9. Investment In and Advances to Affiliates:

6 Months Ended

Jun. 30, 2015

Notes to Financial Statements

9. Investment In and Advances to Affiliates:

Siebert, Brandford, Shank Financial., L.L.C. (“SBSF”)

Siebert and two individuals (the “Principals”) formed SBS, a wholly-owned subsidiary of SBSF, to succeed to the tax-exempt underwriting business of the Siebert Brandford Shank division of Siebert (See note 2). The agreement with the principals provides that profits will be allocated 51% to the Principals and 49% to Siebert. Income or loss from SBS is considered to be integral to Siebert’s operations and material to the results of operations.

Summarized financial data of SBSF and SBS is set forth below.

	SBSF		SBS
	June 30, 2015		June 30, 2014
Total assets, including secured demand note of $1,200,000 due from Siebert	$	32,104,000
Total liabilities, including purchase obligation of $1,971,000, advance payable of $100,000, and subordinated liabilities of $1,200,000 due to Siebert		15,724,000
Total members’ capital		16,380,000
Regulatory minimum net capital requirement		250,000
Six months ended:
Total revenues	$	13,969,000	$	12,384,000
Net income (loss)		495,000		810,000
Three months ended:
Total revenues		9,919,000		4,649,000
Net income (loss)		2,014,000		(671,000	)

Siebert charged SBS $50,000 for each of the six months ended June 30, 2015 and 2014, and $25,000 for each of the three months ended June 30, 2015 and 2014, respectively, for general and administrative services, which Siebert believes approximates the cost of furnishing such services.

Siebert’s share of SBSF’s consolidated net income for the three and six months ended June 30, 2015, respectively amounted to $1,045,000, net of interest income from the receivable from the SCM sale to SBSF of $58,000, and $357,000, net of interest income from the receivable from the SCM sale to SBSF of $114,000. Siebert’s share of SBS’s net loss for the three months ended June 30 2014 amounted to $332,000 and its share of SBS’s net income for the six months ended June 30, 2014 amounted to $354,000.

Siebert made a collections of $361,000, net of $357,000 of advances to SBS, during the six months ended June 30, 2015. Siebert received a distribution from SBSF of $86,000 during the six months ended June 30, 2015, and Siebert’s share of undistributed earnings of SBSF amounted to $7.6 million at June 30, 2015. Such amount may not be immediately available for distribution to Siebert for various reasons including the amount of SBS’s available cash, the provisions of the agreement among Siebert and the Principals and SBS’s continued compliance with its regulatory net capital requirements.

SBS Financial Products Company, LLC (“SBSFPC”)

Pursuant to the terms of an Operating Agreement, Siebert and each of the Principals owned a 33.33% interest in SBSFPC which engaged in derivatives transactions related to the municipal underwriting business. The Operating Agreement provides that income/(loss) be shared 66.66% by the Principals and 33.33% by Financial. For the three and six months ended June 30, 2014, SBSFPC had nominal activity and ceased operations in December 2014.