Related Party Disclosures

9 Months Ended

Sep. 30, 2023

Related Party Disclosures [Abstract]

Related Party Disclosures

23. Related Party Disclosures

KCA

KCA is an affiliate of the Company and is under common ownership with the Company. To gain efficiencies and economies of scale with billing and administrative functions, KCA serves as a paymaster for the Company for payroll and related functions, the entirety of which KCA passes through to the subsidiaries of the Company proportionally. In the first quarter of 2023, KCA entered into an agreement with the Company for payroll processing services. The Company incurred $10,000 and $40,000 of expenses related to these services for the three and nine months ended September 30, 2023, respectively.

KCA owns a license from the Muriel Siebert Estate / Foundation to use the names “Muriel Siebert & Co., Inc.” and “Siebert” within business activities, which expires in 2025. For the use of these names, KCA passed through to the Company $15,000 and $45,000 for the three and nine months ended September 30, 2023, respectively. There were no costs passed through to the Company for the use of these names in 2022.

Other than the above arrangements, KCA has earned no profit for providing any services to the Company as KCA passes through any revenue or expenses to the Company’s subsidiaries for the three and nine months ended September 30, 2023 and 2022. As of September 30, 2023 and December 31, 2022, the Company had a payable to KCA for miscellaneous expenses of $11,000 and $4,000, respectively, which are in the line item “Accounts payable and accrued liabilities” on the statements of financial condition.

PW

PW brokers the insurance policies for related parties. Revenue for PW from related parties was $8,000 and $7,000 for the three months ended September 30, 2023 and 2022, respectively. Revenue for PW from related parties was $99,000 and $102,000 for the nine months ended September 30, 2023 and 2022, respectively.

Gloria E. Gebbia, John J. Gebbia, and Gebbia Family Members

On March 31, 2022, Gloria E. Gebbia, a director of the Company, exchanged approximately $2.9 million of the Company’s notes payable to Gloria E. Gebbia for 24% of the outstanding and issued membership interests in RISE.

The Company has entered into various notes payable with Gloria E. Gebbia. The Company paid off this notes payable in 2022 and as such, the Company had no interest expense related to these notes payable in 2023. The Company had interest expense related to these notes payable of $30,000 and $131,000 for the three and nine months ended September 30, 2022, respectively.

Gloria E. Gebbia had extended loans to certain Company employees for the purchase of the Company’s shares. These transactions have not materially impacted the Company’s financial statements.

The sons of Gloria E. Gebbia and John J. Gebbia hold executive positions within the Company’s subsidiaries and their compensation was in aggregate $748,000 and $820,000 for the three months ended September 30, 2023 and 2022, respectively. The compensation for the sons of Gloria E. Gebbia and John J. Gebbia was in aggregate $1,878,000 and $1,894,000 for the nine months ended September 30, 2023 and 2022, respectively. Part of their compensation includes performance-based payments related to key revenue streams.

On May 22, 2023, Gloria E. Gebbia issued a warrant to BCW Securities LLC, a Delaware limited liability company, to purchase 403,780 shares of common stock of the Company held by Gloria E. Gebbia at an exercise price of $2.15 per share.

On May 24, 2023, the Board of Directors of the Company appointed John J. Gebbia as Chairman of the Board and Chief Executive Officer.

The Company compensated Gloria E. Gebbia and John J. Gebbia $90,000 each for the nine months ended September 30, 2023 for board of director fees.

On July 1, 2023, Gloria E. Gebbia and John J. Gebbia entered into a consulting agreement with the Company for services. The compensation for the consulting agreement for Gloria E. Gebbia was $30,000 for both the three and nine months ended September 30, 2023. The compensation for the consulting agreement for John J. Gebbia was $125,000 for both the three and nine months ended September 30, 2023.

Gebbia Sullivan County Land Trust

The Company operates on a month-to-month lease agreement for its branch office in Omaha, Nebraska with the Gebbia Sullivan County Land Trust, the trustee of which is a member of the Gebbia Family. For both the three months ended September 30, 2023 and 2022, rent expense was $15,000 for this branch office. For both the nine months ended September 30, 2023 and 2022, rent expense was $45,000 for this branch office.

RISE

During the year ended December 31, 2022, RISE issued and Siebert sold membership interests of RISE to Siebert employees, directors and affiliates, refer to Note 4 – RISE for further detail. RISE entered into a clearing arrangement with MSCO and deposited a clearing fund escrow deposit of $50,000 to MSCO and had excess cash of approximately $1.0 million in its brokerage account at MSCO as of September 30, 2023.

Kakaopay and Affiliates

On April 27, 2023, the Company entered into the First Tranche Stock Purchase Agreement, pursuant to which the Company agreed to issue to Kakaopay the First Tranche Shares at a per share price of Two Dollars Fifteen Cents ($2.15). Refer to Note 5 – Kakaopay Transaction for further details on the transaction. MSCO entered into an agreement whereby it would provide an omnibus trading account for Kakaopay’s subsidiary, Kakao Pay Securities Corp., and provide trade execution services to Kakao Pay Securities Corp, subject to compliance with applicable U.S. laws, rules and regulations.