Acquisitions (Tables)

3 Months Ended

Mar. 31, 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 acquired
Payables to customers		308,091,000
Payables to non-customers		9,151,000
Drafts payable		2,834,000
Payables to broker-dealers and clearing organizations		1,406,000
Accounts payable and accrued liabilities		963,000
Securities loaned		170,443,000
Securities sold, not yet purchased, at fair value		28,000
Notes payable – related party		5,000,000
Lease liabilities		1,295,000
Total Liabilities acquired		499,211,000

Net Assets acquired	$	15,714,000

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. StockCross’ statement of income and statement of financial condition have already been consolidated in the Company’s financial statements for the periods presented for 2020:

Statements of Operations (unaudited)

	Three Months Ended March 31, 2019
	Siebert		StockCross		Pro Forma Adjustments			Total Combined Siebert

Revenue
Commissions and fees	$	1,864,000	$	404,000	$	—		$	2,268,000
Margin interest, marketing and distribution fees		2,772,000		784,000		—			3,556,000
Principal transactions		1,610,000		280,000		—			1,890,000
Interest income		15,000		1,158,000		—			1,173,000
Market making		—		563,000		—			563,000
Stock borrow / stock loan		—		581,000		—			581,000
Advisory fees		168,000		—		—			168,000
Other income		—		138,000		(59,000	)		79,000
Total Revenue		6,429,000		3,908,000		(59,000	)		10,278,000

Expenses
Employee compensation and benefits		2,835,000		1,693,000		—			4,528,000
Clearing fees, including execution costs		654,000		207,000		(59,000	)		802,000
Technology and communications		247,000		175,000		—			422,000
Other general and administrative		385,000		348,000		—			733,000
Data processing		—		543,000		—			543,000
Rent and occupancy		295,000		236,000		—			531,000
Professional fees		502,000		381,000		—			883,000
Depreciation and amortization		175,000		19,000		—			194,000
Interest expense		—		21,000		—			21,000
Total Expenses		5,093,000		3,623,000		(59,000	)		8,657,000

Earnings of equity method investment in related party		39,000		—		(39,000	)		—

Income before provision (benefit) for (from) income taxes		1,375,000		285,000		(39,000	)		1,621,000
Provision (benefit) for (from) income taxes		369,000		39,000		(11,000	)		397,000
Net income / (loss)	$	1,006,000	$	246,000	$	(28,000	)	$	1,224,000

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

Weighted average shares outstanding
Basic and diluted		27,157,188		6,152,500

Pro forma shares used to compute net income per share									30,459,804

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		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

Schedule of Proforma Statements

The following pro forma summary presents the statement 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 statement of income and statement of financial condition have already been consolidated as part of the Company’s financial statements for the periods presented for 2020:

	Three Months Ended March 31, 2019
Revenue	$	13,014,000
Operating income	$	1,334,000
Net income	$	967,000