Acquisitions (Tables)

9 Months Ended

Sep. 30, 2020

Schedule of Assets Acquired and Liabilities Assumed

The Company acquired various assets and liabilities from StockCross which were recorded at their historical carrying amounts and summarized below:

	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

Schedule of Statements of Operations

The following pro forma financial statements present the statements of income of the Company as if the acquisition of StockCross had occurred on January 1, 2019, inclusive of pro forma adjustments (unaudited). The combined results of these pro forma financial statements are also reflected in the Company’s financial statements for the periods presented for 2019. StockCross’ financial statements have already been consolidated in the Company’s financial statements for the periods presented for 2020:

Statements of Operations

Three Months Ended September 30, 2019 (unaudited)

	Three Months Ended September 30, 2019
	Siebert		StockCross		Pro Forma Adjustments			Total Combined Siebert

Revenue
Commissions and fees	$	1,925,000	$	348,000	$	—		$	2,273,000
Margin interest, marketing and distribution fees		2,944,000		968,000		—			3,912,000
Principal transactions		2,041,000		286,000		—			2,327,000
Interest income		23,000		1,038,000		—			1,061,000
Market making		—		330,000		—			330,000
Stock borrow / stock loan		—		349,000		—			349,000
Advisory fees		211,000		—		—			211,000
Other income		—		351,000		(61,000	)		290,000
Total Revenue		7,144,000		3,670,000		(61,000	)		10,753,000

Expenses
Employee compensation and benefits		3,157,000		1,652,000		—			4,809,000
Clearing fees, including execution costs		617,000		242,000		(61,000	)		798,000
Technology and communications		291,000		150,000		—			441,000
Other general and administrative		589,000		279,000		—			868,000
Data processing		—		527,000		—			527,000
Rent and occupancy		380,000		250,000		—			630,000
Professional fees		439,000		344,000		—			783,000
Depreciation and amortization		244,000		—		—			244,000
Interest expense		—		31,000		—			31,000
Total Expenses		5,717,000		3,475,000		(61,000	)		9,131,000

Earnings of equity method investment in related party		30,000		—		(30,000	)		—

Income before provision (benefit) for (from) income taxes		1,457,000		195,000		(30,000	)		1,622,000
Provision (benefit) for (from) income taxes		353,000		4,000		(8,000	)		349,000
Net income / (loss)	$	1,104,000	$	191,000	$	(22,000	)	$	1,273,000

Net income per share of common stock
Basic and diluted	$	0.04	$	0.03				$	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

Nine Months Ended September 30, 2019 (unaudited)

	Nine Months Ended September 30, 2019
	Siebert		StockCross		Pro Forma Adjustments			Total Combined Siebert

Revenue
Commissions and fees	$	6,030,000	$	1,102,000	$	—		$	7,132,000
Margin interest, marketing and distribution fees		8,499,000		2,662,000		—			11,161,000
Principal transactions		5,479,000		659,000		—			6,138,000
Interest income		54,000		3,363,000		—			3,417,000
Market making		—		1,303,000		—			1,303,000
Stock borrow / stock loan		—		1,353,000		—			1,353,000
Advisory fees		572,000		—		—			572,000
Other income		—		816,000		(183,000	)		633,000
Total Revenue		20,634,000		11,258,000		(183,000	)		31,709,000

Expenses
Employee compensation and benefits		8,882,000		4,930,000		—			13,812,000
Clearing fees, including execution costs		1,849,000		659,000		(183,000	)		2,325,000
Technology and communications		800,000		464,000		—			1,264,000
Other general and administrative		1,861,000		926,000		—			2,787,000
Data processing		—		1,487,000		—			1,487,000
Rent and occupancy		995,000		759,000		—			1,754,000
Professional fees		1,388,000		1,180,000		—			2,568,000
Depreciation and amortization		670,000		19,000		—			689,000
Interest expense		—		84,000		—			84,000
Total Expenses		16,445,000		10,508,000		(183,000	)		26,770,000

Earnings of equity method investment in related party		84,000		—		(84,000	)		—

Income before provision (benefit) for (from) income taxes		4,273,000		750,000		(84,000	)		4,939,000
Provision (benefit) for (from) income taxes		1,171,000		218,000		(24,000	)		1,365,000
Net income / (loss)	$	3,102,000	$	532,000	$	(60,000	)	$	3,574,000

Net income per share of common stock
Basic and diluted	$	0.11	$	0.09				$	0.12

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

Schedule of Statements of Financial Condition

Statements of Financial Condition

	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
Current portion of 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

Schedule of Proforma Statements

The following pro forma summary presents the statements of income of the Company as if the acquisition of WP had occurred on January 1, 2019, inclusive of pro forma adjustments (unaudited). WP’s financial statements have already been consolidated as part of the Company’s financial statements for the periods presented for 2020.

	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Revenue	$	14,372,000	$	41,191,000
Operating income	$	1,905,000	$	3,693,000
Net income	$	1,577,000	$	2,407,000