Kakaopay Transaction	9 Months Ended
Sep. 30, 2023
Kakaopay Transaction [Abstract]
Kakaopay Transaction	5. Kakaopay Transaction On April 27, 2023, Siebert entered into a Stock Purchase Agreement with Kakaopay (the “First Tranche Stock Purchase Agreement”), pursuant to which Siebert agreed to issue to Kakaopay Corporation (“Kakaopay”), a company established under the Laws of the Republic of Korea and a fintech subsidiary of Korean-based conglomerate Kakao Corp., 8,075,607 shares of Siebert’s common stock (the “First Tranche Shares” and, such transaction, the “First Tranche”) at a per share price of Two Dollars Fifteen Cents ($2.15), which represented 19.9% of the outstanding equity securities of Siebert on a fully diluted basis (taking into account the issuance of the First Tranche Shares). The First Tranche closed on May 18, 2023. Concurrent with the execution of the First Tranche Stock Purchase Agreement, Siebert and Kakaopay entered into a second Stock Purchase Agreement (the “Second Tranche Stock Purchase Agreement” and, together with the First Tranche Stock Purchase Agreement, the “Stock Purchase Agreements”), pursuant to which Siebert agreed to issue to Kakaopay an additional 25,756,470 shares of Siebert’s common stock (the “Second Tranche Shares” and, such transaction, the “Second Tranche”) at a per share price of Two Dollars Thirty Five Cents ($2.35), so that Kakaopay will own 51% of the outstanding equity securities of Siebert on a fully diluted basis (taking into account the issuance of the First Tranche Shares and the Second Tranche Shares). The consummation of the Second Tranche is subject to a number of conditions, which have not yet been satisfied as of the date of this Report. The conditions to Kakaopay’s obligation to close the Second Tranche include, among others, (i) the affirmative vote of a majority of the outstanding shares of Siebert’s common stock and the affirmative vote of the holders of a majority of the outstanding shares of Siebert’s common stock not beneficially owned, directly or indirectly, by certain family members related to Directors John J. Gebbia and Gloria E. Gebbia (“Gebbia Stockholders”), Kakaopay or any of their respective affiliates, (ii) approval by FINRA, (iii) favorable completion of the review by the Committee on Foreign Investment in the United States (“CFIUS”), (iv) certain performance conditions relating to order execution and the execution of employment and consulting agreements for key personnel of Siebert and MSCO, (v) the approvals in connection to the filing of an overseas direct investment report as required under the Foreign Exchange Transactions Act of the Republic of Korea, and, if applicable in accordance with applicable law, any antitrust report or filing with the Korea Fair Trade Commission shall have been obtained or provided, (vi) the listing by Siebert of the Second Tranche Shares on the Nasdaq Capital Market, (vii) the accuracy of certain representations and warranties of Siebert as of the closing of the Second Tranche, (viii) the absence of any material adverse effect having occurred with respect to Siebert between April 27, 2023 and the closing of the Second Tranche, and (ix) the performance by Siebert of all covenants, agreements and obligations required to be performed by it prior to the closing of the Second Tranche. The conditions to Siebert’s obligation to close the Second Tranche include, among others, (i) the affirmative vote of the holders of a majority of the outstanding shares of Siebert’s common stock not beneficially owned, directly or indirectly, by the Gebbia Stockholders, Kakaopay or any of their respective affiliates, (ii) approval by FINRA, (iii) favorable completion of the review by CFIUS, (iv) the accuracy of certain representations and warranties of Kakaopay as of the closing of the Second Tranche, (v) the absence of any material adverse effect having occurred with respect to Kakaopay between April 27, 2023 and the closing of the Second Tranche, and (vi) the performance by Kakaopay of all covenants, agreements and obligations required to be performed by it prior to the closing of the Second Tranche. Refer to the Company’s Current Report on Form 8-K filed on May 3, 2023, incorporated herein by reference, for further detail regarding this transaction. Since the closing of the First Tranche, Korean authorities have taken action against Kakaopay, its parent company, Kakao Corp., and their affiliates. In addition, Kakao Corp., recently announced that it will establish an independent compliance committee for Kakao Corp. and its subsidiaries to address what it described as the current crisis at Kakao Corp. and its subsidiaries. Siebert believes these events have had a material adverse effect on both Kakaopay and its ability to perform its obligations under the Second Tranche Stock Purchase Agreement and consummate the transactions contemplated therein. Accordingly, on November 11, 2023, Siebert delivered a notice to Kakaopay stating that a material adverse effect had occurred with respect to Kakaopay and that, as a result, Siebert’s conditions to closing will not be satisfied. The notice also specified that Kakaopay has indicated that it has no intention of satisfying the conditions precedent to Siebert preparing the proxy statement contemplated by the Second Tranche Stock Purchase Agreement. Siebert is considering its rights and obligations under the Second Tranche Stock Purchase Agreement, including evaluating whether and under what circumstances the Second Tranche Stock Purchase Agreement might be terminated, and has reserved all of its rights and remedies, including Siebert’s right to assert that Kakaopay has materially breached a number of covenants in the Second Tranche Stock Purchase Agreement. On November 12, 2023, Kakaopay delivered a letter in response to the notice that expressed Kakaopay’s disagreement with the statements in the notice. As a result of the foregoing, Siebert has incurred and may incur additional legal expenses evaluating these matters, the amount of which is uncertain as of the date hereof. As of December 31, 2022, the Company capitalized deferred issuance costs related to this transaction of $318,000, which was recorded within the line item “Prepaid expenses and other assets” in the statements of financial condition. At the time of the issuance, the total deferred issuance cost of $1,907,000 related to this transaction was reclassified as a reduction to “Additional paid-in capital” in stockholders’ equity in the statements of financial condition. During the nine months ended September 30, 2023, the Company recognized $1,589,000 of issuance costs related to this transaction. During the three and nine months ended September 30, 2023, the Company incurred deferred issuance costs related to the Second Tranche of $58,000, which was recorded within the line item “Prepaid expenses and other assets” in the statements of financial condition. On May 22, 2023, Gloria E. Gebbia issued a warrant to BCW Securities LLC, a Delaware limited liability company (“BCW”), to purchase 403,780 shares of common stock of the Company held by Ms. Gebbia at an exercise price of $2.15 per share. Ms. Gebbia issued the warrant pursuant to that certain agreement, dated March 27, 2023, by and among Ms. Gebbia, the Company and BCW relating to the investment by Kakaopay in the Company.

Kakaopay Transaction

9 Months Ended

Sep. 30, 2023

5. Kakaopay Transaction

On April 27, 2023, Siebert entered into a Stock Purchase Agreement with Kakaopay (the “First Tranche Stock Purchase Agreement”), pursuant to which Siebert agreed to issue to Kakaopay Corporation (“Kakaopay”), a company established under the Laws of the Republic of Korea and a fintech subsidiary of Korean-based conglomerate Kakao Corp., 8,075,607 shares of Siebert’s common stock (the “First Tranche Shares” and, such transaction, the “First Tranche”) at a per share price of Two Dollars Fifteen Cents ($2.15), which represented 19.9% of the outstanding equity securities of Siebert on a fully diluted basis (taking into account the issuance of the First Tranche Shares). The First Tranche closed on May 18, 2023.

Concurrent with the execution of the First Tranche Stock Purchase Agreement, Siebert and Kakaopay entered into a second Stock Purchase Agreement (the “Second Tranche Stock Purchase Agreement” and, together with the First Tranche Stock Purchase Agreement, the “Stock Purchase Agreements”), pursuant to which Siebert agreed to issue to Kakaopay an additional 25,756,470 shares of Siebert’s common stock (the “Second Tranche Shares” and, such transaction, the “Second Tranche”) at a per share price of Two Dollars Thirty Five Cents ($2.35), so that Kakaopay will own 51% of the outstanding equity securities of Siebert on a fully diluted basis (taking into account the issuance of the First Tranche Shares and the Second Tranche Shares). The consummation of the Second Tranche is subject to a number of conditions, which have not yet been satisfied as of the date of this Report. The conditions to Kakaopay’s obligation to close the Second Tranche include, among others, (i) the affirmative vote of a majority of the outstanding shares of Siebert’s common stock and the affirmative vote of the holders of a majority of the outstanding shares of Siebert’s common stock not beneficially owned, directly or indirectly, by certain family members related to Directors John J. Gebbia and Gloria E. Gebbia (“Gebbia Stockholders”), Kakaopay or any of their respective affiliates, (ii) approval by FINRA, (iii) favorable completion of the review by the Committee on Foreign Investment in the United States (“CFIUS”), (iv) certain performance conditions relating to order execution and the execution of employment and consulting agreements for key personnel of Siebert and MSCO, (v) the approvals in connection to the filing of an overseas direct investment report as required under the Foreign Exchange Transactions Act of the Republic of Korea, and, if applicable in accordance with applicable law, any antitrust report or filing with the Korea Fair Trade Commission shall have been obtained or provided, (vi) the listing by Siebert of the Second Tranche Shares on the Nasdaq Capital Market, (vii) the accuracy of certain representations and warranties of Siebert as of the closing of the Second Tranche, (viii) the absence of any material adverse effect having occurred with respect to Siebert between April 27, 2023 and the closing of the Second Tranche, and (ix) the performance by Siebert of all covenants, agreements and obligations required to be performed by it prior to the closing of the Second Tranche. The conditions to Siebert’s obligation to close the Second Tranche include, among others, (i) the affirmative vote of the holders of a majority of the outstanding shares of Siebert’s common stock not beneficially owned, directly or indirectly, by the Gebbia Stockholders, Kakaopay or any of their respective affiliates, (ii) approval by FINRA, (iii) favorable completion of the review by CFIUS, (iv) the accuracy of certain representations and warranties of Kakaopay as of the closing of the Second Tranche, (v) the absence of any material adverse effect having occurred with respect to Kakaopay between April 27, 2023 and the closing of the Second Tranche, and (vi) the performance by Kakaopay of all covenants, agreements and obligations required to be performed by it prior to the closing of the Second Tranche. Refer to the Company’s Current Report on Form 8-K filed on May 3, 2023, incorporated herein by reference, for further detail regarding this transaction.

Since the closing of the First Tranche, Korean authorities have taken action against Kakaopay, its parent company, Kakao Corp., and their affiliates. In addition, Kakao Corp., recently announced that it will establish an independent compliance committee for Kakao Corp. and its subsidiaries to address what it described as the current crisis at Kakao Corp. and its subsidiaries. Siebert believes these events have had a material adverse effect on both Kakaopay and its ability to perform its obligations under the Second Tranche Stock Purchase Agreement and consummate the transactions contemplated therein. Accordingly, on November 11, 2023, Siebert delivered a notice to Kakaopay stating that a material adverse effect had occurred with respect to Kakaopay and that, as a result, Siebert’s conditions to closing will not be satisfied. The notice also specified that Kakaopay has indicated that it has no intention of satisfying the conditions precedent to Siebert preparing the proxy statement contemplated by the Second Tranche Stock Purchase Agreement. Siebert is considering its rights and obligations under the Second Tranche Stock Purchase Agreement, including evaluating whether and under what circumstances the Second Tranche Stock Purchase Agreement might be terminated, and has reserved all of its rights and remedies, including Siebert’s right to assert that Kakaopay has materially breached a number of covenants in the Second Tranche Stock Purchase Agreement. On November 12, 2023, Kakaopay delivered a letter in response to the notice that expressed Kakaopay’s disagreement with the statements in the notice. As a result of the foregoing, Siebert has incurred and may incur additional legal expenses evaluating these matters, the amount of which is uncertain as of the date hereof.

As of December 31, 2022, the Company capitalized deferred issuance costs related to this transaction of $318,000, which was recorded within the line item “Prepaid expenses and other assets” in the statements of financial condition. At the time of the issuance, the total deferred issuance cost of $1,907,000 related to this transaction was reclassified as a reduction to “Additional paid-in capital” in stockholders’ equity in the statements of financial condition. During the nine months ended September 30, 2023, the Company recognized $1,589,000 of issuance costs related to this transaction.

During the three and nine months ended September 30, 2023, the Company incurred deferred issuance costs related to the Second Tranche of $58,000, which was recorded within the line item “Prepaid expenses and other assets” in the statements of financial condition.

On May 22, 2023, Gloria E. Gebbia issued a warrant to BCW Securities LLC, a Delaware limited liability company (“BCW”), to purchase 403,780 shares of common stock of the Company held by Ms. Gebbia at an exercise price of $2.15 per share. Ms. Gebbia issued the warrant pursuant to that certain agreement, dated March 27, 2023, by and among Ms. Gebbia, the Company and BCW relating to the investment by Kakaopay in the Company.