UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	~~June~~September 30, 2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ____________________ to ____________________
	Commission file number	0-5703

Siebert Financial Corp.
(Exact Name of Registrant as Specified in its Charter)
New York		11-1796714
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
535 Fifth Avenue, ~~4th~~4th Floor, New York, NY10017
(Address of Principal Executive Offices) (Zip Code)
(212) 644-2400
(Registrant’s Telephone Number, Including Area Code)

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock - $0.01 par value	SIEB	The Nasdaq Capital Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (“Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of ~~August 15,~~November 14, 2022, there were ~~32,403,235~~32,347,329 shares outstanding of the registrant’s common stock.

SIEBERT FINANCIAL CORP.

INDEX


PART I - FINANCIAL INFORMATION	2
ITEM 1. FINANCIAL STATEMENTS	2
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION	2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY	4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	5
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	6
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	2326
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	3236
ITEM 4. CONTROLS AND PROCEDURES	3337
PART II - OTHER INFORMATION	3438
ITEM 1. LEGAL PROCEEDINGS	3438
ITEM 1A. RISK FACTORS	3438
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	38
ITEM 6. EXHIBITS	3539
SIGNATURES	3640

Forward-Looking Statements

For purposes of this Quarterly Report on Form 10-Q (“Report”), the terms “Siebert,” “Company,” “we,” “us” and “our” refer to Siebert Financial Corp., its subsidiaries, and its variable interest entity (“VIE”) collectively, unless the context otherwise requires.

The statements contained throughout this Report, including any documents incorporated by reference, that are not historical facts, including statements about our beliefs and expectations, are “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements preceded by, followed by or that include the words “may,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “project,” “intend” and similar words or expressions. In addition, any statements that refer to expectations, projections, or other characterizations of future events or circumstances are forward-looking statements.

These forward-looking statements, which reflect our beliefs, objectives, and expectations as of the date hereof, are based on the best judgement of management. All forward-looking statements speak only as of the date on which they are made. Such forward-looking statements are subject to certain risks, uncertainties and assumptions relating to factors that could cause actual results to differ materially from those anticipated in such statements, including, without limitation, the following: economic, social and political conditions, global economic downturns resulting from extraordinary events such as the COVID-19 pandemic and other securities industry risks; interest rate risks; liquidity risks; credit risk with clients and counterparties; risk of liability for errors in clearing functions; systemic risk; systems failures, delays and capacity constraints; network security risks; competition; reliance on external service providers; new laws and regulations affecting our business; net capital requirements; extensive regulation, regulatory uncertainties and legal matters; failure to maintain relationships with employees, customers, business partners or governmental entities; the inability to achieve synergies or to implement integration plans and other consequences associated with risks and uncertainties detailed in under Part I, Item 1A - Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2021, as amended on May 20, 2022 (“2021 Form 10-K”), our Quarterly ~~Report~~Reports on Form ~~10-Q for the quarter ended March 31, 2022 (“Q1 2022 Form 10-Q”), as well as in our other filings with the SEC.~~10-Q.

We caution that the foregoing list of factors is not exclusive, and new factors may emerge, or changes to the foregoing factors may occur, that could impact our business. We undertake no obligation to publicly update or revise these statements, whether as a result of new information, future events or otherwise, except to the extent required by the federal securities laws.

-1-

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SIEBERT FINANCIAL CORP. & SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

	June 30, 2022 (unaudited)		December 31, 2021		September 30, 2022 (unaudited)		December 31, 2021
ASSETS

Current assets
Cash and cash equivalents	$	4,089,000	$	3,758,000	$	4,489,000	$	3,758,000
Cash and securities segregated for regulatory purposes		321,669,000		326,826,000		295,133,000		326,826,000
Receivables from customers		63,264,000		85,327,000		65,606,000		85,327,000
Receivables from broker-dealers and clearing organizations		5,164,000		8,185,000		5,220,000		8,185,000
Receivables from non-customers		149,000		81,000		62,000		81,000
Other receivables		3,652,000		2,242,000		2,903,000		2,242,000
Prepaid service contract - current		650,000		709,000		—		709,000
Prepaid expenses and other assets		1,802,000		1,596,000		1,758,000		1,596,000
Securities borrowed		715,392,000		939,518,000		615,024,000		939,518,000
Securities owned, at fair value		3,350,000		3,991,000		3,468,000		3,991,000
Total Current assets		1,119,181,000		1,372,233,000		993,663,000		1,372,233,000

Deposits with broker-dealers and clearing organizations		4,457,000		5,541,000		4,221,000		5,541,000
Prepaid service contract - non-current		0-		295,000
Prepaid service contract – non-current						—		295,000
Property, office facilities, and equipment, net		7,957,000		7,463,000		8,222,000		7,463,000
Software, net		621,000		752,000		670,000		752,000
Lease right-of-use assets		2,551,000		2,662,000		2,348,000		2,662,000
Equity method investments in related parties		9,042,000		8,156,000		8,895,000		8,156,000
Investments, cost		850,000		850,000		850,000		850,000
Deferred tax assets		4,386,000		4,294,000		4,289,000		4,294,000
Goodwill		1,989,000		1,989,000		1,989,000		1,989,000
Total Assets	$	1,151,034,000	$	1,404,235,000	$	1,025,147,000	$	1,404,235,000

LIABILITIES AND EQUITY

Liabilities
Current liabilities
Payables to customers	$	353,138,000	$	376,670,000	$	322,603,000	$	376,670,000
Payables to non-customers		9,209,000		17,430,000		9,349,000		17,430,000
Drafts payable		1,969,000		1,804,000		1,308,000		1,804,000
Payables to broker-dealers and clearing organizations		855,000		254,000		442,000		254,000
Accounts payable and accrued liabilities		2,876,000		3,677,000		1,854,000		3,677,000
Taxes payable		1,047,000		1,748,000		1,416,000		1,748,000
Securities loaned		712,703,000		931,735,000		618,701,000		931,735,000
Securities sold, not yet purchased, at fair value		9,000		24,000		11,000		24,000
Notes payable - related party		3,250,000		7,000,000		3,250,000		7,000,000
Current portion of lease liabilities		1,103,000		1,234,000		1,051,000		1,234,000
Current portion of long-term debt		1,022,000		998,000		1,052,000		998,000
Current portion of deferred contract incentive		758,000		808,000		750,000		808,000
Total Current liabilities		1,087,939,000		1,343,382,000		961,787,000		1,343,382,000

Lease liabilities, less current portion		1,670,000		1,699,000		1,494,000		1,699,000
Long-term debt, less current portion		6,524,000		6,710,000		6,245,000		6,710,000
Deferred contract incentive, less current portion		1,563,000		1,938,000		1,375,000		1,938,000
Total Liabilities		1,097,696,000		1,353,729,000		970,901,000		1,353,729,000

Commitments and Contingencies
Equity
Stockholders’ equity
Common stock, $.01 par value; 100 million shares authorized; 32,403,235 shares issued and outstanding as of both June 30, 2022 and December 31, 2021		324,000		324,000
Common stock, $.01 par value; 100 million shares authorized; 32,541,235 shares issued and 32,347,329 shares outstanding, respectively, as of September 30, 2022; 32,403,235 shares issued and outstanding as of December 31, 2021						325,000		324,000
Treasury stock, 193,906 and 0 shares held as of September 30, 2022 and December 31, 2021, respectively						(293,000)		—
Additional paid-in capital		29,540,000		27,967,000		29,773,000		27,967,000
Retained earnings		20,710,000		20,972,000		21,762,000		20,972,000
Total Stockholders’ equity		50,574,000		49,263,000		51,567,000		49,263,000
Noncontrolling interests		2,764,000		1,243,000		2,679,000		1,243,000
Total Equity		53,338,000		50,506,000		54,246,000		50,506,000

Total Liabilities and Equity	$	1,151,034,000	$	1,404,235,000	$	1,025,147,000	$	1,404,235,000

Numbers are rounded for presentation purposes. See notes to condensed consolidated financial statements.

	Three Months Ended June 30,					Six Months Ended June 30,					Three Months Ended September 30,					Nine Months Ended September 30,
	2022			2021		2022			2021		2022			2021		2022			2021
Revenue
Commissions and fees	$	1,853,000		$	4,325,000	$	4,193,000		$	11,333,000	$	1,750,000		$	4,019,000	$	5,943,000		$	15,352,000
Interest, marketing and distribution fees		3,151,000			3,623,000		5,513,000			7,082,000		5,204,000			3,435,000		10,717,000			10,517,000
Principal transactions and proprietary trading		1,081,000			4,107,000		814,000			8,355,000		953,000			3,924,000		1,767,000			12,279,000
Market making		535,000			1,758,000		1,299,000			3,372,000		723,000			1,514,000		2,022,000			4,886,000
Stock borrow / stock loan		4,148,000			2,240,000		7,726,000			4,087,000		4,183,000			3,465,000		11,909,000			7,552,000
Advisory fees		476,000			403,000		983,000			759,000		437,000			441,000		1,420,000			1,200,000
Other income		479,000			337,000		1,503,000			729,000		1,086,000			253,000		2,589,000			982,000
Total Revenue		11,723,000			16,793,000		22,031,000			35,717,000		14,336,000			17,051,000		36,367,000			52,768,000

Expenses
Employee compensation and benefits		7,368,000			8,745,000		14,462,000			17,911,000		7,290,000			9,294,000		21,752,000			27,205,000
Clearing fees, including execution costs		375,000			1,289,000		869,000			3,142,000		398,000			986,000		1,267,000			4,128,000
Technology and communications		978,000			1,100,000		2,160,000			2,341,000		1,214,000			1,196,000		3,374,000			3,537,000
Other general and administrative		935,000			1,188,000		1,866,000			1,958,000		1,072,000			927,000		2,939,000			2,885,000
Data processing		687,000			695,000		1,203,000			1,492,000		932,000			787,000		2,135,000			2,279,000
Rent and occupancy		456,000			470,000		929,000			1,040,000		562,000			441,000		1,491,000			1,481,000
Professional fees		1,032,000			577,000		1,728,000			1,192,000		874,000			759,000		2,602,000			1,951,000
Depreciation and amortization		261,000			374,000		520,000			766,000		240,000			354,000		760,000			1,120,000
Referral fees		0—			353,000		0—			760,000		—			374,000		—			1,134,000
Loss on impairment												—			699,000		—			699,000
Interest expense		103,000			89,000		227,000			192,000		108,000			86,000		335,000			278,000
Advertising and promotion		59,000			0—		172,000			0—		58,000			13,000		230,000			13,000
Total Expenses		12,254,000			14,880,000		24,136,000			30,794,000		12,748,000			15,916,000		36,885,000			46,710,000

Earnings of equity method investments in related parties		14,000			0—		215,000			0—
Earnings of (loss from) equity method investments in related parties												(148,000	)		—		67,000			—

Income (loss) before provision for (benefit from) income taxes		(517,000	)		1,913,000		(1,890,000	)		4,923,000		1,440,000			1,135,000		(451,000	)		6,058,000
Provision for (benefit from) income taxes		(1,027,000	)		484,000		(1,309,000	)		1,219,000		473,000			265,000		(836,000	)		1,484,000
Net income (loss)		510,000			1,429,000		(581,000	)		3,704,000
Net income												967,000			870,000		385,000			4,574,000
Less net loss attributable to noncontrolling interests		(201,000	)		0—		(320,000	)		0—		(85,000	)		—		(405,000	)		—
Net income (loss) available to common stockholders	$	711,000		$	1,429,000	$	(261,000	)	$	3,704,000
Net income available to common stockholders											$	1,052,000		$	870,000	$	790,000		$	4,574,000

Net income (loss) available to common stockholders per share of common stock
Net income available to common stockholders per share of common stock
Basic and diluted	$	0.02		$	0.05	$	(0.01	)	$	0.12	$	0.03		$	0.03	$	0.02		$	0.15

Weighted average shares outstanding
Basic and diluted		32,403,235			31,283,364		32,403,235			31,228,725		32,403,235			31,125,703		32,419,398			31,194,007

Numbers are rounded for presentation purposes. See notes to condensed consolidated financial statements.


	Number of Shares Issued		$.01 Par Value		Additional Paid-In Capital		Retained Earnings		Total Stockholders’ Equity		Noncontrolling Interests		Total Equity		Number of Shares Issued			$.01 Par Value			Additional Paid-In Capital			Retained Earnings		Total Stockholders’ Equity			Noncontrolling Interests		Total Equity
Balance – January 1, 2021		30,953,710	$	309,000	$	21,768,000	$	15,909,000	$	37,986,000	$	0—	$	37,986,000		30,953,710		$	309,000		$	21,768,000		$	15,909,000	$	37,986,000		$	—	$	37,986,000
Shares issued for OpenHand transaction		329,654		3,000		1,378,000		0—		1,381,000		0—		1,381,000		329,654			3,000			1,378,000			—		1,381,000			—		1,381,000
Net income		—		0—		0—		2,275,000		2,275,000		0—		2,275,000		—			—			—			2,275,000		2,275,000			—		2,275,000
Balance – March 31, 2021		31,283,364	$	312,000	$	23,146,000	$	18,184,000	$	41,642,000	$	0—	$	41,642,000		31,283,364		$	312,000		$	23,146,000		$	18,184,000	$	41,642,000		$	—	$	41,642,000
Net income		0—		—		—		1,429,000		1,429,000		—		1,429,000		—			—			—			1,429,000		1,429,000			—		1,429,000
Balance – June 30, 2021		31,283,364	$	312,000	$	23,146,000	$	19,613,000	$	43,071,000	$	0—	$	43,071,000		31,283,364		$	312,000		$	23,146,000		$	19,613,000	$	43,071,000		$	—	$	43,071,000
Shares retired from Openhand transaction																(329,654	)		(3,000	)		(1,315,000	)		—		(1,318,000	)		—		(1,318,000	)
Net income																—			—			—			870,000		870,000			—		870,000
Balance – September 30, 2021																30,953,710		$	309,000		$	21,831,000		$	20,483,000	$	42,623,000		$	—	$	42,623,000


	Number of Shares Issued		$.01 Par Value		Additional Paid-In Capital		Retained Earnings			Total Stockholders’ Equity			Noncontrolling Interests			Total Equity			Number of Shares Issued		$.01 Par Value			Treasury Stock		Additional Paid-In Capital		Retained Earnings				Total Stockholders’ Equity			Noncontrolling Interests		Total Equity
Balance – January 1, 2022		32,403,235	$	324,000	$	27,967,000	$	20,972,000		$	49,263,000		$	1,243,000		$	50,506,000			32,403,235	$	324,000	$	—		$	27,967,000	$	20,972,000		$	49,263,000		$	1,243,000		$	50,506,000
Issuance and transfers of RISE membership interests		—		0—		1,573,000		0—			1,573,000			1,841,000			3,414,000			—		—		—			1,573,000		—			1,573,000			1,841,000			3,414,000
Net income (loss)		—		0—		0—		(973,000	)		(973,000	)		(119,000	)		(1,092,000	)		—		—		—			—		(973,000	)		(973,000	)		(119,000	)		(1,092,000	)
Balance – March 31, 2022		32,403,235	$	324,000	$	29,540,000	$	19,999,000		$	49,863,000		$	2,965,000		$	52,828,000			32,403,235	$	324,000	$	—		$	29,540,000	$	19,999,000		$	49,863,000		$	2,965,000		$	52,828,000
Net income (loss)		0—		—		0—		711,000			711,000			(201,000	)		510,000			—		—		—			—		711,000			711,000			(201,000	)		510,000
Balance – June 30, 2022		32,403,235	$	324,000	$	29,540,000	$	20,710,000		$	50,574,000		$	2,764,000		$	53,338,000			32,403,235	$	324,000	$	—		$	29,540,000	$	20,710,000		$	50,574,000		$	2,764,000		$	53,338,000
Termination of agreement with technology partner																				—		—		(293,000	)		—		—			(293,000	)		—			(293,000	)
Share-based compensation																				138,000		1,000		—			233,000		—			234,000			—			234,000
Net income (loss)																				—		—		—			—		1,052,000			1,052,000			(85,000	)		967,000
Balance – September 30, 2022																				32,541,235	$	325,000	$	(293,000	)	$	29,773,000	$	21,762,000		$	51,567,000		$	2,679,000		$	54,246,000

Numbers are rounded for presentation purposes. See notes to condensed consolidated financial statements.

	Six Months Ended June 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Cash Flows From Operating Activities
Net income (loss)	$	(581,000	)	$	3,704,000
Adjustments to reconcile net income (loss) to net cash provided by / (used in) operating activities:
Net income							$	385,000		$	4,574,000
Adjustments to reconcile net income to net cash provided by / (used in) operating activities:
Deferred income tax expense / (benefit)		(92,000	)		273,000			(22,000	)		329,000
Depreciation and amortization		520,000			766,000			760,000			1,120,000
Net lease liabilities		(49,000	)		(14,000	)		(74,000	)		(32,000	)
Downward adjustment due to changes in observable prices								—			63,000
Loss on impairment								—			699,000
Earnings of equity method investments in related parties		(215,000	)		0—			(67,000	)		—
Share-based compensation								234,000			—

Changes in
Receivables from customers		22,063,000			10,508,000			19,721,000			8,445,000
Receivables from non-customers		(68,000	)		0—			19,000			(25,000	)
Receivables from and deposits with broker-dealers and clearing organizations		4,105,000			3,906,000			4,285,000			7,147,000
Securities borrowed		224,126,000			267,616,000			324,494,000			114,436,000
Securities owned, at fair value		641,000			(1,652,000	)		523,000			(1,393,000	)
Prepaid expenses and other assets		(1,614,000	)		205,000			(823,000	)		(490,000	)
Prepaid service contract		354,000			454,000			711,000			631,000
Payables to customers		(23,532,000	)		11,350,000			(54,067,000	)		(6,681,000	)
Payables to non-customers		(8,221,000	)		495,000			(8,081,000	)		4,641,000
Drafts payable		165,000			(2,747,000	)		(496,000	)		(2,961,000	)
Payables to broker-dealers and clearing organizations		601,000			5,024,000			188,000			1,322,000
Accounts payable and accrued liabilities		(801,000	)		147,000			(1,824,000	)		341,000
Securities loaned		(219,032,000	)		(277,166,000	)		(313,034,000	)		(130,975,000	)
Securities sold, not yet purchased, at fair value		(15,000	)		28,000			(13,000	)		6,000
Interest payable		0—			0—
Taxes payable		(1,252,000	)		1,270,000			(855,000	)		1,280,000
Deferred contract incentive		(425,000	)		0—			(621,000	)		2,875,000
Net cash provided by (used in) operating activities		(3,322,000	)		24,167,000			(28,657,000	)		5,352,000

Cash Flows From Investing Activities
Distribution from equity method investment in related party		172,000			0—			172,000			—
Purchase of OpenHand common stock		0—			(850,000	)		—			(850,000	)
Purchase of office facilities and equipment		(95,000	)		(198,000	)		(165,000	)		(274,000	)
Purchase of software		(193,000	)		(156,000	)		(379,000	)		(209,000	)
Build out of property		(596,000	)		0—			(892,000	)		—
Net cash (used in) investing activities		(712,000	)		(1,204,000	)		(1,264,000	)		(1,333,000	)

Cash Flows From Financing Activities
Issuance of RISE membership interests		600,000			0—			600,000			—
Transfers of RISE membership interests		240,000			0—			240,000			—
Repayments of notes payable – related party		(1,470,000	)		0—			(1,470,000	)		(200,000	)
Repayments of long-term debt		(162,000	)		(498,000	)		(411,000	)		(748,000	)
Net cash (used in) financing activities		(792,000	)		(498,000	)		(1,041,000	)		(948,000	)

Net change in cash and cash equivalents, and cash and securities segregated for regulatory purposes		(4,826,000	)		22,465,000			(30,962,000	)		3,071,000
Cash and cash equivalents, and cash and securities segregated for regulatory purposes - beginning of year		330,584,000			328,556,000			330,584,000			328,556,000
Cash and cash equivalents, and cash and securities segregated for regulatory purposes - end of period	$	325,758,000		$	351,021,000		$	299,622,000		$	331,627,000

Reconciliation of cash, cash equivalents, and cash and securities segregated for regulatory purposes
Cash and cash equivalents - end of period	$	4,089,000		$	2,332,000		$	4,489,000		$	4,260,000
Cash and securities segregated for regulatory purposes - end of period		321,669,000			348,689,000			295,133,000			327,367,000
Cash and cash equivalents, and cash and securities segregated for regulatory purposes - end of period	$	325,758,000		$	351,021,000		$	299,622,000		$	331,627,000

Supplemental cash flow information
Cash paid / (refunds received) during the period for income taxes	$	35,000		$	(873,000	)
Cash paid (refunds received) during the period for income taxes							$	42,000		$	(674,000	)
Cash paid during the period for interest	$	227,000		$	192,000		$	335,000		$	278,000

Non-cash investing and financing activities
Shares issued for OpenHand transaction	$	0—		$	1,381,000
Treasury stock							$	(293,000	)	$	—
Transfers of RISE membership interests	$	2,880,000		$	0—		$	2,880,000		$	—
Purchase of equity method investment in related party, net of cash paid of $350,000	$	650,000		$	0—
Purchase of equity method investment in related party, net of cash paid of $350,000							$	650,000		$	—

Numbers are rounded for presentation purposes. See notes to condensed consolidated financial statements.

Siebert Financial Corp., a New York corporation, incorporated in 1934, is a holding company that conducts the following lines of business through its wholly-owned subsidiaries and VIE:

Muriel Siebert & Co., Inc. (“MSCO”) provides retail brokerage services. MSCO is a Delaware corporation and broker-dealer registered with the Securities and Exchange Commission (“SEC”) under the Exchange Act and the Commodity Exchange Act of 1936, and member of the Financial Industry Regulatory Authority (“FINRA”), the New York Stock Exchange (“NYSE”), the Securities Investor Protection Corporation (“SIPC”), and the National Futures Association (“NFA”).

Siebert AdvisorNXT, Inc. (“SNXT”) provides investment advisory services. SNXT is a New York corporation registered with the SEC as a Registered Investment Advisor (“RIA”) under the Investment Advisers Act of 1940.

Park Wilshire Companies, Inc. (“PW”) provides insurance services. PW is a Texas corporation and licensed insurance agency.

Siebert Technologies, LLC (“STCH”) provides technology development. STCH is a Nevada limited liability company.

RISE Financial Services, LLC (“RISE”) provides prime brokerage services. RISE is a Delaware limited liability company and a broker-dealer registered with the SEC and NFA. RISE is a woman-owned and operated financial services firm that offers a comprehensive suite of prime brokerage services aligned with the growing mission-driven environmental, social and governance (“ESG”) initiatives of institutional investors.

StockCross Digital Solutions, Ltd. (“STXD”) is an inactive subsidiary headquartered in Bermuda.

For purposes of this Report on Form 10-Q, the terms “Siebert,” “Company,” “we,” “us,” and “our” refer to Siebert Financial Corp., MSCO, SNXT, PW, STCH, RISE, and STXD collectively, unless the context otherwise requires.

The Company is headquartered in New York, NY, with primary operations in New Jersey, Florida, and California. The Company has 14 branch offices throughout the U.S. and clients around the world. The Company’s SEC filings are available through the Company’s website at www.siebert.com, where investors can obtain copies of the Company’s public filings free of charge. The Company’s common stock, par value $.01 per share, trades on the Nasdaq Capital Market under the symbol “SIEB.”

The Company primarily operates in the securities brokerage and asset management industry and has no other reportable segments. All of the Company's revenues for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021 were derived from its operations in the U.S.

As of ~~June~~September 30, 2022, the Company is comprised of a single operating segment based on the factors related to management’s decision-making framework as well as management evaluating performance and allocating resources based on assessments of the Company from a consolidated perspective.

On April 21, 2020, the Company entered into a Master Services Agreement (“MSA”), with a technology partner. Refer to Note 5 – Prepaid Service Contract in the Company’s 2021 Form 10-K for further detail.

The Company entered into a Consulting Services Agreement (“CSA”) in February 2022 with the technology partner, whereby the Company would provide certain consulting services over an 18-month period. The consulting fee income was being recognized on a straight-line basis over the service period. The Company recorded $867,000 and $1,170,000 for the three and nine months ended September 30, 2022 related to this agreement in the line item “Other income” on the statements of operations.

On September 26, 2022, the Company and the technology partner mutually agreed to terminate the services being provided under both the MSA and the CSA. Per the terms of the respective termination agreements, neither the Company nor the technology partner will have any further obligations to provide future services. As part of the termination, the technology partner returned 193,906 shares of the Company’s common stock previously issued and agreed to pay the Company a total of $950,000.

As of September 30, 2022, the Company has a receivable of $475,000 in the line item “Other receivables” on the statements of financial condition which is expected to be paid in December 2022. As a result of the termination, the Company wrote off the remaining balance of the prepaid service contract of $532,000 and the expense is included in “Technology and Communications” on the statements of operations for the three and nine months ended September 30, 2022. The payment of $950,000 is included in the line item “Other income” on the statements of operations for the three and nine months ended September 30, 2022.

On January 21, 2022, RISE entered into an agreement with Hedge Connection, Inc. (“Hedge Connection”), a Florida corporation and a woman-owned fintech company founded by Lisa Vioni that provides capital introduction software solutions for the prime brokerage industry. The Company accounts for Hedge Connection under the equity method of accounting. Refer to Note 8 – Equity Method Investments in Related Parties, for additional detail.

During the first quarter of 2022, RISE issued and Siebert sold membership interests in RISE to certain employees, directors, and affiliates of RISE and Siebert.

From January 1, 2022 through March 30, 2022, RISE issued 8.3% of RISE’s total issued and outstanding membership interests in exchange for a net increase in assets of $1,000,000. Siebert sold membership interests representing 2% of RISE’s total issued and outstanding membership interests to two Siebert employees. Through March 30, 2022, Siebert continued to hold a majority ownership interest in RISE.

On March 31, 2022, Siebert exchanged $2,880,000 in aggregate of notes payable to Gloria E. Gebbia for 24% ownership interest in RISE. As a result of the aforementioned transactions, Siebert’s direct ownership percentage in RISE declined from 76% as of December 31, 2021 to approximately 44% as of March 31, 2022, and remained unchanged as of ~~June~~September 30, 2022.

The change in membership interest on March 31, 2022 required Siebert to reassess its interest in RISE in accordance with Accounting Standards Codification (“ASC”) Topic 810 – Consolidation. As of March 31, 2022, Siebert determined that RISE is a VIE as the equity holders lack the characteristics of a controlling financial interest. Siebert holds a variable interest in RISE and is the primary beneficiary of RISE since it holds both the power to direct the activities of RISE that most significantly impact RISE’s economic performance, as well as the obligation to absorb losses and right to receive the returns from RISE that would be significant to RISE. Accordingly, Siebert consolidates RISE as a VIE. As of ~~June~~September 30, 2022, there have been no changes to this conclusion. Refer to Note 3 – Consolidation of Variable Interest Entity for further information.

The Company entered into several arrangements in the fourth quarter of 2022 that will impact its ownership interests of RISE, Tigress, and Hedge Connection and as well as various arrangements with these entities. Refer to Note 20 – Subsequent Events for further detail.

The accompanying condensed consolidated financial statements (“financial statements”) of the Company have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete annual financial statements.

In the opinion of management, the financial statements contain all adjustments (consisting of normal recurring entries) necessary to fairly present such interim results. Interim results are not necessarily indicative of the results of operations which may be expected for a full year or any subsequent period. These financial statements should be read in conjunction with the financial statements and notes thereto in the Company’s 2021 Form 10-K.

The consolidated financial statements include the accounts of Siebert and its consolidated subsidiaries, each of which is a wholly-owned subsidiary, as well as the 44% investment in a VIE for which the Company has determined it is the primary beneficiary. Upon consolidation, all intercompany balances and transactions are eliminated.

For consolidated subsidiaries that are not wholly-owned, the third-party holdings of equity interests are referred to as noncontrolling interests. The net income or loss attributable to noncontrolling interests for such subsidiaries is presented as net income or loss attributable to noncontrolling interests in the ~~statement~~statements of operations. The portion of total equity that is attributable to noncontrolling interests for such subsidiaries is presented as noncontrolling interests in the statements of financial condition.

For investments in entities in which the Company does not have a controlling financial interest but has significant influence over its operating and financial decisions, the Company applies the equity method of accounting with net income and losses recorded within earnings of equity method investments in related parties. The U.S. dollar is the functional currency of the Company and numbers are rounded for presentation purposes.

The Company’s significant accounting policies are included in Note 2 – Summary of Significant Accounting Policies in the Company’s 2021 Form 10-K. Other than the below, there have been no material changes to the Company’s significant accounting policies during the three and ~~six~~nine months ended ~~June~~September 30, 2022.

The Company evaluates whether an entity is a VIE and determines if the primary beneficiary status is appropriate on a quarterly basis. The Company consolidates a VIE for which it is the primary beneficiary. When assessing the determination of the primary beneficiary, the Company considers all relevant facts and circumstances, including factors such as the power to direct the activities of the VIE that most significantly impact its economic performance, the obligation to absorb the losses and/or the right to receive the expected returns of the VIE. Through this evaluation, the Company determined that RISE is a VIE and the Company is the primary beneficiary, primarily due to the Company having the power to direct the activities of RISE that most significantly impact its economic performance. Additionally, the Company may be obligated to fund RISE’s operations at an amount that is disproportional to its ownership percentage.

The Company grants share-based compensation, which is described in the Employee Benefit Plan section of Note 18 – Commitments, Contingencies, and Other. The Company accounts for share-based compensation in accordance with ASC Topic 718, “Compensation-Stock Compensation,” which establishes accounting for share-based compensation to employees for services. Under the provisions of ASC 718-10-35, share-based compensation cost is measured at the grant date, based on the fair value of the award on that date and is expensed at the grant date (for the portion that vests immediately) or ratably over the related vesting periods.

The Company did not adopt any new accounting standards during the three and ~~six~~nine months ended ~~June~~September 30, 2022. In addition, the Company has evaluated other recently issued accounting standards and does not believe that any of these standards will have a material impact on the Company’s financial statements and related disclosures as of ~~June~~September 30, 2022.

As of ~~June~~September 30, 2022, the Company owned approximately 44% of RISE. RISE was deemed to be a VIE as the equity investors at risk, as a group, lack the characteristics of a controlling financial interest. The major factor that led to the conclusion that the Company is the primary beneficiary of this VIE is that the Company has the power to direct the activities of RISE that most significantly impact its economic performance, as well as the potential obligation to fund operations and absorb losses in amount that is disproportional to the Company’s ownership percentage.

As of ~~June~~September 30, 2022, RISE reported assets of $~~3.3~~2.9 million and liabilities of $~~0.4~~0.3 million. There are no restrictions on the consolidated VIE’s assets.

4. Receivables From, Payables To, and Deposits With Broker-Dealers and Clearing Organizations

Amounts receivable from, payables to, and deposits with broker-dealers and clearing organizations consisted of the following as of the periods indicated:

Under the DTCC shareholders’ agreement, MSCO is required to participate in the DTCC common stock mandatory purchase. As of ~~June~~September 30, 2022 and December 31, 2021, MSCO had shares of DTCC common stock valued at approximately $1,054,000 and $905,000, respectively, which are included within the line item “Deposits with broker-dealers and clearing organizations” on the statements of financial condition.

In September 2022, MSCO and RISE entered into a clearing agreement whereby RISE would introduce clients to MSCO. As part of the agreement, RISE deposited a clearing fund escrow deposit of $50,000 to MSCO. The resulting asset of RISE and liability of MSCO is eliminated in consolidation.

ASC 820 defines fair value, establishes a framework for measuring fair value as well as a hierarchy of fair value inputs. Refer to the below as well as Note 6 – Fair Value Measurements in the Company’s 2021 Form 10-K for further information regarding fair value hierarchy, valuation techniques and other items related to fair value measurements.

Municipal securities: Municipal securities are valued using recently executed transactions, market price quotations (when observable), bond spreads from independent external parties such as vendors and brokers, adjusted for any basis difference between cash and derivative instruments. The spread data used is for the same maturity as the bond. Municipal securities are generally categorized in level 2 of the fair value hierarchy.

~~Options: Options~~Unit investment trusts (“UITs”): Units of UITs are ~~valued based on quoted prices from the exchange. To the extent these securities are actively traded, valuation adjustments are not applied, and they are categorized in level 1~~carried at redemption value, which represents fair value. Units of ~~the fair value hierarchy. Securities quoted in inactive markets or with observable inputs are categorized into level 2. If there are no observable inputs or quoted prices, securities~~UITs are categorized as level ~~3 assets in the fair value hierarchy. Level 3 assets are not actively traded and subjective estimates based on managements’ assumptions are utilized for valuation.~~2.

The following tables present the Company's fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of the periods presented.

	As of June 30, 2022								As of September 30, 2022
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Cash and securities segregated for regulatory purposes
U.S. government securities*	$	116,818,000	$	0—	$	0—	$	116,818,000	$	140,197,000	$	—	$	—	$	140,197,000

Securities owned, at fair value
U.S. government securities**	$	2,845,000	$	0—	$	0—	$	2,845,000	$	2,823,000	$	—	$	—	$	2,823,000
Certificates of deposit		0—		92,000		0—		92,000		—		92,000		—		92,000
Municipal securities		0—		10,000		0—		10,000		—		174,000		—		174,000
Corporate bonds		0—		11,000		0		11,000		—		106,000		—		106,000
Equity securities		240,000		152,000		0—		392,000		96,000		177,000		—		273,000
Total Securities owned, at fair value	$	3,085,000	$	265,000	$	0—	$	3,350,000	$	2,919,000	$	549,000	$	—	$	3,468,000

Liabilities
Securities sold, not yet purchased, at fair value
Equity securities	$	0—	$	9,000	$	0—	$	9,000	$	4,000	$	—	$	—	$	4,000
Unit investment trust										—		7,000		—		7,000
Total Securities sold, not yet purchased, at fair value	$	0—	$	9,000	$	0—	$	9,000	$	4,000	$	7,000	$	—	$	11,000

	As of December 31, 2021								As of December 31, 2021
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Securities owned, at fair value
U.S. government securities**	$	2,966,000	$	0—	$	0—	$	2,966,000	$	2,966,000	$	—	$	—	$	2,966,000
Certificates of deposit		0—		91,000		0—		91,000		—		91,000		—		91,000
Corporate bonds		0—		12,000		0—		12,000		—		12,000		—		12,000
Equity securities		489,000		433,000		0—		922,000		489,000		433,000		—		922,000
Total Securities owned, at fair value	$	3,455,000	$	536,000	$	0—	$	3,991,000	$	3,455,000	$	536,000	$	—	$	3,991,000

Liabilities
Securities sold, not yet purchased, at fair value
Equity securities	$	0—	$	24,000	$	0—	$	24,000	$	—	$	24,000	$	—	$	24,000
Total Securities sold, not yet purchased, at fair value	$	0—	$	24,000	$	0—	$	24,000	$	—	$	24,000	$	—	$	24,000

*As of ~~June~~September 30, 2022, the Company had U.S. government securities with market values of approximately ~~$9.8~~$24.6 million, ~~$9.9~~ $9.8million, ~~$62.9~~$9.7 million, ~~$24.3~~$62.2 million, $23.9 million, and ~~9.9~~$9.7 million ~~and~~with corresponding maturity dates of March 23, 2023, May 18, 2023, August 31, 2023, December 31, 2023, January 31, 2024, and May 31, 2024, ~~respectively.~~respectively as well as approximately $0.3 million of interest. As of December 31, 2021, the Company did not have any U.S. government securities classified as cash and securities segregated for regulatory purposes.

**As of ~~both~~September 30, 2022, the Company had U.S. government securities with market values of approximately $24,000, $5,000 and $2.8 million with corresponding maturity dates of June 30, ~~2022~~2024, September 30, 2024, and August 15, 2024, respectively. As of December 31, 2021, the U.S. government securities had a maturity date of August 15, 2024.

Refer to the below as well as Note 6 – Fair Value Measurements in the Company’s 2021 Form 10-K for further information regarding financial instruments not carried at fair value on the statements of financial condition as of ~~June~~September 30, 2022 and December 31, 2021.

Short-term financial instruments: The carrying value of short-term financial instruments, including cash and cash equivalents as well as cash and securities segregated for regulatory purposes, are recorded at amounts that approximate the fair value of these instruments. These financial instruments generally expose the Company to limited credit risk and have no stated maturities or have short-term maturities and carry interest rates that approximate market rates. The Company had no cash equivalents for regulatory purposes as of ~~June~~September 30, 2022 and December 31, 2021. Securities segregated for regulatory purposes consist solely of U.S. government securities and are included in the fair value hierarchy table above. Cash and cash equivalents and cash and securities segregated for regulatory purposes are classified as level 1.

Property, office facilities, and equipment consisted of the following as of the periods indicated:

Total depreciation expense for property, office facilities, and equipment was $~~99,000~~102,000 and $98,000 for the three months ended ~~June~~September 30, 2022 and 2021, respectively. Total depreciation expense for property, office facilities, and equipment was $~~196,000~~298,000 and $~~214,000~~312,000 for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively.

On December 30, 2021, the Company purchased an office building located at 653 Collins Ave, Miami Beach, FL (“Miami office building”). The Miami office building contains approximately 12,000 square feet of office space and will ~~be used~~serve as ~~one of the~~a primary operating ~~centers for~~center of the Company.

As of ~~June~~September 30, 2022, no depreciation expense has been recorded for the Miami office building. Depreciation expense will commence when the build out of the Miami office building is completed and placed in service, which is expected to occur in the ~~third~~first quarter of ~~2022.~~2023. The Company invested ~~$320,000~~$296,000 and ~~$596,000~~$892,000 in the three and ~~six~~nine months ended ~~June~~September 30, 2022, respectively, to build out the Miami office building.

As of ~~June~~September 30, 2022, the Company rents office space under operating leases expiring in ~~2022~~2023 through 2027, and the Company has no financing leases. The leases call for base rent plus escalations as well as other operating expenses. The following table represents the Company’s lease right-of-use assets and lease liabilities on the statements of financial condition. The Company elected not to include short-term leases (i.e., leases with initial terms of less than twelve months), or equipment leases (deemed immaterial) on the statements of financial condition.

As of ~~June~~September 30, 2022, the Company does not believe that any of the renewal options under the existing leases are reasonably certain to be exercised; however, the Company will continue to assess and monitor the lease renewal options on an ongoing basis.

The calculated amounts of the lease right-of-use assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company leases some miscellaneous office equipment, but they are immaterial and therefore the Company records the costs associated with this office equipment on the statements of operations rather than capitalizing them as lease right-of-use assets. The Company determined a discount rate of 5.0% would approximate the Company’s cost to obtain financing given its size, growth, and risk profile.

The following table represents lease costs and other lease information. The Company has elected the practical expedient to not separate lease and non-lease components, and as such, the variable lease cost primarily represents variable payments such as common area maintenance and utilities which are usually determined by the leased square footage in proportion to the overall office building.

Future annual minimum payments for operating leases with initial terms of greater than one year as of ~~June~~September 30, 2022 were as follows:

On November 16, 2021, the Company entered into an agreement with Tigress Holdings, LLC, (“Tigress”), a Delaware limited liability company. Refer to Note 10 – Equity Method Investment in Related Party in the Company’s 2021 Form 10-K for further information regarding the material terms of this agreement and the corresponding accounting treatment.

For the three months ended ~~June~~September 30, 2022 and 2021, the loss recognized from the Company’s investment in Tigress was $151,000 and $0, respectively. For the nine months ended September 30, 2022 and 2021, the earnings recognized from the Company’s investment in Tigress was $~~33,000~~ ~~and $~~0~~, respectively. For the six months ended June 30, 2022 and 2021, the earnings recognized from the Company’s investment in Tigress was $198,000~~46,000 and $0, respectively. For the three and ~~six~~nine months ended ~~June~~September 30, 2022, the Company received cash distributions from Tigress of $172,000. The Company did not receive any cash distributions from Tigress in 2021; however, RISE made a distribution of $156,000 to SFC in 2021 in lieu of a corresponding distribution from Tigress.

As of ~~June~~September 30, 2022 and December 31, 2021, the carrying amount of the investment in Tigress was $~~8,025,000~~7,874,000 and $8,156,000, respectively. The Company evaluates its equity method investments for impairment when events or changes indicate the carrying value may not be recoverable. If the impairment is determined to be other-than-temporary, the Company will recognize an impairment loss equal to the difference between the expected realizable value and the carrying value of the investment.

There were no events or circumstances suggesting the carrying amount of the investment may be impaired as of ~~June~~September 30, 2022 and December 31, 2021.

Below is a table showing the summary from the consolidated statements of operations and financial condition for Tigress for the periods indicated (unaudited):

On January 21, 2022, RISE entered into an agreement to acquire a minority stake in Hedge Connection, a Florida corporation and a woman-owned fintech company founded by Lisa Vioni that provides capital introduction software solutions for the prime brokerage industry. Refer to Note 25 – Subsequent Events in the Company’s 2021 Form 10-K for additional details.

		Three Months Ended June 30,		Six Months Ended June 30,
Revenue	$	2,333,000	$	3,269,000	$	5,732,000	$	7,321,000
Operating income	$	134,000	$	914,000	$	823,000	$	2,624,000
Net income	$	134,000	$	914,000	$	823,000	$	2,624,000

	Three Months Ended September 30,		Nine Months Ended September 30,
Revenue	$	1,213,000		$	3,816,000	$	6,945,000	$	11,211,000
Operating income (loss)	$	(627,000	)	$	1,375,000	$	196,000	$	4,027,000
Net income (loss)	$	(627,000	)	$	1,375,000	$	196,000	$	4,027,000

For the three months ended ~~June 30, 2022 and 2021, the loss recognized from the Company’s investment in Hedge Connection was $19,000~~ ~~and $~~0~~, respectively. For the six months ended June~~September 30, 2022 and 2021, the earnings recognized from the Company’s investment in Hedge Connection was $~~17,000~~3,000 and $0, respectively. For the nine months ended September 30, 2022 and 2021, the earnings recognized from the Company’s investment in Hedge Connection was $20,000 and $0, respectively. The Company has not received any cash distributions from Hedge Connection for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021.

As of ~~June~~September 30, 2022 and December 31, 2021, the carrying amount of the investment in Hedge Connection was $~~1,017,000~~1,020,000 and $0, respectively. The Company evaluates its equity method investments for impairment when events or changes indicate the carrying value may not be recoverable. If the impairment is determined to be other-than-temporary, the Company will recognize an impairment loss equal to the difference between the expected realizable value and the carrying value of the investment. There were no events or circumstances suggesting the carrying amount of the investment may be impaired as of ~~June~~September 30, 2022.

The Company incurred no expenses from Hedge Connection for licensing and consulting fees for the three months ended September 30, 2022 and 2021. The Company incurred expenses from Hedge Connection for licensing and consulting fees in an aggregate amount of $~~103,000~~186,000 and $0, for the ~~three~~nine months ended ~~June~~September 30, 2022 and 2021, respectively.

The Company ~~incurred expenses from~~entered into several arrangements in the fourth quarter of 2022 that will impact its ownership interests of RISE, Tigress, and Hedge Connection and as well as various arrangements with these entities. Refer to Note 20 – Subsequent Events for ~~licensing and consulting fees in an aggregate amount of $171,000~~ ~~and $~~0, for the six months ended June 30, 2022 and 2021, respectively. As of June 30, 2022, the Company had a future commitment to Hedge Connection for consulting fees and the notes payable to Hedge Connection. This commitment was in aggregate $~~340,000, $180,000, and $15,000~~ ~~for the years ended 2022, 2023, and 2024, respectively.~~further detail.

As of ~~June~~September 30, 2022, the Company maintained a 2% ownership interest in OpenHand Holdings, Inc. (“OpenHand”) and an option to purchase an additional 2% of the outstanding common stock of OpenHand at an exercise price equal to a $42.5 million valuation of OpenHand. The option expires in November 2022 and the Company is currently evaluating whether to exercise the option.

The investment does not have a readily determinable fair value since OpenHand is a private company and its shares are not publicly traded. The Company made an accounting policy election to measure this investment at cost less any impairment adjusted for any changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

As of ~~June~~September 30, 2022, management concluded that the investment in OpenHand is not impaired and that no additional events or changes in circumstances were identified that could have a significant effect on the original valuation of the investment. As of both ~~June~~September 30, 2022 and December 31, 2021, the carrying value of the Company’s investment in OpenHand was $850,000.

As of both ~~June~~September 30, 2022 and December 31, 2021, no value was attributed to the option to purchase an additional 2% of OpenHand because the option is not a derivative and there were no transaction costs associated with this option as of those periods.

Refer to Note 11 – Investments, Cost in the Company’s 2021 Form 10-K for further information regarding this transaction and the corresponding accounting treatment.

As of both ~~June~~September 30, 2022 and December 31, 2021, the Company’s carrying amount of goodwill was $1,989,000, all of which came from the Company’s acquisition of RISE. As of ~~June~~September 30, 2022, management concluded that there have been no impairments to the carrying value of the Company’s goodwill and no impairment charges related to goodwill were recognized in the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021. Additionally, the Company determined there was not a material risk for future possible impairments to goodwill as of the date of the assessment.

For the three and nine months ended September 30, 2021, the Company recorded a full impairment of its RISE customer relationships intangible asset of $699,000.

On December 30, 2021, the Company purchased the Miami office building for approximately $6.8 million, and the Company entered into a mortgage with East West Bancorp, Inc. (“East West Bank”) for approximately $4 million to finance part of the purchase of the Miami office building as well as $338,000 to finance part of the build out of the Miami office building.

The ~~Company’s~~Company's obligations under the mortgage are secured by a lien on the Miami office building and the term of the loan is ten years. The repayment schedule will utilize a 30-year amortization period, with a balloon on the remaining amount due at the end of ten years. The interest rate is 3.6% for the first 7 years, and thereafter the interest rate shall be at the prime rate as reported by the Wall Street Journal, provided that the minimum interest rate on any term loan will not be less than 3.6%. As part of the agreement, the Company must maintain a debt service coverage ratio of 1.4 to 1. The loan is subject to a prepayment penalty over the first five years which is calculated as a percentage of the principal amount outstanding at the time of prepayment. This percentage is 5% in the first year and decreases by 1% each year thereafter, with the prepayment penalty ending after 5 years.As of ~~June~~September 30, 2022, the Company iswas in compliance with all of its covenants related to this agreement.

As of ~~June~~September 30, 2022, the Company used its full commitment of $338,000 with East West Bank for the build out of the Miami office building.

Future remaining annual minimum principal payments for the mortgage with East West Bank as of ~~June~~September 30, 2022 were as follows:

The interest expense related to this mortgage was $~~40,000~~38,000 and $0 for the three months ended ~~June~~September 30, 2022, and 2021, respectively. The interest expense related to this mortgage was $~~65,000~~103,000 and $0 for the ~~six~~nine months ended ~~June~~September 30, 2022, and 2021, respectively. As of ~~June~~September 30, 2022, the interest rate for this mortgage was 3.6%.

On July 22, 2020, the Company entered into a loan and security agreement with East West Bank. In accordance with the terms of this agreement, the Company ~~has~~had the ability to borrow term loans in an aggregate principal amount not to exceed $10 million during the two-year period after July 22, 2020. The Company originally borrowed $5.0 million and had an outstanding balance of $2.9 million as of September 30, 2022. The Company’s ability to borrow an additional $5.0 million available on its line of credit with East West Bank expired on July 22, 2022; however, the Company does not believe this will impact its ability to fund its operations.

The Company’s obligations under the agreement are secured by a lien on all of the Company’s cash, dividends, stocks and other monies and property from time to time received or receivable in exchange for the Company’s equity interests in and any other rights to payment from the Company’s subsidiaries; any deposit accounts into which the foregoing is deposited and all substitutions, products, proceeds (cash and non-cash) arising out of any of the foregoing. Each term loan will have a term of four years, beginning when the draw is made. The repayment schedule will utilize a five-year (60 month) amortization period, with a balloon on the remaining amount due at the end of four years.

Term loans made pursuant to the agreement shall bear interest at the prime rate as reported by the Wall Street Journal, provided that the minimum interest rate on any term loan will not be less than 3.25%. In addition to the foregoing, on the date that each term loan is made, the Company shall pay to the lender an origination fee equal to 0.25% of the principal amount of such term loan. Pursuant to the loan agreement, the Company paid all lender expenses in connection with the loan agreement.

This agreement contains certain financial and non-financial covenants. The financial covenants are that the Company must maintain a debt service coverage ratio of 1.35 to 1, an effective tangible net worth of a minimum of $25 million, and MSCO must maintain a net capital ratio that is not less than 10% of aggregate debit items. Certain other non-financial covenants include that the Company must promptly notify East West Bank of the creation or acquisition of any subsidiary that at any time owns assets with a value of $100,000 or greater. As of ~~June~~September 30, 2022, the Company was in compliance with all its covenants related to this agreement.

In addition, the Company’s obligations under the agreement are guaranteed pursuant to a guarantee agreement by and among, John J. Gebbia and Gloria E. Gebbia, individually, and as a co-trustees of the John and Gloria Living Trust, U/D/T December 8, 1994 (“John and Gloria Gebbia Trust”).

~~As of June 30, 2022, the Company has drawn down a $5.0 million term loan under this agreement and has an outstanding balance of $3.2~~ ~~million. The Company has an additional $5.0~~ ~~million remaining to draw down from this line of credit.~~

Future remaining annual minimum principal payments for the line of credit with East West Bank as of ~~June~~September 30, 2022 were as follows:

The interest expense related to ~~this~~the line of credit was $~~31,000~~39,000 and $~~36,000~~34,000 for the three months ended ~~June~~September 30, 2022 and 2021, respectively. The interest expense related to ~~this~~the line of credit was $~~60,000~~99,000 and $~~73,000~~107,000 for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively. As of ~~June~~September 30, 2022, the interest rate for this line of credit was ~~4.8~~6.3%.

As of ~~June~~September 30, 2022, the Company had various notes payable to Gloria E. Gebbia and Hedge Connection, the details of which are presented below:

As of December 31, 2021, the Company had various notes payable to Gloria E. Gebbia, the details of which are presented below:

*On January 21, 2022, the Company entered into a $600,000 note payable to Hedge Connection. During the ~~six~~nine months ended ~~June~~September 30, 2022, the Company paid $350,000 of this note payable. See Note 20 – Subsequent Events for further detail.

**On March 31, 2022, $2,880,000 in aggregate of notes payable to Gloria E. Gebbia was exchanged for 24% ownership interest in RISE. During the ~~six~~nine months ended ~~June~~September 30, 2022, the Company paid the remainder of these notes payable.

***This note payable is subordinated to MSCO and is subordinated to the claims of general creditors, approved by FINRA, and is included in MSCO’s calculation of net capital and the capital requirements under FINRA and SEC regulations. On August 17, 2021, this note payable was renewed with a maturity of November 30, 2022.

The Company’s interest expense for these notes payable for the three months ended ~~June~~September 30, 2022 and 2021 was $~~31,000~~30,000 and $52,000, respectively. The Company’s interest expense for these notes payable for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021 was $~~101,000~~131,000 and $~~104,000~~156,000, respectively.

As part of this agreement, the Company received a one-time business development credit of $3 million from NFS which ~~is within~~was recorded in the line item “Deferred contract incentive” on the statements of financial condition. This credit will be recognized as contra expense over the term of the agreement in the line item “Clearing fees, including execution costs” on the statements of operations. For the three months ended ~~June~~September 30, 2022 and 2021, the Company recognized $~~213,000~~196,000 and $0 in contra expense, respectively. For the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, the Company recognized $~~425,000~~621,000 and $0 in contra expense, respectively. As of ~~June~~September 30, 2022 and December 31, 2021, the balance of the deferred contract incentive was $~~2.3~~2.1 million and $2.7 million, respectively.

The Company earns commission revenue for executing trades for clients in individual equities, options, insurance products, futures, fixed income securities, as well as certain third-party mutual funds and ETFs. Commission revenue associated with combined trade execution and clearing services, as well as trade execution services on a standalone basis, is recognized at a point in time on the trade date when the performance obligation is satisfied. 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.

Principal transactions and proprietary trading primarily represent two business lines. The first business line is riskless transactions in which the Company, after executing a solicited order, buys or sells securities as principal and at the same time buys or sells the securities with a markup or markdown to satisfy the order. The second business line is entering into transactions where proprietary U.S. government securities and other securities are traded by the Company.

Principal transactions and proprietary trading are recognized at a point in time on the trade date when the performance obligation is satisfied. 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.

During the ~~six~~nine months ended ~~June~~September 30, 2022, the Company invested in a portfolio of U.S. government securities, which is primarily within the line item ~~cash~~“Cash and securities segregated for regulatory ~~purposes~~purposes” on the statements of financial condition. The following table represents detail related to principal transactions and proprietary trading. Refer to the year-over-year comparisons within Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations within this Report for additional detail.

Market making revenue is generated from the buying and selling of securities. Market making transactions are recorded on a trade-date basis as the securities transactions occur. 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 counterparty. Securities owned are recorded at fair market value at the end of the reporting period.

The Company borrows securities on behalf of retail clients to facilitate short trading, loans excess margin and fully-paid securities from client accounts, facilitates borrow and loan contracts for broker-dealer counterparties, and provides stock locate services to broker-dealer counterparties. The Company recognizes self-clearing revenues net of operating expenses related to stock borrow / stock loan. Stock borrow / stock loan also includes any revenues generated from the Company’s fully paid lending programs on a self-clearing or introducing basis. The Company does not utilize stock borrow / stock loan activities for the purpose of financing transactions.

The performance obligation is satisfied on the contract 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 counterparty.

For the three months ended ~~June~~September 30, 2022, stock borrow / stock loan revenue was $~~4,148,000~~4,183,000 ($~~8,836,000~~9,921,000 gross revenue less $~~4,688,000~~5,738,000 expenses). For the three months ended ~~June~~September 30, 2021, stock borrow / stock loan revenue was $~~2,240,000~~3,465,000 ($~~7,021,000~~7,754,000 gross revenue minus $~~4,781,000~~4,289,000 expenses).

For the ~~six~~nine months ended ~~June~~September 30, 2022, stock borrow / stock loan revenue was $~~7,726,000~~11,909,000 ($~~16,301,000~~26,222,000 gross revenue less $~~8,575,000~~14,313,000 expenses). For the ~~six~~nine months ended ~~June~~September 30, 2021, stock borrow / stock loan revenue was $~~4,087,000~~7,552,000 ($~~11,851,000~~19,605,000 gross revenue minus $~~7,764,000~~12,053,000 expenses).

The Company earns advisory fees associated with managing client assets. The performance obligation related to this revenue stream is satisfied over time; however, the advisory fees are variable as they are charged as a percentage of the client’s total asset value, which is determined at the end of the quarter.

The Company earns interest from clients’ accounts, net of payments to clients’ accounts, and on the Company’s bank balances. Interest income also includes interest payouts from introducing relationships related to short interest, net of charges.

The Company also earns margin interest which is the net interest charged to customers for holding financed margin positions. Marketing and distribution fees consist of 12b-1 fees which are trailing payments from money market funds. Interest, marketing and distribution fees are recorded as earned.

Other income represents fees generated from consulting services to ~~institutional partners,~~technology providers, corporate services client fees, payment for order flow, and transactional fees generated from client accounts. Transactional fees are recorded concurrently with the related activity. Other income is recorded as earned.

The following table presents the Company’s major revenue categories and when each category is recognized:

	Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
Revenue Category	2022		2021		2022		2021		Timing of Recognition	2022		2021		2022		2021		Timing of Recognition

Trading Execution and Clearing Services
Commissions and fees	$	1,853,000	$	4,325,000	$	4,193,000	$	11,333,000	Recorded on trade date	$	1,750,000	$	4,019,000	$	5,943,000	$	15,352,000	Recorded on trade date
Principal transactions and proprietary trading		1,081,000		4,107,000		814,000		8,355,000	Recorded on trade date		953,000		3,924,000		1,767,000		12,279,000	Recorded on trade date
Market making		535,000		1,758,000		1,299,000		3,372,000	Recorded on trade date		723,000		1,514,000		2,022,000		4,886,000	Recorded on trade date
Stock borrow / stock loan		4,148,000		2,240,000		7,726,000		4,087,000	Recorded as earned		4,183,000		3,465,000		11,909,000		7,552,000	Recorded as earned
Advisory fees		476,000		403,000		983,000		759,000	Recorded as earned		437,000		441,000		1,420,000		1,200,000	Recorded as earned
Total Trading Execution and Clearing Services		8,093,000		12,833,000		15,015,000		27,906,000			8,046,000		13,363,000		23,061,000		41,269,000

Other Income
Interest, marketing and distribution fees
Interest		572,000		1,163,000		807,000		2,317,000	Recorded as earned		1,387,000		1,014,000		2,195,000		3,331,000	Recorded as earned
Margin interest		2,201,000		2,296,000		4,168,000		4,448,000	Recorded as earned		3,169,000		2,251,000		7,336,000		6,698,000	Recorded as earned
12b-1 fees		378,000		164,000		538,000		317,000	Recorded as earned		648,000		170,000		1,186,000		488,000	Recorded as earned
Total Interest, marketing and distribution fees		3,151,000		3,623,000		5,513,000		7,082,000			5,204,000		3,435,000		10,717,000		10,517,000

Other income		479,000		337,000		1,503,000		729,000	Recorded as earned		1,086,000		253,000		2,589,000		982,000	Recorded as earned

Total Revenue	$	11,723,000	$	16,793,000	$	22,031,000	$	35,717,000		$	14,336,000	$	17,051,000	$	36,367,000	$	52,768,000

The following table presents each revenue category and its related performance obligation:

Revenue Stream		Performance Obligation
Commissions and fees, Principal transactions and proprietary trading, Market making, Stock borrow / stock loan, Advisory fees		Provide financial services to customers and counterparties
Interest, marketing and distribution fees, Other income		n / a

For the periods presented, there were no costs capitalized related to obtaining or fulfilling a contract with a customer, and thus the Company has no balances for contract assets or contract liabilities. The Company concludes that its revenue streams have the same underlying economic factors, and as such, no disaggregation of revenue is required.

The Company’s provision for income taxes consists of federal and state taxes, as applicable, in amounts necessary to align the Company’s year-to-date tax provision with the effective rate that it expects to achieve for the full year. Each quarter the Company updates its estimate of the annual effective tax rate and records cumulative adjustments as necessary. As of ~~June~~September 30, 2022, the Company has concluded that its deferred tax assets are realizable on a more-likely-than-not basis with the exception of certain state net operating losses.

On March 11, 2021, the American Rescue Plan Act of 2021 (“American Rescue Plan”) was signed into law to provide additional relief in connection with the ongoing COVID-19 pandemic. The American Rescue Plan includes, among other things, provisions relating to PPP loan expansion, defined pension contributions, excessive employee remuneration, and the repeal of the election to allocate interest expense on a worldwide basis. Under ASC 740, the effects of new legislation are recognized upon enactment. The enactment of the American Rescue Plan did not impact the Company’s income tax provision.

For the three months ended ~~June~~September 30, 2022, the Company recorded an income tax provision of $473,000 on pre-tax book income of $1,440,000. For the nine months ended September 30, 2022, the Company recorded an income tax benefit of $~~1,027,000~~836,000 on pre-tax book loss of ~~$517,000. For the six months ended June 30, 2022, the Company recorded an income tax benefit of~~ $~~1,309,000~~451,000 ~~on pre-tax book loss of $1,890,000.~~. The effective tax rate for the three and ~~six~~nine months ended ~~June~~September 30, 2022 was ~~199~~33% and 69185%, respectively. The effective tax rate differs from the federal statutory rate of 21% primarily related to the benefit from the reversal of the uncertain tax position related to the 2018 amended tax return due to the expiration of the statute of limitations and certain permanent tax differences and state and local taxes.

For the three and ~~six~~nine months ended ~~June~~September 30, 2021, the Company recorded an income tax provision of $~~484,000~~265,000 and $~~1,219,000~~1,484,000, respectively. The effective tax rate for the three and ~~six~~nine months ended ~~June~~September 30, 2021 was ~~both~~ 2523%. and 24% respectively. The effective tax rate differs from the statutory rate of 21% primarily related to certain permanent tax differences and state and local taxes.

As of ~~June~~September 30, 2022 and December 31, 2021, the Company recorded an uncertain tax position of $1,583,000 and $2,418,000, respectively, related to various tax matters. During the ~~three~~nine months ended ~~June~~September 30, 2022, the Company reversed its uncertain tax position related to the 2018 amended tax return due to the expiration of the statute of limitations.

MSCO is subject to the Uniform Net Capital Rules of the SEC (Rule 15c3-1) of the Exchange Act. Under the alternate method permitted by this rule, net capital, as defined, shall not be less than the lower of $1$1 million or 2%2% of aggregate debit items arising from customer transactions. As of ~~June~~September 30, 2022, MSCO’s net capital was ~~$30.1~~$32.9 million, which was approximately $~~28.5~~31.2 million in excess of its required net capital of $~~1.6~~1.7 million, and its percentage of aggregate debit balances to net capital was ~~37.1~~38.7%.

As of December 31, 2021, MSCO’s net capital was ~~$36.4~~$36.4 million, which was approximately $34.3 million in excess of its required net capital of $2.1 million, and its percentage of aggregate debit balances to net capital was 34.9%.

MSCO is subject to Customer Protection Rule 15c3-3 which requires segregation of funds in a special reserve account for the exclusive benefit of customers. As of ~~June~~September 30, 2022, MSCO had cash and securities deposits of $~~321.7~~295.1 million in the special reserve accounts which was $~~28.7~~29.2 million in excess of the deposit requirement of $~~293.0~~265.9 million. After adjustments for deposit(s) and / or withdrawal(s) made on ~~July 1,~~October 3, 2022, MSCO had $~~28.4~~13.3 million in excess of the deposit requirement.

As of December 31, 2021, MSCO had cash deposits of $326.8 million in the special reserve accounts which was $31.9 million in excess of the deposit requirement of $294.9 million. After adjustments for deposit(s) and / or withdrawal(s) made on January 3, 2022, MSCO had $1.9 million in excess of the deposit requirement.

RISE, 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. RISE is also subject to the CFTC's minimum financial requirements which require that RISE 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.

As of ~~June~~September 30, 2022, RISE’s net capital was approximately ~~$1.3~~$1.1 million which was ~~$1.1~~$0.9 million in excess of its minimum requirement of $250,000 under 15c3-1. As of December 31, 2021, RISE’s net capital was approximately ~~$1.7~~$1.7 million which was ~~$1.4~~$1.4 million in excess of its minimum requirement of $250,000 under 15c3-1.

The Company enters into various transactions to meet the needs of customers, conduct trading activities, and manage market risks and is, therefore, subject to varying degrees of market and credit risk. Refer to the below as well as Note 21 – Financial Instruments with Off-Balance Sheet Risk in the Company’s 2021 Form 10-K for further information.

As of ~~June~~September 30, 2022, the Company had margin loans extended to its customers of approximately $~~0.5~~437.8 ~~billion,~~million, of which $~~63.2~~59.8 million is within the line item “Receivables from customers” on the statements of financial condition. As of December 31, 2021, the Company had margin loans extended to its customers of approximately $~~0.6~~581.8 ~~billion,~~million, of which $84.2 million is within the line item “Receivables from customers” on the statements of financial condition. There were no material losses for unsettled customer transactions for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021.

The Company is party to certain claims, suits and complaints arising in the ordinary course of business. The below legal matter is related to operations of StockCross Financial Services, Inc. (“StockCross”), prior to the Company’s acquisition of StockCross on January 1, 2020.

For activity related to operations of StockCross prior to the Company’s acquisition of StockCross, FINRA’s Division of Enforcement is currently investigating ~~(“Unit investment trust”)~~ UIT transactions that were executed by StockCross that the enforcement staff believes were terminated early. Management cannot at this time assess either the duration or the likely outcome or consequences of this matter. Nevertheless, FINRA has the authority to impose sanctions on the Company or require that it make offers of restitution to other customers who FINRA believes incurred sales charges in early liquidations of UITs. No assurances can be given that a mutual settlement with FINRA regarding this matter can be reached or that any amount paid in settlement will not be material.

As of both ~~June~~September 30, 2022 and December 31, 2021, all other legal matters are without merit or involve amounts which would not have a material impact on the Company’s results of operations or financial position.

As of ~~June~~September 30, 2022 and December 31, 2021, MSCO had an available line of credit for short term overnight demand borrowing with BMO Harris Bank (“BMO Harris”) of up to $25 million and $15 million, respectively. As of those dates, MSCO had no outstanding loan balance and there were no commitment fees or other restrictions on this line of credit. On May 23, 2022, MSCO increased its principal amount for this line of credit from $15$15 million to $25 million.

The interest expense for this line of credit was $1,000 and $0for ~~both~~ the three months ended ~~June~~September 30, 2022 and ~~2021.~~2021, respectively. The interest expense for this line of credit was $~~1,000~~2,000 and $15,000 for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively. There were no fees related to this line of credit for both the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021.

On May 27, 2022, the Company entered into a Capital on DemandTM Sales Agreement (the “Sales Agreement”) with JonesTrading as agent, pursuant to which the Company may offer and sell, from time to time through JonesTrading, shares of the Company’s common stock having an aggregate offering ~~price~~amount of up to $9.6 million under the Company’s shelf registration statement on Form S-3. The Company is not obligated to make any sales of shares under the Sales Agreement. The Company agreed to pay JonesTrading a commission rate equal to 3.0% of the aggregate gross proceeds from each sale of shares. The Company or JonesTrading may suspend or terminate the offering upon notice to the other party and subject to other conditions. Whether the Company sells securities under the Sales Agreement will depend on a number of factors, including the market conditions at that time, the Company’s cash position at that time and the availability and terms of alternative sources of capital.

For the ~~six~~nine months ended ~~June~~September 30, 2022, the Company did not sell any shares pursuant to this Sales Agreement. For the ~~six~~nine months ended ~~June~~September 30, 2022, the Company incurred approximately $~~77,000~~98,000 in legal and audit fees related to this Sales Agreement, which are within the line item “Professional services” on the statements of operations, and were expensed as incurred.

Effective August 1, 2021, MSCO entered into an amendment to its clearing agreement with NFS that, among other things, extends the term of ~~their~~the arrangement for an additional four-year period commencing on August 1, 2021 and ending July 31, 2025. If the Company chooses to exit this agreement before the end of the contract term, the Company is under the obligation to pay an early termination fee upon occurrence pursuant to the table below:

Date of Termination		Early Termination Fee
~~Prior to August 1, 2022~~	$	~~8,000,000~~
Prior to August 1, 2023	$	7,250,000
Prior to August 1, 2024	$	4,500,000
Prior to August 1, 2025	$	3,250,000

For the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, there has been no expense recognized for any early termination fees. The Company believes that it is unlikely it will have to make material payments related to ~~this~~ early termination ~~arrangement~~fees and has not recorded any contingent liability in the financial statements related to this arrangement.

The Company’s general contingencies are included in Note 22 – Commitments, Contingencies, and Other in the Company’s 2021 Form 10-K. Other than the below, there have been no material updates to the Company’s general contingencies during the three and ~~six~~nine months ended ~~June~~September 30, 2022.

The Company, through its affiliate, Kennedy Cabot Acquisition, LLC (“KCA”), is self-insured with respect to employee health claims. KCA maintains stop-loss insurance for certain risks and has a health claim reinsurance limit capped at approximately $65,000 per employee as of ~~June~~September 30, 2022.

As part of this plan, the Company recognized expenses of $~~409,000~~234,000 and $~~359,000~~404,000 for the three months ended ~~June~~September 30, 2022 and 2021, respectively. The Company recognized expenses of $~~905,000~~1,139,000 and $~~650,000~~1,054,000 for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively.

The Company had an accrual of $~~117,000~~80,000 as of ~~June~~September 30, 2022, which represents the estimate of future expense to be recognized for claims incurred during the period.

The Company believes that its present insurance coverage and reserves are sufficient to cover currently estimated exposures, but there can be no assurance that the Company will not incur liabilities in excess of recorded reserves or in excess of its insurance limits.

The Company, through KCA, sponsors a defined-contribution retirement plan under Section 401(k) of the Internal Revenue Code that covers substantially all employees. Participant contributions to the plan are voluntary and are subject to certain limitations. The Company may also make discretionary contributions to the plan. No contributions were made by the Company or KCA for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021.

The Company has an equity incentive plan that provides for the grant of stock options, restricted stock, and other equity awards of the Company’s common stock to employees, officers, consultants, directors, affiliates and other service providers of the Company. There are 3 million shares reserved under the ~~plan,~~plan. For the three and nine months ended September 30, 2022, the Company granted 138,000 restricted units that were fully vested upon grant date. The restricted units had a grant date fair value of $1.70 per share and compensation expense of $235,000 was recognized and is included in the line item “Employee compensation and benefits” in the statements of operations both for the three and nine months ended September 30, 2022. The Company issued no securities under the plan for the three and ~~six~~nine months ended ~~June~~September 30, ~~2022 and~~ 2021.

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 addition, KCA has purchased the naming rights of the Company for the Company to use.

KCA sponsors a defined-contribution retirement plan under Section 401(k) of the Internal Revenue Code that covers substantially all employees. For the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, 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.

PW brokers the insurance policies for related parties. Revenue for PW from related parties was $~~20,000~~7,000 and $~~7,000~~6,000 for the three months ended ~~June~~September 30, 2022 and 2021, respectively. Revenue for PW from related parties was $~~95,000~~102,000 and $~~56,000~~62,000 for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively.

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

The Company has entered into various debt agreements with Gloria E. Gebbia, the Company’s principal stockholder. Refer to Note 12 – Notes Payable -– Related Party for additional detail.

The Company’s obligations under its line of credit with East West Bank are guaranteed pursuant to a guarantee agreement by and among, John J. Gebbia and Gloria E. Gebbia, individually, and as a co-trustees of the John and Gloria Gebbia Trust. Refer to Note 11 – Long-Term Debt for additional detail.

Gloria E. Gebbia has 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 $~~631,000~~820,000 and $210,000 for the three months ended ~~June~~September 30, 2022 and 2021, respectively.

The compensation for the sons of Gloria E. Gebbia and John J. Gebbia was in aggregate $~~1,074,000~~1,894,000 and $~~398,000~~608,000 for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively.

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 ~~June~~September 30, 2022 and 2021, rent expense was $15,000 for this branch office. For both the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, rent expense was $~~30,000~~45,000 for this branch office.

On November 16, 2021, the Company entered into an agreement with Tigress in exchange for ~~24%~~24% of RISE and shares of the Company’s common stock. Refer to Note 8 – Equity Method Investments in Related Parties for additional detail.

As part of the transaction, Tigress’ founder, Cynthia DiBartolo, will continue as CEO of Tigress, and assumed the position as CEO of RISE. Gloria E. Gebbia, one of Siebert’s and RISE’s directors, assumed the position of Chief Impact Officer at RISE. Ms. DiBartolo was appointed to Siebert’s and RISE’s Board of Directors and Ms. Gebbia was appointed to Tigress’ Board of Directors.

On January 21, 2022, RISE entered into an agreement with Hedge Connection, a Florida corporation and a woman-owned fintech company founded by Lisa Vioni.

Refer to Note 8 ~~– Equity~~–Equity Method Investments in Related Parties and Note 12 – Notes Payable – Related Party for additional detail.

The Company has evaluated events that have occurred subsequent to ~~June~~September 30, 2022 and through ~~August 15,~~November 14, 2022, the date of the filing of this Report.

On ~~July 13,~~October 18, 2022, the Company ~~renewed~~entered into a Reorganization Agreement (“Reorganization Agreement”) with Tigress Holdings, LLC, a limited liability company organized under the laws of Delaware (“Tigress Holdings”), whereby the Company exchanged seven percent (7%) of the outstanding membership interests in Tigress Holdings for all of Tigress Holdings’ ownership interest in the Company’s subsidiary RISE Financial Services, LLC, a limited liability company organized under the laws of Delaware (“RISE”). The Company may sell its remaining interest in Tigress Holdings, representing seventeen percent (17%) of the outstanding membership interests in Tigress Holdings, to Gloria E. Gebbia for a consideration to be determined subject to an independent fairness opinion. Gloria E. Gebbia is a director and controlling shareholder of the Company.

Pursuant to the Reorganization Agreement, Cynthia DiBartolo, the Chief Executive Officer and controlling owner of Tigress Holdings, resigned from her position as Chief Executive Officer and board member of RISE and will not stand for re-election to the Company’s board of directors.

Concurrent with the Reorganization Agreement, RISE entered into a Termination Agreement (“Termination Agreement”) with Hedge Connection, Inc., a corporation organized under the laws of Florida (“Hedge Connection”), and its Chief Executive Officer and principal shareholder, Lisa Vioni. Pursuant to the Termination Agreement, the parties terminated the Purchase Agreement, dated January 21, 2022, by and among the parties. Under the terms of the Termination Agreement, the Company will re-convey to Hedge Connection, Hedge Connection common stock representing twenty percent (20%) of Hedge Connection and the related option from Ms. Vioni to acquire 100% of Ms. Vioni’s remaining interest in Hedge Connection.

The Termination Agreement also terminates the Hedge Connection technology license agreement, and terminates a voting agreement with Ms. Vioni providing the Company with the right to appoint one director to the board of directors of Hedge Connection. Pursuant to the Termination Agreement, Ms. Vioni will resign from her position from the Board of Directors of RISE, as well as the President of RISE Prime – Capital Introduction, a division of RISE.

Under the Termination Agreement, Ms. Vioni shall become a registered representative of the broker-dealer subsidiary of Tigress Holdings, Tigress Financial Partners, LLC, a limited liability company organized under the laws of Delaware (“Tigress Financial”), and RISE shall assign to Tigress Financial prospective prime brokerage customers of RISE who were solicited by RISE from January 1, 2022 through the closing date of the Reorganization Agreement. In exchange, Tigress Financial will split revenue with RISE on certain customers pursuant to the Reorganization Agreement.

As part of this Termination Agreement, the Company’s obligation to repay the remaining $250,000 of its ~~leases~~note payable to Hedge Connection was cancelled. See Note 12 – Notes Payable – Related Party for further detail.

As of the date of this Report, the Company is assessing the financial impact of these transactions which may result in a ~~total commitment of approximately $155,000~~ ~~over a two-year period commencing on August 1, 2022.~~material one-time charge to the Company’s financial statements.

Based on the Company’s assessment, other than the ~~event~~events described above, there have been no material subsequent events that occurred during such period that would require disclosure in this Report or would be required to be recognized in the financial statements as of ~~June~~September 30, 2022.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion provides a narrative of our financial performance and condition that should be read in conjunction with the accompanying financial statements and related notes included under Part I, Item 1 of this Report.

We are a financial services company and provide a wide variety of financial services to our clients. We operate in business lines such as retail brokerage, investment advisory, insurance, technology development, and prime brokerage through our wholly-owned subsidiaries and VIE.

Results in the businesses in which we operate are highly correlated to general economic conditions and, more specifically, to the direction of the U.S. equity and fixed-income markets. Market volatility, overall market conditions, interest rates, economic, political, and regulatory trends, and industry competition are among the factors which could affect us and which are unpredictable and beyond our control. These factors affect the financial decisions made by market participants who include investors and competitors, impacting their level of participation in the financial markets. In addition, in periods of reduced financial market activity, profitability is likely to be adversely affected because certain expenses remain relatively fixed, including salaries and related costs, as well as portions of communications costs and occupancy expenses. Accordingly, earnings for any period should not be considered representative of earnings to be expected for any other period.

We are exposed to market risk from changes in interest rates. Such changes in interest rates primarily impact revenue from interest, marketing, and distribution fees. The Company primarily earns interest, marketing and distribution fees from margin interest charged on clients’ margin balances, interest on cash and securities segregated for regulatory purposes, and distribution fees from money market mutual funds in clients’ accounts. Securities segregated for regulatory purposes consist solely of U.S. government securities. If prices of U.S. government securities within our portfolio decline, we anticipate the impact to be temporary as we intend to hold these securities to maturity. We seek to mitigate this risk by managing the average maturities of our U.S. government securities portfolio and setting risk parameters for securities owned, at fair value.

In third quarter of 2022, Siebert reassessed its technology needs and entered into a software license agreement with another technology provider for the development of a new retail trading platform, which resulted in the termination of our original technology relationship. We believe this new technology provider will be key to creating a platform for the next generation of retail customers and the termination of our original technology partnership had minimal impact on our current operations. Refer to Note 1 – Organization and Basis of Presentation for further detail on the accounting and financial impact of this transaction.

On August 30, 2021, GSCO notified RISE that its clearing arrangement with RISE will be terminated. Due to the termination of RISE’s clearing arrangement with GSCO, substantially all the revenue producing customers of RISE have transitioned to other prime service providers. Revenue and pre-tax income from customers that have transitioned to other prime service providers was approximately ~~$3.5~~$3.2 million and $0.4 million, respectively, for the three months ended ~~June~~September 30, 2021. Revenue and pre-tax income from customers that have transitioned to other prime service providers was approximately ~~$8.4~~$11.6 million and ~~$1.5~~$1.9 million, respectively, for the ~~six~~nine months ended ~~June~~September 30, 2021.

On October 7, 2021, RISE signed an agreement with JonesTrading Institutional Services, LLC (“JonesTrading”) to transfer certain customers of RISE to JonesTrading. In exchange, JonesTrading agreed to pay RISE a percentage of the net revenue produced by those clients less any related expenses. For the three and ~~six~~nine months ended ~~June~~September 30, 2022, this agreement resulted in pre-tax income of ~~$36,000~~$61,000 and ~~$76,000,~~$137,000, respectively. There was no pre-tax income for the three or nine months ended September 30, 2021 related to this agreement. We do not anticipate the pre-tax income related to this agreement will offset the reduction in pre-tax income from customers that have transitioned to other prime service providers.

In 2022, RISE relaunched its business as a woman-owned and operated prime brokerage with a specific emphasis on aligning the mission-driven initiatives with the technological needs of institutional customers. Cynthia DiBartolo was appointed as the new CEO of RISE, and Gloria E. Gebbia, one of Siebert’s and RISE’s directors, was appointed as the Chief Impact Officer of RISE. In addition, on January 21, 2022, RISE entered into an agreement with Hedge Connection, a woman-owned fintech company founded by Lisa Vioni that provides capital introduction software solutions for the prime brokerage industry.

Since the relaunch, management decided to change the strategic direction and leadership of RISE. As part of this, Siebert entered into an agreement to exchange its 7% ownership of Tigress for Tigress’ ownership of RISE, and Siebert may sell its remaining 17% ownership of Tigress to Gloria E. Gebbia. Siebert also entered into an agreement with Hedge Connection whereby Siebert re-conveyed 20% of the common stock of Hedge Connection and the related option to acquire 100% of Hedge Connection.

As part of these agreements, Cynthia DiBartolo and Lisa Vioni resigned from their respective positions within Siebert and RISE, and Ms. DiBartolo will not stand for re-election for Siebert’s Board of Directors. Refer to Note 20 – Subsequent Events for further detail on these transactions.

Management is assessing the future strategic direction of RISE, taking into consideration current market conditions, demand trends, and resources. While we believe our expertise and industry relationships will enable us to execute ~~this~~a new strategic direction, our business plan for RISE is ~~new and~~ untested, and it is uncertain whether our efforts will attract the ~~prime brokerage~~ customers and revenue necessary to compete in a new market for prime customers. Any failure to adapt to these evolving trends may reduce our revenue or operating margins and could have a material adverse effect on our business, results of operations and financial condition.

~~As of~~ the date of this Report, management is assessing the strategic direction of RISE, taking into consideration current market conditions, demand trends, and resources, and is currently reviewing RISE’s originally proposed business plan and evaluating whether we can accomplish those plans as contemplated.market.

During the first quarter of 2022, RISE issued and Siebert sold membership interests in RISE to certain employees, directors, and affiliates of RISE and Siebert. As a result of these transactions, Siebert’s ownership percentage in RISE declined from 76% as of December 31, 2021 to approximately 44% as of March 31, 2022, and remained unchanged as of ~~June~~September 30, 2022. Management will continue to assess whether RISE remains a VIE and whether Siebert remains the primary beneficiary on an on-going basis. Refer to Note 1 – Organization and Basis of Presentation for additional detail.

The following tables set forth metrics we use in analyzing our client account and activity trends for the periods indicated.

		As of
Retail and institutional customer net worth (in billions)		$	14.0			$	17.3

		As of
Retail and institutional customer net worth (in billions)		$	12.8			$	17.3

Retail customer net worth represents the total value of securities and cash in the retail customer accounts after deducting margin debits

Retail customer margin debit balances represents credit extended to our customers to finance their purchases against current positions

Retail customer credit balances represents client cash held in brokerage accounts

Retail customer money market fund value represents all retail customers accounts invested in money market funds

		As of
Institutional customer net worth (in billions)		$	0.2			$	0.5

		As of
Institutional customer net worth (in billions)		$	—			$	0.5

Institutional customer net worth represents the total value of securities and cash in the institutional customer accounts after deducting margin debits and short positions

Statements of Operations for the Three Months Ended ~~June~~September 30, 2022 and 2021

Commissions and fees for the three months ended ~~June~~September 30, 2022 were ~~$1,853,000~~$1,750,000 and decreased by ~~$2,472,000~~$2,269,000 from the corresponding period in the prior year, primarily due to the loss of institutional customers ~~due to the termination of GSCO’s clearing agreement with~~in RISE as well as market conditions during the ~~second~~third quarter of 2022.

Interest, marketing and distribution fees for the three months ended ~~June~~September 30, 2022 were ~~$3,151,000~~$5,204,000 and ~~decreased~~increased by ~~$472,000~~$1,769,000 from the corresponding period in the prior year, primarily due to ~~the loss of institutional customers due to the termination of GSCO’s clearing agreement with RISE, partially offset by~~ an increase in margin interest, 12b-1fees, as well as interest on U.S. treasuries and cash deposits within ~~MSCO.~~MSCO of an aggregate of $3.2 million, partially offset by the loss of interest income from institutional customers in RISE of $1.4 million.

Principal transactions and proprietary trading for the three months ended ~~June~~September 30, 2022 were ~~$1,081,000~~$953,000 and decreased by ~~$3,026,000~~$2,971,000 from the corresponding period in the prior year, primarily due to the factors discussed below.

The decrease in realized and unrealized gain on primarily riskless principal transactions was primarily due to market conditions.The increase in unrealized loss on our portfolio of U.S. government securities was due to the following. From January to ~~June~~September 2022, Siebert invested approximately ~~$120~~$145 million notional value in 1-year treasury bills and 2-year treasury notes in order to enhance its yield on its excess 15c3-3 deposits. ~~For the six months ended June 30,~~During 2022 there was an increase in U.S. government securities yields, which created an unrealized loss of approximately ~~$617,000~~$1.4 million on our government securities portfolio for the three months ended ~~June~~September 30, 2022. We intend to hold these securities to maturity and as such, the aggregate unrealized loss of ~~$2.8~~$4.2 million on the portfolio as of ~~June~~September 30, 2022 will be returned over the duration of the government securities, at a point no later than the maturity of the securities, the latest maturity being August 2024. If the value of our portfolio of government securities declines further, we will incur further unrealized losses; however, we anticipate this loss to be temporary as we intend to hold these securities to maturity. The portfolio of U.S. government securities represents less than half of the total value of our cash and securities segregated for regulatory purposes, and we believe that the level invested reduces the risk of having to liquidate the securities prior to maturity.

Below is a summary of the change in the principal transactions and proprietary trading line item as well as a maturity schedule of our portfolio of U.S. government securities for the periods presented.

Market making for the three months ended ~~June~~September 30, 2022 was ~~$535,000~~$723,000 and decreased by ~~$1,223,000~~$791,000 from the corresponding period in the prior year, primarily due to market conditions.

Stock borrow / stock loan for the three months ended ~~June~~September 30, 2022 was ~~$4,148,000~~$4,183,000 and increased by ~~$1,908,000~~$718,000 from the corresponding period in the prior year, primarily due to the growth of the business, expansion of our stock locate revenues, and additional securities lending and locate counterparty relationships.

Advisory fees for the three months ended ~~June~~September 30, 2022 were ~~$476,000~~$437,000 and ~~increased~~decreased by ~~$73,000~~$4,000 from the corresponding period in the prior ~~year, primarily due to the expansion of the advisory business line.~~year.

Other income for the three months ended ~~June~~September 30, 2022 was ~~$479,000~~$1,086,000 and increased by ~~$142,000~~$833,000 from the corresponding period in the prior year, primarily due to an increase in income from consulting services ~~to institutional, partners partially offset by lower~~and termination payment ~~for order flow in the second quarter of 2022.~~from a technology partner.

Employee compensation and benefits for the three months ended ~~June~~September 30, 2022 were ~~$7,368,000~~$7,290,000 and decreased by ~~$1,377,000~~$2,004,000 from the corresponding period in the prior year, primarily due to a decrease in commissions payouts from RISE related to the loss of our institutional customers and a decrease in fixed income commissions and market making payouts, partially offset by an increase in ~~payouts related to stock borrow / stock loan.~~executive compensation.

Clearing fees, including execution costs for the three months ended ~~June~~September 30, 2022 were ~~$375,000~~$398,000 and decreased by ~~$914,000~~$588,000 from the corresponding period in the prior year, primarily due to a decrease in our institutional clearing costs as well as the recognition of ~~the~~our business development credit from our agreement with NFS.

Technology and communications expenses for the three months ended ~~June~~September 30, 2022 were ~~$978,000~~$1,214,000 and ~~decreased~~increased by ~~$122,000~~$18,000 from the corresponding period in the prior year primarily due to aan increase in software license costs partially offset by the decrease in technology costs ~~related to RISE, partially offset by miscellaneous technology expenses.~~associated with RISE.

Other general and administrative expenses for the three months ended ~~June~~September 30, 2022 were ~~$935,000~~$1,072,000 and ~~decreased~~increased by ~~$253,000~~$145,000 from the corresponding period in the prior year, primarily due to ~~a legal settlement occurring in the second quarter of 2021, partially offset by~~ an increase in travel and entertainment ~~in 2022.~~as well as insurance costs.

Data processing expenses for the three months ended ~~June~~September 30, 2022 were ~~$687,000~~$932,000 and ~~decreased~~increased by ~~$8,000 from the corresponding period in the prior year.~~

~~Rent and occupancy expenses for the three months ended June 30, 2022 were $456,000 and decreased by $14,000~~$145,000 from the corresponding period in the prior year, primarily due to ~~a reduction~~an increase in service contracts.

Rent and occupancy expenses for the three months ended September 30, 2022 were $562,000 and increased by $121,000 from the corresponding period in the prior year, primarily due to an increase in short term rent ~~related RISE’s operations.~~and lease termination costs.

Professional fees for the three months ended ~~June~~September 30, 2022 were ~~$1,032,000~~$874,000 and increased by ~~$455,000~~$115,000 from the corresponding period in the prior year, primarily due to an increase in legal and consulting fees related to certain transactions.

Depreciation and amortization expenses for the three months ended ~~June~~September 30, 2022 were ~~$261,000~~$240,000 and decreased by ~~$113,000~~$114,000 from the corresponding period in the prior year, primarily due to the completion of useful lives of assets within STCH and write-offs of intangible assets related to RISE occurring in the third quarter of 2021.

Referral fees for the three months ended ~~June~~September 30, 2022 were $0 and decreased by ~~$353,000~~$374,000 from the corresponding period in the prior year, primarily due to the loss of our institutional clients.

Loss on impairment for the three months ended September 30, 2022 was $0 and decreased by $699,000 from the corresponding period in the prior year, primarily due to the impairment of our RISE customer relationships intangible asset due to the termination of our clearing arrangement with GSCO occurring in the third quarter of 2021.

Interest expense for the three months ended ~~June~~September 30, 2022 was ~~$103,000~~$108,000 and increased by ~~$14,000~~$22,000 from the corresponding period in the prior year, primarily due to the interest from the mortgage with East West Bank in 2022, partially offset by a decrease in interest from notes payable – related party.

Advertising and promotion expense for the three months ended ~~June~~September 30, 2022 was ~~$59,000~~$58,000 and increased by ~~$59,000~~$45,000 from the corresponding period in the prior year, primarily due to an increase in promotional costs for various marketing initiatives.

The ~~earnings of~~loss from equity method ~~investment~~investments in related ~~party~~parties for the three months ended ~~June~~September 30, 2022 was ~~$14,000~~$148,000 and increased by ~~$14,000~~$148,000 from the corresponding period in the prior year, primarily due to our proportional ~~income~~loss from our investment in Tigress.

The ~~benefit from~~provision for income taxes for the three months ended ~~June~~September 30, 2022 was ~~$1,027,000~~$473,000 and ~~decreased~~increased from the provision for income taxes by ~~$1,511,000~~$208,000 from the corresponding period in the prior year. The change from the corresponding period in the prior year is primarily due ~~to the reversal of the uncertain tax position related to the 2018 amended tax return coupled with lower~~higher pre-tax earnings. Refer to Note 15 – Income Taxes for additional detail.

As further discussed in Note 1 – Organization and Basis of Presentation, we consolidate RISE’s financial results into our financial statements and reflect the portion of RISE not held by Siebert as a noncontrolling interests in our financial statements. The net loss attributable to noncontrolling interests for the three months ended ~~June~~September 30, 2022 was ~~$201,000,~~$85,000 and increased by ~~$201,000~~$85,000 from the corresponding period in the prior year.

Statements of Operations for the ~~Six~~Nine Months Ended ~~June~~September 30, 2022 and 2021

Commissions and fees for the ~~six~~nine months ended ~~June~~September 30, 2022 were ~~$4,193,000~~$5,943,000 and decreased by ~~$7,140,000~~$9,409,000 from the corresponding period in the prior year, primarily due to the loss of institutional customers ~~due to the termination of GSCO’s clearing agreement with~~in RISE as well as market conditions during 2022.

Interest, marketing and distribution fees for the ~~six~~nine months ended ~~June~~September 30, 2022 were ~~$5,513,000~~$10,717,000 and ~~decreased~~increased by ~~$1,569,000~~$200,000 from the corresponding period in the prior year, primarily due to ~~the loss of institutional customers due to the termination of GSCO’s clearing agreement with RISE, partially offset by~~ an increase in margin interest, 12b-1fees, as well as interest on U.S. treasuries and cash deposits within ~~MSCO.~~MSCO of an aggregate of $4.4 million, partially offset by the loss of interest income from institutional customers in RISE of $4.2 million.

Principal transactions and proprietary trading for the ~~six~~nine months ended ~~June~~September 30, 2022 were ~~$814,000~~$1,767,000 and decreased by ~~$7,541,000~~$10,512,000 from the corresponding period in the prior year, primarily due to the factors discussed below.

The decrease in realized and unrealized gain on primarily riskless principal transactions was primarily due to market conditions. The increase in unrealized loss on our portfolio of U.S. government securities was due to the following. From January to ~~June~~September 2022, Siebert invested approximately ~~$120~~$145 million in 1-year treasury bills and 2-year treasury notes in order to enhance its yield on its excess 15c3-3 deposits. ~~For the six months ended June 30,~~During 2022, there was an increase in U.S. government securities yields, which created an unrealized loss of approximately ~~$2.8~~$4.2 million on our government securities portfolio for the ~~six~~nine months ended ~~June~~September 30, 2022. We intend to hold these securities to maturity and as such, the aggregate unrealized loss of ~~$2.8~~approximately $4.2 million on the portfolio as of ~~June~~September 30, 2022 will be returned over the duration of the government securities, at a point no later than the maturity of the securities, the latest maturity being August 2024. If the value of our portfolio of government securities declines further, we will incur further unrealized losses; however, we anticipate this loss to be temporary as we intend to hold these securities to maturity. The portfolio of U.S. government securities represents less than half of the total value of our cash and securities segregated for regulatory purposes, and we believe that the level invested reduces the risk of having to liquidate the securities prior to maturity.

Below is a summary of the change in the principal transactions and proprietary trading line item for the periods presented.

Market making for the ~~six~~nine months ended ~~June~~September 30, 2022 was ~~$1,299,000~~$2,022,000 and decreased by ~~$2,073,000~~$2,864,000 from the corresponding period in the prior year, primarily due to market conditions.

Stock borrow / stock loan for the ~~six~~nine months ended ~~June~~September 30, 2022 was ~~$7,726,000~~$11,909,000 and increased by ~~$3,639,000~~$4,357,000 from the corresponding period in the prior year, primarily due to the growth of the business, expansion of our stock locate revenues, and additional securities lending and locate counterparty relationships.

Advisory fees for the ~~six~~nine months ended ~~June~~September 30, 2022 were ~~$983,000~~$1,420,000 and increased by ~~$224,000~~$220,000 from the corresponding period in the prior year, primarily due to overall expansion of the advisory business line.

Other income for the ~~six~~nine months ended ~~June~~September 30, 2022 was ~~$1,503,000~~$2,589,000 and increased by ~~$774,000~~$1,607,000 from the corresponding period in the prior year, primarily due to an increase in income from consulting services ~~to institutional partners.~~and termination payment from a technology partner.

Employee compensation and benefits for the ~~six~~nine months ended ~~June~~September 30, 2022 were ~~$14,462,000~~$21,752,000 and decreased by ~~$3,449,000~~$5,453,000 from the corresponding period in the prior year, primarily due to a decrease in commissions payouts from RISE related to the loss of our institutional customers and a decrease in payouts related to fixed income, ~~commissions,~~market making, and commission revenue, partially offset by an increase in payouts related to stock borrow / stock ~~loan.~~loan as well as an increase in executive compensation.

Clearing fees, including execution costs for the ~~six~~nine months ended ~~June~~September 30, 2022 were ~~$869,000~~$1,267,000 and decreased by ~~$2,273,000~~$2,861,000 from the corresponding period in the prior year, primarily due to a decrease in our institutional clearing costs as well as the recognition of our business development credit from our agreement with NFS.

Technology and communications expenses for the ~~six~~nine months ended ~~June~~September 30, 2022 were ~~$2,160,000~~$3,374,000 and decreased by ~~$181,000~~$163,000 from the corresponding period in the prior year, primarily due to a decrease in technology costs related to RISE, partially offset by an increase in other technology expenses.

Other general and administrative expenses for the ~~six~~nine months ended ~~June~~September 30, 2022 were ~~$1,866,000~~$2,939,000 and increased by $54,000 from the corresponding period in the prior year, primarily due to an increase in travel and entertainment as well as insurance costs, partially offset by a legal settlement occurring in 2021.

Data processing expenses for the nine months ended September 30, 2022 were $2,135,000 and decreased by ~~$92,000~~$144,000 from the corresponding period in the prior year, primarily due to a ~~legal settlement occurring~~decrease in ~~the second quarter of 2021, partially offset by an increase in travel and entertainment cost in 2022.~~

Data processing expenses for the six months ended June 30, 2022 were $1,203,000 and decreased by $289,000 from the corresponding period in the prior year, primarily due to a reduction in market data analytics and service bureau costs.development charges.

Rent and occupancy expenses for the ~~six~~nine months ended ~~June~~September 30, 2022 were ~~$929,000~~$1,491,000 and ~~decreased~~increased by ~~$111,000~~$10,000 from the corresponding period in the prior ~~year, primarily due to a reduction in rent related RISE’s operations, partially offset by an increase in other occupancy expenses.~~year.

Professional fees for the ~~six~~nine months ended ~~June~~September 30, 2022 were ~~$1,728,000~~$2,602,000 and increased by ~~$536,000~~$651,000 from the corresponding period in the prior year, primarily due to an increase in legal and consulting fees related to certain transactions.

Depreciation and amortization expenses for the ~~six~~nine months ended ~~June~~September 30, 2022 were ~~$520,000~~$760,000 and decreased by ~~$246,000~~$360,000 from the corresponding period in the prior year, primarily due to the completion of useful lives of assets within STCH and write-offs of intangible assets related to RISE occurring in 2021.

Referral fees for the ~~six~~nine months ended ~~June~~September 30, 2022 were $0 and decreased by ~~$760,000~~$1,134,000 from the corresponding period in the prior year, primarily due to the loss of our institutional clients.

Loss on impairment for the nine months ended September 30, 2022 was $0 and decreased by $699,000 from the corresponding period in the prior year, primarily due to the impairment of our RISE customer relationships intangible asset due to the termination of our clearing arrangement with GSCO occurring in the third quarter of 2021.

Interest expense for the ~~six~~nine months ended ~~June~~September 30, 2022 was ~~$227,000~~$335,000 and increased by ~~$35,000~~$57,000 from the corresponding period in the prior year, primarily due to the interest from the mortgage with East West Bank in 2022.

Advertising and promotion expense for the ~~six~~nine months ended ~~June~~September 30, 2022 was ~~$172,000~~$230,000 and increased by ~~$172,000~~$217,000 from the corresponding period in the prior year, primarily due to an increase in promotional costs for various marketing initiatives.

The earnings of equity method ~~investment~~investments in related ~~party~~parties for the ~~six~~nine months ended ~~June~~September 30, 2022 was ~~$215,000~~$67,000 and increased by ~~$215,000~~$67,000 from the corresponding period in the prior year, primarily due to our proportional income from our investments in Tigress and Hedge Connection.

The benefit from income taxes for the ~~six~~nine months ended ~~June~~September 30, 2022 was ~~$1,309,000~~$836,000 and decreased from the provision for income taxes by ~~$2,528,000~~$2,320,000 from the corresponding period in the prior year. The change from the corresponding period in the prior year is primarily due to the reversal of the uncertain tax position related to the 2018 amended tax return coupled with lower pre-tax earnings. Refer to Note 15 – Income Taxes for additional detail.

As further discussed in Note 1 – Organization and Basis of Presentation, we consolidate RISE’s financial results into our financial statements and reflect the portion of RISE not held by Siebert as a noncontrolling interests in our financial statements. The net loss attributable to noncontrolling interests for the ~~six~~nine months ended ~~June~~September 30, 2022 was ~~$320,000,~~$405,000, and increased by ~~$320,000~~$405,000 from the corresponding period in the prior year.

Statements of Financial Condition as of ~~June~~September 30, 2022 and December 31, 2021

Assets as of ~~June~~September 30, 2022 were ~~$1,151,034,000~~$1,025,147,000 and decreased by ~~$253,201,000~~$379,088,000 from December 31, 2021, primarily due to a decrease in securities borrowed, ~~and~~ receivables from ~~customers.~~customers, and cash and securities segregated for regulatory purposes.

Liabilities as of ~~June~~September 30, 2022 were ~~$1,097,696,000~~$970,901,000 and decreased by ~~$256,033,000~~$382,828,000 from December 31, 2021, primarily due to a decrease in securities loaned and payables to customers.

The indicators of our liquidity are cash and cash equivalents. Our cash and cash equivalents are unrestricted and are used to fund our working capital needs. Our cash and cash equivalents as of ~~June~~September 30, 2022 and December 31, 2021 were ~~$4.1~~$4.5 million and $3.8 million, respectively. We believe that our operating cash flows, cash and cash equivalents, borrowing capacity, and overall access to capital markets are sufficient to fund our operating, investing and financing requirements for the foreseeable future.

As of ~~June~~September 30, 2022, we had a variety of debt instruments and sources of borrowing capability. As of ~~June~~September 30, 2022, the debt instruments and their outstanding obligations were as follows: $4.4 million mortgage with East West Bank, ~~$3.2~~$2.9 million line of credit with East West Bank, and $3.3 million in notes payable to related parties. We ~~have an additional $5.0 million available on our line of credit with East West Bank and~~ have an available line of credit for short term overnight demand borrowing of up to $25 million with BMO Harris.

~~Our~~The ability to borrow ~~incremental amounts for the~~an additional $5.0 million available on our line of credit with East West Bank ~~is set to terminate by~~expired on July 22, 2022; however, we ~~are in discussions~~do not believe this will impact our ability to ~~extend and possibly increase this line of credit.~~fund our operations. As of ~~June~~September 30, 2022, we were in compliance with all of our covenants related to our debt agreements.

As of ~~June~~September 30, 2022, the aggregate future payment obligations related to these debt instruments were ~~$6.7~~$6.5 million through 2026 and ~~$4.1~~$4.0 million thereafter. The remaining balance of our lease payments for operating leases with initial terms of greater than one year was ~~$0.6~~$0.3 million during 2022, and $2.4 million thereafter.

On December 30, 2021, we purchased the Miami office building and are building out this space to be one of our primary operating centers. The total estimated cost for the build out is ~~$1.4~~$1.5 million, with $338,000 financed through a commitment with East West Bank and the remainder being cash.

On May 27, 2022, we entered into a Capital on DemandTM Sales Agreement with JonesTrading as agent, pursuant to which we may offer and sell, from time to time through JonesTrading, shares of our common stock having an aggregate offering ~~price~~amount of up to $9.6 million under our shelf registration statement on Form S-3. For the ~~six~~nine months ended ~~June~~September 30, 2022, we did not sell any shares pursuant to this Sales Agreement. Refer to Note 18 – Commitments, Contingencies, and Other for additional detail.

Net Capital, Reserve Accounts, Segregation of Funds, and Other Regulatory Requirements

MSCO is subject to the Uniform Net Capital Rules of the SEC (Rule 15c3-1) and the Customer Protection Rule (15c3-3) of the Exchange Act and maintains capital and segregated cash reserves in excess of regulatory requirements. Requirements under these regulations may vary; however, MSCO has adequate reserves and contingency funding plans in place to sufficiently meet any regulatory requirements. In addition to net capital requirements, as a self-clearing broker-dealer, MSCO is subject to cash deposit and collateral requirements with clearing houses, such as the DTCC and OCC, which may fluctuate significantly from time to time based upon the nature and size of clients’ trading activity and market volatility. RISE, as a member of FINRA, is subject to the SEC Uniform Net Capital Rule 15c3-1 and the corresponding regulatory capital requirements.

For the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, MSCO and RISE met all of their respective liquidity and regulatory capital requirements. Refer to Note 16 – Capital Requirements for additional detail on our capital requirements.

We enter into various transactions to meet the needs of customers, conduct trading activities, and manage market risks and are, therefore, subject to varying degrees of market and credit risk. In the normal course of business, our customer activities involve the execution, settlement, and financing of various customer securities transactions. These activities may expose us to off-balance sheet risk in the event the customer or other broker is unable to fulfill its contracted obligations and we are forced to purchase or sell the financial instrument underlying the contract at a loss. There were no material losses for unsettled customer transactions for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021. Refer to Note 17 – Financial Instruments with Off-Balance Sheet Risk for additional detail.

We account for uncertain tax positions in accordance with the authoritative guidance issued under ASC 740-10, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. We may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC 740-10 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure requirements.

We recognize interest and penalties related to unrecognized tax benefits on the provision for income taxes line on the statements of operations. Accrued interest and penalties would be included on the related tax liability line on the statements of financial condition.

As of ~~June~~September 30, 2022, and December 31, 2021, ~~the Company~~we recorded an uncertain tax position of $1,583,000 and $2,418,000, respectively, related to various tax matters. During the ~~three~~nine months ended ~~June~~September 30, 2022, ~~the Company~~ we reversed ~~its~~our uncertain tax position related to the 2018 amended tax return due to the expiration of the statute of limitations.

During the course of business, we enter into various agreements and transactions with related parties. Refer to Note 19 – Related Party Disclosures for additional detail.

We have securities that are valued using the fair value framework under ASC 820 within our assets and liabilities as of ~~June~~September 30, 2022 and December 31, 2021. Refer to Note 5 – Fair Value Measurements for additional detail.

We have concluded as of ~~June~~September 30, 2022, there has been no impairment to the carrying value of Siebert’s goodwill and tangible assets, and there are no intangible assets. Refer to Note 10 – Goodwill and Intangible Assets, Net for additional information.

We concluded as of ~~June~~September 30, 2022, Siebert is comprised of a single operating segment based on the factors related to management’s decision-making framework as well as management evaluating performance and allocating resources based on assessments of Siebert from a consolidated perspective.

Certain of our accounting policies that involve a higher degree of judgment and complexity are discussed in Part I, Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2021 Form 10-K as well as in the below section. As of ~~June~~September 30, 2022, there have been no changes to our critical accounting policies or estimates other than the below.

We evaluate whether an entity is a VIE and determine if the primary beneficiary status is appropriate on a quarterly basis. We consolidate a VIE for which we are the primary beneficiary. When assessing the determination of the primary beneficiary, we consider all relevant facts and circumstances, including factors such as the power to direct the activities of the VIE that most significantly impact its economic performance, the obligation to absorb the losses and/or the right to receive the expected returns of the VIE. Through this evaluation, as of ~~June~~September 30, 2022, we determined that RISE is a VIE and we are the primary beneficiary, primarily due to Siebert’s power to direct the activities of RISE that most significantly impact its economic performance. Additionally, Siebert may be obligated to fund RISE’s operations at an amount that is disproportional to its ownership percentage.

We did not adopt any new accounting standards during the three and ~~six~~nine months ended ~~June~~September 30, 2022. In addition, we evaluated other recently issued accounting standards and do not believe that any of these standards will have a material impact on our financial statements and related disclosures as of ~~June~~September 30, 2022.

We are party to certain claims, suits and complaints arising in the ordinary course of business. As of ~~June~~September 30, 2022, we had one pending regulatory matter related to operations of StockCross prior to our acquisition of StockCross on January 1, 2020. Refer to Note 18 – Commitments, Contingencies, and Other for additional detail.

On October 18, 2022, Siebert entered into a Reorganization Agreement with Tigress and RISE entered into a Termination Agreement with Hedge Connection. As of the date of this Report, we are assessing the financial impact of these transactions which may result in a material one-time charge to our financial statements. Refer to Note 20 – Subsequent Events for additional detail.

We do not directly engage in derivative transactions, have no interest in any special purpose entity and have no liabilities, contingent or otherwise, for the debt of another entity.

We generally invest our cash and cash equivalents temporarily in dollar denominated bank account(s). These investments are not subject to material changes in value due to interest rate movements.

We invest cash and securities segregated for regulatory purposes in dollar denominated bank accounts which are not subject to material changes in value due to interest rate movements. We also invest cash and securities segregated for regulatory purposes and securities owned, at fair value in U.S. government securities which may be subject to material changes in value due to interest rate movements. Securities owned, at fair value invested in U.S. government securities are generally purchased to enhance yields on required regulatory deposits. While the value of the government securities may be subject to material changes in value, we believe any reduction in value would be temporary since the securities would mature at par value.

Customer transactions are cleared through clearing brokers on a fully disclosed basis and are also self-cleared by MSCO. If customers do not fulfill their contractual obligations any loss incurred in connection with the purchase or sale of securities at prevailing market prices to satisfy customer obligations may be incurred by Siebert. We regularly monitor the activity in customer accounts for compliance with margin requirements. We are exposed to the risk of loss on unsettled customer transactions if customers and other counterparties are unable to fulfill their contractual obligations. There were no material losses for unsettled customer transactions in the last five years.

We carried out an evaluation, under the supervision and with the participation of our management, including our Executive Vice President / Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Report pursuant to Rule 13a-15(e) or Rule 15d-15(e) of the Exchange Act. Based on that evaluation, our management, including the Executive Vice President / Chief Financial Officer, concluded that our disclosure controls and procedures are effective to ensure that the information we are required to disclose in reports that we file or submit under the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and to ensure that information required to be disclosed is accumulated and communicated to our management, including our Executive Vice President / Chief Financial Officer, to allow timely decisions regarding required disclosure.

Based on its evaluation, our management, including our Executive Vice President / Chief Financial Officer, concluded that as of the end of the period covered by this Report, our disclosure controls and procedures were effective.

No change in the Company’s internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) was identified during the end of the period covered by this Report, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

The Company is party to certain claims, suits and complaints arising in the ordinary course of business. In the opinion of our management, as of the date of this Report, all such matters are without merit, or involve amounts which would not have a significant effect on the results of operations or financial position of the Company.

In addition to the other information set forth in this Report, investors should carefully consider the risk factors discussed in Part I, Item 1A - Risk Factors in our 2021 Form 10-K and under Part II, Item 1A. of our ~~Q1 2022~~ Form ~~10-Q.~~10-Qs. Each of such risk factors could materially affect our business, financial position, and results of operations. As of the date of this Report, other than the supplemental risk factors provided below, there have been no material changes from the risk factors disclosed in our 2021 Form 10-K.

~~11,635,458~~11,753,825 shares of our common stock, or approximately 36% of our shares of our common stock outstanding, are currently held by non-affiliates as of ~~August 15,~~November 14, 2022. A stock with a small number of shares held by non-affiliates, known as the “float,” will generally be more volatile than a stock with a large float. Although our common stock is traded on the Nasdaq Capital Market, there can be no assurance that an active public market will continue.

The direction and level of interest rates are important factors in our earnings. Such changes in interest rates primarily impact our revenue from interest, marketing, and distribution fees.

As the U.S. economy recovers, aided by stimulus packages and fiscal and monetary policies, inflation has been rising at historically high rates, and the Federal Reserve has signaled that it will continue increasing the target federal funds effective rate. Although we believe we may benefit from a rising interest rate environment, a rise in interest rates may cause our funding costs to increase if market conditions or the competitive environment induces us to raise our interest rates to avoid losing deposits, or replace deposits with higher cost funding sources without offsetting increases in yields on interest-earning assets which can reduce our interest revenue.

On August 23, 2022, Siebert granted 138,000 shares of common stock that were fully vested upon grant date as compensation to certain employees and consultants. The common stock was issued pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended. Refer to Note 18 – Commitments, Contingencies, and Other for more detail.

# This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.

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 thereunto duly authorized.

	As of June 30, 2022			As of December 31, 2021			As of September 30, 2022			As of December 31, 2021
Property	$	6,815,000		$	6,815,000		$	6,815,000		$	6,815,000
Office facilities		2,204,000			1,608,000			2,522,000			1,608,000
Equipment		508,000			413,000			555,000			413,000
Total Property, office facilities, and equipment		9,527,000			8,836,000			9,892,000			8,836,000
Less accumulated depreciation		(1,570,000	)		(1,373,000	)		(1,670,000	)		(1,373,000	)
Total Property, office facilities, and equipment, net	$	7,957,000		$	7,463,000		$	8,222,000		$	7,463,000

		As of			As of
	June 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
Assets	$	10,893,000	$	10,793,000	$	10,127,000	$	10,793,000
Liabilities	$	5,359,000	$	6,096,000	$	5,270,000	$	6,096,000
Stockholders’ Equity	$	5,534,000	$	4,697,000	$	4,857,000	$	4,697,000

Description	Issuance Date		Face Amount		Unpaid Principal Amount
0.00% due July 20, 2022*	January 21, 2022	$	600,000	$	250,000
4.00% due November 30, 2022***	November 30, 2020		3,000,000		3,000,000

Total Notes payable – related party		$	3,600,000	$	3,250,000

Description	Issuance Date		Face Amount		Unpaid Principal Amount
4.00% due December 30, 2022**	December 30, 2021	$	2,000,000	$	2,000,000
4.00% due June 30, 2022**	December 31, 2021		2,000,000		2,000,000
4.00% due November 30, 2022***	November 30, 2020		3,000,000		3,000,000

Total Notes payable – related party		$	7,000,000	$	7,000,000

	Three Months Ended June 30,									Three Months Ended September 30,
	2022			2021			(Year over Year Decrease)			2022			2021	(Year over Year Decrease)
Principal transactions and proprietary trading
Realized and unrealized gain on primarily riskless principal transactions	$	1,698,000		$	4,114,000		$	(2,416,000	)	$	2,339,000	$	3,931,000	$	(1,592,000)
Unrealized loss on portfolio of U.S. government securities		(617,000	)		(7,000	)		(610,000	)		(1,386,000)		(7,000)		(1,379,000)
Total Principal transactions and proprietary trading	$	1,081,000		$	4,107,000		$	(3,026,000	)	$	953,000	$	3,924,000	$	(2,971,000)

Year	Amount
2022	$	623,000
2023		1,092,000
2024		543,000
2025		450,000
2026		234,000
2027		48,000
Remaining balance of lease payments		2,990,000
Less: difference between undiscounted cash flows and discounted cash flows		217,000
Lease liabilities	$	2,773,000

	Six Months Ended June 30,									Nine Months Ended September 30,
	2022			2021			(Year over Year Decrease)			2022		2021		(Year over Year Decrease)
Principal transactions and proprietary trading
Realized and unrealized gain on primarily riskless principal transactions	$	3,616,000		$	8,369,000		$	(4,753,000	)	$	5,956,000	$	12,300,000	$	(6,344,000)
Unrealized loss on portfolio of U.S. government securities		(2,802,000	)		(14,000	)		(2,788,000	)		(4,189,000)		(21,000)		(4,168,000)
Total Principal transactions and proprietary trading	$	814,000		$	8,355,000		$	(7,541,000	)	$	1,767,000	$	12,279,000	$	(10,512,000)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Total retail trades		91,389		111,028		201,341		253,903

	Three Months Ended			Nine Months Ended
	September 30,			September 30,
		2022	2021	2022	2021
Total retail trades		84,077	94,705	285,418	348,608

Exhibit No.		Description of Document

~~10.25~~10.26		~~Capital on Demand~~Reorganization Agreement By and Among Tigress Holdings, LLC, Rise Financial Services, LLC, and Siebert TM ~~Sales Agreement, dated May 27, 2022, by and between Siebert~~ Financial Corp. ~~and~~ ~~JonesTrading Institutional Services LLC. (incorporated by reference to Siebert Financial Corp.’s Current Report~~ dated October 18, 2022 (previously filed on September 21, 2022 on Form ~~8-K filed with the SEC on May 27, 2022).~~8-K)

10.27		Termination Agreement By and Among Hedge Connection, Inc., Lisa Vioni, Rise Financial Services, LLC, and Siebert Financial Corp., dated October 18, 2022 (previously filed on September 21, 2022 on Form 8-K)

31.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Exchange Act Rules13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1#		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350,as adopted pursuant toof Section 906 of the Sarbanes-Oxley Act of 2002.

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	SIEBERT FINANCIAL CORP.

	By:	/s/ Andrew H. Reich
		Andrew H. Reich
		Executive Vice President, Chief Operating Officer,
		Chief Financial Officer, and Secretary
		(Principal executive, financial and accounting officer)

	Dated: ~~August 15,~~November 14, 2022

	Amount		Amount
2022	$	0—
2023		54,000	$	75,000
2024		61,000		84,000
2025		65,000		88,000
2026		69,000		91,000
Thereafter		4,139,000		4,048,000
Total	$	4,388,000	$	4,386,000