8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  December 2, 2019

SIEBERT FINANCIAL CORP.

(Exact name of registrant as specified in its charter)

New York	0-5703	11-1796714
(State or other jurisdiction of	(Commission File Number)	(IRS Employer Identification Number)
incorporation)

120 Wall Street, New York, New York	10005
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:(212) 644-2400

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐Written communications pursuant to Rule 425 under the Securities Act

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company      ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

EXPLANATORY NOTE

On December 4, 2019, Siebert Financial Corp. (the “Company”) (NASDAQ: SIEB), filed a Current Report on Form 8-K (the “Original Form 8-K”) reporting, among other items, that on December 2, 2019 the Company completed its acquisition of all of the member interests of Weeden Prime Services, LLC, a broker-dealer registered with the SEC offering prime brokerage services.

This Amendment No. 1 to the Original Form 8-K is being filed solely to include the financial statements and financial information required under Item 9.01, which statements and information were excluded from the Original Form 8-K in reliance on paragraphs (a)(4) and (b)(2) of Item 9.01 of Form 8-K. Except as stated in this Explanatory Note, no other information contained in the Original Form 8-K is changed.

Forward-Looking Statements.

This Current Report on Form 8-K/A contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements typically are identified by use of terms such as “may,” “project,” “should,” “plan,” “expect,” “anticipate,” “believe,” “estimate” and similar words. Except as required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The Company’s actual results could differ materially from those contained in forward-looking statements due to a number of factors, including the statements under “Risk Factors” found in the Company’s Annual Reports on Form 10-K and its Quarterly Reports on Form 10-Q filed with the SEC.

Item 9.01. Financial Statements and Exhibits.

(a)  Financial statements of businesses acquired.

Audited financial statements and the accompanying notes of Weeden Prime Services, LLC for the year ended December 31, 2018, attached hereto as Exhibit 99.2 and incorporated herein by reference.

 (b)  Pro forma financial information.

Unaudited pro forma financial statements and the accompanying notes for the nine months ended September 30, 2019 and the fiscal year ended December 31, 2018 attached hereto as Exhibit 99.3 and incorporated herein by reference.

(d)          Exhibits

99.1Equity Interests Purchase Agreement, dated as of September 27, 2019, by and among Siebert Financial Corp., Weeden Investors L.P. and Weeden Securities Corporation (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed by the Company on October 3, 2019).

99.2Audited financial statements and the accompanying notes of Weeden Prime Services, LLC for the year ended December 31, 2018.

99.3Unaudited pro forma financial statements and the accompanying notes for the nine months ended September 30, 2019 and the fiscal year ended December 31, 2018.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated:  February 14, 2020
	By:	/s/ Andrew H. Reich
		Andrew H. Reich
		EVP, Chief Operating Officer, Chief Financial Officer and Secretary

EX-99.2

Exhibit 99.2

WEEDEN PRIME SERVICES, LLC

FINANCIAL STATEMENTS WITH SUPPLEMENTARY INFORMATION

AND

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

DECEMBER  31, 2018

(CONFIDENTIAL PURSUANT TO RULE 17a-5(e)(3)

AND CFTC REGULATION 1.10)

CONFIDENTIAL TREATMENT REQUESTED
UNITED STATES SECURITIES AND EXCHANGE COMMISSION  Washington, D.C. 20549 0MB APPROVAL 0MB Number :  3235-0123 Expires:   August 31 , 2020 Estimated average burden hours per response.......12.00

ANNUAL AUDITED REPORT
FORM X-17A-5	SEC FILE NUMBER 8-67787
PART Ill

FACING PAGE

Information Required of Brokers and Dealers Pursuant to Section 17 of the

Securities Exchange Act of 1934 and Rule 17a-5 Thereunder

REPORT FOR THE PERIOD BEGINNING	1/1/2018	AND ENDING	12/31/2018
	MM/DD/YY		M/DD/YY

A. REGISTRANT IDENTIFICATION

NAME OF BROKER-DEALER: Weeden Prime Services, LLC  OFFICIAL USE ONLY   FIRM 1.0. NO.

ADDRESS OF PRINCIPAL PLACE OF BUSINESS : (Do not use P.O. Box No .)

145 Mason Street
	(No. and Street)

Greenwich	CT	06830
(City)	(State)	(Zip Code)

NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT

Justyna Keilty	203-861-7605
	(Area Code - Telephone Number )

B.  ACCOUNTANT IDENTIFICATION

INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report*

CohnReznick LLP
	(Name - if individual , state last. first. middle name)

1301 Avenue of the Americas,	New York	NY	10019
(Address)	(City)	(State)	(Zip Code)

CHECK ONE:

☐ Certified Public Accountant

☑ Public Accountant

☐ Accountant not resident in United States or any of its possessions.

FOR OFFICIAL USE ONLY

*Claims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement of facls and circumstances relied on as the basis for the exemplio n. See Section 240. J7a-5( e)(2)

SEC 1410 (11-05) Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid 0MB control number.

 

 

WEEDEN PRIME SERVICES, LLC

Facing Page
Report of Independent Registered Public Accounting Firm	1
Financial Statements
Statement of Financial Condition	2
Statement of Operations	3
Statement of Changes in Members' Equity	4
Statement of Cash Flows	5
Notes to Financial Statements	6 - 13

 

Supplementary Information
Schedule I - Computation of Net Capital Under Rule 15c3-1 of the Securities and Exchange Commission and Regulation 1.17 of the Commodity Futures Trading Commission	14
Schedule II - Computation for Determination of Reserve Requirements and Information Relating to Possession or Control Requirements Under Rule 15c3-3 of the Securities and Exchange Commission	15

 

CohnReznick LLP cohnreznlck.com  

 

Report of Independent Registered Public Accounting Firm

To the Board of Managers and Shareholders

of Weeden Prime Services, LLC

Opinion on the Financial Statements

We have audited the accompanying statement of financial condition of Weeden Prime Services, LLC as of December 31, 2018, and the related statements of operations, changes in members' equity, and cash flows for the year then ended, and the related notes and schedules (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of Weeden Prime Services, LLC as of December 31, 2018, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of Weeden Prime Services, LLC's management. Our responsibility is to express an opinion on Weeden Prime Services, LLC's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to Weeden Prime Services,  LLC in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatemen,twhether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Auditor's Report. on Supplemental Information

The supplemental information contained in Schedules I and II has been subjected to audit procedures performed in conjunction with the audit of Weeden Prime Services, LLC's financial statements. The supplemental information is the responsibility of Weeden Prime Services, LLC's management. Our audit procedures included determining whether the supplemental information reconciles to  the  financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 C.F.R. §240.17a-5. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.

We have served as Weeden Prime Services, LLC's auditor since 2012.

 

New York, New York

March 1, 2019

WEEDEN PRIME SERVICES, LLC

STATEMENT OF FINANCIAL CONDITION

DECEMBER 31, 2018

ASSETS

Cash	$	452,731
Cash segregated under Federal regulations		189,644
Receivable from clearing brokers, net		4,293,655
Furnishings, computers and software, net		98,752
Other assets and security deposits		273,346
Total	$	5,308,128

LIABILITIES AND MEMBERS' EQUITY

Liabilities : 

Accounts payable, accrued expenses and other liabilities	$	1,714,049
Due to related parties		22,765
Total liabilities		1,736,814
Commitments
Members' equity		3,571,314
Total	$	5,308,128

See Notes to Financial Statements.

2

WEEDEN PRIME SERVICES, LLC

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2018

Revenue: 

Commissions	$	9,869,162
Interest income		2,610,990
Other income		1,086,443
Gross revenue		13,566,595
Reseach		(610,734	)
Net Revenue		12,955,861

Expenses: 

Employee compensation, commissions and benefits		5,268,793
Floor brokerage, exchange and clearing charges		3,620,652
Professional fees		665,073
Communications, quotation and electronic services		531,787
Occupancy		483,094
Referral fees		1,548,028
Registration		53,891
Insurance		18,363
Legal contingency		600,000
Depreciation and amortization		122,183
Other		439,021
Total expenses		13,350,885
Net Loss	$	(395,024	)

See Notes to Financial Statements.

3

WEEDEN PRIME SERVICES, LLC

STATEMENT OF CHANGES IN MEMBERS' EQUITY

YEAR ENDED DECEMBER 31, 2018

Balance, beginning of year	$	3,966,338
Capital contributions		0
Net loss		(395,024	)
Balance, end of year	$	3,571,314

See Notes to Financial Statements.

4

WEEDEN PRIME SERVICES, LLC

STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2018

Operating activities: 

Net Loss	$	(395,024	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		122,183
Changes in operating assets and liabilities:
Receivable from clearing brokers, net		(304,748	)
Other assets and security deposits		(28 ,660	)
Accounts payable, accrued expenses and other liabilities		931,898
Due to related parties		(98,600	)
Net cash provided by operating activities		227,049

Investing activities:

Purchases of fixed assets and capitalized software development costs		(9,161	)
Net cash used in investing activities		(9,161	)
Net increase in cash		217,888
Cash and cash segregated, beginning of year		424,487
Cash and cash segregated, end of year	$	642,375

See Notes to Financial Statements.

5

WEEDEN PRIME SERVICES, LLC

Note 1 - Organization

Weeden Prime Services, LLC (the "Company") is a Delaware limited liability company, originally organized as a corporation under the laws of the State of Florida  on April 6,  2007. The Company is a registered broker-dealer with the Securities and Exchange Commission ("SEC") and Commodity Futures Trading Commission ("CFTC"), and is a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"), National Futures Association ("NFA"), and Securities Investor Protection Corporation ("SIPC"). The Company's operations consist primarily of  trade  execution  and  risk  management services for customers and is an introducing broker for the transactions of institutional customers.

The Company is comprised of two members, Weeden Securities  Corporation  ("WSC"), and Weeden Investors, L.P. ("WILP"). The Company is managed  by  a  Board  of Managers which has the authority and discretion to  conduct  and oversee  all aspects  of its business and affairs.

As of December 31, 2018 the Company has agreements with four broker-dealers ("clearing brokers") to clear transactions, carry customers' accounts on a fully disclosed basis and perform record keeping functions, and consequently operates under the exemptive provisions of SEC rule 15c3-3(k)(2)(ii).

Note 2 - Summary of significant accounting policies

Basis of Presentation

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP").

These financial statements were approved by management and available for issuance on March 1, 2019 .

Subsequent events have been evaluated from the date these statements were approved  by management and available for issuance.

The Company has a history of recurring losses from operations and of using cash in operating activities. For the year  ended  December  31,  2018,  the Company's  net loss was   $395,024;  however   cash  was  provided  by  operating   activities   in  the  amount of $227,049. Revenues have increased 7%  and  23%  in  2017  and  2018,  respectively. Cash and receivable from clearing brokers total $4,936,030  and the Company  continues  to  meet  all  current   obligations. Regulatory   net  capital  at  December 31, 2018 was $3,199,216. Based on its cash and receivable from clearing brokers balance at December 31, 2018, its cash usage expectations for the remainder of 2019, the availability of capital contributions from WILP and WSC as well as the ability to curtail expenses and discontinue its relationships with certain of its clearing brokers if the need arises, management believes the Company will have sufficient liquidity to fund itsoperations and meet its obligations as they become due for at least the next 12 month period from the date of issuance.

6

WEEDEN PRIME SERVICES, LLC

NOTES TO FINANCIAL STATEMENTS

Furnishings, Computers, and Software

Amortization of internally created software is provided for using the straight-line method over five years. Depreciation for all other capitalized assets is provided for over the estimated useful lives of the related assets, generally five to seven years, using the straight-line method.

The Company accounts for costs incurred in connection with  the  development  of  software in accordance with guidance on accounting for costs of computer software developed or obtained for internal use. Accordingly, all costs in the preliminary project  stage are expensed as incurred. Internal and external costs  incurred to develop internal use computer software during the application's development state are capitalized. Upgrades and enhancements that result in additional functionality are also capitalized.

Revenue Recognition

The Company has adopted ASU 2014-09 as defined below and all related amendments and applied is provisions using the modified retrospective method. There was no cumulative effect of retrospectively applying ASC 606 as defined below and no adjustments to members' capital as of January 1, 2018.

Commission income is earned and related  clearing  expenses  are  incurred  from execution of customer's securities transactions and are recorded on a trade date basis. Interest income, which predominantly represents interest charged on debit balances in customer margin accounts, and other income, including referral fees, are recorded when incurred or in accordance with associated agreements.

In May 2014, the Financial Accounting Standards Board ("FASS") issued ASU 2014-09, Revenue from Contracts with Customers, as a new Topic, ASC 606. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a  company  should  recognize revenue to depict the transfer of promised goods or services to customers in an amount  that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Revenue from contracts with customers includes commission income. Commissions and related clearing expenses  are  recorded  on  the  trade  date (the date that the Company fills the trade order by finding and contracting with a counterparty and confirms the trade with the customer). The Company believes that the performance obligation is satisfied on the trade date because that is when the underlying financial instrument or purchaser is identified, the  pricing  is agreed  upon  and the risks and rewards of ownership have been transferred to/from the customer.  The adoption  of this standard did not change the accounting for the majority of the Company's revenue arrangements except as disclosed below as it relates to soft dollar arrangements.

7

WEEDEN PRIME SERVICES, LLC

NOTES TO FINANCIAL STATEMENTS

Income Taxes

The Company is a multi-member limited liability company and files a U.S. Partnership return.

The Internal Revenue Code ("IRC") provides that any income or loss, for either a single member or multi-member limited liability company, is passed through to the members for Federal and state income tax purposes. Accordingly, the Company has not provided for Federal or state income taxes. The Company is subject to the New York City Unincorporated Business Tax ("UBT").

At December 31, 2018, management has determined  that  the  Company  had  no uncertain tax positions that would require financial statement recognition . This determination will be subject to ongoing reevaluation as facts and circumstances may require. The Company remains  subject  to U.S.  Federal and state income tax audits  for  all periods subsequent to 2015.

Soft Dollar Arrangements

The Company has soft dollar and commission sharing arrangements with customers that fall both within, and outside of, the safe harbor provisions of Rule 28(e) of the Securities Exchange Act of 1934 ("Rule 28(e)"), as amended, which provides for the payment of research, brokerage, quote services and other expenses.

Research services provided by the Company to customers in soft-dollar  arrangements were determined to be a separate performance obligation that should be  allocated  a portion of the transaction price. Research services provided by a broker-dealer may be internally generated or provided by a third party and paid directly by the broker-dealer on the customer's behalf. It was determined that the Company is considered an agent  as it does not control the research services before they are transferred to the customer. Therefore,  fees received for research services  should be recorded net of  amounts paid  for the soft dollar arrangement. These amounts paid by the Company were previously recorded as an expense and beginning January 1, 2018 were recorded as an offset  with the associated revenue recorded. The amounts  recorded  as  a net to revenue  during  2018 were $610,734.

Amounts relating to all customers with a positive total balance are reflected in the accompanying statement of financial condition in accrued expenses. Such amounts represent the estimated third-party research services and other services to be provided to all customers from whom the Company has earned commissions for execution of brokerage transactions or revenue from direct sales. The provision for uncollectible commissions is determined under the direct write-off method, which is not materially different from the allowance method. As of December 31, 2018, no allowance for uncollectible commissions was necessary as management believes all commissions receivable and prepaid research costs will be realized.

8

WEEDEN PRIME SERVICES, LLC

NOTES TO FINANCIAL STATEMENTS

The amount of third-party research and  other  services  that the Company  will furnish  to its customers is based on the amount of commissions that the Company receives or expects to receive for execution of brokerage transactions and is measured by the Company in terms of commission total  balance  (commissions  paid  less  service provided). It is understood by the customers and the Company that the commission total balance is not redeemable in cash and, when redeemed, may only be used to obtain third-party research and other approved services  through  the  Company. The accumulated commission total balance of customers is reduced when such customers request the Company to provide third-party services.

New Accounting Pronouncements

In February 2016, the FASS issued ("ASU 2016-02 ") Leases (ASC Topic 842), which establishes the principles for the recognition,  measurement,  presentation  and disclosure of leases for both lessees and  lessors.  ASU  2016-02  requires  lessees  to  recognize most leases on their balance  sheets but recognize  expenses  in the income statement  in  a manner similar to current treatment. For lessees, lease classification will determine the manner lease-related expenses are recognized. ASC Topic 842 and all subsequent amendments thereto are effective for reporting periods beginning  after  December  15, 2019 (January 1, 2019 for the Company) for nonpublic reporting entities,  with  early adoption permitted. Management is currently evaluating the  impact  of  adopting  ASC Topic 842 on the Company's financial 2019 statements.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires the Company's management to make estimates and assumptions that affect the amounts disclosed in the financial statements. Actual results could differ from those estimates.

Note 3 - Cash

During 2018, the Company maintained cash accounts in excess of FDIC and SIPC limits. The Company monitors the solvency of the institutions in which these cash accounts are maintained.

Note 4 - Cash segregated under Federal regulations

Cash of $189,644 has been segregated in a special reserve bank account  for the benefit  of customers.

9

WEEDEN PRIME SERVICES, LLC

NOTES TO FINANCIAL STATEMENTS

   

Note 5 - Furnishings, computers and software

Details of furnishings, computers and software at December 31, 2018 are as follows:

Furnishings	$	14,609
Computers		8,588
Software		631,503
Sub-total		654,700
Less accumulated depreciation and amortization		555,948
Total	$	98,752

Note 6 - Net capital requirement

The Company, as a member of FINRA, is subject to the SEC Uniform Net Capital Rule 15c3-1 . This rule requires the maintenance of minimum net capital and that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1 and that equity capital may not be withdrawn  or  cash dividends  paid if the resulting  net capital  ratio would exceed 10 to 1. The Company is also subject  to  the  CFTC's  minimum financial requirements which require that the Company maintain net capital, as defined, equal to the greater of its requirements under Regulation 1.17 under the Commodity Exchange Act or Rule 15c3-1. At December 31, 2018, the Company's net capital was $3,199,216 which was $2,949,216 in excess of its minimum requirement of $250,000 under 15c3-1.

Note 7 - Receivable from clearing brokers

The clearing and depository operations for the Company's transactions are provided by four brokers. For financial reporting purposes, amounts due to brokers have been offset against amounts due from brokers. The total net receivable from brokers at December 31, 2018 was $4,293,655.

In addition, the receivables from the clearing brokers are subject to these clearance agreements and include required clearing deposits of $250,000, $250,000, and $1,000 ,000 , as well as an additional  $750,000 minimum  equity  requirement  to ensure the clearing brokers' obligations.

Note 8 - Off-balance-sheet risk

Pursuant to the clearance agreements, the Company introduces all of its securities transactions to clearing brokers on a fully-disclosed basis. All of the customers' money balances and long and short security positions are carried on the books of the clearing brokers. In accordance with the clearance agreements, the Company has agreed to indemnify the clearing brokers for losses, if any, which the clearing brokers may sustain  from carrying securities transactions introduced by the Company. In accordance with industry practice and regulatory requirements, the Company and the clearing brokers monitor collateral on the customer's accounts.

10

WEEDEN PRIME SERVICES, LLC

NOTES TO FINANCIAL STATEMENTS

In the normal course of business, the Company's customer activities involve the execution, settlement, and financing of the various customer securities transactions. These activities may expose the Company to off-balance-sheet risk in the event the customer or other broker is unable to fulfill its contracted obligation and the Company has to purchase or sell the financial instrument underlying the contract at a loss.

Note 9 - Commitments

The Company has agreements with various third parties to share commissions and pay fees as defined in the respective agreements. Approximately  $1,548,000  was expensed for the year ended December 31, 2018 under these agreements.

On June 1, 2013, the Company entered into a lease with a related party, Weeden  & Co,  LP (the "affiliate"). The terms of the lease were  amended  in March 2014, renewed  on June 1, 2015 and amended again in September 2016. Provided no notice is given, the  lease will continue to auto-renew for one year  terms  until  the  final  auto-renewal beginning on June 1, 2026. On December 1, 2013, the Company entered into a second lease with a non-related party whose term  began  on February  21, 2014  and  will expire on April 30, 2020. The Company has paid a security  deposit  of  $73,081 in accordance with that lease. On June 1, 2018 the Company entered into a third lease with  a non-  related party whose term began on November 1, 2018 and will expire on May 31, 2019.  The aggregate minimum rental commitments under these leases are as follows:

Year Ending
December 31,	Amount
2019	$	511,967
2020		267,647
2021		151,200
2022		151,200
2023		151,200
Thereafter		604,800
Total	$	1,838,014

 

The Company has entered into two sublease agreements, one with a related party which will expire in 2019 and one with a non-related party which will also expire in 2019. For the year ended December 31, 2018, total sublease income amounted to $195,188. Future sublease income of $76,686 for calendar year 2019 is anticipated.

11

WEEDEN PRIME SERVICES, LLC

NOTES TO FINANCIAL STATEMENTS

Note 10 - Concentrations of credit risk

The Company maintains its cash balances at one financial institution. These balances are insured by the Federal Deposit Insurance Corporation up to $250,000 per institution. The Company is subject to credit risk to the extent that the financial institution with which it conducts business is unable to fulfill its contractual obligations.

During the year ended December 31, 2018, approximately 75% of the Company's commission revenues were derived from twenty customers. There was a $73,355 direct receivable due from customers as of December 31, 2018 which is included in other assets and security deposits on the statement of financial condition. All other outstanding commissions are included in receivable from clearing brokers on the statement of financial condition.

Note 11 - Related party transactions

The Company has an expense sharing agreement with the affiliate where each company may provide various accounting, technology, and administrative services. For the year ended December 31, 2018, the Company incurred expenses of approximately $279,951 for services and provided services in the amount of $47,643. In addition, the Company also capitalized approximately $9,200 of software costs related to the aforementioned expense sharing arrangement. The Company also has a cross referral agreement , whereby each company may refer clients to the other in exchange for a share of the commissions generated. The Company generated approximately $150,600 to the affiliate and received approximately $510,000. The Company also sub-leases office space from the affiliate. The Company recorded $151,200 of occupancy expense under this lease in 2018. During the year, approximately $142,000 of various miscellaneous expenses were incurred on behalf of the affiliate and $535,000 of miscellaneous expenses were provided to the Company by the affiliate. There is an outstanding balance of $22,765 due to the affiliate as of December 31, 2018.

Note 12 - Income taxes

The Company is subject to a 4% New York City UBT, with an approximate net operating loss carryforward $2.1 million (tax credit of $87,000) which will expire starting in 2033. The Company has recorded a full valuation allowance against the New York City UBT loss on the basis of management's assessment that the amount is more likely than not to be realized.

Note 13 - Soft dollar transactions

The Company entered into soft dollar and comm1ss1on sharing arrangements with certain clients which fell both within, and outside of, the provision of Rule28(e). Under this program, the Company charges additional dollars on customer trades made with the Company and uses these fees to pay market data, research related and other expenses on behalf of clients. During 2018, the Company paid client expenses totaling approximately $611,000 and has an outstanding receivable and liability of approximately $57,000 and $158,000, respectively, as of December 31, 2018.

12

WEEDEN PRIME SERVICES, LLC

NOTES TO FINANCIAL STATEMENTS

Note 14 - Legal Contingency

In the fourth quarter of 2018, a court-appointed receiver has threatened to commence FINRA arbitration against the Company in connection with an alleged fraud perpetrated by a money manager customer of the Company. In February 2019, the receiver indicated it was prepared to seek leave of court to file a claim against the Company and its affiliate (a company related through common ownership) through FINRA arbitration. The Company has engaged in settlement negotiations to determine whether a pre- dispute resolution can be achieved. The initial claims against the Company were $20 million and while the Company believes it has a meritorious defense against this claim, it has offered to settle the matter for $600,000 which is included accounts  payable, accrued expenses and other liabilities on the statement of financial condition. The Company cannot predict the ultimate resolution of the matter or the amount the Company will be liable. The ultimate resolution of this matter could be materially  different than the $600,000 accrued at December 31, 2018.

Note 15 - Members' equity

At December 31, 2018, members' equity is comprised of the following:

Weeden Securities Corporation	$	35,713
Weeden Investors, L.P.		3,535,601
Total	$	3,571,314

Note 16 - Subsequent event

On February 24, 2019, the Company's affiliate and Piper Jaffray Companies (NYSE: PJC), a leading investment bank and asset management firm, executed a definitive agreement whereby Piper Jaffray Companies will acquire 100% of the affiliate. The acquisition is subject to FINRA approval. Upon closing, the affiliate will convert to and operate as Piper Jaffray & Co. The acquisition is expected to close in June 2019. In conjunction with the sale, the Company's cross referral agreement with the affiliate is expected to continue with the purchaser. The Company's expense sharing agreement with the affiliate will terminate at closing which will increase rent and other expenses by an estimated $200,000 annually.

13

WEEDEN PRIME SERVICES, LLC

SCHEDULE 1- COMPUTATION OF NET CAPITAL UNDER RULE 15c3-1 OF THE SECURITIES AND

EXCHANGE COMMISSION AND REGULATION 1.17 OF THE COMMODITY FUTURES TRADING

COMMISSION

DECEMBER  31, 2018

Net capital:

Total members' equity	$	3,571,314
Deduct nonallowable assets:
Other assets and security deposits		273,346
Furnishings, computers and software, net		98,752
Total		372,098
Net capital	$	3,199,216
Aggregate indebtedness	$	1,736,814
Computed minimum net capital required (6 2/3% of aggregate indebtedness)	$	115,788
Minimum net capital required (under SEC Rule 15c3-1)	$	250,000
Minimum net capital required (under CFTC Regulation 1.17)	$	250,000
Excess net capital ($3,199,216 - 250,000)	$	2,949,216
Percentage of aggregate indebtedness to net capital		54	%

There were no material differences existing between the above computation and computation included in the Company's corresponding unaudited amended Focus X-17A-5 Part II filing submitted March 1, 2019

See Report of Independent Registered Public Accounting Firm .

14

WEEDEN PRIME SERVICES, LLC

SCHEDULE II - COMPUTATION FOR DETERMINATION OF RESERVE REQUIREMENTS AND

INFORMATION RELATING TO POSSESSION OR CONTROL REQUIREMENTS UNDER RULE

15c3-3 OF THE SECURITIES AND EXCHANGE COMMISSION

DECEMBER  31, 2018

The Company is exempt from the provisions of Rule 15c3-3 as of December 31, 2018  under  the Securities and Exchange Act of 1934, in  that  the Company's  activities  are  limited to those  set forth in the conditions for exemption appearing in paragraph (k)(2)(ii).

See Report of Independent Registered Public Accounting Firm.

15

EX-99.3

Exhibit 99.3

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

The unaudited pro forma combined financial statements (“Pro Forma Financial Statements”) of Siebert Financial Corp. (“Siebert”) and Weeden Prime Services, LLC (“Weeden”) reflect various adjustments to give effect to the following transaction:

•   Siebert acquired all of the member interests in Weeden, pursuant to the terms of an Equity Interests Purchase Agreement (the “Agreement”) for a purchase price of $7,124,996, which was paid through cash and effective December 2, 2019, Weeden became a wholly-owned subsidiary of Siebert (“the Transaction”).

The Transaction will be accounted for using the acquisition method of accounting for business combinations per ASC 805 under U.S. generally accepted accounting principles (“GAAP”). Based on the Agreement, Siebert has been identified as the accounting acquirer.

The unaudited pro forma combined balance sheet as of September 30, 2019 (“Pro Forma Balance Sheet”) is based on the historical consolidated balance sheets of Siebert and Weeden after giving effect to the Transaction as if it had occurred on January 1, 2018.

The unaudited pro forma combined statements of operations for the year ended December 31, 2018 and nine months ended September 30, 2019 (“Pro Forma Income Statements”) are based on the historical consolidated statements of operations of Siebert and Weeden after giving effect to the Transaction as if it had occurred on January 1, 2018 and January 1, 2019, respectively.

The historical consolidated financial information has been adjusted in the Pro Forma Financial Statements to give effect to pro forma events that are (1) directly attributable to the Transaction, (2) factually supportable and (3) with respect to the Pro Forma Income Statements, are expected to have a continuing impact on the results of operations.

The Pro Forma Financial Statements and adjustments have been prepared based on the information that is currently available and certain assumptions, which are described in the accompanying notes thereto. The accompanying Pro Forma Income Statements do not reflect the financial impact of any future expected cost savings, restructurings, synergies, integration costs or non-recurring activities and one-time transaction costs that may be realized or incurred in subsequent reporting periods. The Pro Forma Income Statements reflect only those adjustments that are expected to have an impact on the continuing operations of the combined companies.

The Pro Forma Financial Statements are provided for information purposed only and are not intended to represent, or be indicative of, the future anticipated financial position or results of operations or results that would have occurred had the Transactions been consummated on the dates indicated herein.  The Pro Forma Financial Statements and notes thereto, should be read in conjunction with:

1. The historical audited and unaudited financial statements and related notes of Siebert and Weeden for the pertinent reporting periods

2. Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q filings filed by Siebert for the pertinent reporting periods

3. Form 17A-5 filings filed by Weeden for the pertinent reporting periods

SIEBERT FINANCIAL CORP. & WEEDEN PRIME SERVICES, LLC

UNAUDITED PRO FORMA COMBINED STATEMENT OF FINANCIAL CONDITION

As of September 30, 2019

	Siebert		Weeden			Pro Forma Adjustments			Note Reference	Pro Forma Combined Siebert
ASSETS
Cash and cash equivalents	$	4,231,000	$	300,000		$	(2,125,000	)	(i)	$	2,406,000
Cash segregated		—		144,000			—				144,000
Receivables from clearing broker dealers		2,436,000		5,094,000			—				7,530,000
Receivable from related party		1,000,000		—			—				1,000,000
Other receivables		103,000		120,000			—				223,000
Prepaid expenses and other assets		302,000		184,000			147,000		(v)		633,000
Escrow deposit		2,000,000		—			(2,000,000	)	(i)		—
Furniture, equipment and leasehold improvements, net		1,000,000		26,000			(4,000	)	(ii)		1,022,000
Software, net		1,806,000		57,000			30,000		(ii)		1,893,000
Intangible assets, net		—		—			1,698,000		(iii)		1,698,000
Lease right-of-use-assets		2,501,000		85,000			—				2,586,000
Equity method investment in related party		3,509,000		—			—				3,509,000
Deferred tax assets		5,105,000		—			—				5,105,000
Goodwill		—		—			484,000		(iii)		484,000
	$	23,993,000	$	6,010,000		$	(1,770,000	)		$	28,233,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued liabilities	$	744,000	$	1,532,000		$	—			$	2,276,000
Due to clearing brokers dealers and related parties		27,000		—			—				27,000
Income taxes payable		38,000		—			—				38,000
Lease liabilities		2,817,000		85,000			—				2,902,000
Notes payable		—		—			3,000,000		(i)		3,000,000
Other liabilities		91,000		—			—				91,000
		3,717,000		1,617,000			3,000,000				8,334,000
Commitments and Contingencies
Stockholders’ equity:
Common stock, $.01 par value		271,000		—			—				271,000
Additional paid-in capital		7,641,000		5,356,000			(5,356,000	)	(iv)		7,641,000
Retained earnings / (Accumulated deficit)		12,364,000		(963,000	)		586,000		(iv)		11,987,000
		20,276,000		4,393,000			(4,770,000	)			19,899,000
	$	23,993,000	$	6,010,000		$	(1,770,000	)		$	28,233,000

SIEBERT FINANCIAL CORP. & WEEDEN PRIME SERVICES, LLC

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

For the year ended December 31, 2018

	Siebert			Weeden			Pro Forma Adjustments			Note Reference	Pro Forma Combined Siebert
REVENUE
Margin interest, marketing and distribution fees	$	10,928,000		$	1,550,000		$	—			$	12,478,000
Commissions and fees		9,504,000			9,258,000			—				18,762,000
Principal transactions		9,020,000			—			—				9,020,000
Interest		106,000			1,160,000			(5,000	)	(i)		1,261,000
Other income		—			987,000			—				987,000
Advisory fees		478,000			—			—				478,000
		30,036,000			12,955,000			(5,000	)			42,986,000
EXPENSES
Employee compensation and benefits		13,817,000			5,269,000			—				19,086,000
Referral fees		—			1,548,000			—				1,548,000
Other general and administrative		1,859,000			1,059,000			—				2,918,000
Professional fees		1,963,000			665,000			—				2,628,000
Clearing fees, including execution costs		2,852,000			3,621,000			—				6,473,000
Rent and occupancy		988,000			483,000			—				1,471,000
Technology and communications		1,008,000			537,000			—				1,545,000
Depreciation and amortization		144,000			122,000			294,000		(ii)		560,000
Interest expense		—			5,000			115,000		(i)		120,000
Advertising and promotion		45,000			42,000			—				87,000
		22,676,000			13,351,000			409,000				36,436,000
Income (loss) before provision (benefit) for (from) income taxes		7,360,000			(396,000	)		(414,000	)			6,550,000
Provision (benefit) for (from) income taxes		(4,602,000	)		—			(116,000	)	(iii)		(4,718,000	)
Net income / (loss)	$	11,962,000		$	(396,000	)	$	(298,000	)		$	11,268,000

Net income / (loss) per share of common stock
Basic and diluted	$	0.44	$	0.41
Weighted average shares outstanding
Basic and diluted		27,157,188		27,157,188

SIEBERT FINANCIAL CORP. & WEEDEN PRIME SERVICES, LLC

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

For the nine months ended September 30, 2019

	Siebert		Weeden			Pro Forma Adjustments			Note Reference	Pro Forma Combined Siebert
REVENUE
Margin interest, marketing and distribution fees	$	8,499,000	$	1,080,000		$	—			$	9,579,000
Commissions and fees		6,030,000		6,724,000			—				12,754,000
Principal transactions		5,479,000		—			—				5,479,000
Interest		54,000		990,000			(7,000	)	(i)		1,037,000
Other income		—		687,000			—				687,000
Advisory fees		572,000		—			—				572,000
		20,634,000		9,481,000			(7,000	)			30,108,000
EXPENSES
Employee compensation and benefits		8,882,000		3,697,000			—				12,579,000
Referral fees		—		1,637,000			—				1,637,000
Other general and administrative		1,861,000		1,479,000			—				3,340,000
Professional fees		1,388,000		670,000			(273,000	)			1,785,000
Clearing fees, including execution costs		1,849,000		1,959,000			—				3,808,000
Rent and occupancy		995,000		341,000			—				1,336,000
Technology and communications		800,000		602,000			—				1,402,000
Depreciation and amortization		670,000		43,000			292,000		(ii)		1,005,000
Interest expense		—		7,000			83,000		(i)		90,000
Advertising and promotion		—		10,000							10,000
		16,445,000		10,445,000			102,000				26,992,000
Earnings of equity method investment in related party		84,000		—			—				84,000
Income (loss) before provision (benefit) for (from) income taxes		4,273,000		(964,000	)		(109,000	)			3,200,000
Provision (benefit) for (from) income taxes		1,171,000		—			(31,000	)	(iii)		1,140,000
Net income / (loss)	$	3,102,000	$	(964,000	)	$	(78,000	)		$	2,060,000
Net income per share of common stock
Basic and diluted	$	0.11								$	0.08
Weighted average shares outstanding
Basic and diluted		27,157,188									27,157,188

1. Basis of Presentation

All financial data in the Pro Forma Financial Statements are presented in U.S. dollars and have been prepared in accordance with Siebert’s accounting policies that conform to U.S. GAAP and the rules and regulations of SEC Regulation S-X. Numbers are rounded for presentation purposes.

Financial information in the Siebert and Weeden columns of the Pro Forma Balance Sheets represents the historical condensed consolidated balance sheets of Siebert and Weeden as of September 30, 2019.  Financial information presented in the Siebert and Weeden columns in the Pro Forma Income Statements represents the historical consolidated income statements of Siebert and Weeden for the year ended December 31, 2018 and the nine months ended September 30, 2019.

The merger will be accounted for under the acquisition method of accounting for business combinations pursuant to Accounting Standards Codification (“ASC”) No. 805- Business Combinations.  ASC No. 805, requires, among other things, that the assets acquired and liabilities assumed be recognized at their fair values as of the proposed merger date. ASC No. 820 - Fair Value Measurements, which establishes a framework for measuring fair values, defines fair value as ‘‘the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.’’

2. Purchase Conditions

Pursuant to the terms of the Agreement, Siebert entered into an unsecured promissory note (the “Promissory Note”) with Gloria E. Gebbia, pursuant to which Siebert borrowed $3,000,000 to finance part of the Transaction. Interest on the note accrues at the rate of 4% per annum and all principal and accrued unpaid interest is due and payable by Siebert in full on December 2, 2020. Siebert may prepay the Note at any time without a penalty.

3. Purchase Consideration and Purchase Price Allocation

Siebert acquired all of the member interests in Weeden, pursuant to the terms of an Equity Interests Purchase Agreement (the “Agreement”), for a purchase price of $7,124,996, which was paid through cash and effective December 2, 2019, Weeden became a wholly-owned subsidiary of Siebert.

Siebert is required to allocate the Weeden purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their fair values as of November 30, 2019. The excess of the purchase price over those fair values is recorded as goodwill. As of date of the filing of this report, the Company has completed its allocation of the Weeden purchase price.

Siebert has performed valuation analysis of the fair market values of Weeden’s assets acquired and liabilities assumed. Using the total consideration, the Company has allocated the purchase price to such assets and liabilities. The excess of the fair value of net identifiable assets, on the date of acquisition, was allocated to goodwill. Adjustments were made for tax considerations.

The following table summarizes Siebert’s allocation of the purchase price as of November 30, 2019:

 

Purchase Price Allocation	Estimated Fair Value		Note Reference
Cash and cash equivalents	$	301,000	(i)
Cash segregated		152,000	(i)
Receivable from clearing broker dealers		4,616,000	(i)
Furniture, equipment and leasehold improvements, net		41,000	(ii)
Software, net		51,000	(ii)
Intangible assets, net		2,248,000	(iii)
Lease right-of-use assets		214,000	(ii)
Other assets		271,000	(ii)
Total Assets acquired		7,894,000
Accounts payable and accrued liabilities		1,353,000	(ii)
Lease liabilities		214,000	(ii)
Total Liabilities acquired		1,567,000
Net Assets acquired		6,327,000
Goodwill		798,000	(iv)
Purchase Price	$	7,125,000

Notes to Purchase Price Allocation

(i) Given the short-term nature of these items, the book values are assumed to be representative of their estimated fair values

(ii) Carrying values of these items are assumed to be representative of their estimated fair values

(iii)   As part of the acquisition, Siebert acquired certain intangible assets from Weeden, consisting of Weeden’s customer relationships and their trade name. The fair value for the intangible assets were determined based on discounted cash flow analyses and market approaches. The intangible assets are generally amortized over their estimated useful lives. The useful life of the customer relationships was determined based on quantitative analysis and qualitative considerations. The useful life of the trade name was determined based on the provisions of the Transaction surrounding Siebert’s use of the trade name. Below is a table with details on the intangible assets acquired.

Intangible Asset	Estimated Fair Value		Estimated Useful Life	Annual Amortization
Customer relationships	$	2,174,000	8 years	$	272,000
Trade name		74,000	0.5 years		74,000
Total	$	2,248,000		$	346,000

(iv) For the purposes of these Pro Forma Financial Statements, the difference between the purchase price and the net assets acquired is allocated to goodwill.

4.   Notes to Pro Forma Balance Sheet Adjustments  

The following summarizes the adjustments included in the “Pro Forma Adjustments” column in the accompanying Pro Forma Balance Sheet as of September 30, 2019:

(i)   Represents an adjustment as of September 30, 2019 to reflect the method of payment of the purchase price of $7,124,996 via cash of $2,125,000, the Promissory Note of $3,000,000, and the elimination of an escrow deposit of $2,000,000 transferred to seller of Weeden in a prior period.

(ii) Represents the recalculation of Weeden’s depreciation and amortization of its furniture, equipment and lease hold improvements as well as software to align with Siebert’s accounting policies and assumptions for useful lives.

(iii) Represents the fair value increase of intangible assets, net of accumulated amortization and goodwill as described in Note 3

(iv) Represents the elimination of the Weeden’s historical additional paid-in capital and retained earnings balances upon consummation of the Transaction as well as the change in retained earnings from the adjustments detailed in the Pro Forma Income Statements for year ended December 31, 2018 and the nine months ended September 30, 2019.

(v) Represents adjustment for income tax payable related to the change in retained earnings from the adjustments detailed in the Pro Forma Income Statements for year ended December 31, 2018 and the nine months ended September 30, 2019.

5. Notes to Pro Forma Income Statements Adjustments

The following summarizes the adjustments included in the “Pro Forma Adjustments” column in the accompanying Pro Forma Income Statements for the year ended December 31, 2018 and the nine months ended September 30, 2019.

(i)   In relation to interest paid on clients’ credit balances, Weeden reported gross interest revenue and a corresponding expense while Siebert’s accounting policy is to report interest revenue net of interest expense. To align Weeden’ reporting to Siebert’s accounting policy, Weeden’ interest expense was deducted from the Interest Expense line item and deducted from the Interest line item. Adjustment also accounts for the interest expense resulting from the Promissory Note.

(ii)   Adjustment reflects expense corresponding to recalculation of Weeden’s depreciation and amortization to align with Siebert’s accounting policies and assumptions for useful lives. Adjustment also reflects pro forma amortization of the intangible assets acquired in the Transaction.

(iii) Reflects the tax effect of pro forma adjustments at the estimated combined statutory rate of 28.0%.

6. Reclassification Adjustments

Reclassification adjustments represent adjustments to conform the presentation of Weeden’s historical financial statements to that of Siebert.  A summary of reclassifications from Weeden’s to Siebert’s line items is summarized below:

Statement of Financial Condition Adjustments

Weeden Reported Line Item	Siebert Line Item Reclassification	As of 09/30/19	Description
Other assets and security deposits	Other receivables	120,000	Additional breakout not segregated by Weeden
Other assets and security deposits	Prepaid expenses and other assets	184,000	Additional breakout not segregated by Weeden
Other assets and security deposits	Lease right-of-use assets	85,000	Additional breakout not segregated by Weeden
Accounts payable, accrued expenses and other liabilities	Lease liabilities	85,000	Additional breakout not segregated by Weeden

Statements of Operations Adjustments

Weeden Reported Line Item	Siebert Line Item Reclassification	Year Ended 12/31/18	Nine Months Ended 09/30/19	Explanation
Revenue
Interest income	Margin interest, marketing, and distribution fees	1,448,000	1,000,000	Additional breakout not segregated by Weeden
Other income	Margin interest, marketing, and distribution fees	102,000	80,000	Additional breakout not segregated by Weeden
Research	Commissions	611,000	471,000	Reported commissions net of research expense to align to Siebert’s accounting policy
Expense
Other	Advertising	42,000	10,000	Additional breakout not segregated by Weeden
Other	Technology and communications	64,000	137,000	Additional breakout not segregated by Weeden
Other	Interest expense	5,000	7,000	Additional breakout not segregated by Weeden