Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 24, 2017 | Jun. 30, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | Siebert Financial Corp | ||
Entity Central Index Key | 65,596 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 2,625,647 | ||
Entity Common Stock, Shares Outstanding | 22,085,126 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
ASSETS | |||
Cash and cash equivalents | $ 2,730,000 | $ 9,420,000 | |
Receivable from brokers | 606,000 | 626,000 | |
Receivable from business sold to former affiliate net of unamortized discount of $908,000 | 0 | 2,092,000 | |
Other receivable from former affiliate, including accrued interest of $46,000 | 0 | 4,046,000 | |
Securities owned, at fair value | 92,000 | 593,000 | |
Furniture, equipment and leasehold improvements, net | 46,000 | 374,000 | |
Prepaid expenses and other assets | 342,000 | 634,000 | |
Intangibles assets | 0 | 0 | |
Assets | 3,816,000 | 17,785,000 | |
Liabilities: | |||
Accounts payable and accrued liabilities, including $171,000 payable to former affiliate in 2015 | 738,000 | 2,102,000 | |
Accrued settlement liability | 825,000 | 0 | |
Total liabilities | 1,563,000 | 2,102,000 | |
Commitments, contingencies and other - Note K,G | |||
Stockholders' equity: | |||
Common stock, $.01 par value; 49,000,000 shares authorized, 22,085,126 shares issued as of December 31, 2016 2016 and 23,211,846 shares issued as of December 31, 2015 and 22,085,126 outstanding shares at both December 31, 2016 and 2015 | 221,000 | 232,000 | |
Additional paid-in capital | 6,889,000 | 19,490,000 | |
(Accumulated deficit) / Retained earnings | (4,857,000) | 721,000 | |
Less: 1,126,720 shares of treasury stock, at cost | 0 | (4,760,000) | |
Stockholders' equity | 2,253,000 | 15,683,000 | $ 18,552,000 |
Liabilities and Stockholders' equity | $ 3,816,000 | $ 17,785,000 | |
SBSF | |||
ASSETS | |||
Cash and cash equivalents | 20,065,062 | ||
Accounts receivable | 1,593,614 | ||
Due from broker | 2,522,557 | ||
Secured demand note | 1,200,000 | ||
Goodwill - Note B | 1,001,000 | ||
Issuer relationships, net of amortization of $41,212 - Note B | 777,788 | ||
Furniture, equipment and leasehold improvements, net | 684,736 | ||
Other assets | 673,276 | ||
Assets | 28,518,033 | ||
Liabilities: | |||
Payable to affiliate | 104,320 | ||
Asset purchase obligation payable to affiliate, net of unamortized discount of $1,143,359 | 1,856,641 | ||
Accounts payable and accrued liabilities, including $171,000 payable to former affiliate in 2015 | 4,747,648 | ||
Deferred rent | 549,287 | ||
Current liabilities | 7,257,896 | ||
Subordinated debt | 5,200,000 | ||
Total liabilities | 12,457,896 | ||
Commitments, contingencies and other - Note K,G | |||
Stockholders' equity: | |||
Members' capital | 16,060,137 | ||
Liabilities and Stockholders' equity | $ 28,518,033 |
CONSOLIDATED STATEMENTS OF FIN3
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Unamortized discount | $ 0 | $ 908,000 | |
Other receivable accrued interest | 0 | 46,000 | |
Accounts payable and accrued liabilities to former affiliate | $ 0 | $ 171,000 | |
Stockholder's equity: | |||
Common stock, par value | $ 0.01 | $ 0.01 | |
Common stock, authorized shares | 49,000,000 | 49,000,000 | |
Common stock, issued shares | 22,085,126 | 23,211,846 | |
Common stock, outstanding shares | 22,085,126 | 22,085,126 | |
Treasury Stock Shares | 1,126,720 | 1,126,720 | |
SBSF | |||
Issuer relationships, net of amortization | $ 41,212 | ||
Unamortized discount | $ 1,143,359 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 10 Months Ended | 12 Months Ended | ||
Nov. 09, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue: | ||||
Commissions and fees | $ 8,294,000 | $ 9,155,000 | $ 10,757,000 | |
Investment banking | 46,000 | 40,000 | 1,830,000 | |
Trading gains, net | 921,000 | 575,000 | 1,351,000 | |
Gain on the disposition of business to former affiliate | 0 | 0 | 1,820,000 | |
Interest and dividends | 551,000 | 326,000 | 94,000 | |
Total | 9,812,000 | 10,096,000 | 15,852,000 | |
Expenses: | ||||
Employee compensation and benefits | 4,883,000 | 5,386,000 | 8,267,000 | |
Clearing fees, including floor brokerage | 866,000 | 1,239,000 | 1,665,000 | |
Professional fees | 3,458,000 | 3,200,000 | 4,310,000 | |
Professional fees and other expenses related to change in control | 2,206,000 | 0 | 0 | |
Loss related to arbitration settlement | 825,000 | 0 | 4,300,000 | |
Advertising and promotion | 258,000 | 268,000 | 248,000 | |
Communications | 462,000 | 595,000 | 865,000 | |
Occupancy | 746,000 | 776,000 | 788,000 | |
Other general and administrative | 1,686,000 | 1,724,000 | 2,033,000 | |
Total | 15,390,000 | 13,188,000 | 22,476,000 | |
Loss before items shown below | (5,578,000) | 0 | 0 | |
Loss from continuing operations before income taxes | (5,578,000) | (3,092,000) | (6,624,000) | |
(Benefit) provision for income taxes | 0 | (275,000) | (27,000) | |
Loss from continuing operations | (5,578,000) | (2,817,000) | (6,597,000) | |
Discontinued operations: (Loss) income from equity in earnings of former affiliate, net of $448,000 loss related to disposal of investment in former affiliate in 2015, and income net of income taxes of $275,000 in 2015 and $27,000 in 2014 | 0 | (52,000) | 40,000 | |
Net income (loss) | $ (5,578,000) | $ (2,869,000) | $ (6,557,000) | |
Net loss per share of common stock Continuing operation | $ (.25) | $ 0.13 | $ 0.30 | |
Net loss per share of common stock Discontinued operations | 0 | 0 | 0 | |
Basic and diluted | $ (.25) | $ 0.13 | $ 0.30 | |
Weighted average shares outstanding | 22,085,126 | 22,085,126 | 22,085,126 | |
SBSF | ||||
Revenue: | ||||
Investment banking | $ 23,786,122 | $ 20,949,508 | ||
Trading gains, net | 3,888,139 | 3,670,726 | ||
Commissions | 473,117 | 182,771 | ||
Interest and dividends | 4,116 | 3,395 | ||
Total | 28,151,494 | 24,806,400 | ||
Expenses: | ||||
Employee compensation and benefits | 19,044,368 | 17,819,595 | ||
Clearing fees, including floor brokerage | 469,014 | 383,538 | ||
Professional fees | 1,187,892 | 895,951 | ||
Communications | 1,015,599 | 929,496 | ||
Occupancy | 898,897 | 1,186,967 | ||
Interest, including amortization of discount (including $200,745, 84,691 and 48,000 to affiliate) | 248,637 | 136,936 | ||
State and local income tax | 66,818 | 31,901 | ||
General and administrative (including $100,000, 100,000 and 100,000 to affiliate) | 3,850,900 | 3,251,269 | ||
Total | 26,782,125 | 24,635,653 | ||
Net income (loss) | $ 1,369,369 | $ 170,747 |
CONSOLIDATED STATEMENTS OF OPE5
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) | 10 Months Ended | 12 Months Ended | ||
Nov. 09, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Loss related to disposal of investment | $ 448,000 | |||
Income net of taxes | $ 275,000 | $ 27,000 | ||
SBSF | ||||
General and administrative including affiliate | $ 100,000 | 100,000 | ||
Interest, including amortization of discount | $ 200,745 | $ 84,691 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Total |
Begining Balance, Shares at Dec. 31, 2013 | 23,211,846 | 1,126,720 | |||
Begining Balance, Amount at Dec. 31, 2013 | $ 232,000 | $ 19,490,000 | $ 10,147,000 | $ (4,760,000) | |
Net loss | (6,557,000) | $ (6,557,000) | |||
Ending Balance, Shares at Dec. 31, 2014 | 23,211,846 | 1,126,720 | |||
Ending Balance, Amount at Dec. 31, 2014 | $ 232,000 | 19,490,000 | 3,590,000 | $ (4,760,000) | 18,552,000 |
Net loss | (2,869,000) | (2,869,000) | |||
Ending Balance, Shares at Dec. 31, 2015 | 23,211,846 | 1,126,720 | |||
Ending Balance, Amount at Dec. 31, 2015 | $ 232,000 | 19,490,000 | 721,000 | $ (4,760,000) | 15,683,000 |
Retirement of Treasury Stock, Shares | (1,126,720) | (1,126,720) | |||
Retirement of Treasury Stock, Amount | $ (11,000) | (4,749,000) | $ 4,760,000 | 0 | |
Net loss | (5,578,000) | (5,578,000) | |||
Dividends | (10,668,000) | (10,668,000) | |||
Capital Contribution | 2,816,000 | 2,816,000 | |||
Ending Balance, Shares at Dec. 31, 2016 | 22,085,126 | 0 | |||
Ending Balance, Amount at Dec. 31, 2016 | $ 221,000 | $ 6,889,000 | $ (4,857,000) | $ 0 | $ 2,253,000 |
CONSOLIDATED STATEMENT OF CHAN7
CONSOLIDATED STATEMENT OF CHANGES IN MEMBERS' CAPITAL - USD ($) | 3 Months Ended | 10 Months Ended | 12 Months Ended | |||
Mar. 31, 2015 | Nov. 09, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |||
Net income (loss) | $ (1,534,000) | $ (2,869,000) | $ (6,557,000) | |||
SIEBERT, BRANDFORD, SHANK FINANCIAL, LLC AND SUBSIDIARY | ||||||
Members' capital, Beginning | $ 16,060,137 | $ 16,060,137 | $ 16,060,137 | 15,915,862 | [1] | |
Distributions to members | (200,000) | (26,472) | ||||
Net income (loss) | 1,369,369 | 170,747 | ||||
Members' capital, Ending | $ 17,229,506 | [2] | $ 16,060,137 | |||
[1] | Represents members' capital of Siebert, Brandford, Shank & Co., L.L.C. | |||||
[2] | Represents members' capital prior to giving effect to redemption of interest of Muriel Siebert & Co., Inc. and other member and related capital contributions which in part funded such redemptions. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 10 Months Ended | 12 Months Ended | ||
Nov. 09, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash Flows From Operating Activities: | ||||
Net income (loss) | $ (5,578,000) | $ (2,869,000) | $ (6,557,000) | |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||||
Depreciation and amortization | 277,000 | 284,000 | 267,000 | |
Gain on the disposition of business sold to former affiliate | 0 | 0 | (1,820,000) | |
Equity in (earnings) of former affiliate | 0 | (671,000) | (67,000) | |
Loss on sale of investment in former affiliate | 0 | 448,000 | 0 | |
Non-cash interest on receivable from former affiliate | (207,000) | 0 | 0 | |
Loss on disposal of fixed assets | 89,000 | 0 | 0 | |
Expenses paid by former shareholder | 2,206,000 | 0 | 0 | |
Amortization of discount on receivable from former affiliate | 0 | (235,000) | (37,000) | |
Accrued interest on note receivable from former affiliate | (322,000) | (46,000) | 0 | |
Distributions from former affiliate | 0 | 98,000 | 13,000 | |
Changes in: | ||||
Cash equivalent - restricted | 0 | 1,532,000 | 0 | |
Securities owned, at fair value | 501,000 | (105,000) | (82,000) | |
Receivable from former affiliate investee equity interest | 0 | 0 | (76,000) | |
Receivable from clearing and other brokers | 20,000 | 162,000 | 317,000 | |
Prepaid expenses and other assets | 292,000 | 84,000 | 33,000 | |
Accounts payable and accrued liabilities | (539,000) | (74,000) | (685,000) | |
Net cash (used in) /provided by operating activities | (3,261,000) | (1,392,000) | (8,694,000) | |
Cash Flows From Investing Activities: | ||||
Purchase of furniture, equipment and leasehold improvements | (38,000) | (41,000) | (154,000) | |
Distributions from equity investees | 0 | 0 | 173,000 | |
Payment received from business sold to former affiliate | 493,000 | 0 | 0 | |
Proceeds from sale of investment in former affiliate | 0 | 4,000,000 | 0 | |
Collection of advances to former affiliate | 0 | 104,000 | 0 | |
Net cash provided by/ (used in) investing activities | 455,000 | 4,063,000 | 19,000 | |
Cash Flows From Financing Activities: | ||||
Cash dividend | (4,494,000) | 0 | 0 | |
Contribution from principal stockholder | 610,000 | 0 | 0 | |
Net cash (used in) provided by financing activities | (3,884,000) | 0 | 0 | |
Net (decrease) increase in cash and cash equivalents | (6,690,000) | 2,671,000 | (8,675,000) | |
Cash and cash equivalents - beginning of period | $ 6,749,000 | 9,420,000 | 6,749,000 | 15,424,000 |
Cash and cash equivalents - end of period | 2,730,000 | 9,420,000 | 6,749,000 | |
Supplemental cash flow disclosure Non-cash investing activity: | ||||
Note received on sale of investment in former affiliate | 0 | 4,000,000 | 0 | |
Cancellation of treasury shares | 4,760,000 | 0 | 0 | |
Non-cash dividend (transferred receivable and note) to principal shareholder | $ 6,174,000 | 0 | 0 | |
SIEBERT, BRANDFORD, SHANK FINANCIAL, LLC AND SUBSIDIARY | ||||
Cash Flows From Operating Activities: | ||||
Net income (loss) | 1,369,369 | 170,747 | ||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||||
Depreciation and amortization | 408,577 | 267,973 | ||
Amortization of discount on receivable from former affiliate | 194,581 | 36,641 | ||
Changes in: | ||||
Accounts receivable | (750,051) | (1,031,467) | ||
Due to/from broker | 9,410,526 | (2,514,399) | ||
Securities owned, at fair value | (8,603,054) | 0 | ||
Other assets | (28,001) | (54,533) | ||
Payable to (receivable from) affiliates | (52,898) | 76,056 | ||
Bank overdraft | 0 | (1,225,779) | ||
Deferred rent | (95,936) | (72,788) | ||
Accounts payable and accrued liabilities | 1,699,037 | 741,040 | ||
Net cash (used in) /provided by operating activities | 3,552,150 | (3,606,509) | ||
Cash Flows From Investing Activities: | ||||
Purchase of furniture, equipment and leasehold improvements | (41,746) | (89,364) | ||
Net cash provided by/ (used in) investing activities | (41,746) | (89,364) | ||
Cash Flows From Financing Activities: | ||||
Distributions to members | (200,000) | (26,472) | ||
Subordinated borrowings | 0 | 9,000,000 | ||
Subordinated repayments | (4,000,000) | (5,000,000) | ||
Net cash (used in) provided by financing activities | (4,200,000) | 3,973,528 | ||
Net (decrease) increase in cash and cash equivalents | (689,596) | 277,655 | ||
Cash and cash equivalents - beginning of period | 20,065,062 | $ 20,065,062 | 19,787,407 | |
Cash and cash equivalents - end of period | 19,375,466 | 20,065,062 | ||
Supplemental Cash Flow Disclosures: | ||||
Cash for: Income taxes paid, net | 39,068 | 24,323 | ||
Interest paid | 46,176 | 100,295 | ||
Supplemental cash flow disclosure Non-cash investing activity: | ||||
Note payable for purchase of business from affiliate | 0 | 1,820,000 | ||
Intangible assets acquired related to business acquired from affiliate issuer relationships | 0 | (819,000) | ||
Goodwill | 0 | (1,001,000) | ||
Repayment of subordinated borrowing from former affiliate by cancellation of related secured demand note receivable from former affiliate | $ 1,200,000 | $ 0 |
BUSINESS
BUSINESS | 12 Months Ended |
Dec. 31, 2016 | |
BUSINESS | Siebert Financial Corp. (the “Company” or “Financial”) is a holding company that conducts its retail discount brokerage business through its wholly-owned subsidiary, Muriel Siebert & Co., Inc. (“Siebert”), a Delaware corporation. Siebert’s principal activity is providing online and traditional brokerage and related services to retail investors. In addition, in 2014 Financial began business as a registered investment advisor through a wholly-owned subsidiary, Siebert Investment Advisors, Inc. (“SIA”). SIA offers advice to clients regarding asset allocation and the selection of investments. On November 4, 2014, Siebert sold its capital markets business to an affiliate Siebert Brandford Shank Financial, LLC (“SBSF”) (see Note C). The accompanying consolidated financial statements include the accounts of Financial and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. Financial, Siebert and SIA collectively are referred to herein as the “Company”. The municipal bond investment banking business was conducted by Siebert Brandford Shank & Co., LLC, a wholly-owned subsidiary of SBSF and related derivatives transactions were conducted by SBS Financial Products Company, LLC (“SBSFP”), non - controlled investees in which the Company held a 49% and 33% equity interest respectively. Such investees are accounted for by the equity method of accounting (see Note F). The equity method provides that the Company records its share of the investees’ earnings or losses in its results of operations with a corresponding adjustment to the carrying value of its investment. In addition, the investment is adjusted for capital contributions to and distributions from the investees. Operations of SBSFP ceased in December 2014 and on November 9, 2015, the Company sold its 49% membership investment in SBSF back to SBSF (see Note C). The Company’s share of income (loss) from its investees is classified as discontinued operations in the accompanying statements of operations. |
Siebert, Brandford, Shank Financial LLC and Subsidiary | |
BUSINESS | Siebert Brandford Shank Financial, LLC (“SBSF” or the “Company”) was organized on November 4, 2014 and through its wholly owned subsidiary, Siebert, Brandford, Shank & Co., L.L.C. (“SBS”), engages in the business of tax-exempt underwriting and related trading activities and, commencing on November 4, 2014, the capital markets business (see Note B). The Company qualifies as a Minority and Women Owned Business Enterprise in certain municipalities. On November 9, 2015, SBSF redeemed Muriel Siebert & Co., Inc., 49% membership interest in addition to the 25.5% membership interest of another member. The accompanying 2015 financial statements are prepared immediately prior to, and do not give effect to such transactions or the related debt and equity financing funding such transactions. |
CHANGE IN OWNERSHIP
CHANGE IN OWNERSHIP | 12 Months Ended |
Dec. 31, 2016 | |
Change In Ownership | |
CHANGE IN OWNERSHIP | On December 16, 2016, pursuant to the terms of an Acquisition Agreement, dated September 1, 2016, as amended (the “Acquisition Agreement”) by and among Financial, Kennedy Cabot Acquisition, LLC (“KCA”), a Nevada limited liability company, and the Estate of Muriel F. Siebert (the “Majority Shareholder”), KCA acquired 677,283 shares of Common Stock in a cash tender offer and 19,310,000 shares owned by the Majority Shareholder (the “Acquisition”). As a result of the Acquisition, effective December 16, 2016, KCA became the owner of approximately 90% of Financials outstanding Common Stock. Pursuant to the terms of the Acquisition Agreement, prior to the closing of the transaction, (1) the Company paid a cash dividend of approximately $.20 per share aggregating to $4,494,000 and (2) the Majority Shareholder was assigned the Company’s right to receive a deferred purchase price payment of $2,507,265 in connection with the Company’s disposition of its capital markets business in 2014 and the $4,000,000 secured junior promissory note issued to the Company in connection with disposition of its minority interest in a former affiliate in 2015 (together tine “Transferred Receivable and Note”). The Majority Shareholder paid into the Company $610,262 for the Transferred Receivable and Note representing 10% of the projected fair value of these assets as of the projected date of the closing (which percentage corresponds to the percentage of the Company’s outstanding stock owned by the Minority Shareholders). The carrying value of the transferred receivable ($1,806,000) and the Note ($4,368,000) immediately prior to the transfer to the majority stockholder, which approximates fair value, has been recorded as a dividend and the $610,262 paid by the majority stockholder has been recorded as a capital contribution in the accompanying financial statements. Additionally, the Estate of Muriel F. Siebert paid $2,206,000 of professional fees, severance and other Company expenses in connection with the Acquisition which were recorded as capital contribution in the accompanying financial statements. |
BUSINESS ACQUISITION
BUSINESS ACQUISITION | 12 Months Ended |
Dec. 31, 2016 | |
Siebert, Brandford, Shank Financial LLC and Subsidiary | |
BUSINESS ACQUISITION | On November 4, 2014, the members of SBS contributed their membership interest into a newly formed Delaware limited liability company, Siebert Brandford Shank Financial, LLC (“SBSF”), in exchange for the same percentage interests in SBSF. On the same day Muriel Siebert & Co., Inc., (“Siebert”) entered an Asset Purchase Agreement (the “Purchase Agreement”) with SBS and SBSF, pursuant to which Siebert sold substantially all of the assets relating to Siebert’s capital markets business to SBSF. Pursuant to the Purchase Agreement, SBSF assumed post-closing liabilities relating to the transferred business. An individual having a 25.5% membership interest in SBS prior to the contribution of membership interests to SBSF, was Siebert’s chief executive officer. The Purchase Agreement provides for an aggregate purchase price for the disposition of $3,000,000, payable by SBSF after closing in annual installments commencing on March 1, 2016 and continuing on each of March 1, 2017, 2018, 2019 and 2020. The transferred business was contributed by SBSF to, and operated by SBS. The amount payable on each annual payment date will equal 50% of the net income attributable to the transferred business recognized by SBS in accordance with generally accepted accounting principles during the fiscal year ending immediately preceding the applicable payment date; provided that, if net income attributable to the transferred business generated prior to the fifth annual payment date is insufficient to pay the remaining balance of the purchase price in full on the fifth annual payment date, then the unpaid amount of the purchase price will be paid in full on March 1, 2021. The annual installment payable on March 1, 2016 is based on the net income attributable to the capital markets business for the year ended December 31, 2015, and amounted to $493,000. Transferred assets of Siebert’s capital markets business, consisted of issuer relationships and goodwill. Issuer relationships, were recorded at $819,000 representing their fair value at the date of acquisition determined based on a discounted cash flow analysis (Level 3). Goodwill, which includes employees of Siebert who transferred to SBS, was recorded at $1,001,000, representing the excess of the fair value ($1,820,000) of SBSF’s purchase obligation to Siebert over the fair value of the issuer relationships. Since the date of acquisition, revenue of $199,000 and net loss of $129,000 attributable to the capital markets business is included in the accompanying statement of operations for the year ended December 31, 2014. The following represents the unaudited pro forma amounts of revenue and net income of the Company for the year ended December 31, 2014, assuming the capital markets business had been acquired as of January 1, 2014: Revenue $ 27,729,000 Net Income $ 672,000 The above net income reflects the additional amortization that would have been charged assuming the fair value adjustment to customer accounts had been applied as of January 1, 2014 and amortization of discount on the purchase obligation for the entire year. |
SALE OF BUSINESS
SALE OF BUSINESS | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
SALE OF BUSINESS | On November 4, 2014, the Company, which held a 49% membership interest in, and the other members of, Siebert Brandford Shank & Co., LLC (“SBS”), contributed their SBS membership interest into a newly formed Delaware limited liability company, SBSF, in exchange for the same percentage interests in SBSF. On the same day the Company entered an Asset Purchase Agreement (the “Purchase Agreement”) with SBS and SBSF, pursuant to which the Company sold substantially all of the assets relating to the Company’s capital markets business to SBSF. Pursuant to the Purchase Agreement, SBSF assumed post-closing liabilities relating to the transferred business. The Purchase Agreement provides for an aggregate purchase price for the disposition of $3,000,000, payable by SBSF after closing in annual installments commencing on March 1, 2016 and continuing on each of March 1, 2017, 2018, 2019 and 2020. The transferred business was contributed by SBSF to, and operated by SBS. The amount payable to the Company on each annual payment date will equal 50% of the net income attributable to the transferred business recognized by SBS in accordance with generally accepted accounting principles during the fiscal year ending immediately preceding the applicable payment date; provided that, if net income attributable to the transferred business generated prior to the fifth annual payment date is insufficient to pay the remaining balance of the purchase price in full on the fifth annual payment date, then the unpaid amount of the purchase price will be paid in full on March 1, 2021. The annual installment payable on March 1, 2016, based on the net income attributable to the capital markets business for the year ended December 31, 2015, which amounted to $493,000 and was paid on March 3, 2016. Transferred assets of the Siebert’s capital markets business, consisted of customer accounts and goodwill, which assets had no carrying value to the Siebert, and the Siebert recorded a gain on sale of $ 1,820,000, which reflected the fair value of the purchase obligation. Such fair value (Level 3) was based on the present value of estimated annual installments to be received during 2016 through 2020 from forecasted net income of the transferred business plus a final settlement in 2021, discounted at 11.5% (representing SBS’s weighted average cost of capital). The discount recorded for the purchase obligation is being amortized as interest income using an effective yield initially calculated based on the original carrying amount of the obligation and estimated annual installments to be received and adjusted in future periods to reflect actual installments received and changes in estimates of future installments. Interest income recognized on the obligation for the year ended December 31, 2016 amounted to $207,000 based on a yield of approximately 12%. As a result of the Siebert’s continuing involvement in the capital markets business through its then 49% ownership in SBSF, results of operations of the capital markets business and the gain on sale were not reflected as discontinued operations in the accompanying financial statements. |
SALE OF INVESTMENT IN AFFILIATE
SALE OF INVESTMENT IN AFFILIATE | 12 Months Ended |
Dec. 31, 2016 | |
Sale Of Investment In Affiliate | |
SALE OF INVESTMENT IN AFFILIATE | Discontinued Operations: In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASU No. 2014-08 changes the definition of a discontinued operation to include only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on the entity’s operations and financial results. ASU No. 2014-08 is effective prospectively to all new disposals of components (including equity method investees) and new classification as held for sale beginning in fiscal years beginning after December 15, 2014 with early adoption permitted. The company adopted this update in 2015. The revised standard cannot be applied to a component that was previously disposed of that was initially precluded from discontinued operations because of significant continuing involvement even where there are subsequent changes in the activities with a disposed component that would no longer preclude discontinued operations (See Note C). On November 9, 2015, the Company sold its 49% membership investment in SBSF back to SBSF for $8,000,000 of which $4,000,000 was paid in cash and the balance of which was paid in the form of a secured junior subordinated promissory note of $4,000,000 (the “SBSF Junior Note”). The sale of the investment in SBSF, which was accounted for by the equity method, represents a strategic shift for the Company based on its significance to the Company’s financial condition and results of operations and the major effect it will have on the Company’s operations and financial results and, accordingly, the Company’s share of operating results of the investment are reflected as discontinued operations in the accompanying statements of operations. The investment was sold for approximately $448,000 less than the carrying value of the investment at November 9, 2015, after adjusting the carrying value of the investment for the Company’s equity in SBSF’s results of operations through such date. Such loss is also included in discontinued operations. The SBSF Junior Note ranks junior in right of payment to up to $5.0 million of subordinated indebtedness incurred by SBSF at the time of the repurchase closing (the “SBSF Senior Debt”). The SBSF Junior Note is secured by a pledge by SBSF”s post-closing members of a number of the outstanding membership interests of SBSF that at all times will equal no less than 49% of the outstanding SBSF membership interests on a fully diluted basis. The SBSF Junior Note matures on November 9, 2020 and bears interest at a rate per year equal to 8% compounding monthly and payable in full at maturity. Interest accrued on the note amounted to $322,000 in 2016 and $46,000 in 2015. The SBSF Junior Note does not require any principal amortization before maturity; however, SBSF has the option to prepay the interest or principal without penalty. The SBSF Junior Note contains covenants and events of defaults that are substantially equivalent to those applicable to the SBSF Senior Debt, including covenants restricting debt and lien incurrence by SBS and SBSF; provided that the SBSF Junior Note is subject to customary intercreditor arrangements with the holders of the SBSF Senior Debt. Immediately upon the dissolution, liquidation, termination or expiration of SBSF or SBS, or a change of control of SBSF or SBS, or sale of all or substantially all of their consolidated assets, SBSF is obligated to prepay all of the then outstanding balance of the SBSF Junior Note. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | [1] Cash Equivalents: Cash equivalents consist of highly liquid investments purchased with an original maturity of 3 months or less. Cash equivalents are carried at fair value and amount to $2,532,000 and $9,053,000 at December 31, 2016 and 2015, respectively, consisting of money market funds. [2] Securities: Securities owned are carried at fair value with realized and unrealized gains and losses reflected in trading profits. Siebert clears all its security transactions through unaffiliated clearing firm on a fully disclosed basis. Accordingly, Siebert does not hold funds or securities for, or owe funds or securities to, its customers. Those functions are performed by the clearing firm. [3] Fair value of financial instruments: Authoritative accounting guidance defines fair value, establishes a framework for measuring fair value and establishes a fair value hierarchy. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between participants at the measurement date. Fair value measurements are not adjusted for transaction costs. The fair value hierarchy prioritizes inputs to valuation techniques used to measure fair value into three levels: Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available. Level 3 – Unobservable inputs which reflect the assumptions that management develops based on available information about the assumptions market participants would use in valuing the asset or liability. The classification of financial instruments valued at fair value as of December 31 is as follows: 2016 2015 Financial Instrument Level 1 Level 1 Cash equivalents $ 2,532,000 $ 9,053,000 Securities 92,000 593,000 $ 2,624,000 $ 9,646,000 Securities consist of common stock, which is valued on the last business day of the year at the last available reported sales price on the primary securities exchange. [4] Income Taxes: The Company accounts for income taxes utilizing the asset and liability approach requiring the recognition of deferred tax assets and liabilities for the expected future tax consequences of net operating loss carryforwards and temporary differences between the basis of assets and liabilities for financial reporting purposes and tax purposes and for net operating loss and other carryforwards. A valuation allowance is provided for deferred tax assets based on the likelihood of realization. [5] Furniture, Equipment and Leasehold Improvements: Furniture, equipment and leasehold improvements are stated at cost, net of accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, generally five years. Leasehold improvements are amortized over the shorter of the estimated useful life of the improvements or period of the lease. [6] Advertising Costs: Advertising costs are charged to expense as incurred. [7] Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. [8] Per Share Data: Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average outstanding common shares during the year. Diluted earnings per share is calculated by dividing net income by the number of shares outstanding under the basic calculation and adding all dilutive securities, which consist of options. The Company incurred a loss from continuing operations and a net loss for each of the years ended December 31, 2016, 2015 and 2014. Accordingly, basic and diluted per share data are the same for each year as the effect of stock options is anti-dilutive. In 2016, 2015 and 2014, 0, 265,000 and 265,000 common shares, respectively, issuable upon the exercise of options were not included in the computation. [9] Revenue: Commission revenues and related clearing expenses are recorded on a trade-date basis. Fees, consisting principally of revenue participation with the Company’s clearing broker in distribution fees and interest are recorded as earned. Fees also include investment advisory fees, which are recorded as earned. Investment banking revenue, which relates to the capital markets business which was sold in 2014 (See Note B), includes gains and fees, net of syndicate expenses, arising from underwriting syndicates in which the Company participates. Investment banking management fees are recorded on the offering date, sales concessions on the settlement date and underwriting fees at the time the underwriting is completed and the income is reasonably determinable. Trading gains and losses are also recorded on a trade-date basis and principally represent riskless principal transactions which the Company, after receiving an order, buys or sells securities as principal and at the same time sells or buys the securities with a markup or markdown to satisfy the order. Interest is recorded on an accrual basis and dividends are recorded on the ex-dividend date. [10] Valuation of Long-Lived Assets: The Company evaluates the recoverability of its long-lived assets including amortizable intangibles and recognizes an impairment loss in the event the carrying value of these assets exceeds the estimated future undiscounted cash flows attributable to these assets. The Company assesses potential impairment to its long-lived assets when events or changes in circumstances indicate that its carrying value may not be recoverable. Should impairment exist, the impairment loss would be measured based on the excess of the carrying value of the assets over their fair value. [11] Certain new accounting guidance: In May 2014, the Financial Accounting Standards Board ("FASB") issued an accounting standard update on revenue recognition (ASU 2014-09). The new guidance creates a single, principle based model for revenue recognition and expands and improves disclosures about revenue. The new guidance is effective for fiscal years beginning on or after December 15, 2017 and interim periods within those fiscal years. The Company is currently assessing the impact the adoption of ASU 2014-09 will have on its financial statements. In February 2016, the FASB issued ASU 2016-02, leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-2 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after the date of initial application, with an option to elect to use certain transaction relief. The Company is currently assessing the impact that the adaption of ASU 2016-02 will have on its financial statements. In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. ASU 2014-15 will explicitly require management to assess an entity's ability to continue as a going concern, and to provide related footnote disclosure in certain circumstances. The new standards effective for all entities in the first annual period ending after December 15, 2016 and did not have any impact on the Company's financial statement disclosures. |
Siebert, Brandford, Shank Financial LLC and Subsidiary | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | [1] Principles of Consolidation: Commencing on November 4, 2014, the accompanying financial statements include the accounts of SBSF and its wholly-owned subsidiary SBS after elimination of intercompany balances and transactions. Prior thereto, the financial statements represent those of SBS. The creation of SBSF and related transfer thereto of the members’ interest in SBS did not result in any change in the carrying value of the existing assets or liabilities of SBS in the consolidated financial statements as both entities were under common control. [2] Revenues: Investment banking revenues include gains and fees, net of syndicate expenses, arising primarily from municipal bond offerings in which the Company acts as an underwriter or agent. Investment banking management fees are recorded on the offering date, sales concessions on the settlement date, and underwriting fees at the time the underwriting is completed and the income is reasonably determinable. Security transactions are recorded on a trade-date basis. Securities owned are valued at fair value. The resulting realized and unrealized gains and losses are reflected as trading profits. Commission revenue which relates to the capital market business are recorded on a trade date basis. Dividends are recorded on the ex-dividend date, and interest income is recognized on an accrual basis. [3] Fair value: Authoritative accounting guidance defines fair value, establishes a framework for measuring fair value and establishes a fair value hierarchy. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are not adjusted for transaction costs. The fair value hierarchy prioritizes inputs to valuation techniques used to measure fair value into three levels: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 Inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available. Level 3 Unobservable inputs which reflect the assumptions that the managing members develop based on available information about the assumptions market participants would use in valuing the asset or liability. See Note C (4) for financial instruments measured at fair value. [4] Cash equivalents: Cash equivalents represent short-term, highly liquid investments which are readily convertible to cash and have maturities of three months or less at time of purchase. Cash equivalents, which are valued at fair value, consist of money market funds which amounted to $15,965,885 at December 31, 2014 (Level 1). The Company maintains its assets with financial institutions which may at times exceed federally insured limits. In the event of financial institutions insolvency, recovery of the assets may be limited. [5] Furniture, equipment and leasehold improvements, net: Furniture, equipment and leasehold improvements are stated at cost, net of accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, generally five years. Leasehold improvements are amortized over the period of the lease. [6] Intangible Assets: Issuer relationships, which were recorded in connection with the acquisition of the capital markets business (see Note B), are being amortized by the straight-line method over 2.9 years. Intangible assets with finite lives are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company assesses the recoverability of its intangible assets by determining whether the unamortized balance can be recovered over the assets’ remaining useful life through undiscounted estimated future cash flows. If undiscounted estimated future cash flows indicate that the unamortized amounts will not be recovered, an adjustment will be made to reduce such amounts to fair value based on estimated future cash flows discounted at a rate commensurate with the risk associated with achieving such cash flows. [7] Goodwill: Goodwill, which was recorded in connection with the acquisition of the capital markets business (see Note B), is not subject to amortization and is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired. The impairment test consists of a comparison of the fair value of the reporting unit with the carrying amount its net assets, including goodwill. Fair value is typically based upon estimated future cash flows discounted at a rate commensurate with the risk involved or market-based comparables. If the carrying amount of the Company’s net assets exceeds the fair value of the reporting unit, then an analysis will be performed to compare the implied fair value of goodwill with the carrying amount of goodwill. An impairment loss will be recognized in an amount equal to the excess of the carrying amount over its implied fair value. [8] Use of estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. [9] Income taxes: The Company is not subject to federal income taxes. Instead, the members are required to include in their income tax returns their respective share of the Company’s income or loss. The Company is subject to tax in certain state and local jurisdictions. Deferred taxes are not significant. |
SUBORDINATED BORROWINGS AND SEC
SUBORDINATED BORROWINGS AND SECURED DEMAND NOTE RECEIVABLE | 12 Months Ended |
Dec. 31, 2016 | |
Siebert, Brandford, Shank Financial, LLC and Subsidiary | |
SUBORDINATED BORROWINGS AND SECURED DEMAND NOTE RECEIVABLE | The subordinated debt at December 31, 2014 consists of the following: 2014 Payable to affiliate (a) $ 1,200,000 Payable to clearing broker (b) 4,000,000 $ 5,200,000 (a) Consists of a Secured Demand Note Collateral Agreement payable to Siebert, an indirect member of the Company, bearing 4% interest and which expired and was repaid on August 31, 2015 through an offset against a $1,200,000 secured demand note receivable due from Siebert. Interest expense paid to Siebert in each of 2015 and 2014 amounted to $32,000 and 48,000 respectively. The secured demand note receivable of $1,200,000 was collateralized by cash equivalents of Siebert of approximately $1,532,000 which expired and was repaid on August 31, 2015. Interest earned on the collateral amounted to approximately $1,000 and $1,028 in 2015 and 2014, respectively. (b) On December 9, 2014, SBS entered into a temporary subordinated loan agreement with National Financial Services, its clearing broker, in the amount of $4,000,000 bearing interest at the federal funds rate plus 6% and maturing January 22, 2015. The note was repaid on January 22, 2015. Interest expense accrued in 2014 amounted to approximately $16,000. The subordinated borrowings are available in computing net capital under the Securities and Exchange Commission’s (“SEC”) Uniform Net Capital Rule. To the extent that such borrowing is required for the Company’s continued compliance with minimum net capital requirements, it may not be repaid. On March 24, 2014, SBS entered into a temporary subordinated loan agreement with National Financial Services, its clearing broker, in the amount of $5,000,000 bearing interest at the federal funds rate plus 6% and maturing May 5, 2014. The note was repaid on May 5, 2014. Interest expense paid was $36,542. |
INVESTMENT IN FORMER AFFILIATES
INVESTMENT IN FORMER AFFILIATES | 12 Months Ended |
Dec. 31, 2016 | |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | |
INVESTMENT IN FORMER AFFILIATES | Investment in and advances to, equity in income / (loss) of, and distributions received from, affiliates consist of the following: December 31, 2015 SBSF SBSFPC TOTAL Income from equity investee $ 671,000 — 671,000 Distributions $ 98,000 — 98,000 December 31, 2014 SBSF SBSFPC TOTAL Investment and advances $ 7,979,000 — 7,979,000 Income (loss) from equity investees $ 84,000 (17,000 ) 67,000 Distributions $ 13,000 173,000 186,000 The Company and two individuals (the “Principals”) formed SBS to succeed to the tax-exempt underwriting business of the Siebert Brandford Shank division of Siebert. The agreements with the Principals provide that profits will be shared 51% to the Principals and 49% to Siebert. Pursuant to the terms of the Operating Agreement, Financial and each of the Principals owned a 33.33% interest in SBSFPC which engaged in derivatives transactions related to the municipal underwriting business. The Operating Agreement provided that income/(loss) be shared 66.66% by the Principals and 33.33% by Financial. SBSFPC ceased operations in December 2014. Summarized consolidated financial data of SBSF and SBS in 2015 and 2014 follows: 2015 2014 Total assets, including secured demand note of $1,200,000 in 2014 due from Siebert $ 30,903,000 $ 28,518,000 Total liabilities, including obligations to Siebert of $6,051,000 in 2015 and $3,057,000 in 2014 23,254,000 12,458,000 Total members’ capital 7,649,000 16,060,000 Regulatory minimum net capital requirement 250,000 250,000 Total revenue 27,774,000 24,806,000 Net income 1,369,000 (a) 171,000 (a) Includes interest expense on purchase obligation payable to Siebert of $195,000. Balance sheet data for 2015 is as of November 9 subsequent to the redemption of the Company’s interest, Revenue and net income for 2015 is for the period from January 1 through November 9. During 2016, 2015 and 2014 Siebert charged SBS $23,100, $100,000 and $100,000, respectively, for each year, respectively, for general and administrative services, which Siebert believes approximates the cost of furnishing such services. In 2016, 2015 and 2014 Siebert earned interest income of $0, $32,000 and $48,000, respectively, from SBS in connection with subordinated loans available or made to SBS and Siebert paid SBS interest earned on restricted cash equivalents of $0, $1,000 and $1,028 in 2016, 2015 and 2014, respectively. In addition, in 2016 and 2015, Siebert earned interest income of $207,000 and $265,000, respectively from SBSF on the purchase obligation in connection with the sale of the capital markets business (see Note B) and in 2016, Siebert earned interest income of $322,000 from SBSF on the receivable arising from the redemption of its ownership interest (see Note D). Summarized financial data of SBSFPC is as follows: 2014 Total Assets $ 26,000 Total liabilities 26,000 Total members’ capital — Total revenue — Net loss (51,000 ) On March 3, 2015, Ms. Shank completed her role as acting chief executive officer of the Company to devote full time to her continuing position as chief executive officer of SBSF. |
FURNITURE, EQUIPMENT AND LEASEH
FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | 12 Months Ended |
Dec. 31, 2016 | |
FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | Furniture, equipment and leasehold improvements consist of the following: December 31, 2016 2015 Equipment $ 28,000 $ 375,000 Leasehold improvements 318,000 549,000 Furniture and fixtures 44,000 346,000 968,000 Less accumulated depreciation and amortization (300,000 ) (594,000 ) $ 46,000 $ 374,000 Depreciation and amortization expense for the years ended December 31, 2016, 2015 and 2014 amounted to $277,000, $276,000 and $257,000, respectively. |
Siebert, Brandford, Shank Financial LLC and Subsidiary | |
FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | Furniture, equipment, and leasehold improvements consist of the following: 12/31/2014 Equipment $ 926,654 Furniture and leasehold improvements 1,718,826 2,645,480 Less accumulated depreciation and amortization 1,960,744 $ 684,736 Depreciation and amortization expense for the period ended November 9, 2015 amounted to $160,046, For the period ended December 31, 2014 the expense amounted to $226,761. |
NET CAPITAL
NET CAPITAL | 12 Months Ended |
Dec. 31, 2016 | |
Siebert, Brandford, Shank Financial, LLC and Subsidiary | |
NET CAPITAL | SBS is subject to the SEC’s Uniform Net Capital Rule 15c3-1, which 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. At December 31, 2014, SBS had net capital of $22,807,796 which was $22,557,796, in excess of its required net capital and its ratio of aggregate indebtedness to net capital was 0.16 to 1. SBS claims exemption from the reserve requirements under Section 15c3-3(k)(2)(ii). |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | Financial files a consolidated federal income tax return with its subsidiaries. Income tax (benefit) expense consists of the following: Year Ended December 31, 2016 2015 2014 Federal income tax (benefit) expense: Current $ — $ (228,000 ) $ (22,000 ) Deferred — — — (228,000 ) (22,000 ) State and local: Current — (47,000 ) (5,000 ) Deferred — — — — (47,000 ) (5,000 ) Total: Current — (275,000 ) (27,000 ) Deferred — — — $ — $ (275,000 ) $ (27,000 ) Income tax benefit in 2015 and 2014 represent the utilization of the loss from continuing operations against income from discontinued operations, exclusive in 2015 of the capital loss from disposal of the investment in the former affiliate. Reconciliation between the income tax (benefit) provision and income taxes computed by applying the statutory Federal income tax rate to loss before income taxes is as follows: Year Ended December 31, 2016 2015 2014 Expected income tax (benefit) at statutory Federal tax rate (34%) $ (1,897,000 ) $ (1,051,000 ) $ (2,251,000 ) State and local taxes, net of Federal tax effect (400,000 ) (68,000 ) (464,000 ) Increase in valuation allowance 1,704,000 (1) 784,000 2,551,000 Nondeductible transaction costs related to change in control 482,000 Expiration of contribution carryforward 85,000 Permanent difference 19,000 13,000 39,000 Other 7,000 47,000 98,000 Income tax (benefit) $ — $ (275,000 ) $ (27,000 ) (1) Reflects a $264,000 reduction to the valuation allowance and related deferred tax assets as of December 31, 2015. The principal items giving rise to deferred tax assets (liabilities) are as follows: December 31, 2016 2015 Deferred tax assets: Net operating loss credit carryforwards $ 10,316,000 $ 9,456,000 Capital loss carryforwards 395,000 — Employee stock based compensation 237,000 237,000 Retail brokerage accounts (b) 71,000 140,000 Contribution carryover 158,000 178,000 Furniture, equipment and leasehold improvements 312,000 181,000 Accrued settlement liability 340,000 252,000 Investment in former affiliate (a) — — Other 8,000 44,000 Total 11,442,000, 10,883,000 Valuation allowance (11,442,000 ) (10,002,000 ) Net deferred tax assets — 881,000 Deferred tax liability: Receivable from affiliate (a) — (881,000 ) — — (a) Relates to receivable from business sold to affiliate treated as an installment sale for tax purposes. (b) Related to acquired retail discount brokerage accounts, which are being amortized over 15 years for tax purposes and have been fully amortized for financial reporting purposes. Due to cumulative losses incurred by the Company during the current and prior two years, the Company is unable to conclude that it is more likely than not that it will realize its deferred tax asset in excess of the deferred tax liability and, accordingly, has recorded a valuation allowance to fully offset such amount at December 31, 2016 and 2015. At December 31, 2016, the Company has state net operating loss carryforwards aggregating $17.4 million, which expires from 2029 through 2036. In addition, the Company has federal net operating loss carryforwards of $24.2 million at December 31, 2016, which expires from 2030 through 2036. Utilization of the Company’s net operating loss carryforwards are subject to annual limitations under Internal Revenue Code section 382 due to the change in ownership. The Company applied the “more-likely-than not” recognition threshold to all tax positions taken or expected to be taken in a tax return which resulted in no unrecognized tax benefits reflected in the financial statements as of December 31, 2016. The Company classifies interest and penalties that would accrue according to the provisions of relevant tax law as income taxes. Tax years 2013 and thereafter are subject to examination by federal and certain tax authorities. For other states the 2010 through 2013 tax years remain open to examination. The Company is currently under tax examination by New York State for the years 2012 to 2014 and by the state of Illinois for the years 2012 and 2013. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | Siebert is subject to the SEC’s Uniform Net Capital Rule (Rule 15c3-1), which requires the maintenance of minimum net capital. Siebert has elected to use the alternative method, permitted by the rule, which requires that Siebert maintain minimum net capital, as defined, equal to the greater of $250,000 or 2 percent of aggregate debit balances arising from customer transactions, as defined. The Net Capital Rule of the New York Stock Exchange also provides that equity capital may not be withdrawn or cash dividends paid if resulting net capital would be less than 5% of aggregate debits. At December 31, 2016 and 2015, Siebert had net capital of approximately $1,112,000 and $8,131,000, respectively, as compared with net capital requirements of $250,000. Siebert claims exemption from the reserve requirement under Section 15c3-3(k)(2)(ii) as it clears its customer transactions through an unaffiliated clearing firm on a fully disclosed basis. |
OPTIONS
OPTIONS | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
OPTIONS | The Company’s 2007 Long-Term Incentive Plan (the “Plan”) authorizes the grant of options to purchase up to an aggregate of 2,000,000 shares, subject to adjustment in certain circumstances. Both non-qualified options and options intended to qualify as “Incentive Stock Options” under Section 422 of the Internal Revenue Code may be granted under the Plan. A Stock Option Committee of the Board of Directors administers the Plan. The committee has the authority to determine when options are granted, the term during which an option may be exercised (provided no option has a term exceeding 10 years), the exercise price and the exercise period. The exercise price shall not be less than the fair market value on the date of grant. No option may be granted under the Plan after December 2017. Generally, employee options vest 20% per year for five years and expire ten years from the date of grant. The Plan was terminated in 2016 in connection with the change in ownership (see Note B). A summary of the Company’s stock option transactions for the year ended December 31, 2016 is presented below: 2016 Shares Weighted Average Exercise Price Outstanding - beginning of the year 265,000 3.02 Cancelled (240,000 ) 3.02 Forfeited — — Expired (25,000 ) 3.02 Outstanding - end of year — — Fully vested and exercisable at end of year — — For the years ended December 31, 2016, 2015 and 2014, no stock options were granted. |
COMMITMENTS, CONTINGENCIES AND
COMMITMENTS, CONTINGENCIES AND OTHER | 12 Months Ended |
Dec. 31, 2016 | |
COMMITMENTS, CONTINGENCIES AND OTHER | (1) Retail customer transactions are cleared through clearing brokers on a fully disclosed basis. If customers do not fulfill their contractual obligations, the clearing broker may charge Siebert for any loss incurred in connection with the purchase or sale of securities at prevailing market prices to satisfy the customer obligations. Siebert regularly monitors the activity in its customer accounts for compliance with its margin requirements. Siebert is exposed to the risk of loss on unsettled customer transactions if customers are unable to fulfill their contractual obligations. There were no material losses for unsettled customer transactions in 2016, 2015 or 2014. Credit risk represents the potential loss that would occur if counterparties fail to perform pursuant to the terms of their obligations. The Company is subject to credit risk to the extent a custodian or broker with whom it conducts business is unable to fulfill contractual obligations. (2) In the ordinary course of business the Company is named a party to certain claims, suits and complaints. In the opinion of management, pending matters are without merit, and their ultimate outcome will not have a significant effect on the financial position or results of operations of the Company. (3) In July 2013 , the Company extended its fully disclosed clearing agreement with its clearing b r oker through July 2017 . (4) On October 24 , 2016 the Principal Executive Officer of the Company entered into a separation agreement pursuant to the Acquisition Agreement. Upon clos i ng of the transact i on con t emplated by the Acquisit i on Agreement, the Principal Executive Officer received a severance payment of $635 , 000 and is subject to the customary future cooperation , non-disparagement , confidentiality , employee and customer non-solicitation and re l ease provisions . The severance payment was funded from the proceeds of closing received by t h e Siebert Estate which has been a c counted for a capital contribut i on. The severance payment is included in professional fees and other expenses related to change in control in the income statement. (See Note B) (5) In D ecember 2015 , a t hen current employee of the Com p any commenced an arbitrat i on before F I NRA against the Company alleging a single cause of action for employment reta l iation under the Sarbanes-Oxley Act of 2002 . In February 2016 , the employee amended his claim to replace the Sarbanes - Oxley claim with a substantially identical claim arising under the Dodd- Frank Act of 2010 . On January 3 1 , 2017, a settlement agreement was entered into pursuant to which the arbitration was dismissed with prejudice and the employee was paid $825 , 000 which was funded in January 2017 by KCA , which acquired controlling interest in Company (See N ote B). The settlement has been reflected as a loss in the accompanying financial statements with a corresponding liability . The payment of the liability by KCA will be accoun t e d fo r as a capital contribution . (6) In July 2014, the Company entered into a settlement agreement in regards to a dispute with a former employee, in which the former employee sought, among other things, damages arising from his separation from the Company. The Company asserted counter claims in the arbitration. Pursuant to the settlement, the Company paid $4,300,000 to the former employee, and the claims and counterclaims have been dismissed and released. The accompanying 2014 statement of operations reflects a charge to give effect to the settlement. (7) The Company rents discount retail brokerage and other office space under long-term operating leases expiring in various periods through 2017. These leases call for base rent plus escalations for taxes and operating expenses. In February 2017 the Company closed its New York office at end of its lease term and relocated to newly lease office space. The leases for the newly leased office space expire in September 2018. The 2017 and 2018 aggregate future minimum base rental payments under these operating leases are approximately $342,000 and $180,000 respectively. Rent expense, including escalations for operating costs, amounted to approximately $650,000, $776,000, $788,000 and for the years ended December 31, 2016, 2015 and 2014, respectively. Rent is being charged to expense over the entire lease term on a straight-line basis. (8) Siebert 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. Siebert may also make discretionary contributions to the plan. No contributions were made by Siebert in 2016, 2015 and 2014. |
Siebert, Brandford, Shank Financial LLC and Subsidiary | |
COMMITMENTS, CONTINGENCIES AND OTHER | SBS rents office space under long-term operating leases expiring through 2026. These leases call for base rent plus escalations for property taxes and other operating expenses. SBSF rents office space under long-term operating leases expiring through 2020. These leases call for base rent plus escalations for property taxes and other operating expenses. Future minimum base rent under these operating leases as of December 31, 2014 are as follows: December 31, 2014 Amount 2015 $ 1,043,000 2016 886,000 2017 639,000 2018 627,000 2019 587,000 Thereafter 185,000 $ 3,967,000 Rent expense, including taxes and operating expenses for 2015 and 2014 amounted to $1,055,944 and $1,186,967, respectively. In prior years, SBS purchased leasehold improvements of approximately $620,000 which were reimbursed by the landlord. SBS recorded such reimbursement as a credit to deferred rent liability, which is being recognized as a reduction of rental expense on a straight-line basis over the term of the lease. Rent expense is being charged to operations on a straight-line basis resulting in a deferred rent liability which, including the reimbursement discussed above amounted to $549,287 at December 31, 2014. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2016 | |
Siebert, Brandford, Shank Financial, LLC and Subsidiary | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | Accounts payable and accrued expenses consist of the following: December 31, 2014 Accounts payable $ 313,285 Accrued bonus and other employee compensation 4,233,521 Other accrued expenses 200,842 $ 4,747,648 |
OTHER
OTHER | 12 Months Ended |
Dec. 31, 2016 | |
Siebert, Brandford, Shank Financial, LLC and Subsidiary | |
OTHER | During each of 2015, 2014 SBS was charged $100,000 by Siebert for general and administrative services. |
SUMMARIZED QUARTERLY FINANCIAL
SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED) | 2016 2015 First Quarter Second Quarter Third Quarter Fourth Quarter First Quarter Second Quarter Third Quarter Fourth Quarter Revenue $ 2,078,000 2,462,000 2,223,000 3,049,000 $ 2,264,000 2,104,000 2,536,000 2,832,000 Net income (loss) $ (501,000 ) (728,000 ) (1,140,000 ) (3,209,000 )(b) $ (1,534,000 ) (407,000 ) (728,000 ) (200,000 )(a) Net income (loss) per share: Continuing operations $ (.02 ) (.03 ) (.05 ) (.15 ) $ (.07 ) (.02 ) (.04 ) (.00 ) Discontinued operations $ — — — — $ — — .01 (.01 ) Basic and diluted (a) Includes $448,000 loss ($0.02 per share) related to disposal of investment in former affiliate. (b) Includes $825,000 loss ($0.04 per share) related to the arbitration settlement and $2,206,000 ($0.10 per share) of expenses related to the change in ownership. |
SUMMARY OF SIGNIFICANT ACCOUN26
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Cash Equivalents | Cash equivalents consist of highly liquid investments purchased with an original maturity of 3 months or less. Cash equivalents are carried at fair value and amount to $2,532,000 and $9,053,000 at December 31, 2016 and 2015, respectively, consisting of money market funds. |
Securities | Securities owned are carried at fair value with realized and unrealized gains and losses reflected in trading profits. Siebert clears all its security transactions through unaffiliated clearing firm on a fully disclosed basis. Accordingly, Siebert does not hold funds or securities for, or owe funds or securities to, its customers. Those functions are performed by the clearing firm. |
Fair value of financial instruments | Authoritative accounting guidance defines fair value, establishes a framework for measuring fair value and establishes a fair value hierarchy. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between participants at the measurement date. Fair value measurements are not adjusted for transaction costs. The fair value hierarchy prioritizes inputs to valuation techniques used to measure fair value into three levels: Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available. Level 3 – Unobservable inputs which reflect the assumptions that management develops based on available information about the assumptions market participants would use in valuing the asset or liability. The classification of financial instruments valued at fair value as of December 31 is as follows: 2016 2015 Financial Instrument Level 1 Level 1 Cash equivalents $ 2,532,000 $ 9,053,000 Securities 92,000 593,000 $ 2,624,000 $ 9,646,000 Securities consist of common stock, which is valued on the last business day of the year at the last available reported sales price on the primary securities exchange. |
Income Taxes | The Company accounts for income taxes utilizing the asset and liability approach requiring the recognition of deferred tax assets and liabilities for the expected future tax consequences of net operating loss carryforwards and temporary differences between the basis of assets and liabilities for financial reporting purposes and tax purposes and for net operating loss and other carryforwards. A valuation allowance is provided for deferred tax assets based on the likelihood of realization. |
Furniture, Equipment and Leasehold Improvements | Furniture, equipment and leasehold improvements are stated at cost, net of accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, generally five years. Leasehold improvements are amortized over the shorter of the estimated useful life of the improvements or period of the lease. |
Advertising Costs | Advertising costs are charged to expense as incurred. |
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Per Share Data | Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average outstanding common shares during the year. Diluted earnings per share is calculated by dividing net income by the number of shares outstanding under the basic calculation and adding all dilutive securities, which consist of options. The Company incurred a loss from continuing operations and a net loss for each of the years ended December 31, 2016, 2015 and 2014. Accordingly, basic and diluted per share data are the same for each year as the effect of stock options is anti-dilutive. In 2016, 2015 and 2014, 0, 265,000 and 265,000 common shares, respectively, issuable upon the exercise of options were not included in the computation. |
Revenues | Commission revenues and related clearing expenses are recorded on a trade-date basis. Fees, consisting principally of revenue participation with the Company’s clearing broker in distribution fees and interest are recorded as earned. Fees also include investment advisory fees, which are recorded as earned. Investment banking revenue, which relates to the capital markets business which was sold in 2014 (See Note B), includes gains and fees, net of syndicate expenses, arising from underwriting syndicates in which the Company participates. Investment banking management fees are recorded on the offering date, sales concessions on the settlement date and underwriting fees at the time the underwriting is completed and the income is reasonably determinable. Trading gains and losses are also recorded on a trade-date basis and principally represent riskless principal transactions which the Company, after receiving an order, buys or sells securities as principal and at the same time sells or buys the securities with a markup or markdown to satisfy the order. Interest is recorded on an accrual basis and dividends are recorded on the ex-dividend date. |
Valuation of Long-Lived Assets | The Company evaluates the recoverability of its long-lived assets including amortizable intangibles and recognizes an impairment loss in the event the carrying value of these assets exceeds the estimated future undiscounted cash flows attributable to these assets. The Company assesses potential impairment to its long-lived assets when events or changes in circumstances indicate that its carrying value may not be recoverable. Should impairment exist, the impairment loss would be measured based on the excess of the carrying value of the assets over their fair value. |
Certain new accounting guidance | In May 2014, the Financial Accounting Standards Board ("FASB") issued an accounting standard update on revenue recognition (ASU 2014-09). The new guidance creates a single, principle based model for revenue recognition and expands and improves disclosures about revenue. The new guidance is effective for fiscal years beginning on or after December 15, 2017 and interim periods within those fiscal years. The Company is currently assessing the impact the adoption of ASU 2014-09 will have on its financial statements. In February 2016, the FASB issued ASU 2016-02, leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-2 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after the date of initial application, with an option to elect to use certain transaction relief. The Company is currently assessing the impact that the adaption of ASU 2016-02 will have on its financial statements. In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. ASU 2014-15 will explicitly require management to assess an entity's ability to continue as a going concern, and to provide related footnote disclosure in certain circumstances. The new standards effective for all entities in the first annual period ending after December 15, 2016 and did not have any impact on the Company's financial statement disclosures. |
Siebert, Brandford, Shank Financial LLC and Subsidiary | |
Principles of Consolidation | Commencing on November 4, 2014, the accompanying financial statements include the accounts of SBSF and its wholly-owned subsidiary SBS after elimination of intercompany balances and transactions. Prior thereto, the financial statements represent those of SBS. The creation of SBSF and related transfer thereto of the members’ interest in SBS did not result in any change in the carrying value of the existing assets or liabilities of SBS in the consolidated financial statements as both entities were under common control. |
Cash Equivalents | Cash equivalents represent short-term, highly liquid investments which are readily convertible to cash and have maturities of three months or less at time of purchase. Cash equivalents, which are valued at fair value, consist of money market funds which amounted to $15,965,885 at December 31, 2014 (Level 1). The Company maintains its assets with financial institutions which may at times exceed federally insured limits. In the event of financial institutions insolvency, recovery of the assets may be limited. |
Fair value of financial instruments | Authoritative accounting guidance defines fair value, establishes a framework for measuring fair value and establishes a fair value hierarchy. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are not adjusted for transaction costs. The fair value hierarchy prioritizes inputs to valuation techniques used to measure fair value into three levels: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 Inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available. Level 3 Unobservable inputs which reflect the assumptions that the managing members develop based on available information about the assumptions market participants would use in valuing the asset or liability. See Note C (4) for financial instruments measured at fair value. |
Income Taxes | The Company is not subject to federal income taxes. Instead, the members are required to include in their income tax returns their respective share of the Company’s income or loss. The Company is subject to tax in certain state and local jurisdictions. Deferred taxes are not significant. |
Furniture, Equipment and Leasehold Improvements | Furniture, equipment and leasehold improvements are stated at cost, net of accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, generally five years. Leasehold improvements are amortized over the period of the lease. |
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Revenues | Investment banking revenues include gains and fees, net of syndicate expenses, arising primarily from municipal bond offerings in which the Company acts as an underwriter or agent. Investment banking management fees are recorded on the offering date, sales concessions on the settlement date, and underwriting fees at the time the underwriting is completed and the income is reasonably determinable. Security transactions are recorded on a trade-date basis. Securities owned are valued at fair value. The resulting realized and unrealized gains and losses are reflected as trading profits. Commission revenue which relates to the capital market business are recorded on a trade date basis. Dividends are recorded on the ex-dividend date, and interest income is recognized on an accrual basis. |
Intangible Assets | Issuer relationships, which were recorded in connection with the acquisition of the capital markets business (see Note B), are being amortized by the straight-line method over 2.9 years. Intangible assets with finite lives are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company assesses the recoverability of its intangible assets by determining whether the unamortized balance can be recovered over the assets’ remaining useful life through undiscounted estimated future cash flows. If undiscounted estimated future cash flows indicate that the unamortized amounts will not be recovered, an adjustment will be made to reduce such amounts to fair value based on estimated future cash flows discounted at a rate commensurate with the risk associated with achieving such cash flows. |
Goodwill | Goodwill, which was recorded in connection with the acquisition of the capital markets business (see Note B), is not subject to amortization and is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired. The impairment test consists of a comparison of the fair value of the reporting unit with the carrying amount its net assets, including goodwill. Fair value is typically based upon estimated future cash flows discounted at a rate commensurate with the risk involved or market-based comparables. If the carrying amount of the Company’s net assets exceeds the fair value of the reporting unit, then an analysis will be performed to compare the implied fair value of goodwill with the carrying amount of goodwill. An impairment loss will be recognized in an amount equal to the excess of the carrying amount over its implied fair value. |
BUSINESS ACQUISITION (Tables)
BUSINESS ACQUISITION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Siebert, Brandford, Shank Financial LLC and Subsidiary | |
Pro forma amounts of revenue | Revenue $ 27,729,000 Net Income $ 672,000 |
SUMMARY OF SIGNIFICANT ACCOUN28
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Financial instruments | 2016 2015 Financial Instrument Level 1 Level 1 Cash equivalents $ 2,532,000 $ 9,053,000 Securities 92,000 593,000 $ 2,624,000 $ 9,646,000 |
INVESTMENT IN AFFILIATES (Table
INVESTMENT IN AFFILIATES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | |
Investment In and Advances to Affiliate | December 31, 2015 SBSF SBSFPC TOTAL Income from equity investee $ 671,000 — 671,000 Distributions $ 98,000 — 98,000 December 31, 2014 SBSF SBSFPC TOTAL Investment and advances $ 7,979,000 — 7,979,000 Income (loss) from equity investees $ 84,000 (17,000 ) 67,000 Distributions $ 13,000 173,000 186,000 |
Summarized financial data of affiliates | 2015 2014 Total assets, including secured demand note of $1,200,000 in 2014 due from Siebert $ 30,903,000 $ 28,518,000 Total liabilities, including obligations to Siebert of $6,051,000 in 2015 and $3,057,000 in 2014 23,254,000 12,458,000 Total members’ capital 7,649,000 16,060,000 Regulatory minimum net capital requirement 250,000 250,000 Total revenue 27,774,000 24,806,000 Net income 1,369,000 (a) 171,000 (a) Includes interest expense on purchase obligation payable to Siebert of $195,000. 2014 Total Assets $ 26,000 Total liabilities 26,000 Total members’ capital — Total revenue — Net loss (51,000 ) |
SUBORDINATED BORROWINGS AND S30
SUBORDINATED BORROWINGS AND SECURED DEMAND NOTE RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Siebert, Brandford, Shank Financial LLC and Subsidiary | |
Subordinated debt | 2014 Payable to affiliate (a) $ 1,200,000 Payable to clearing broker (b) 4,000,000 $ 5,200,000 (a) Consists of a Secured Demand Note Collateral Agreement payable to Siebert, an indirect member of the Company, bearing 4% interest and which expired and was repaid on August 31, 2015 through an offset against a $1,200,000 secured demand note receivable due from Siebert. Interest expense paid to Siebert in each of 2015 and 2014 amounted to $32,000 and 48,000 respectively. The secured demand note receivable of $1,200,000 was collateralized by cash equivalents of Siebert of approximately $1,532,000 which expired and was repaid on August 31, 2015. Interest earned on the collateral amounted to approximately $1,000 and $1,028 in 2015 and 2014, respectively. (b) On December 9, 2014, SBS entered into a temporary subordinated loan agreement with National Financial Services, its clearing broker, in the amount of $4,000,000 bearing interest at the federal funds rate plus 6% and maturing January 22, 2015. The note was repaid on January 22, 2015. Interest expense accrued in 2014 amounted to approximately $16,000. The subordinated borrowings are available in computing net capital under the Securities and Exchange Commission’s (“SEC”) Uniform Net Capital Rule. To the extent that such borrowing is required for the Company’s continued compliance with minimum net capital requirements, it may not be repaid. On March 24, 2014, SBS entered into a temporary subordinated loan agreement with National Financial Services, its clearing broker, in the amount of $5,000,000 bearing interest at the federal funds rate plus 6% and maturing May 5, 2014. The note was repaid on May 5, 2014. Interest expense paid was $36,542. |
FURNITURE, EQUIPMENT AND LEAS31
FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Furniture, equipment and leasehold improvements | December 31, 2016 2015 Equipment $ 28,000 $ 375,000 Leasehold improvements 318,000 549,000 Furniture and fixtures 44,000 346,000 968,000 Less accumulated depreciation and amortization (300,000 ) (594,000 ) $ 46,000 $ 374,000 |
Siebert, Brandford, Shank Financial LLC and Subsidiary | |
Furniture, equipment and leasehold improvements | 12/31/2014 Equipment $ 926,654 Furniture and leasehold improvements 1,718,826 2,645,480 Less accumulated depreciation and amortization 1,960,744 $ 684,736 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income tax expense (benefit) provision | Year Ended December 31, 2016 2015 2014 Federal income tax (benefit) expense: Current $ — $ (228,000 ) $ (22,000 ) Deferred — — — (228,000 ) (22,000 ) State and local: Current — (47,000 ) (5,000 ) Deferred — — — — (47,000 ) (5,000 ) Total: Current — (275,000 ) (27,000 ) Deferred — — — $ — $ (275,000 ) $ (27,000 ) |
Reconciliation between income tax benefit and income taxes | Year Ended December 31, 2016 2015 2014 Expected income tax (benefit) at statutory Federal tax rate (34%) $ (1,897,000 ) $ (1,051,000 ) $ (2,251,000 ) State and local taxes, net of Federal tax effect (400,000 ) (68,000 ) (464,000 ) Increase in valuation allowance 1,704,000 (1) 784,000 2,551,000 Nondeductible transaction costs related to change in control 482,000 Expiration of contribution carryforward 85,000 Permanent difference 19,000 13,000 39,000 Other 7,000 47,000 98,000 Income tax (benefit) $ — $ (275,000 ) $ (27,000 ) (1) Reflects a $264,000 reduction to the valuation allowance and related deferred tax assets as of December 31, 2015. |
Deferred tax assets (liabilities) | December 31, 2016 2015 Deferred tax assets: Net operating loss credit carryforwards $ 10,316,000 $ 9,456,000 Capital loss carryforwards 395,000 — Employee stock based compensation 237,000 237,000 Retail brokerage accounts (b) 71,000 140,000 Contribution carryover 158,000 178,000 Furniture, equipment and leasehold improvements 312,000 181,000 Accrued settlement liability 340,000 252,000 Investment in former affiliate (a) — — Other 8,000 44,000 Total 11,442,000, 10,883,000 Valuation allowance (11,442,000 ) (10,002,000 ) Net deferred tax assets — 881,000 Deferred tax liability: Receivable from affiliate (a) — (881,000 ) — — (a) Relates to receivable from business sold to affiliate treated as an installment sale for tax purposes. (b) Related to acquired retail discount brokerage accounts, which are being amortized over 15 years for tax purposes and have been fully amortized for financial reporting purposes. |
COMMITMENTS, CONTINGENCIES AN33
COMMITMENTS, CONTINGENCIES AND OTHER (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Siebert, Brandford, Shank Financial LLC and Subsidiary | |
Future minimum base rental payments | December 31, 2014 Amount 2015 $ 1,043,000 2016 886,000 2017 639,000 2018 627,000 2019 587,000 Thereafter 185,000 $ 3,967,000 |
ACCOUNTS PAYABLE AND ACCRUED 34
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Siebert, Brandford, Shank Financial LLC and Subsidiary | |
Accounts payable and accrued expenses | December 31, 2014 Accounts payable $ 313,285 Accrued bonus and other employee compensation 4,233,521 Other accrued expenses 200,842 $ 4,747,648 |
OPTIONS (Tables)
OPTIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Stock option transactions | 2016 Shares Weighted Average Exercise Price Outstanding - beginning of the year 265,000 3.02 Cancelled (240,000 ) 3.02 Forfeited — — Expired (25,000 ) 3.02 Outstanding - end of year — — Fully vested and exercisable at end of year — — |
SUMMARIZED QUARTERLY FINANCIA36
SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summarized quarterly financial data | 2016 2015 First Quarter Second Quarter Third Quarter Fourth Quarter First Quarter Second Quarter Third Quarter Fourth Quarter Revenue $ 2,078,000 2,462,000 2,223,000 3,049,000 $ 2,264,000 2,104,000 2,536,000 2,832,000 Net income (loss) $ (501,000 ) (728,000 ) (1,140,000 ) (3,209,000 )(b) $ (1,534,000 ) (407,000 ) (728,000 ) (200,000 )(a) Net income (loss) per share: Continuing operations $ (.02 ) (.03 ) (.05 ) (.15 ) $ (.07 ) (.02 ) (.04 ) (.00 ) Discontinued operations $ — — — — $ — — .01 (.01 ) Basic and diluted (a) Includes $448,000 loss ($0.02 per share) related to disposal of investment in former affiliate. (b) Includes $825,000 loss ($0.04 per share) related to the arbitration settlement and $2,206,000 ($0.10 per share) of expenses related to the change in ownership. |
BUSINESS ACQUISITION (Details)
BUSINESS ACQUISITION (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||
Revenue | $ 3,049,000 | $ 2,223,000 | $ 2,462,000 | $ 2,078,000 | $ 2,832,000 | $ 2,536,000 | $ 2,104,000 | $ 2,624,000 | $ 9,812,000 | $ 10,096,000 | $ 15,852,000 | ||
Net income (loss) | $ (3,209,000) | [1] | $ (114,000) | $ (728,000) | $ (501,000) | $ (200,000) | [2] | $ (728,000) | $ (407,000) | $ (1,534,000) | $ (5,578,000) | (2,869,000) | (6,557,000) |
SBS | |||||||||||||
Revenue | 27,774,000 | ||||||||||||
Net income (loss) | $ 1,369,000 | 171,000 | |||||||||||
Pro Forma [Member] | SBS | |||||||||||||
Revenue | 27,729,000 | ||||||||||||
Net income (loss) | $ 672,000 | ||||||||||||
[1] | Includes $825,000 loss ($0.04 per share) related to the arbitration settlement and $2,206,000 ($0.10 per share) of expenses related to the change in ownership. | ||||||||||||
[2] | Includes $448,000 loss ($0.02 per share) related to disposal of investment in former affiliate. |
BUSINESS ACQUISITION (Details N
BUSINESS ACQUISITION (Details Narrative) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Income attributable to capital markets obligation | $ 493,000 |
Pro Forma [Member] | SBS | |
Income attributable to capital markets obligation | $ 493,000 |
SUMMARY OF SIGNIFICANT ACCOUN39
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Cash equivalents | $ 2,730,000 | $ 9,420,000 |
Financial instruments | 92,000 | 593,000 |
Level 1 | ||
Cash equivalents | 2,532,000 | 9,053,000 |
Securities | 92,000 | 593,000 |
Financial instruments | $ 2,624,000 | $ 9,646,000 |
SUMMARY OF SIGNIFICANT ACCOUN40
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | |||
Cash equivalents carried at fair value | $ 2,532,000 | $ 9,053,000 | |
Anti-dilutive common shares | 0 | 265,000 | 265,000 |
INVESTMENT IN FORMER AFFILIAT41
INVESTMENT IN FORMER AFFILIATES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Investment and advances | $ 7,979,000 | |
Income from equity investees | $ 671,000 | 84,000 |
Distributions | 98,000 | 186,000 |
Siebert, Brandford, Shank Financial LLC and Subsidiary | ||
Income from equity investees | 671,000 | |
Distributions | 98,000 | |
SBSFPC | ||
Investment and advances | 0 | |
Income from equity investees | 0 | (17,000) |
Distributions | $ 0 | 173,000 |
SBS | ||
Investment and advances | 7,979,000 | |
Income from equity investees | 84,000 | |
Distributions | $ 13,000 |
INVESTMENT IN FORMER AFFILIAT42
INVESTMENT IN FORMER AFFILIATES (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||
Total assets | $ 3,816,000 | $ 17,785,000 | $ 3,816,000 | $ 17,785,000 | |||||||||
Total liabilities | 1,563,000 | 2,102,000 | 1,563,000 | 2,102,000 | |||||||||
Regulatory minimum net capital requirement | 250,000 | 250,000 | 250,000 | 250,000 | |||||||||
Total revenue | 3,049,000 | $ 2,223,000 | $ 2,462,000 | $ 2,078,000 | 2,832,000 | $ 2,536,000 | $ 2,104,000 | $ 2,624,000 | 9,812,000 | 10,096,000 | $ 15,852,000 | ||
Net income (loss) | $ (3,209,000) | [1] | $ (114,000) | $ (728,000) | $ (501,000) | (200,000) | [2] | $ (728,000) | $ (407,000) | $ (1,534,000) | $ (5,578,000) | (2,869,000) | (6,557,000) |
SBS | |||||||||||||
Total assets | 30,903,000 | 30,903,000 | 28,518,000 | ||||||||||
Total liabilities | 23,254,000 | 23,254,000 | 12,458,000 | ||||||||||
Total members' capital | 7,649,000 | 7,649,000 | 16,060,000 | ||||||||||
Regulatory minimum net capital requirement | $ 250,000 | 250,000 | 250,000 | ||||||||||
Total revenue | 27,774,000 | ||||||||||||
Net income (loss) | $ 1,369,000 | 171,000 | |||||||||||
SBSFPC | |||||||||||||
Total assets | 26,000 | ||||||||||||
Total liabilities | 26,000 | ||||||||||||
Total members' capital | 0 | ||||||||||||
Total revenue | 0 | ||||||||||||
Net income (loss) | $ (51,000) | ||||||||||||
[1] | Includes $825,000 loss ($0.04 per share) related to the arbitration settlement and $2,206,000 ($0.10 per share) of expenses related to the change in ownership. | ||||||||||||
[2] | Includes $448,000 loss ($0.02 per share) related to disposal of investment in former affiliate. |
INVESTMENT IN FORMER AFFILIAT43
INVESTMENT IN FORMER AFFILIATES (Details Narrative) - SBS - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
General and administrative services | $ 23,100 | $ 100,000 | $ 100,000 |
Interest income | 0 | 32,000 | 48,000 |
Restricted cash equivalents | 0 | 1,000 | $ 1,028 |
Interest income purchase obligation | $ 207,000 | $ 265,000 |
SUBORDINATED BORROWINGS AND S44
SUBORDINATED BORROWINGS AND SECURED DEMAND NOTE RECEIVABLE (Details) - SBS | Dec. 31, 2014USD ($) | |
Payable to affiliate | $ 1,200,000 | [1] |
Payable to clearing broker | 4,000,000 | [2] |
Subordinated debt | $ 5,200,000 | |
[1] | Consists of a Secured Demand Note Collateral Agreement payable to Siebert, an indirect member of the Company, bearing 4% interest and which expired and was repaid on August 31, 2015 through an offset against a $1,200,000 secured demand note receivable due from Siebert. Interest expense paid to Siebert in each of 2015 and 2014 amounted to $32,000 and 48,000 respectively.The secured demand note receivable of $1,200,000 was collateralized by cash equivalents of Siebert of approximately $1,532,000 which expired and was repaid on August 31, 2015. Interest earned on the collateral amounted to approximately $1,000 and $1,028 in 2015 and 2014, respectively. | |
[2] | On December 9, 2014, SBS entered into a temporary subordinated loan agreement with National Financial Services, its clearing broker, in the amount of $4,000,000 bearing interest at the federal funds rate plus 6% and maturing January 22, 2015. The note was repaid on January 22, 2015. Interest expense accrued in 2014 amounted to approximately $16,000. The subordinated borrowings are available in computing net capital under the Securities and Exchange Commission's ("SEC") Uniform Net Capital Rule. To the extent that such borrowing is required for the Company's continued compliance with minimum net capital requirements, it may not be repaid. On March 24, 2014, SBS entered into a temporary subordinated loan agreement with National Financial Services, its clearing broker, in the amount of $5,000,000 bearing interest at the federal funds rate plus 6% and maturing May 5, 2014. The note was repaid on May 5, 2014. Interest expense paid was $36,542. |
FURNITURE, EQUIPMENT AND LEAS45
FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Equipment | $ 28,000 | $ 375,000 | |
Leasehold improvements | 318,000 | 549,000 | |
Furniture and fixtures | 0 | 44,000 | |
Furniture, equipment and leasehold improvements, gross | 346,000 | 968,000 | |
Less accumulated depreciation and amortization | (300,000) | (594,000) | |
Furniture, equipment and leasehold improvements, net | $ 46,000 | $ 374,000 | |
SBS | |||
Equipment | $ 926,654 | ||
Leasehold improvements | 1,718,826 | ||
Furniture, equipment and leasehold improvements, gross | 2,645,480 | ||
Less accumulated depreciation and amortization | 1,960,744 | ||
Furniture, equipment and leasehold improvements, net | $ 684,736 |
FURNITURE, EQUIPMENT AND LEAS46
FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET (Details Narrative) - USD ($) | 10 Months Ended | 12 Months Ended | ||
Nov. 09, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Depreciation and amortization expense | $ 277,000 | $ 276,000 | $ 257,000 | |
SBS | ||||
Depreciation and amortization expense | $ 160,046 | $ 226,761 |
NET CAPITAL (Details Narrative)
NET CAPITAL (Details Narrative) - Siebert, Brandford, Shank Financial LLC and Subsidiary | Dec. 31, 2014USD ($) |
Net capital | $ 22,807,796 |
Excess of required capital | $ 22,557,796 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Federal income tax expense (benefit): | |||
Current | $ 0 | $ (228,000) | $ (22,000) |
Deferred | 0 | 0 | 0 |
Federal income tax provision (benefit) | 0 | (228,000) | (22,000) |
State and local: | |||
Current | 0 | (47,000) | (5,000) |
Deferred | 0 | 0 | 0 |
State and local | 0 | (47,000) | (5,000) |
Total: | |||
Current | 0 | (275,000) | (27,000) |
Deferred | 0 | 0 | 0 |
Total | $ 0 | $ (275,000) | $ (27,000) |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Income Taxes Details 1 | ||||
Expected income tax (benefit) at statutory Federal tax rate (34%) | $ (1,897,000) | $ (1,051,000) | $ (2,251,000) | |
State and local taxes, net of Federal tax effect | (400,000) | (68,000) | (464,000) | |
Increase in valuation allowance | 1,704,000 | [1] | 784,000 | 2,551,000 |
Nondeductible transaction costs related to change in control | 482,000 | 0 | 0 | |
Expiration of contribution carryforward | 85,000 | 0 | 0 | |
Permanent difference | 19,000 | 13,000 | 39,000 | |
Other | 7,000 | 47,000 | 98,000 | |
Income tax (benefit) | $ 0 | $ (275,000) | $ (27,000) | |
[1] | Reflects a $264,000 reduction to the valuation allowance and related deferred tax assets as of December 31, 2015. |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | |
Deferred tax assets: | |||
Net operating loss credit carryforwards | $ 10,316,000 | $ 9,456,000 | |
Capital loss carryforwards | 0 | 395,000 | |
Employee stock based compensation | 237,000 | 237,000 | |
Retail brokerage accounts | [1] | 71,000 | 140,000 |
Contribution carryover | 158,000 | 178,000 | |
Furniture, equipment and leasehold improvements | 312,000 | 181,000 | |
Accrued settlement liability | 340,000 | 252,000 | |
Investment in former affiliate | [2] | 0 | 0 |
Other | 8,000 | 44,000 | |
Total | 11,442,000 | 10,883,000 | |
Valuation allowance | (11,442,000) | (10,002,000) | |
Net deferred tax assets | 0 | 881,000 | |
Deferred tax liability: | |||
Receivable from affiliate | [2] | 0 | (881,000) |
Deferred tax liability, net | $ 0 | $ 0 | |
[1] | Related to acquired retail discount brokerage accounts, which are being amortized over 15 years for tax purposes and have been fully amortized for financial reporting purposes. | ||
[2] | Relates to receivable from business sold to affiliate treated as an installment sale for tax purposes. |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Stockholders Equity Details Narrative | ||
Net capital | $ 1,112,000 | $ 8,131,000 |
Net capital requirements | $ 250,000 | $ 250,000 |
OPTIONS (Details)
OPTIONS (Details) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Number of Options | |
Number of Options Outstanding, Beginning balance | shares | 265,000 |
Number of Options Cancelled | shares | (240,000) |
Number of Options Forfeited | shares | 0 |
Number of Options Expired | shares | (25,000) |
Number of Options Outstanding, Ending balance | shares | 0 |
Fully vested and exercisable at end of year | shares | 0 |
Weighted Average Exercise Price | |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | $ 3.02 |
Weighted Average Exercise Price Cancelled | $ / shares | 3.02 |
Weighted Average Exercise Price Forfeited | $ / shares | 0 |
Weighted Average Exercise Price Expired | $ / shares | 3.02 |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | 0 |
Weighted Average Exercise Price vest and exercisable | $ / shares | $ 0 |
COMMITMENTS, CONTINGENCIES AN53
COMMITMENTS, CONTINGENCIES AND OTHER (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2014 |
Future minimum lease payment due current | $ 342,000 | |
Future minimum lease payment due in two years | $ 180,000 | |
Siebert, Brandford, Shank Financial LLC and Subsidiary | ||
Future minimum lease payment due current | $ 1,043,000 | |
Future minimum lease payment due in two years | 886,000 | |
Future minimum lease payment due in three years | 639,000 | |
Future minimum lease payment due in four years | 627,000 | |
Future minimum lease payment due in five years | 587,000 | |
Future minimum lease payment due thereafter | 185,000 | |
Future minimum base rental payments under these operating leases | $ 3,967,000 |
COMMITMENTS, CONTINGENCIES AN54
COMMITMENTS, CONTINGENCIES AND OTHER (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Rent expense | $ 650,000 | $ 776,000 | $ 788,000 |
Siebert, Brandford, Shank Financial LLC and Subsidiary | |||
Rent expense | $ 1,055,944 | $ 1,186,967 |
ACCOUNTS PAYABLE AND ACCRUED 55
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Accounts payable and accrued liabilities | $ 738,000 | $ 2,102,000 | |
Siebert, Brandford, Shank Financial LLC and Subsidiary | |||
Accounts payable | $ 313,285 | ||
Accrued bonus and other employee compensation | 4,233,521 | ||
Other accrued expenses | 200,842 | ||
Accounts payable and accrued liabilities | $ 4,747,648 |
OTHER (Details Narrative)
OTHER (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
General and administrative services | $ 1,686,000 | $ 1,724,000 | $ 2,033,000 |
Siebert, Brandford, Shank Financial LLC and Subsidiary | |||
General and administrative services | $ 100,000 | $ 100,000 |
SUMMARIZED QUARTERLY FINANCIA57
SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||
Summarized Quarterly Financial Data Details | |||||||||||||
Revenue | $ 3,049,000 | $ 2,223,000 | $ 2,462,000 | $ 2,078,000 | $ 2,832,000 | $ 2,536,000 | $ 2,104,000 | $ 2,624,000 | $ 9,812,000 | $ 10,096,000 | $ 15,852,000 | ||
Net income (loss) | $ (3,209,000) | [1] | $ (114,000) | $ (728,000) | $ (501,000) | $ (200,000) | [2] | $ (728,000) | $ (407,000) | $ (1,534,000) | $ (5,578,000) | $ (2,869,000) | $ (6,557,000) |
Earnings (loss) per share: | |||||||||||||
Basic | $ (.15) | $ (.05) | $ (.03) | $ (.02) | $ 0 | $ (0.04) | $ (0.02) | $ (0.07) | |||||
Diluted | $ (0.01) | $ 0.01 | |||||||||||
[1] | Includes $825,000 loss ($0.04 per share) related to the arbitration settlement and $2,206,000 ($0.10 per share) of expenses related to the change in ownership. | ||||||||||||
[2] | Includes $448,000 loss ($0.02 per share) related to disposal of investment in former affiliate. |