37 | $44 | $46 | | **Total AUM** | **$1,802** | **$1,781** | **$1,611** | Q2 2022 AUM Change (in millions) | Component | Amount | | :--- | :--- | | AUM at March 31, 2022 | $1,839 | | Market Depreciation | $(66) | | Foreign Currency Impact | $(52) | | Net Inflows | $81 | | **AUM at June 30, 2022** | **$1,802** | [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with **$344.3 million** in cash and cash equivalents and **$25.0 million** in U.S. Treasury Bills as of June 30, 2022, while net cash from operating activities for the first six months of 2022 was **$29.3 million**, significantly lower than the **$231.7 million** generated in the same period of 2021, reflecting the company's net loss and changes in working capital - The company's principal assets include cash, short-term treasuries, marketable securities (including **2.4 million** shares of GAMCO), and interests in various funds, providing substantial liquidity[128](index=128&type=chunk) Six-Month Cash Flow Summary (in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Operating activities | $29,272 | $231,661 | | Investing activities | $(2,865) | $5,602 | | Financing activities | $(5,010) | $(7,501) | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&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 - The company is not required to provide quantitative and qualitative disclosures about market risk because it qualifies as a smaller reporting company[136](index=136&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and Co-CFOs, evaluated the company's disclosure controls and procedures and concluded they were effective as of the end of the period, with no material changes to the 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 for the period covered by the report[134](index=134&type=chunk) - No changes occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[135](index=135&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently subject to any legal proceedings that would be material to its financial condition, operations, or cash flows, and management has determined that provisions for any probable or reasonably possible losses are not material - As of June 30, 2022, the company is not subject to any legal proceedings where a claim for damages exceeds **10%** of its consolidated assets. Management believes any potential losses from existing matters are not material to the company's financial condition[138](index=138&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's repurchase of its Class A Common Stock during the second quarter of 2022, with a total of **35,292** shares repurchased at an average price of **$37.32** per share Class A Stock Repurchases (Quarter Ended June 30, 2022) | Period | Total Shares Repurchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 2022 | 9,332 | $39.17 | | May 2022 | 8,166 | $38.13 | | June 2022 | 17,794 | $35.97 | | **Total** | **35,292** | **$37.32** | [Item 6. Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and Interactive Data Files (XBRL) - The report includes standard exhibits such as CEO and Co-CFO certifications pursuant to Rule 13a-14(a) and Section 906 of the Sarbanes-Oxley Act, as well as Inline XBRL documents[143](index=143&type=chunk)[144](index=144&type=chunk)

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company reported a net loss in Q1 2022, a significant downturn from prior-year net income, primarily driven by investment losses [Condensed Consolidated Statements of Financial Condition](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Condition) Total assets increased to **$1.28 billion** as of March 31, 2022, while total liabilities significantly rose and total equity slightly declined Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$1,284,192** | **$1,203,336** | | Cash and cash equivalents | $348,629 | $319,048 | | Total Investments | $553,874 | $562,101 | | **Total Liabilities** | **$160,684** | **$65,534** | | **Total Equity** | **$918,188** | **$935,346** | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) The company reported a **$16.2 million** net loss in Q1 2022, a sharp reversal from prior-year net income, primarily due to investment losses Q1 2022 vs Q1 2021 Income Statement (in thousands, except EPS) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Total Revenues | $2,582 | $2,325 | | Operating Loss | $(3,306) | $(6,365) | | Net gain/(loss) from investments | $(15,610) | $31,321 | | **Net income/(loss) attributable to ACG** | **$(16,186)** | **$18,555** | | **Diluted EPS** | **$(0.73)** | **$0.83** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly declined in Q1 2022, while overall cash and equivalents increased during the quarter Q1 2022 vs Q1 2021 Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $28,558 | $243,568 | | Net cash provided by/(used in) investing activities | $(1,773) | $710 | | Net cash provided by/(used in) financing activities | $(779) | $(4,062) | | **Net increase in cash** | **$26,006** | **$240,216** | [Notes to the Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's business as an alternative investment manager and proprietary investor, including SPAC consolidation and dividend declaration - The company's business consists of providing **alternative investment management services** and generating investment income from its own **proprietary investments**[20](index=20&type=chunk) - The company consolidates its special purpose acquisition corporation, PMV Consumer Acquisition Corp. (PMV), which resulted in the consolidation of **$162.6 million of assets** and **$8.3 million of liabilities** as of March 31, 2022[24](index=24&type=chunk) - Subsequent to the quarter's end, on May 4, 2022, the board of directors declared a semi-annual dividend of **$0.10 per share**[75](index=75&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the Q1 2022 net loss to investment portfolio mark-to-market losses, while operating loss narrowed and AUM grew [Overview](index=20&type=section&id=Overview) The company operates in alternative investment management and direct investment, with the latter structured across three core pillars - The company's business is divided into **Alternative Investment Management** and a **direct investment business** utilizing **proprietary capital**[78](index=78&type=chunk)[79](index=79&type=chunk)[83](index=83&type=chunk) - The direct investment business operates through **three core pillars**: Gabelli Private Equity Partners, LLC (GPEP), Gabelli Special Purpose Acquisition Vehicles (SPAC), and Gabelli Principal Strategies Group, LLC (GPS)[83](index=83&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) The Q1 2022 net loss was primarily due to investment losses, while the operating loss improved due to the absence of a management fee expense - The **decrease in operating loss** from **$6.4 million** in Q1 2021 to **$3.3 million** in Q1 2022 was primarily due to the **absence of management fee expense** and **higher revenue**[99](index=99&type=chunk) - **Investment losses** were **$(15.6) million** in Q1 2022 versus **gains of $31.3 million** in Q1 2021, a decrease attributed to **market uncertainty, rising interest rates, high inflation, and geo-political conflict**[104](index=104&type=chunk) - **No management fee expense** was recorded for Q1 2022 due to a pre-tax loss, compared to a **$2.7 million expense** in Q1 2021[103](index=103&type=chunk) [Assets Under Management](index=24&type=section&id=Assets%20Under%20Management) Assets Under Management (AUM) increased to **$1.839 billion** as of March 31, 2022, driven by net inflows despite negative currency impact Assets Under Management by Strategy (in millions) | Strategy | March 31, 2022 | Dec 31, 2021 | March 31, 2021 | | :--- | :--- | :--- | :--- | | Merger Arbitrage | $1,606 | $1,542 | $1,253 | | Event-Driven Value | $191 | $195 | $196 | | Other | $42 | $44 | $46 | | **Total AUM** | **$1,839** | **$1,781** | **$1,495** | - The increase in AUM during Q1 2022 was driven by **net inflows of $76 million** and **market appreciation of $2 million**, offset by a **negative currency impact of $(20) million**[109](index=109&type=chunk)[110](index=110&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained a strong liquidity position with **$348.6 million** in cash, despite a significant decrease in operating cash flow Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Operating activities | $28,558 | $243,568 | | Investing activities | $(1,773) | $710 | | Financing activities | $(779) | $(4,062) | - As of March 31, 2022, the company had **cash and cash equivalents of $348.6 million** and **$260.4 million of investments** net of securities sold short[114](index=114&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=26&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the company is exempt from providing quantitative and qualitative market risk disclosures - The company is **exempt** from this disclosure requirement as it qualifies as a **smaller reporting company**[118](index=118&type=chunk) [Item 4. Controls and Procedures](index=26&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including CEO and CFO, concluded that disclosure controls were effective with no material changes to internal controls - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were **effective** as of the end of the reporting period[118](index=118&type=chunk) - **No changes in internal control over financial reporting** occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[119](index=119&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) The company is not subject to legal proceedings with claims exceeding **10%** of consolidated assets, deeming existing matters immaterial - As of March 31, 2022, the company is **not involved** in any legal proceedings with claims exceeding **10% of its consolidated assets**[124](index=124&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=28&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **7,536** Class A shares for **$0.3 million** in Q1 2022, with **669,608** shares remaining for repurchase Q1 2022 Share Repurchase Activity | Period | Total Shares Repurchased | Average Price Paid Per Share | | :--- | :--- | :--- | | Jan 2022 | - | $- | | Feb 2022 | 7,136 | $38.76 | | Mar 2022 | 400 | $40.41 | | **Total** | **7,536** | **$38.84** | - As of March 31, 2022, the maximum number of shares that may yet be purchased under the plan is **669,608**[126](index=126&type=chunk) [Item 6. Exhibits](index=29&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate documents, material agreements, and required certifications - The report includes a list of filed exhibits, such as the **Separation and Distribution Agreement**, **Amended Certificate of Incorporation**, Employment Agreement with Mario J. Gabelli, and **CEO/CFO certifications**[127](index=127&type=chunk)[128](index=128&type=chunk)

Part I [Business](index=5&type=section&id=Item%201.%20Business) Associated Capital Group, Inc. (AC) provides alternative investment management and direct investment services, focusing on active fundamental strategies and growth through acquisitions - The company operates two main business lines: **alternative investment management** and a **direct investment business**, supplemented by income from proprietary investments[14](index=14&type=chunk) Assets Under Management (AUM) as of December 31 (in millions) | Strategy | 2021 | 2020 | | :--- | :--- | :--- | | Merger Arbitrage | $1,542 | $1,126 | | Event-Driven Value | $195 | $180 | | Other | $44 | $45 | | **Total** | **$1,781** | **$1,351** | - The company's direct investment business operates through three pillars: **Gabelli Private Equity Partners (GPEP)**, **Gabelli Special Purpose Acquisition Vehicles (SPAC)**, and **Gabelli Principal Strategies Group (GPS)**[20](index=20&type=chunk) - On August 5, 2020, AC completed the spin-off of its **83.3% stake in Morgan Group Holding Co.**, with historical financial results presented as discontinued operations[24](index=24&type=chunk)[25](index=25&type=chunk) - The company's business is subject to extensive regulation in the U.S. and Europe, impacting operations and compliance costs[34](index=34&type=chunk)[35](index=35&type=chunk)[43](index=43&type=chunk) [Risk Factors](index=11&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, the company is not required to disclose specific risk factors - Disclosure of risk factors is **not required** as the company qualifies as a smaller reporting company[54](index=54&type=chunk) [Unresolved Staff Comments](index=11&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - There are **no unresolved staff comments** as of the report date[54](index=54&type=chunk) [Properties](index=11&type=section&id=Item%202.%20Properties) The company owns office properties in Greenwich, CT, and London, UK, leasing portions to affiliates, and subleases office space in Rye, NY - Owns office property in Greenwich, CT, leasing a portion to affiliates and receiving **$118.1 thousand** in 2021[55](index=55&type=chunk) - Owns a property in London, UK, fully leased to its former parent GAMCO, generating **$275.4 thousand** in 2021[55](index=55&type=chunk) - Paid **$73.7 thousand** in 2021 to GAMCO for a sublease at its Rye, NY offices[56](index=56&type=chunk) [Legal Proceedings](index=11&type=section&id=Item%203.%20Legal%20Proceedings) The company is not subject to material legal proceedings, with management assessing potential losses as immaterial to financial condition or operations - The company is **not subject to any legal proceedings** where the claim for damages exceeds **10% of its consolidated assets**[57](index=57&type=chunk) - Management concluded that potential losses from current legal actions are **not material** to the company's financial condition, operations, or cash flows as of December 31, 2021[57](index=57&type=chunk) [Mine Safety Disclosures](index=12&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - The company has **no mine safety disclosures** to report[59](index=59&type=chunk) Part II [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=12&type=section&id=Item%205.%20Market%20for%20Registrant%E2%80%99s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's Class A common stock trades on the NYSE under 'AC', with an active stock repurchase program that repurchased **4,302 shares** in Q4 2021 - Class A common stock is traded on the **New York Stock Exchange** under the symbol **AC**[59](index=59&type=chunk) Class A Common Stock Repurchases (Quarter Ended Dec 31, 2021) | Period | Total Shares Repurchased | Average Price Paid ($) | Shares Remaining for Repurchase | | :--- | :--- | :--- | :--- | | Oct 2021 | 2,276 | 36.86 | 679,170 | | Nov 2021 | 2,026 | 36.08 | 677,144 | | Dec 2021 | 0 | - | 677,144 | | **Total** | **4,302** | **36.49** | **677,144** | - The company's stock repurchase program **does not have an expiration date**[61](index=61&type=chunk) [Selected Financial Data](index=12&type=section&id=Item%206.%20Selected%20Financial%20Data) As a smaller reporting company, the company is not required to provide selected financial data - Disclosure of selected financial data is **not required** as the company qualifies as a smaller reporting company[65](index=65&type=chunk) [Management’s Discussion and Analysis of Financial Condition and Results of Operations](index=12&type=section&id=Item%207.%20Management%E2%80%99s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2021, the company's financial performance significantly improved, driven by higher investment gains and increased assets under management, leading to **$59.2 million net income** and **$1.78 billion AUM** Financial Highlights (Full Year) | Metric | 2021 | 2020 | | :--- | :--- | :--- | | AUM - end of period (in millions) | $1,781 | $1,351 | | Net income per share-diluted | $2.68 | $0.84 | | Book Value Per Share | $42.48 | $40.36 | Year-over-Year Operating Results (in thousands) | Line Item | 2021 | 2020 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenues | $20,924 | $18,983 | 10.2% | | Compensation | $24,457 | $19,436 | 25.8% | | Management Fee | $8,426 | $3,101 | 171.7% | | Net Gain from Investments | $93,405 | $36,864 | 153.4% | | Net Income Attributable to AC | $59,203 | $18,816 | 214.6% | Change in Assets Under Management (AUM) for 2021 (in millions) | Strategy | Beginning AUM | Inflows | Outflows | Investment Return | Ending AUM | | :--- | :--- | :--- | :--- | :--- | :--- | | Merger Arbitrage | $1,126 | $566 | $(200) | $50 | $1,542 | | Event-Driven Value | $180 | $5 | $(12) | $22 | $195 | | Other | $45 | $0 | $(3) | $2 | $44 | | **Total** | **$1,351** | **$571** | **$(215)** | **$74** | **$1,781** | Summary Cash Flow Data (in thousands) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | Operating Activities | $238,194 | $(279,483) | | Investing Activities | $65,285 | $(174,072) | | Financing Activities | $(14,394) | $150,949 | [Quantitative and Qualitative Disclosures About Market Risk](index=20&type=section&id=Item%207A.%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 - Disclosure of quantitative and qualitative information about market risk is **not required** as the company qualifies as a smaller reporting company[120](index=120&type=chunk) [Financial Statements and Supplementary Data](index=20&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2021 and 2020, including income, financial condition, equity, and cash flows, with an unqualified opinion from Deloitte & Touche, LLP - The independent auditor, **Deloitte & Touche, LLP**, issued an **unqualified opinion** on the consolidated financial statements[123](index=123&type=chunk)[127](index=127&type=chunk) [Consolidated Statements of Income](index=23&type=section&id=Consolidated%20Statements%20of%20Income) For 2021, the company reported **$20.9 million in total revenues** and a **$19.1 million operating loss**, but achieved **$59.2 million net income** due to a **$93.4 million net gain from investments** Consolidated Income Statement Highlights (in thousands, except per share data) | Metric | 2021 | 2020 | | :--- | :--- | :--- | | Total Revenues | $20,924 | $18,983 | | Total Expenses | $40,000 | $31,452 | | Operating Loss | $(19,076) | $(12,469) | | Total Other Income, net | $100,415 | $42,352 | | Net Income Attributable to AC | $59,203 | $18,816 | | Diluted EPS | $2.68 | $0.84 | [Consolidated Statements of Financial Condition](index=25&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) As of December 31, 2021, total assets were **$1.20 billion**, primarily cash and investments, with total equity increasing to **$937.1 million** driven by net income Consolidated Balance Sheet Highlights (in thousands) | Metric | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $319,048 | $39,509 | | Total Investments | $623,091 | $888,939 | | Total Assets | $1,203,336 | $1,174,545 | | Total Liabilities | $65,534 | $66,328 | | Total AC Equity | $937,102 | $898,938 | [Consolidated Statements of Cash Flows](index=29&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) In 2021, the company generated **$238.2 million** from operating activities, with cash and cash equivalents increasing by **$289.1 million** overall Consolidated Cash Flow Summary (in thousands) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash from Operating Activities | $238,194 | $(279,483) | | Net cash from Investing Activities | $65,285 | $(174,072) | | Net cash from Financing Activities | $(14,394) | $150,949 | | **Net Increase in Cash** | **$289,085** | **$(302,492)** | [Notes to Consolidated Financial Statements](index=31&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies and financial results, covering consolidation, revenue recognition, fair value measurements, related party transactions, and equity plans - The company consolidates its **PMV Consumer Acquisition Corp. (PMV SPAC)**, which held **$175.1 million** in a trust account as of December 31, 2021[146](index=146&type=chunk)[222](index=222&type=chunk) - Performance-based advisory fees, typically **20% of investment performance**, are recognized at the end of the measurement period or upon investor redemption[181](index=181&type=chunk) - The company has significant related party transactions, including a **$8.4 million management fee** paid to the Executive Chair in 2021 and affiliations with GAMCO[251](index=251&type=chunk)[256](index=256&type=chunk)[258](index=258&type=chunk) - The company repurchased **215,958 shares** for **$7.6 million** in 2021 and paid **$0.20 per share** in dividends, totaling **$4.4 million**[274](index=274&type=chunk)[275](index=275&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=55&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting principles or financial disclosure - There were **no disagreements with accountants** on accounting and financial disclosure[285](index=285&type=chunk) [Controls and Procedures](index=55&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of December 31, 2021, having remediated a material weakness in internal control over financial reporting - Management concluded that **disclosure controls and procedures were effective** as of December 31, 2021[286](index=286&type=chunk)[287](index=287&type=chunk) - A material weakness in internal control over financial reporting identified as of December 31, 2020, has been **remediated** as of December 31, 2021[291](index=291&type=chunk)[293](index=293&type=chunk) - Remediation efforts included hiring new personnel, implementing new policies, and enhancing controls[292](index=292&type=chunk) [Other Information](index=56&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - There is **no information to disclose** under this item[295](index=295&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=56&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information for this item is incorporated by reference from the company's 2022 Annual Meeting of Stockholders proxy statement - Required information regarding directors, executive officers, and corporate governance is **incorporated by reference** from the company's Proxy Statement[296](index=296&type=chunk) [Executive Compensation](index=56&type=section&id=Item%2011.%20Executive%20Compensation) Information for this item is incorporated by reference from the company's 2022 Annual Meeting of Stockholders proxy statement - Required information regarding executive compensation is **incorporated by reference** from the company's Proxy Statement[299](index=299&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=56&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information for this item is incorporated by reference from the company's 2022 Annual Meeting of Stockholders proxy statement - Required information regarding security ownership is **incorporated by reference** from the company's Proxy Statement[299](index=299&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=56&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information for this item is incorporated by reference from the company's 2022 Annual Meeting of Stockholders proxy statement - Required information regarding related transactions and director independence is **incorporated by reference** from the company's Proxy Statement[299](index=299&type=chunk) [Principal Accountant Fees and Services](index=56&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information for this item is incorporated by reference from the company's 2022 Annual Meeting of Stockholders proxy statement - Required information regarding principal accountant fees and services is **incorporated by reference** from the company's Proxy Statement[300](index=300&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=56&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists documents filed as part of the Form 10-K report, including consolidated financial statements and various exhibits - This section provides an index to the consolidated financial statements and a list of all exhibits filed with the report[300](index=300&type=chunk)[303](index=303&type=chunk) [Form 10-K Summary](index=59&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports no summary for this item - **No Form 10-K summary** is provided[305](index=305&type=chunk)