|
|
|
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
||
|
|
||
|
For the quarterly period ended
|
June 30, 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 ☐
|
June 30, 2020
|
December 31, 2019*
|
|||||||
ASSETS
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$
|
4,179,000
|
$
|
4,670,000
|
||||
Cash and securities segregated for regulatory purposes
|
255,683,000
|
224,924,000
|
||||||
Receivables from customers
|
80,378,000
|
86,331,000
|
||||||
Receivables from broker-dealers and clearing organizations
|
2,738,000
|
3,524,000
|
||||||
Other receivables
|
1,000,000
|
762,000
|
||||||
Prepaid expenses and other assets
|
673,000
|
970,000
|
||||||
Securities borrowed
|
167,252,000
|
193,529,000
|
||||||
Securities owned, at fair value
|
2,374,000
|
3,018,000
|
||||||
Total Current assets
|
514,277,000
|
517,728,000
|
||||||
Deposits with broker-dealers and clearing organizations
|
6,593,000
|
4,951,000
|
||||||
Prepaid service contract – non-current
|
2,099,000
|
—
|
||||||
Furniture, equipment and leasehold improvements, net
|
950,000
|
1,150,000
|
||||||
Software, net
|
1,671,000
|
1,888,000
|
||||||
Lease right-of-use assets
|
3,062,000
|
3,951,000
|
||||||
Deferred tax assets
|
5,155,000
|
5,388,000
|
||||||
Intangible assets, net
|
891,000
|
1,022,000
|
||||||
Goodwill
|
1,989,000
|
1,989,000
|
||||||
Total Assets
|
$
|
536,687,000
|
$
|
538,067,000
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Liabilities
|
||||||||
Current liabilities
|
||||||||
Payables to customers
|
$
|
314,098,000
|
$
|
308,091,000
|
||||
Payables to non-customers
|
7,719,000
|
8,063,000
|
||||||
Drafts payable
|
1,975,000
|
2,834,000
|
||||||
Payables to broker-dealers and clearing organizations
|
3,582,000
|
523,000
|
||||||
Accounts payable and accrued liabilities
|
2,600,000
|
2,443,000
|
||||||
Securities loaned
|
159,447,000
|
170,443,000
|
||||||
Securities sold, not yet purchased, at fair value
|
17,000
|
116,000
|
||||||
Interest payable
|
30,000
|
10,000
|
||||||
Notes payable - related party
|
8,000,000
|
8,000,000
|
||||||
Taxes payable
|
39,000
|
—
|
||||||
Current portion of lease liabilities
|
1,921,000
|
2,227,000
|
||||||
Total Current liabilities
|
499,428,000
|
502,750,000
|
||||||
Lease liabilities, less current portion
|
1,522,000
|
2,182,000
|
||||||
Total Liabilities
|
500,950,000
|
504,932,000
|
||||||
Commitments and Contingencies
|
||||||||
Stockholders’ equity
|
||||||||
Common stock, $.01 par value; 100 million shares authorized; 30,653,710 and 30,459,804 shares
issued and outstanding as of June 30, 2020 and December 31, 2019, respectively**
|
306,000
|
304,000
|
||||||
Additional paid-in capital
|
21,022,000
|
19,897,000
|
||||||
Retained earnings
|
14,409,000
|
12,934,000
|
||||||
Total Stockholders’ equity
|
35,737,000
|
33,135,000
|
||||||
Total Liabilities and stockholders' equity
|
$
|
536,687,000
|
$
|
538,067,000
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Revenue
|
||||||||||||||||
Commissions and fees
|
$
|
4,887,000
|
$
|
2,591,000
|
$
|
10,470,000
|
$
|
4,859,000
|
||||||||
Margin interest, marketing and distribution fees
|
2,125,000
|
3,693,000
|
5,419,000
|
7,249,000
|
||||||||||||
Principal transactions
|
2,581,000
|
1,921,000
|
5,784,000
|
3,811,000
|
||||||||||||
Interest income
|
909,000
|
1,186,000
|
2,240,000
|
2,359,000
|
||||||||||||
Market making
|
615,000
|
410,000
|
1,085,000
|
973,000
|
||||||||||||
Stock borrow / stock loan
|
771,000
|
423,000
|
1,215,000
|
1,004,000
|
||||||||||||
Advisory fees
|
243,000
|
193,000
|
505,000
|
361,000
|
||||||||||||
Other income
|
488,000
|
264,000
|
702,000
|
343,000
|
||||||||||||
Total Revenue
|
12,619,000
|
10,681,000
|
27,420,000
|
20,959,000
|
||||||||||||
Expenses
|
||||||||||||||||
Employee compensation and benefits
|
6,614,000
|
4,476,000
|
13,905,000
|
9,004,000
|
||||||||||||
Clearing fees, including execution costs
|
1,339,000
|
726,000
|
2,637,000
|
1,528,000
|
||||||||||||
Technology and communications
|
953,000
|
400,000
|
1,934,000
|
822,000
|
||||||||||||
Other general and administrative
|
401,000
|
1,185,000
|
1,255,000
|
1,918,000
|
||||||||||||
Data processing
|
754,000
|
418,000
|
1,603,000
|
961,000
|
||||||||||||
Rent and occupancy
|
698,000
|
593,000
|
1,425,000
|
1,124,000
|
||||||||||||
Professional fees
|
744,000
|
902,000
|
1,399,000
|
1,785,000
|
||||||||||||
Depreciation and amortization
|
377,000
|
251,000
|
825,000
|
445,000
|
||||||||||||
Referral fees
|
162,000
|
—
|
273,000
|
—
|
||||||||||||
Interest expense
|
88,000
|
31,000
|
164,000
|
52,000
|
||||||||||||
Total Expenses
|
12,130,000
|
8,982,000
|
25,420,000
|
17,639,000
|
||||||||||||
Income before provision (benefit) for (from) income taxes
|
489,000
|
1,699,000
|
2,000,000
|
3,320,000
|
||||||||||||
Provision (benefit) for (from) income taxes
|
(10,000
|
)
|
620,000
|
525,000
|
1,017,000
|
|||||||||||
Net income
|
$
|
499,000
|
$
|
1,079,000
|
$
|
1,475,000
|
$
|
2,303,000
|
||||||||
Net income per share of common stock
|
||||||||||||||||
Basic and diluted
|
$
|
0.02
|
$
|
0.04
|
$
|
0.05
|
$
|
0.08
|
||||||||
Weighted average shares outstanding
|
||||||||||||||||
Basic and diluted
|
30,587,794
|
30,455,962
|
30,521,878
|
30,455,962
|
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
|
|||||||||||
Shares issued for payment of professional services
|
193,906
|
2,000
|
1,125,000
|
—
|
1,127,000
|
|||||||||||||||
Net income
|
—
|
—
|
—
|
499,000
|
499,000
|
|||||||||||||||
Balance – June 30, 2020
|
30,653,710
|
$
|
306,000
|
$
|
21,022,000
|
$
|
14,409,000
|
$
|
35,737,000
|
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
|
|||||||||||
Net income
|
—
|
—
|
—
|
1,079,000
|
1,079,000
|
|||||||||||||||
Balance – June 30, 2019
|
30,459,804
|
$
|
304,000
|
$
|
21,678,000
|
$
|
11,565,000
|
$
|
33,547,000
|
Six Months Ended
June 30,
|
||||||||
2020
|
2019
|
|||||||
Cash Flows From Operating Activities
|
||||||||
Net income
|
$
|
1,475,000
|
$
|
2,303,000
|
||||
Adjustments to reconcile net income to net cash provided by / (used in) operating activities:
|
||||||||
Deferred income tax expense
|
233,000
|
703,000
|
||||||
Depreciation and amortization
|
825,000
|
445,000
|
||||||
Changes in
|
||||||||
Receivables from customers
|
5,953,000
|
(9,286,000
|
)
|
|||||
Receivables from non-customers
|
—
|
(125,000
|
)
|
|||||
Receivables from and deposits with broker-dealers and clearing organizations
|
(856,000
|
)
|
(877,000
|
)
|
||||
Securities borrowed
|
26,277,000
|
130,507,000
|
||||||
Securities owned, at fair value
|
644,000
|
(794,000
|
)
|
|||||
Prepaid expenses and other assets
|
58,000
|
(178,000
|
)
|
|||||
Prepaid service contract - non-current
|
(972,000
|
)
|
—
|
|||||
Payables to customers
|
6,007,000
|
(4,582,000
|
)
|
|||||
Payables to non-customers
|
(344,000
|
)
|
(4,689,000
|
)
|
||||
Drafts payable
|
(859,000
|
)
|
1,114,000
|
|||||
Payables to broker-dealers and clearing organizations
|
3,059,000
|
189,000
|
||||||
Accounts payable and accrued liabilities
|
157,000
|
(181,000
|
)
|
|||||
Securities loaned
|
(10,996,000
|
)
|
(138,219,000
|
)
|
||||
Securities sold, not yet purchased, at fair value
|
(99,000
|
)
|
64,000
|
|||||
Interest payable
|
20,000
|
—
|
||||||
Lease liabilities
|
(77,000
|
)
|
320,000
|
|||||
Taxes payable
|
39,000
|
(15,000
|
)
|
|||||
Bank loan payable
|
—
|
5,000,000
|
||||||
Net cash provided by / (used in) operating activities
|
30,544,000
|
(18,301,000
|
)
|
|||||
Cash Flows From Investing Activities
|
||||||||
Purchase of furniture, equipment, and leasehold improvements
|
—
|
(722,000
|
)
|
|||||
Purchase of software
|
(276,000
|
)
|
(612,000
|
)
|
||||
Net cash used in investing activities
|
(276,000
|
)
|
(1,334,000
|
)
|
||||
Cash Flows From Financing Activities
|
||||||||
Purchase of StockCross common stock
|
—
|
(3,666,000
|
)
|
|||||
Treasury stock sales - StockCross
|
—
|
172,000
|
||||||
Net cash used in financing activities
|
—
|
(3,494,000
|
)
|
|||||
Net increase / (decrease) in cash and cash equivalents, and cash and securities segregated for regulatory purposes
|
30,268,000
|
(23,129,000
|
)
|
|||||
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
|
$
|
259,862,000
|
$
|
190,909,000
|
||||
Cash and cash equivalents - end of period
|
$
|
4,179,000
|
$
|
5,231,000
|
||||
Cash and securities segregated for regulatory purposes - end of period
|
255,683,000
|
185,678,000
|
||||||
Cash and cash equivalents, and cash and securities segregated for regulatory purposes - end of period
|
$
|
259,862,000
|
$
|
190,909,000
|
||||
Supplemental cash flow information
|
||||||||
Cash paid during the period for income taxes
|
$
|
130,000
|
$
|
630,000
|
||||
Cash paid during the period for interest
|
$
|
150,000
|
$
|
52,000
|
||||
Non-cash investing and financing activities
|
||||||||
Shares issued for payment of professional services
|
$
|
1,127,000
|
$
|
—
|
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 assumed
|
||||
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 assumed
|
499,211,000
|
|||
|
||||
Net Assets acquired
|
$
|
15,714,000
|
Three Months Ended June 30, 2019
|
||||||||||||||||
Siebert
|
StockCross
|
Pro Forma
Adjustments
|
Total Combined Siebert
|
|||||||||||||
Revenue
|
||||||||||||||||
Commissions and fees
|
$
|
2,241,000
|
$
|
350,000
|
$
|
—
|
$
|
2,591,000
|
||||||||
Margin interest, marketing and distribution fees
|
2,783,000
|
910,000
|
—
|
3,693,000
|
||||||||||||
Principal transactions
|
1,828,000
|
93,000
|
—
|
1,921,000
|
||||||||||||
Interest income
|
16,000
|
1,170,000
|
—
|
1,186,000
|
||||||||||||
Market making
|
—
|
410,000
|
—
|
410,000
|
||||||||||||
Stock borrow / stock loan
|
—
|
423,000
|
—
|
423,000
|
||||||||||||
Advisory fees
|
193,000
|
—
|
—
|
193,000
|
||||||||||||
Other income
|
—
|
327,000
|
(63,000
|
)
|
264,000
|
|||||||||||
Total Revenue
|
7,061,000
|
3,683,000
|
(63,000
|
)
|
10,681,000
|
|||||||||||
Expenses
|
||||||||||||||||
Employee compensation and benefits
|
2,890,000
|
1,586,000
|
—
|
4,476,000
|
||||||||||||
Clearing fees, including execution costs
|
578,000
|
211,000
|
(63,000
|
)
|
726,000
|
|||||||||||
Technology and communications
|
262,000
|
138,000
|
—
|
400,000
|
||||||||||||
Other general and administrative
|
887,000
|
298,000
|
—
|
1,185,000
|
||||||||||||
Data processing
|
—
|
418,000
|
—
|
418,000
|
||||||||||||
Rent and occupancy
|
320,000
|
273,000
|
—
|
593,000
|
||||||||||||
Professional fees
|
447,000
|
455,000
|
—
|
902,000
|
||||||||||||
Depreciation and amortization
|
251,000
|
—
|
—
|
251,000
|
||||||||||||
Interest expense
|
—
|
31,000
|
—
|
31,000
|
||||||||||||
Total Expenses
|
5,635,000
|
3,410,000
|
(63,000
|
)
|
8,982,000
|
|||||||||||
Earnings of equity method investment in related party
|
15,000
|
—
|
(15,000
|
)
|
—
|
|||||||||||
Income before provision (benefit) for (from) income taxes
|
1,441,000
|
273,000
|
(15,000
|
)
|
1,699,000
|
|||||||||||
Provision (benefit) for (from) income taxes
|
449,000
|
175,000
|
(4,000
|
)
|
620,000
|
|||||||||||
Net income / (loss)
|
$
|
992,000
|
$
|
98,000
|
$
|
(11,000
|
)
|
$
|
1,079,000
|
|||||||
Net income per share of common stock
|
||||||||||||||||
Basic and diluted
|
$
|
0.04
|
$
|
0.02
|
$
|
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
|
30,455,962
|
Six Months Ended June 30, 2019
|
||||||||||||||||
Siebert
|
StockCross
|
Pro Forma
Adjustments
|
Total Combined Siebert
|
|||||||||||||
Revenue
|
||||||||||||||||
Commissions and fees
|
$
|
4,105,000
|
$
|
754,000
|
$
|
—
|
$
|
4,859,000
|
||||||||
Margin interest, marketing and distribution fees
|
5,555,000
|
1,694,000
|
—
|
7,249,000
|
||||||||||||
Principal transactions
|
3,438,000
|
373,000
|
—
|
3,811,000
|
||||||||||||
Interest income
|
31,000
|
2,328,000
|
—
|
2,359,000
|
||||||||||||
Market making
|
—
|
973,000
|
—
|
973,000
|
||||||||||||
Stock borrow / stock loan
|
—
|
1,004,000
|
—
|
1,004,000
|
||||||||||||
Advisory fees
|
361,000
|
—
|
—
|
361,000
|
||||||||||||
Other income
|
—
|
465,000
|
(122,000
|
)
|
343,000
|
|||||||||||
Total Revenue
|
13,490,000
|
7,591,000
|
(122,000
|
)
|
20,959,000
|
|||||||||||
Expenses
|
||||||||||||||||
Employee compensation and benefits
|
5,725,000
|
3,279,000
|
—
|
9,004,000
|
||||||||||||
Clearing fees, including execution costs
|
1,232,000
|
418,000
|
(122,000
|
)
|
1,528,000
|
|||||||||||
Technology and communications
|
509,000
|
313,000
|
—
|
822,000
|
||||||||||||
Other general and administrative
|
1,272,000
|
646,000
|
—
|
1,918,000
|
||||||||||||
Data processing
|
—
|
961,000
|
—
|
961,000
|
||||||||||||
Rent and occupancy
|
615,000
|
509,000
|
—
|
1,124,000
|
||||||||||||
Professional fees
|
949,000
|
836,000
|
—
|
1,785,000
|
||||||||||||
Depreciation and amortization
|
426,000
|
19,000
|
—
|
445,000
|
||||||||||||
Interest expense
|
—
|
52,000
|
—
|
52,000
|
||||||||||||
Total Expenses
|
10,728,000
|
7,033,000
|
(122,000
|
)
|
17,639,000
|
|||||||||||
Earnings of equity method investment in related party
|
54,000
|
—
|
(54,000
|
)
|
—
|
|||||||||||
Income before provision (benefit) for (from) income taxes
|
2,816,000
|
558,000
|
(54,000
|
)
|
3,320,000
|
|||||||||||
Provision (benefit) for (from) income taxes
|
818,000
|
214,000
|
(15,000
|
)
|
1,017,000
|
|||||||||||
Net income / (loss)
|
$
|
1,998,000
|
$
|
344,000
|
$
|
(39,000
|
)
|
$
|
2,303,000
|
|||||||
Net income per share of common stock
|
||||||||||||||||
Basic and diluted
|
$
|
0.07
|
$
|
0.06
|
$
|
0.08
|
||||||||||
Weighted average shares outstanding
|
||||||||||||||||
Basic and diluted
|
27,157,188
|
6,152,500
|
||||||||||||||
Pro forma shares used to compute net income per share
|
30,455,962
|
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, at fair value
|
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 June 30, 2019
|
Six Months Ended June 30, 2019
|
|||||||
Revenue
|
$
|
13,805,000
|
$
|
26,819,000
|
||||
Operating income
|
$
|
454,000
|
$
|
1,788,000
|
||||
Net income / (loss)
|
$
|
(137,000
|
)
|
$
|
830,000
|
|||
As of
June 30, 2020
|
As of
December 31, 2019
|
|||||||
Receivables from and deposits with broker-dealers and clearing organizations
|
||||||||
DTCC / OCC / NSCC
|
$
|
4,461,000
|
$
|
3,059,000
|
||||
Goldman Sachs
|
2,676,000
|
2,841,000
|
||||||
Pershing Capital
|
1,195,000
|
1,192,000
|
||||||
NFS
|
972,000
|
1,328,000
|
||||||
Securities fail-to-deliver
|
19,000
|
43,000
|
||||||
Globalshares
|
8,000
|
2,000
|
||||||
ICBC
|
—
|
10,000
|
||||||
Total Receivables from and deposits with broker-dealers and clearing organizations
|
$
|
9,331,000
|
$
|
8,475,000
|
||||
Payables to broker-dealers and clearing organizations
|
||||||||
Securities fail-to-receive
|
$
|
3,582,000
|
$
|
523,000
|
||||
Total Payables to broker-dealers and clearing organizations
|
$
|
3,582,000
|
$
|
523,000
|
As of June 30, 2020
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Assets
|
||||||||||||||||
Cash and cash equivalents
|
||||||||||||||||
Certificates of deposit
|
$
|
—
|
$
|
143,000
|
$
|
—
|
$
|
143,000
|
||||||||
Securities owned, at fair value
|
||||||||||||||||
U.S. government securities*
|
$
|
2,042,000
|
$
|
—
|
$
|
—
|
$
|
2,042,000
|
||||||||
Corporate bonds
|
—
|
23,000
|
—
|
23,000
|
||||||||||||
Equity securities
|
161,000
|
148,000
|
—
|
309,000
|
||||||||||||
Total Securities owned, at fair value
|
$
|
2,203,000
|
$
|
171,000
|
$
|
—
|
$
|
2,374,000
|
||||||||
Liabilities
|
||||||||||||||||
Securities sold, not yet purchased, at fair value
|
||||||||||||||||
Equity securities
|
$
|
—
|
$
|
17,000
|
$
|
—
|
$
|
17,000
|
||||||||
Total Securities sold, not yet purchased, at fair value
|
$
|
—
|
$
|
17,000
|
$
|
—
|
$
|
17,000
|
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 |
||||||
Six Months Ended June 30, 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 – June 30, 2020
|
$
|
—
|
As of
June 30, 2020
|
As of
December 31, 2019
|
|||||||
Assets
|
||||||||
Lease right-of-use assets
|
$
|
3,062,000
|
$
|
3,951,000
|
||||
Liabilities
|
||||||||
Lease liabilities
|
$
|
3,443,000
|
$
|
4,409,000
|
Lease Term and Discount Rate
|
As of
June 30, 2020
|
|||
Weighted average remaining lease term – operating leases (in years)
|
2.3
|
|||
Weighted average discount rate – operating leases
|
5.0
|
%
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Operating lease cost
|
$
|
575,000
|
$
|
396,000
|
$
|
1,146,000
|
$
|
759,000
|
||||||||
Short-term lease cost
|
24,000
|
110,000
|
63,000
|
240,000
|
||||||||||||
Variable lease cost
|
99,000
|
87,000
|
216,000
|
125,000
|
||||||||||||
Sublease income
|
—
|
—
|
—
|
—
|
||||||||||||
Total Rent and occupancy
|
$
|
698,000
|
$
|
593,000
|
$
|
1,425,000
|
$
|
1,124,000
|
||||||||
Cash paid for amounts included in the measurement of lease liabilities
|
||||||||||||||||
Operating cash flows from operating leases
|
$
|
617,000
|
$
|
444,000
|
$
|
1,231,000
|
$
|
826,000
|
||||||||
Lease right-of-use assets obtained in exchange for new lease liabilities
|
||||||||||||||||
Operating leases
|
$
|
160,000
|
$
|
106,000
|
$
|
2,075,000
|
$
|
4,943,000
|
Year
|
Amount
|
|||
2020
|
$
|
1,214,000
|
||
2021
|
1,208,000
|
|||
2022
|
624,000
|
|||
2023
|
543,000
|
|||
2024
|
56,000
|
|||
Remaining balance of lease payments
|
3,645,000
|
|||
Difference between undiscounted cash
flows and discounted cash flows
|
202,000
|
|||
Lease liabilities
|
$
|
3,443,000
|
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
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||||
Revenue Category
|
2020
|
2019
|
2020
|
2019
|
Timing of Recognition
|
||||||||||||
Trading Execution and Clearing Services
|
|||||||||||||||||
Commissions and fees
|
$
|
4,887,000
|
$
|
2,591,000
|
$
|
10,470,000
|
$
|
4,859,000
|
Recorded on trade date
|
||||||||
Principal transactions
|
2,581,000
|
1,921,000
|
5,784,000
|
3,811,000
|
Recorded on trade date
|
||||||||||||
Market making
|
615,000
|
410,000
|
1,085,000
|
973,000
|
Recorded on trade date
|
||||||||||||
Stock borrow / stock loan
|
771,000
|
423,000
|
1,215,000
|
1,004,000
|
Recorded as earned
|
||||||||||||
Advisory fees
|
243,000
|
193,000
|
505,000
|
361,000
|
Recorded as earned
|
||||||||||||
Total Trading Execution and Clearing Services
|
9,097,000
|
5,538,000
|
19,059,000
|
11,008,000
|
|||||||||||||
Other Income
|
|||||||||||||||||
Margin interest, marketing and distribution fees
|
|||||||||||||||||
Margin interest
|
1,829,000
|
2,870,000
|
4,335,000
|
5,687,000
|
Recorded as earned
|
||||||||||||
12b1 fees
|
296,000
|
823,000
|
1,084,000
|
1,562,000
|
Recorded as earned
|
||||||||||||
Total Margin interest, marketing and distribution fees
|
2,125,000
|
3,693,000
|
5,419,000
|
7,249,000
|
|||||||||||||
Interest income
|
909,000
|
1,186,000
|
2,240,000
|
2,359,000
|
Recorded as earned
|
||||||||||||
Other income
|
488,000
|
264,000
|
702,000
|
343,000
|
Recorded as earned
|
||||||||||||
Total Other Income
|
3,522,000
|
5,143,000
|
8,361,000
|
9,951,000
|
|||||||||||||
Total Revenue
|
$
|
12,619,000
|
$
|
10,681,000
|
$
|
27,420,000
|
$
|
20,959,000
|
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
|
|
As of June 30,
|
||||||||
2020
|
2019
|
|||||||
Retail customer margin debit balances (in billions)
|
$
|
0.4
|
$
|
0.3
|
||||
Retail customer credit balances (in billions)
|
$
|
0.6
|
$
|
0.6
|
||||
Retail customer money market fund value (in billions)
|
$
|
0.7
|
$
|
0.6
|
||||
Retail customer net worth (in billions)
|
$
|
12.3
|
$
|
12.5
|
||||
Retail customer accounts
|
109,294
|
104,551
|
•
|
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
June 30, 2020
|
||||
Institutional customer net worth (in billions)
|
$
|
1.3
|
•
|
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
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Total retail trades
|
120,821
|
74,944
|
241,316
|
154,298
|
||||||||||||
Average commission per retail trade
|
$
|
14.96
|
$
|
18.77
|
$
|
15.21
|
$
|
18.83
|
•
|
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
|
$
|
1,214,000
|
||
2021
|
1,208,000
|
|||
2022
|
624,000
|
|||
2023
|
543,000
|
|||
2024
|
56,000
|
|||
Total
|
$
|
3,645,000
|
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: August 13, 2020
|
|