|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
||
|
|
||
|
For the quarterly period ended
|
March 31, 2020
|
|
|
|
||
OR
|
|||
|
|||
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
||
|
|
||
|
For the transition period from ____________________________ to __________________________
|
||
|
|
||
|
Commission file number
|
|
0-5703
|
Siebert Financial Corp.
|
(Exact Name of Registrant as Specified in its Charter)
|
New York
|
|
11-1796714
|
(State or Other Jurisdiction of Incorporation or Organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
120 Wall Street, New York, NY 10005
|
||
(Address of Principal Executive Offices) (Zip Code)
|
(212) 644-2400
|
(Registrant’s Telephone Number, Including Area Code)
|
|
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock - $0.01 par value
|
SIEB
|
The Nasdaq Capital Market
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
Non-accelerated filer ☒
|
Smaller reporting company ☒
|
|
Emerging growth company ☐
|
March 31, 2020
|
December 31, 2019*
|
|||||||
ASSETS
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$
|
5,220,000
|
$
|
4,670,000
|
||||
Cash and securities segregated for regulatory purposes
|
227,581,000
|
224,924,000
|
||||||
Receivables from customers
|
70,447,000
|
86,331,000
|
||||||
Receivables from broker-dealers and clearing organizations
|
3,311,000
|
3,524,000
|
||||||
Other receivables
|
1,035,000
|
762,000
|
||||||
Prepaid expenses and other assets
|
653,000
|
970,000
|
||||||
Securities borrowed
|
62,223,000
|
193,529,000
|
||||||
Securities owned, at fair value
|
3,680,000
|
3,018,000
|
||||||
Total Current assets
|
374,150,000
|
517,728,000
|
||||||
Deposits with broker-dealers and clearing organizations
|
5,273,000
|
4,951,000
|
||||||
Furniture, equipment and leasehold improvements, net
|
1,048,000
|
1,150,000
|
||||||
Software, net
|
1,792,000
|
1,888,000
|
||||||
Lease right-of-use assets
|
3,430,000
|
3,951,000
|
||||||
Deferred tax assets
|
5,096,000
|
5,388,000
|
||||||
Intangible assets, net
|
956,000
|
1,022,000
|
||||||
Goodwill
|
1,989,000
|
1,989,000
|
||||||
Total Assets
|
$
|
393,734,000
|
$
|
538,067,000
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Liabilities
|
||||||||
Current liabilities
|
||||||||
Payables to customers
|
$
|
285,070,000
|
$
|
308,091,000
|
||||
Payables to non-customers
|
7,404,000
|
8,063,000
|
||||||
Drafts payable
|
2,621,000
|
2,834,000
|
||||||
Payables to broker-dealers and clearing organizations
|
1,033,000
|
523,000
|
||||||
Accounts payable and accrued liabilities
|
2,657,000
|
2,443,000
|
||||||
Securities loaned
|
48,836,000
|
170,443,000
|
||||||
Securities sold, not yet purchased, at fair value
|
31,000
|
116,000
|
||||||
Interest payable
|
40,000
|
10,000
|
||||||
Notes payable - related party
|
8,000,000
|
8,000,000
|
||||||
Taxes payable
|
86,000
|
—
|
||||||
Current portion of lease liabilities
|
2,135,000
|
2,227,000
|
||||||
Total Current liabilities
|
357,913,000
|
502,750,000
|
||||||
Lease liabilities, less current portion
|
1,710,000
|
2,182,000
|
||||||
Total Liabilities
|
359,623,000
|
504,932,000
|
||||||
Commitments and Contingencies
|
||||||||
Stockholders’ equity
|
||||||||
Common stock, $.01 par value; 100 million shares authorized; 30,459,804 shares issued and outstanding as of March 31, 2020 and December 31, 2019**
|
304,000
|
304,000
|
||||||
Additional paid-in capital
|
19,897,000
|
19,897,000
|
||||||
Retained earnings
|
13,910,000
|
12,934,000
|
||||||
Total Stockholders’ equity
|
34,111,000
|
33,135,000
|
||||||
Total Liabilities and stockholders' equity |
$
|
393,734,000
|
$
|
538,067,000
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Revenue
|
||||||||
Commissions and fees
|
$
|
5,583,000
|
$
|
2,268,000
|
||||
Margin interest, marketing and distribution fees
|
3,294,000
|
3,556,000
|
||||||
Principal transactions
|
3,203,000
|
1,890,000
|
||||||
Interest income
|
1,331,000
|
1,173,000
|
||||||
Market making
|
470,000
|
563,000
|
||||||
Stock borrow / stock loan
|
444,000
|
581,000
|
||||||
Advisory fees
|
262,000
|
168,000
|
||||||
Other income
|
214,000
|
79,000
|
||||||
Total Revenue
|
14,801,000
|
10,278,000
|
||||||
Expenses
|
||||||||
Employee compensation and benefits
|
7,291,000
|
4,528,000
|
||||||
Clearing fees, including execution costs
|
1,298,000
|
802,000
|
||||||
Technology and communications
|
981,000
|
422,000
|
||||||
Other general and administrative
|
854,000
|
733,000
|
||||||
Data processing
|
849,000
|
543,000
|
||||||
Rent and occupancy
|
727,000
|
531,000
|
||||||
Professional fees
|
655,000
|
883,000
|
||||||
Depreciation and amortization
|
448,000
|
194,000
|
||||||
Referral fees
|
111,000
|
—
|
||||||
Interest expense
|
76,000
|
21,000
|
||||||
Total Expenses
|
13,290,000
|
8,657,000
|
||||||
Income before provision for income taxes
|
1,511,000
|
1,621,000
|
||||||
Provision for income taxes
|
535,000
|
397,000
|
||||||
Net income
|
$
|
976,000
|
$
|
1,224,000
|
||||
Net income per share of common stock
|
||||||||
Basic and diluted
|
$
|
0.03
|
$
|
0.04
|
||||
Weighted average shares outstanding
|
||||||||
Basic and diluted
|
30,459,804
|
30,459,804
|
Three Months Ended March 31, 2020
|
||||||||||||||||||||
Number of Shares
Issued
|
$.01 Par Value
|
Additional Paid-
In Capital
|
Retained Earnings
|
Total
|
||||||||||||||||
Balance – January 1, 2020
|
27,157,188
|
$
|
271,000
|
$
|
7,641,000
|
$
|
12,869,000
|
$
|
20,781,000
|
|||||||||||
Shares issued for StockCross purchase
|
3,302,616
|
33,000
|
12,256,000
|
65,000
|
12,354,000
|
|||||||||||||||
Net income
|
—
|
—
|
—
|
976,000
|
976,000
|
|||||||||||||||
Balance – March 31, 2020
|
30,459,804
|
$
|
304,000
|
$
|
19,897,000
|
$
|
13,910,000
|
$
|
34,111,000
|
Three Months Ended March 31, 2019
|
||||||||||||||||||||
Number of Shares
Issued
|
$.01 Par Value
|
Additional Paid-
In Capital
|
Retained Earnings
|
Total
|
||||||||||||||||
Balance – January 1, 2019
|
27,157,188
|
$
|
271,000
|
$
|
7,641,000
|
$
|
9,262,000
|
$
|
17,174,000
|
|||||||||||
Shares issued for StockCross purchase
|
3,302,616
|
33,000
|
14,037,000
|
—
|
14,070,000
|
|||||||||||||||
Net income
|
—
|
—
|
—
|
1,224,000
|
1,224,000
|
|||||||||||||||
Balance – March 31, 2019
|
30,459,804
|
$
|
304,000
|
$
|
21,678,000
|
$
|
10,486,000
|
$
|
32,468,000
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Cash Flows From Operating Activities
|
||||||||
Net income
|
$
|
976,000
|
$
|
1,224,000
|
||||
Adjustments to reconcile net income to net cash provided by / (used in) operating activities:
|
||||||||
Deferred income tax expense
|
291,000
|
90,000
|
||||||
Depreciation and amortization
|
448,000
|
194,000
|
||||||
Changes in
|
||||||||
Receivables from customers
|
15,884,000
|
(5,063,000
|
)
|
|||||
Receivables from non-customers
|
—
|
(146,000
|
)
|
|||||
Receivables from and deposits with broker-dealers and clearing organizations
|
(109,000
|
)
|
199,000
|
|||||
Securities borrowed
|
131,306,000
|
(65,259,000
|
)
|
|||||
Securities owned, at fair value
|
(662,000
|
)
|
(1,711,000
|
)
|
||||
Prepaid expenses and other assets
|
44,000
|
(198,000
|
)
|
|||||
Payables to customers
|
(23,021,000
|
)
|
(2,344,000
|
)
|
||||
Payables to non-customers
|
(659,000
|
)
|
4,305,000
|
|||||
Drafts payable
|
(213,000
|
)
|
1,910,000
|
|||||
Payables to broker-dealers and clearing organizations
|
510,000
|
453,000
|
||||||
Accounts payable and accrued liabilities
|
214,000
|
(274,000
|
)
|
|||||
Securities loaned
|
(121,607,000
|
)
|
58,449,000
|
|||||
Securities sold, not yet purchased, at fair value
|
(85,000
|
)
|
11,000
|
|||||
Interest payable
|
30,000
|
—
|
||||||
Lease liabilities
|
(43,000
|
)
|
273,000
|
|||||
Taxes payable
|
86,000
|
185,000
|
||||||
Net cash provided by / (used in) operating activities
|
3,390,000
|
(7,702,000
|
)
|
|||||
Cash Flows From Investing Activities
|
||||||||
Purchase of furniture, equipment, and leasehold improvements
|
—
|
(579,000
|
)
|
|||||
Purchase of software
|
(183,000
|
)
|
(387,000
|
)
|
||||
Net cash used in investing activities
|
(183,000
|
)
|
(966,000
|
)
|
||||
Cash Flows From Financing Activities
|
||||||||
Purchase of StockCross common stock
|
—
|
(3,665,000
|
)
|
|||||
Treasury stock sales - StockCross
|
—
|
172,000
|
||||||
Net cash used in financing activities
|
—
|
(3,493,000
|
)
|
|||||
Net increase / (decrease) in cash and cash equivalents, and cash and securities segregated for regulatory purposes
|
3,207,000
|
(12,161,000
|
)
|
|||||
Cash and cash equivalents, and cash and securities segregated for regulatory purposes - beginning of year
|
229,594,000
|
214,038,000
|
||||||
Cash and cash equivalents, and cash and securities segregated for regulatory purposes - end of period
|
$
|
232,801,000
|
$
|
201,877,000
|
||||
Cash and cash equivalents - end of period
|
$
|
5,220,000
|
$
|
5,892,000
|
||||
Cash and securities segregated for regulatory purposes - end of period
|
227,581,000
|
195,985,000
|
||||||
Cash and cash equivalents, and cash and securities segregated for regulatory purposes - end of period
|
$
|
232,801,000
|
$
|
201,877,000
|
||||
Supplemental cash flow information
|
||||||||
Cash paid during the period for income taxes
|
$
|
17,000
|
$
|
5,500
|
||||
Cash paid during the period for interest
|
$
|
116,000
|
$
|
103,000
|
Historical
Carrying Value
|
||||
Assets acquired
|
||||
Cash and cash equivalents
|
$
|
1,588,000
|
||
Cash and securities segregated for regulatory purposes
|
224,814,000
|
|||
Receivables from customers
|
86,331,000
|
|||
Receivables from broker-dealers and clearing organizations
|
3,105,000
|
|||
Other receivables
|
627,000
|
|||
Prepaid expenses and other assets
|
346,000
|
|||
Securities borrowed
|
193,529,000
|
|||
Securities owned, at fair value
|
3,018,000
|
|||
Furniture, equipment and leasehold improvements, net
|
19,000
|
|||
Lease right-of-use assets
|
1,141,000
|
|||
Deferred tax assets
|
407,000
|
|||
Total Assets acquired
|
514,925,000
|
|||
Liabilities acquired
|
||||
Payables to customers
|
308,091,000
|
|||
Payables to non-customers
|
9,151,000
|
|||
Drafts payable
|
2,834,000
|
|||
Payables to broker-dealers and clearing organizations
|
1,406,000
|
|||
Accounts payable and accrued liabilities
|
963,000
|
|||
Securities loaned
|
170,443,000
|
|||
Securities sold, not yet purchased, at fair value
|
28,000
|
|||
Notes payable – related party
|
5,000,000
|
|||
Lease liabilities
|
1,295,000
|
|||
Total Liabilities acquired
|
499,211,000
|
|||
|
||||
Net Assets acquired
|
$
|
15,714,000
|
Three Months Ended March 31, 2019
|
||||||||||||||||
Siebert
|
StockCross
|
Pro Forma
Adjustments
|
Total Combined
Siebert
|
|||||||||||||
Revenue
|
||||||||||||||||
Commissions and fees
|
$
|
1,864,000
|
$
|
404,000
|
$
|
—
|
$
|
2,268,000
|
||||||||
Margin interest, marketing and distribution fees
|
2,772,000
|
784,000
|
—
|
3,556,000
|
||||||||||||
Principal transactions
|
1,610,000
|
280,000
|
—
|
1,890,000
|
||||||||||||
Interest income
|
15,000
|
1,158,000
|
—
|
1,173,000
|
||||||||||||
Market making
|
—
|
563,000
|
—
|
563,000
|
||||||||||||
Stock borrow / stock loan
|
—
|
581,000
|
—
|
581,000
|
||||||||||||
Advisory fees
|
168,000
|
—
|
—
|
168,000
|
||||||||||||
Other income
|
—
|
138,000
|
(59,000
|
)
|
79,000
|
|||||||||||
Total Revenue
|
6,429,000
|
3,908,000
|
(59,000
|
)
|
10,278,000
|
|||||||||||
Expenses
|
||||||||||||||||
Employee compensation and benefits
|
2,835,000
|
1,693,000
|
—
|
4,528,000
|
||||||||||||
Clearing fees, including execution costs
|
654,000
|
207,000
|
(59,000
|
)
|
802,000
|
|||||||||||
Technology and communications
|
247,000
|
175,000
|
—
|
422,000
|
||||||||||||
Other general and administrative
|
385,000
|
348,000
|
—
|
733,000
|
||||||||||||
Data processing
|
—
|
543,000
|
—
|
543,000
|
||||||||||||
Rent and occupancy
|
295,000
|
236,000
|
—
|
531,000
|
||||||||||||
Professional fees
|
502,000
|
381,000
|
—
|
883,000
|
||||||||||||
Depreciation and amortization
|
175,000
|
19,000
|
—
|
194,000
|
||||||||||||
Interest expense
|
—
|
21,000
|
—
|
21,000
|
||||||||||||
Total Expenses
|
5,093,000
|
3,623,000
|
(59,000
|
)
|
8,657,000
|
|||||||||||
Earnings of equity method investment in related party
|
39,000
|
—
|
(39,000
|
)
|
—
|
|||||||||||
Income before provision (benefit) for (from) income taxes
|
1,375,000
|
285,000
|
(39,000
|
)
|
1,621,000
|
|||||||||||
Provision (benefit) for (from) income taxes
|
369,000
|
39,000
|
(11,000
|
)
|
397,000
|
|||||||||||
Net income / (loss)
|
$
|
1,006,000
|
$
|
246,000
|
$
|
(28,000
|
)
|
$
|
1,224,000
|
|||||||
Net income per share of common stock
|
||||||||||||||||
Basic and diluted
|
$
|
0.04
|
$
|
0.04
|
$
|
0.04
|
||||||||||
Weighted average shares outstanding
|
||||||||||||||||
Basic and diluted
|
27,157,188
|
6,152,500
|
||||||||||||||
Pro forma shares used to compute net income per share
|
30,459,804
|
As of December 31, 2019
|
||||||||||||||||
Siebert
|
StockCross
|
Pro Forma
Adjustments
(unaudited)
|
Total Combined Siebert
(unaudited)
|
|||||||||||||
ASSETS
|
||||||||||||||||
Cash and cash equivalents
|
$
|
3,082,000
|
$
|
1,588,000
|
$
|
—
|
$
|
4,670,000
|
||||||||
Cash and securities segregated for regulatory purposes
|
110,000
|
224,814,000
|
—
|
224,924,000
|
||||||||||||
Receivables from customers
|
—
|
86,331,000
|
—
|
86,331,000
|
||||||||||||
Receivables from broker-dealers and clearing organizations
|
3,067,000
|
1,265,000
|
(808,000
|
)
|
3,524,000
|
|||||||||||
Receivables from related party
|
1,000,000
|
—
|
(1,000,000
|
)
|
—
|
|||||||||||
Other receivables
|
223,000
|
627,000
|
(88,000
|
)
|
762,000
|
|||||||||||
Prepaid expenses and other assets
|
624,000
|
346,000
|
—
|
970,000
|
||||||||||||
Securities borrowed
|
—
|
193,529,000
|
—
|
193,529,000
|
||||||||||||
Securities owned, at fair value
|
—
|
3,018,000
|
—
|
3,018,000
|
||||||||||||
Total Current assets
|
8,106,000
|
511,518,000
|
(1,896,000
|
)
|
517,728,000
|
|||||||||||
Deposits with broker-dealers and clearing organizations
|
3,186,000
|
1,840,000
|
(75,000
|
)
|
4,951,000
|
|||||||||||
Furniture, equipment and leasehold improvements, net
|
1,131,000
|
19,000
|
—
|
1,150,000
|
||||||||||||
Software, net
|
1,888,000
|
—
|
—
|
1,888,000
|
||||||||||||
Lease right-of-use assets
|
2,810,000
|
1,141,000
|
—
|
3,951,000
|
||||||||||||
Equity method investment in related party
|
3,360,000
|
—
|
(3,360,000
|
)
|
—
|
|||||||||||
Deferred tax assets
|
4,981,000
|
407,000
|
—
|
5,388,000
|
||||||||||||
Intangible assets, net
|
1,022,000
|
—
|
—
|
1,022,000
|
||||||||||||
Goodwill
|
1,989,000
|
—
|
—
|
1,989,000
|
||||||||||||
Total Assets
|
$
|
28,473,000
|
$
|
514,925,000
|
$
|
(5,331,000
|
)
|
$
|
538,067,000
|
|||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||||||||||
Payables to customers
|
$
|
—
|
$
|
308,091,000
|
$
|
—
|
$
|
308,091,000
|
||||||||
Payables to non-customers
|
—
|
9,151,000
|
(1,088,000
|
)
|
8,063,000
|
|||||||||||
Drafts payable
|
—
|
2,834,000
|
—
|
2,834,000
|
||||||||||||
Payables to broker-dealers and clearing organizations
|
—
|
1,406,000
|
(883,000
|
)
|
523,000
|
|||||||||||
Payables to related parties
|
7,000
|
—
|
(7,000
|
)
|
—
|
|||||||||||
Accounts payable and accrued liabilities
|
1,473,000
|
963,000
|
7,000
|
2,443,000
|
||||||||||||
Securities loaned
|
—
|
170,443,000
|
—
|
170,443,000
|
||||||||||||
Securities sold, not yet purchased
|
88,000
|
28,000
|
—
|
116,000
|
||||||||||||
Interest payable
|
10,000
|
—
|
—
|
10,000
|
||||||||||||
Notes payable - related party
|
3,000,000
|
5,000,000
|
—
|
8,000,000
|
||||||||||||
Current portion of lease liabilities
|
1,291,000
|
936,000
|
—
|
2,227,000
|
||||||||||||
Total Current liabilities
|
5,869,000
|
498,852,000
|
(1,971,000
|
)
|
502,750,000
|
|||||||||||
Lease liabilities, less current portion
|
1,823,000
|
359,000
|
—
|
2,182,000
|
||||||||||||
Total Liabilities
|
7,692,000
|
499,211,000
|
(1,971,000
|
)
|
504,932,000
|
|||||||||||
Commitments and Contingencies
|
||||||||||||||||
Stockholders’ equity
|
||||||||||||||||
Common stock, $.01 par value
|
271,000
|
10,000
|
23,000
|
304,000
|
||||||||||||
Additional paid-in capital
|
7,641,000
|
12,436,000
|
(180,000
|
)
|
19,897,000
|
|||||||||||
Retained earnings
|
12,869,000
|
3,268,000
|
(3,203,000
|
)
|
12,934,000
|
|||||||||||
Total Stockholders’ equity
|
20,781,000
|
15,714,000
|
(3,360,000
|
)
|
33,135,000
|
|||||||||||
Total Liabilities and stockholders' equity |
$
|
28,473,000
|
$
|
514,925,000
|
$
|
(5,331,000
|
)
|
$
|
538,067,000
|
Three Months Ended
March 31, 2019
|
||||
Revenue
|
$
|
13,014,000
|
||
Operating income
|
$
|
1,334,000
|
||
Net income
|
$
|
967,000
|
As of
March 31, 2020
|
As of
December 31, 2019
|
|||||||
Receivables from and deposits with broker-dealers and clearing organizations
|
||||||||
DTCC / OCC / NSCC
|
$
|
2,956,000
|
$
|
3,059,000
|
||||
Goldman Sachs
|
2,763,000
|
2,841,000
|
||||||
Pershing Capital
|
1,467,000
|
1,192,000
|
||||||
NFS
|
1,348,000
|
1,328,000
|
||||||
Securities fail-to-deliver
|
24,000
|
43,000
|
||||||
Globalshares
|
16,000
|
2,000
|
||||||
ICBC
|
10,000
|
10,000
|
||||||
Total Receivables from and deposits with broker-dealers and clearing organizations
|
$
|
8,584,000
|
$
|
8,475,000
|
||||
Payables to broker-dealers and clearing organizations
|
||||||||
NFS
|
$
|
727,000
|
$
|
—
|
||||
Securities fail-to-receive
|
306,000
|
523,000
|
||||||
Total Payables to broker-dealers and clearing organizations
|
$
|
1,033,000
|
$
|
523,000
|
As of March 31, 2020
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Assets
|
||||||||||||||||
Cash and cash equivalents
|
||||||||||||||||
Certificates of deposit
|
$
|
—
|
$
|
142,000
|
$
|
—
|
$
|
142,000
|
||||||||
Securities owned, at fair value
|
||||||||||||||||
U.S. government securities
|
$
|
2,040,000
|
$
|
—
|
$
|
—
|
$
|
2,040,000
|
||||||||
Municipal securities
|
—
|
938,000
|
—
|
938,000
|
||||||||||||
Corporate bonds
|
—
|
303,000
|
—
|
303,000
|
||||||||||||
Equity securities
|
139,000
|
259,000
|
—
|
398,000
|
||||||||||||
Unit investment trusts
|
1,000
|
—
|
—
|
1,000
|
||||||||||||
Total Securities owned, at fair value
|
$
|
2,180,000
|
$
|
1,500,000
|
$
|
—
|
$
|
3,680,000
|
||||||||
Liabilities
|
||||||||||||||||
Securities sold, not yet purchased, at fair value
|
||||||||||||||||
Equity securities
|
$
|
—
|
$
|
31,000
|
$
|
—
|
$
|
31,000
|
||||||||
Total Securities sold, not yet purchased, at fair value
|
$
|
—
|
$
|
31,000
|
$
|
—
|
$
|
31,000
|
As of December 31, 2019
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Assets
|
||||||||||||||||
Cash and cash equivalents
|
||||||||||||||||
Certificates of deposit
|
$
|
—
|
$
|
142,000
|
$
|
—
|
$
|
142,000
|
||||||||
Segregated securities
|
||||||||||||||||
U.S. government securities
|
1,311,000
|
—
|
—
|
1,311,000
|
||||||||||||
Securities owned, at fair value
|
||||||||||||||||
U.S. government securities
|
$
|
2,007,000
|
$
|
—
|
$
|
—
|
$
|
2,007,000
|
||||||||
Corporate bonds
|
—
|
25,000
|
—
|
25,000
|
||||||||||||
Equity securities
|
453,000
|
245,000
|
288,000
|
986,000
|
||||||||||||
Total Securities owned, at fair value
|
$
|
2,460,000
|
$
|
270,000
|
$
|
288,000
|
$
|
3,018,000
|
||||||||
Liabilities
|
||||||||||||||||
Securities sold, not yet purchased, at fair value
|
||||||||||||||||
Equity securities
|
$
|
88,000
|
$
|
28,000
|
$
|
—
|
$
|
116,000
|
||||||||
Total Securities sold, not yet purchased, at fair value
|
$
|
88,000
|
$
|
28,000
|
$
|
—
|
$
|
116,000
|
|
Changes in Level 3 Equity Assets | |||||||
|
Three Months Ended March 31, 2020 | |||||||
|
Amount |
Valuation Technique
|
Reason for Change
|
|||||
Balance – January 1, 2020
|
$
|
288,000
|
Liquidation value based on valuation report
|
|||||
Transfers out of level 3
|
(288,000
|
)
|
Sale of equity security
|
|||||
Balance – March 31, 2020
|
$
|
—
|
As of
March 31, 2020
|
As of
December 31, 2019
|
|||||||
Assets
|
||||||||
Lease right-of-use assets
|
$
|
3,430,000
|
$
|
3,951,000
|
||||
Liabilities
|
||||||||
Lease liabilities
|
$
|
3,845,000
|
$
|
4,409,000
|
Lease Term and Discount Rate
|
As of
March 31, 2020
|
|||
Weighted average remaining lease term – operating leases (in years)
|
2.5
|
|||
Weighted average discount rate – operating leases
|
5.0
|
%
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Operating lease cost
|
$
|
571,000
|
$
|
363,000
|
||||
Short-term lease cost
|
39,000
|
130,000
|
||||||
Variable lease cost
|
117,000
|
38,000
|
||||||
Sublease income
|
—
|
—
|
||||||
Total Rent and occupancy
|
$
|
727,000
|
$
|
531,000
|
||||
Cash paid for amounts included in the measurement of lease liabilities
|
||||||||
Operating cash flows from operating leases
|
$
|
614,000
|
$
|
382,000
|
||||
Lease right-of-use assets obtained in exchange for new lease liabilities
|
||||||||
Operating leases
|
$
|
1,915,000
|
$
|
5,732,000
|
Year
|
Amount
|
|||
2020
|
$
|
1,772,000
|
||
2021
|
1,114,000
|
|||
2022
|
599,000
|
|||
2023
|
543,000
|
|||
2024
|
56,000
|
|||
Remaining balance of lease payments
|
4,084,000
|
|||
Difference between undiscounted cash flows and discounted cash flows
|
239,000
|
|||
Lease liabilities
|
$
|
3,845,000
|
Description
|
Issuance Date
|
Face Amount
|
|||
4% due December 2, 2020
|
December 2, 2019
|
$
|
3,000,000
|
||
Subordinated to MSCO*
|
|||||
4% due November 30, 2020**
|
November 30, 2018
|
$
|
3,000,000
|
||
4% due September 4, 2020
|
September 4, 2019
|
$ |
2,000,000
|
||
5,000,000
|
|||||
Total Notes payable – related party
|
$
|
8,000,000
|
Three Months Ended
March 31,
|
||||||||||
Revenue Category
|
2020
|
2019
|
Timing of Recognition
|
|||||||
Trading Execution and Clearing Services
|
||||||||||
Commissions and fees
|
$
|
5,583,000
|
$
|
2,268,000
|
Recorded on trade date
|
|||||
Principal transactions
|
3,203,000
|
1,890,000
|
Recorded on trade date
|
|||||||
Market making
|
470,000
|
563,000
|
Recorded on trade date
|
|||||||
Stock borrow / stock loan
|
444,000
|
581,000
|
Recorded as earned
|
|||||||
Advisory fees
|
262,000
|
168,000
|
Recorded as earned
|
|||||||
Total Trading Execution and Clearing Services
|
9,962,000
|
5,470,000
|
||||||||
Other Income
|
||||||||||
Margin interest, marketing and distribution fees
|
||||||||||
Margin interest
|
2,506,000
|
2,817,000
|
Recorded as earned
|
|||||||
12b1 fees
|
788,000
|
739,000
|
Recorded as earned
|
|||||||
Total Margin interest, marketing and distribution fees
|
3,294,000
|
3,556,000
|
||||||||
Interest income
|
1,331,000
|
1,173,000
|
Recorded as earned
|
|||||||
Other income
|
214,000
|
79,000
|
Recorded as earned
|
|||||||
|
||||||||||
Total Other Income
|
4,839,000
|
4,808,000
|
||||||||
Total Revenue
|
$
|
14,801,000
|
$
|
10,278,000
|
Revenue Stream
|
Performance Obligation
|
Commissions and fees, Principal transactions, Market making, Stock borrow / stock loan, Advisory fees
|
Provide financial services to customers and counterparties
|
Margin interest, marketing and distribution fees, Interest income, Other income
|
n / a
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Current income tax expense
|
||||||||
Federal
|
$
|
184,000
|
$
|
222,000
|
||||
State and local
|
60,000
|
85,000
|
||||||
Total Current income tax expense
|
244,000
|
307,000
|
||||||
Deferred income tax expense
|
||||||||
Federal
|
35,000
|
47,000
|
||||||
State and local
|
256,000
|
43,000
|
||||||
Total Deferred income tax expense
|
291,000
|
90,000
|
||||||
Total Provision for income taxes
|
$
|
535,000
|
$
|
397,000
|
As of March 31,
|
||||||||
2020
|
2019
|
|||||||
Retail customer margin debit balances (in billions)
|
$
|
0.3
|
$
|
0.3
|
||||
Retail customer credit balances (in billions)
|
$
|
0.6
|
$
|
0.5
|
||||
Retail customer money market fund value (in billions)
|
$
|
0.7
|
$
|
0.6
|
||||
Retail customer net worth (in billions)
|
$
|
10.6
|
$
|
12.3
|
||||
Retail customer accounts
|
108,163
|
103,641
|
●
|
Retail customer margin debit balances represents credit extended to our customers to finance their purchases against current positions
|
●
|
Retail customer credit balances represents client cash held in brokerage accounts
|
●
|
Retail customer money market fund value represents all retail customers accounts invested in money market funds
|
●
|
Retail customer net worth represents the total value of securities and cash in the retail customer accounts after deducting margin debits
|
●
|
Retail customer accounts represents the number of retail customers
|
As of
March 31, 2020
|
||||
Institutional customer net worth (in billions)
|
$
|
1.2
|
●
|
Institutional customer net worth represents the total value of securities and cash in the institutional customer accounts after deducting margin debits and short positions
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Total retail trades
|
120,495
|
79,354
|
||||||
Average commission per retail trade
|
$
|
15.46
|
$
|
18.90
|
●
|
Total retail trades represents retail trades that generate commissions
|
●
|
Average commission per retail trade represents the average commission generated for all types of retail customer trades
|
Year
|
Amount
|
|||
2020
|
$
|
1,772,000
|
||
2021
|
1,114,000
|
|||
2022
|
599,000
|
|||
2023
|
543,000
|
|||
2024
|
56,000
|
|||
Total
|
$
|
4,084,000
|
Exhibit
No. |
|
Description of Document
|
|
|
|
|
||
|
|
|
|
||
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
SIEBERT FINANCIAL CORP.
|
|
|
|
|
|
By:
|
/s/ Andrew H. Reich
|
|
|
Andrew H. Reich
|
|
|
Executive Vice President, Chief Operating Officer, Chief Financial Officer, and Secretary
|
|
|
(Principal executive, financial and accounting officer)
|
|
|
|
|
Dated: May 28, 2020
|