Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 23, 2020 | Jun. 30, 2019 | |
Document And Entity Information | |||
Entity Registrant Name | Siebert Financial Corp | ||
Entity Central Index Key | 0000065596 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Common Stock, Shares Outstanding | 30,455,962 | ||
Entity Public Float | $ 54,998,000 | ||
Entity File Number | 0-5703 | ||
Entity Interactive Data Current | Yes | ||
Entity Incorporation State Country Code | NY |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash and cash equivalents | $ 3,082,000 | $ 7,229,000 |
Cash segregated under federal regulations | 110,000 | |
Receivables from clearing broker dealers | 6,253,000 | 2,030,000 |
Receivable from related party | 1,000,000 | 1,000,000 |
Receivable from lessors | 171,000 | |
Other receivables | 223,000 | 96,000 |
Prepaid expenses and other assets | 624,000 | 470,000 |
Furniture, equipment and leasehold improvements, net | 1,131,000 | 468,000 |
Software, net | 1,888,000 | 1,137,000 |
Lease right-of-use assets | 2,810,000 | |
Equity method investment in related party | 3,360,000 | |
Deferred tax assets | 4,981,000 | 5,576,000 |
Intangible assets, net | 1,022,000 | |
Goodwill | 1,989,000 | |
Total Assets | 28,473,000 | 18,177,000 |
Liabilities | ||
Accounts payable and accrued liabilities | 1,473,000 | 699,000 |
Lease incentive obligation | 171,000 | |
Due to clearing broker dealers and related parties | 7,000 | 133,000 |
Securities sold, not yet purchased, at fair value | 88,000 | |
Interest payable | 10,000 | |
Lease liabilities | 3,114,000 | |
Note payable to related party | 3,000,000 | |
Total liabilities | 7,692,000 | 1,003,000 |
Commitments and contingencies | ||
Stockholders' equity | ||
Common stock, $.01 par value; 49,000,000 shares authorized, 27,157,188 shares issued and outstanding as of December 31, 2019 and December 31, 2018 | 271,000 | 271,000 |
Additional paid-in capital | 7,641,000 | 7,641,000 |
Retained earnings | 12,869,000 | 9,262,000 |
Stockholders' equity | 20,781,000 | 17,174,000 |
Liabilities and Stockholders' equity | $ 28,473,000 | $ 18,177,000 |
CONSOLIDATED STATEMENTS OF FI_2
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
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 | 27,157,188 | 27,157,188 |
Common stock, outstanding shares | 27,157,188 | 27,157,188 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue | ||
Margin interest, marketing and distribution fees | $ 11,121,000 | $ 10,928,000 |
Commissions and fees | 8,302,000 | 9,504,000 |
Principal transactions | 8,061,000 | 9,020,000 |
Advisory fees | 801,000 | 478,000 |
Interest and other income | 308,000 | 106,000 |
Total revenue | 28,593,000 | 30,036,000 |
Expenses | ||
Employee compensation and benefits | 12,946,000 | 13,817,000 |
Clearing fees, including execution costs | 2,793,000 | 2,852,000 |
Other general and administrative | 2,454,000 | 1,859,000 |
Professional fees | 1,912,000 | 1,963,000 |
Rent and occupancy | 1,401,000 | 988,000 |
Technology and communications | 1,215,000 | 1,008,000 |
Depreciation and amortization | 983,000 | 144,000 |
Referral fees | 86,000 | |
Interest expense | 10,000 | |
Advertising and promotion | 2,000 | 45,000 |
Total expenses | 23,802,000 | 22,676,000 |
Loss from equity method investment in related party | (66,000) | |
Income before provision (benefit) for (from) income taxes | 4,725,000 | 7,360,000 |
Provision (benefit) for (from) income taxes | 1,118,000 | (4,602,000) |
Net income | $ 3,607,000 | $ 11,962,000 |
Net income per share of common stock Basic and diluted | $ 0.13 | $ 0.44 |
Weighted average shares outstanding Basic and diluted | 27,157,188 | 27,157,188 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Number of Shares $.01 Par Value [Member] | Additional Paid-In Capital [Member] | Retained Earnings / (Accumulated Deficit) [Member] | Total |
Beginning balance at Dec. 31, 2017 | $ 271,000 | $ 7,641,000 | $ (2,700,000) | $ 5,212,000 |
Beginning balance, shares at Dec. 31, 2017 | 27,157,188 | |||
Net income | 11,962,000 | 11,962,000 | ||
Ending balance at Dec. 31, 2018 | $ 271,000 | 7,641,000 | 9,262,000 | 17,174,000 |
Ending balance, shares at Dec. 31, 2018 | 27,157,188 | |||
Net income | 3,607,000 | 3,607,000 | ||
Ending balance at Dec. 31, 2019 | $ 271,000 | $ 7,641,000 | $ 12,869,000 | $ 20,781,000 |
Ending balance, shares at Dec. 31, 2019 | 27,157,188 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | ||
Net income | $ 3,607,000 | $ 11,962,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Deferred income tax expense / (benefit) | 595,000 | (5,576,000) |
Depreciation and amortization | 983,000 | 144,000 |
Loss from equity method investment in related party | 66,000 | |
Changes in | ||
Receivables from clearing broker dealers | 393,000 | (634,000) |
Receivable from related party | (717,000) | |
Receivable from lessors | 171,000 | (171,000) |
Other receivables | (10,000) | (96,000) |
Prepaid expenses and other assets | (236,000) | |
Accounts payable and accrued liabilities | (579,000) | 138,000 |
Lease incentive obligation | (171,000) | 171,000 |
Due to clearing broker dealers and related parties | (126,000) | 6,000 |
Securities sold, not yet purchased, at fair value | 88,000 | |
Interest payable | 10,000 | |
Income taxes payable | (125,000) | |
Lease liabilities | 304,000 | |
Net cash provided by operating activities | 5,331,000 | 4,866,000 |
Cash Flows From investing activities | ||
Return of investment in equity method investment in related party | 241,000 | |
Equity method investment in related party | (3,665,000) | |
Purchase of furniture, equipment, and leasehold improvements | (1,010,000) | (277,000) |
Purchase of software | (1,262,000) | (1,125,000) |
Cash paid in a business acquisition, net of cash and cash equivalents acquired | (3,824,000) | |
Segregated cash acquired in a business acquisition | 152,000 | |
Net cash used in investing activities | (9,368,000) | (1,402,000) |
Net (decrease) / increase in cash, cash equivalents and cash segregated under federal regulations | (4,037,000) | 3,464,000 |
Cash, cash equivalents and cash segregated under federal regulations - beginning of year | 7,229,000 | 3,765,000 |
Cash, cash equivalents and cash segregated under federal regulations - end of year | 3,192,000 | 7,229,000 |
Cash and cash equivalents - end of year | 3,082,000 | 7,229,000 |
Cash segregated under federal regulations - end of year | 110,000 | |
Cash, cash equivalents and cash segregated under federal regulations - end of year | 3,192,000 | 7,229,000 |
Supplemental Cash Flow information | ||
Cash paid during the year for income taxes | $ 1,208,000 | $ 1,177,000 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | 1. Organization Siebert Financial Corp., a New York corporation incorporated in 1934, is a holding company that conducts its retail brokerage business through its wholly-owned subsidiary, Muriel Siebert & Co., Inc. (“MSCO”), a Delaware corporation and registered broker-dealer, its investment advisory business through its wholly-owned subsidiary, Siebert AdvisorNXT, Inc. (“SNXT”), a New York corporation registered with the U.S. Securities and Exchange Commission (“SEC”) as a RIA under the Investment Advisers Act of 1940, as amended, and its insurance business through its wholly-owned subsidiary, Park Wilshire Companies, Inc. (“PWC”), a Texas corporation and licensed insurance agency. Siebert conducts operations through its wholly-owned subsidiary, Siebert Technologies, LLC. (“STCH”), a Nevada limited liability company and developer of robo-advisory technology. In September 2019, the name of this subsidiary was changed from KCA Technologies, LLC. to Siebert Technologies, LLC. Siebert also offers prime brokerage services through its fifth wholly-owned subsidiary, Weeden Prime Services, LLC (“Weeden Prime”), a Delaware limited liability company and a broker-dealer registered with the SEC. For purposes of this Annual Report on Form 10-K, the terms “Siebert,” “Company,” “we,” “us,” and “our” refer to Siebert Financial Corp., MSCO, SNXT, PWC, STCH, and Weeden Prime collectively, unless the context otherwise requires. The Company is headquartered in New York, NY, with primary operations in New Jersey and California. The Company has 18 offices throughout the U.S. and clients around the world. The Company’s SEC filings are available through the Company’s website at www.siebertnet.com, where investors can obtain copies of the Company’s public filings free of charge. The Company’s common stock (“Common Stock”), par value $.01 per share, trades on the Nasdaq Capital Market under the symbol “SIEB.” The Company primarily operates in the securities brokerage and asset management industry . All of the Company's revenues for the years ended December 31, 2019 and 2018 were derived from its operations in the U.S. As a result of its recent acquisitions, the Company re-evaluated its reportable segments and concluded that as of December 31, 2019, the Company is comprised of a single operating segment based on the factors related to management’s decision-making framework as well as management evaluating performance and allocating resources based on assessments of the Company from a consolidated perspective. Acquisitions in 2019 Weeden Prime Services, LLC As previously disclosed in a Current Report on Form 8-K filed on December 4, 2019, the Company completed the acquisition of 100% of the member interests in Weeden Prime. Effective December 1, 2019, Weeden Prime became a wholly-owned subsidiary of the Company and the operating results for the 31-day period ending December 31, 2019 were included in the Company’s statement of income. StockCross Financial Services, Inc. As previously disclosed in a Current Report on Form 8-K filed on January 25, 2019, the Company purchased approximately 15% of the outstanding shares of StockCross Financial Services, Inc. (“StockCross”), a clearing broker dealer. Subsequently, as previously disclosed in a Current Report on Form 8-K filed on January 7, 2020, the Company acquired the remaining 85% of StockCross’ outstanding shares in exchange for 3,298,774 shares of Common Stock. Effective January 1, 2020, StockCross was merged with and into MSCO and a See “Note 20 – Subsequent Events” for additional detail on the transaction with StockCross. Acquisitions in 2018 Siebert Technologies, LLC. On August 21, 2018, the Company acquired all of the issued and outstanding membership interests of STCH from Kennedy Cabot Acquisition LLC, (“KCA”), one of the Company’s affiliates through common ownership, for approximately $690,000. This transaction was accounted for as an asset acquisition. STCH is a technology company initially tasked with developing a Robo-Advisor platform for SNXT. The Robo-Advisor provides clients with an automated wealth management solution intended to maximize portfolio returns based on the client’s specific risk tolerance. Park Wilshire Companies, Inc. In March 2018, the Company acquired all of the issued and outstanding shares of PWC, an insurance agency, from three related parties for approximately $110,000. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements are prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as established by the Financial Accounting Standards Board (“FASB”) to ensure consistent reporting of financial condition. The consolidated financial statements include the accounts of Siebert and its wholly-owned subsidiaries and upon consolidation, all intercompany balances and transactions are eliminated. The U.S. dollar is the functional currency of the Company and numbers are rounded for presentation purposes. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company makes significant estimates that affect the reported amounts of assets, liabilities, revenue, and expenses. The estimates relate primarily to revenue and expenses in the normal course of business as to which the Company receives no confirmations, invoices, or other documentation at the time the books are closed. The Company uses its best judgment, based on knowledge of these revenue transactions and expenses incurred, to estimate the amount of such revenue and expenses. The Company is not aware of any material differences between the estimates used in closing the Company’s books for the last five years and the actual amounts of revenue and expenses incurred when the Company subsequently receives the actual confirmations, invoices, or other documentation. Estimates are used in intangible asset valuations and useful lives, depreciation, income taxes, and the contingent liabilities related to legal and healthcare expenses. The Company also estimates the valuation allowance for its deferred tax assets based on the more likely than not criteria. The Company believes that its estimates are reasonable. Cash and Cash Equivalents Cash and cash equivalents are all cash balances that are unrestricted. The Company has defined cash equivalents as highly liquid investments with original maturities of less than 90 days that are not held for sale in the ordinary course of business. As of December 31, 2019 and 2018, the Company did not hold any cash equivalents. Cash Segregated Under Federal Regulations As of December 31, 2019, cash of $110,000 has been segregated in a special reserve bank account for the benefit of customers. Non-Cash Investing and Financing Activities The Company entered into a promissory note of $3 million with Gloria E. Gebbia to finance part of the acquisition of Weeden Prime. This was a non-cash item for the Company for the year ended December 31, 2019 as the $3 million was paid directly from Gloria E. Gebbia to Weeden Prime. See “Note 11 – Note Payable - Related Party” for additional detail. Concentrations of Credit Risk The Company is engaged in various trading and brokerage activities whose contra-parties include broker-dealers, banks and other financial institutions. In the event contra-parties do not fulfill their obligations, the Company may sustain a loss if the market value of the instrument is different from the contract value of the transaction. The risk of default primarily depends upon the credit worthiness of the contra-parties involved in the transactions. It is the Company’s policy to review, as necessary, the credit standing of each contra-party with which it conducts business. The Company has experienced no material historical losses in relation to its contra-parties. As of December 31, 2019, the Company maintains its cash balances at two financial institutions. These balances are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per institution. The Company is subject to credit risk to the extent that the financial institution with which it conducts business is unable to fulfill its contractual obligations and deposits exceed FDIC limits. Receivables from Clearing Broker Dealers Retail customer transactions for the years ended December 31, 2019 and 2018, cleared, on a fully disclosed basis, through two clearing broker dealers, StockCross and NFS, the former of which is an affiliate. The Company operates on a month to month basis with the clearing broker dealers and their fees are offset against the Company's revenues on a monthly basis. Receivables from clearing broker dealers include amounts receivable as well as cash on deposit. As of the years ended December 31, 2019 and 2018, cash clearing deposits with StockCross and NFS were $75,000 and $50,000, respectively, which are included in the line item titled “Receivables from clearing broker dealers” on the statements of financial condition. Institutional customer transactions for the year ended December 31, 2019 cleared, on a fully disclosed basis, through two clearing broker dealers, The Goldman Sachs Group, Inc. (“Goldman Sachs”) and Pershing LLC (“Pershing”). Amounts due to the clearing broker dealers are offset against amounts due from clearing broker dealers. Receivables from clearing broker dealers are subject to clearance agreements and include the net receivable from monthly revenues as well as cash on deposit. As of the years ended December 31, 2019 and 2018, cash clearing deposits with Goldman Sachs and Pershing were approximately $2 million and $1.1 million, respectively, which are included in the line item titled “Receivables from clearing broker dealers” on the statements of financial condition. The Company evaluates receivables from clearing broker dealers and other receivables for collectability noting no amount was considered uncollectable as of the years ended December 31, 2019 and 2018. No valuation allowance is recognized for these receivables as the Company does not have a history of losses from these receivables and does not anticipate losses in the future. The accounting policies for the revenue related to these receivables are detailed further in the significant accounting policy for revenue recognition. 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 not exceeding four years. Leasehold improvements are amortized over the shorter of their estimated useful life or the remaining lease term unless the lease transfers ownership of the underlying asset to the lessee, or the lessee is reasonably certain to exercise an option to purchase the underlying asset, in which case the lessee will amortize over the estimated useful life of the leasehold improvements. Software, Net The Company capitalizes certain costs for software, such as the Robo-Advisor, software license arrangements with a contract term of greater than 1 year, as well as other software, and amortizes the assets over the estimated useful life of the software or contract term, generally not exceeding 3 years. The Company accounts for software license arrangements with a contract term of 1 year as prepaid assets and amortizes them over the contract term. Other software costs such as routine maintenance and various data services to provide market information to customers are expensed as incurred. The Company acquired the Robo-Advisor from STCH in August 2018. The Robo-Advisor has an estimated useful life of 3 years and the Company started to amortize it on January 1, 2019. Equity Method Investments Investments in which the Company has the ability to exercise significant influence, but does not control, are accounted for under the equity method of accounting and are included in the equity method investment in related party asset in the statement of financial condition. Under this method of accounting, the Company’s share of the net earnings or losses of the investee is presented before the income before provision (benefit) for (from) income taxes on the statement of income. The Company evaluates its equity method investments whenever events or changes in circumstance indicate that the carrying amounts of such investments may be impaired. If a decline in the value of an equity method investment is determined to be other than temporary, a loss is recorded in earnings in the current period. Intangible Assets, Net Certain identifiable intangible assets the Company acquires such as customer relationships and trade names are amortized over their estimated useful lives on a straight-line basis. Amortization expense associated with such intangible assets is included in the “Depreciation and amortization” expense on the statement of income. The Company evaluates intangible assets for impairment on an annual basis or when events or changes indicate the carrying value may not be recoverable. The Company also evaluates the remaining useful lives of intangible assets on an annual basis or when events or changes warrants the remaining period of amortization to be revised. The Company currently does not have any intangible assets with indefinite lives other than goodwill. Goodwill Goodwill is recognized as a result of business combinations and represents the excess of the purchase price over the fair value of net tangible assets and identifiable intangible assets. The Company evaluates goodwill for impairment on an annual basis or when events or changes indicate the carrying value may not be recoverable. The Company has the option of performing a qualitative assessment of goodwill to determine whether it is more likely than not that the fair value of its equity is less than the carrying value. If it is more likely than not that the fair value exceeds the carrying value, then no further testing is necessary; otherwise, the Company must perform a two-step quantitative assessment of goodwill. The Company may elect to bypass the qualitative assessment and proceed directly to performing a two-step quantitative assessment. For the year ended December 31, 2019, the Company concluded there have been no impairments to the carrying value of the Company's goodwill during the periods presented. Revenue Recognition and Other Income On January 1, 2018, the Company adopted the new revenue recognition standard ASC 606, Revenue from Contracts with Customers, on the modified retrospective method (i.e., cumulative method). The Company has elected the modified retrospective method which did not result in a cumulative-effect adjustment at the date of adoption. The implementation of this new standard had no material impact on the Company's consolidated financial statements for the years ended December 31, 2019 and 2018. Revenue from contracts with customers includes commissions and fees, principal transactions, and advisory fees. The recognition and measurement of revenue is based on the assessment of individual contract terms. Significant judgment is required to determine whether performance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance obligations are identified; when to recognize revenue based on the appropriate measure of the Company’s progress under the contract; and whether constraints on variable consideration should be applied due to uncertain future events. For the years ended December 31, 2019 and 2018, there were no costs capitalized related to obtaining or fulfilling a contract with a customer, and thus the Company has no balances for contract assets or contract liabilities. As of December 31, 2019, the acquisition of new entities did not impact the Company’s existing revenue streams as the acquired entities have consistent application of the revenue recognition guidance. Advertising Costs Advertising costs are expensed as incurred and were $2,000 and $45,000 for the years ended December 31, 2019 and 2018, respectively. Income Taxes The results of operations are included in the consolidated federal and state income tax return of the Company as well as the consolidated or standalone state and local income tax returns of the Company and/or its subsidiaries. The amount of current and deferred taxes payable or refundable is recognized as of the date of the consolidated financial statements, utilizing currently enacted tax laws and rates. Deferred tax expenses or benefits are recognized in the consolidated financial statements for the changes in deferred tax liabilities or assets between years. The Company records accruals for uncertain tax positions when the Company believes that it is not more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The Company adjusts these accruals when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. The Company had no uncertain tax positions as of December 31, 2019 and 2018. Income taxes receivable as of December 31, 2019, and 2018, were $141,000 and The Company recognizes deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversal of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. To the extent the Company determines that realization of deferred tax assets is not more likely than not, the Company records a valuation allowance for the deferred tax assets. As a result, the amount of the deferred tax assets considered realizable could be reduced in the near term if estimates of future taxable income are reduced. Such an occurrence could materially impact the Company’s consolidated financial statements. Capital Stock The authorized capital stock of the Company consists of a single class of common stock. 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 has no dilutive securities as of December 31, 2019 and 2018. Accounting for Acquisitions ASC 805 is used for accounting in business acquisitions. ASC 805 requires that goodwill be recognized separately from assets acquired and liabilities assumed at their acquisition date fair values. Goodwill, as of the date of acquisition, is determined as the excess of the consideration transferred net of the acquisition date fair values of assets acquired and liabilities assumed. Fair value estimates at acquisition date may be assessed internally or externally using third parties. As part of the valuation and appraisal process, the third-party appraiser prepares a report assigning estimated acquisition date fair values to assets and liabilities. These fair value estimations are subjective and require careful consideration and sound judgment. Management reviews the third-party reports for fairness of the assigned values. Recently Issued Accounting Pronouncements ASU 2018-15 – In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which requires customers to apply the same criteria for capitalizing implementation costs incurred in a cloud computing arrangement that is hosted by the vendor as they would for an arrangement that has a software license. The standard is effective for interim and annual periods beginning after December 15, 2019 and early adoption is permitted. The standard can be adopted prospectively or retrospectively. The Company is currently evaluating the expected impact of this new standard; however, the Company believes there will be no material impact to its consolidated financial statements. ASU 2017-04 – In January 2017, the FASB amended the guidance to simplify the test for goodwill impairment by eliminating Step 2 from the goodwill impairment test. The amended guidance requires the Company to perform its annual goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized at the amount by which the carrying amount exceeds the fair value of the reporting unit; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Income tax effects resulting from any tax-deductible goodwill should be considered when measuring the goodwill impairment loss, if applicable. The Company will still have the option to perform a qualitative assessment to conclude whether it is more likely than not that the carrying amount of the Company exceeds its fair value. The guidance will be effective for interim and annual periods beginning January 1, 2020, and must be applied prospectively. Early adoption is permitted. The Company is currently evaluating the expected impact of this new standard; however, the Company believes there will be no material impact to its consolidated financial statements. Recently Adopted Accounting Pronouncements ASU 2016-02 The new standard provides a number of optional practical expedients in transition. The Company elected the “package of practical expedients,” which permits the Company not to reassess under the new standard the Company’s prior conclusions about lease identification, lease classification and initial direct costs. The Company has not elected the hindsight practical expedient at transition. The new standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, the Company will not recognize lease right-of-use assets or lease liabilities. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2019 | |
Acquisitions Abstract | |
Acquisitions | 3. Acquisitions Weeden Prime Weeden Prime is a Delaware limited liability company originally organized as a corporation under the laws of the State of Florida in 2007. Weeden Prime is a registered broker-dealer with the SEC and Commodity Futures Trading Commission ("CFTC"), and is a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"), National Futures Association ("NFA"), and Securities Investor Protection Corporation ("SIPC"). Weeden Prime’s operations consist primarily of trade execution and risk management services for customers and is an introducing broker for the transactions of institutional customers. Overview of Acquisition Prior to being acquired by the Company, Weeden Prime was comprised of two members, Weeden Investors L.P. (“WILP”), a Delaware limited partnership, and Weeden Securities Corporation (“WSC”), a Delaware corporation, and was managed by a Board of Managers. Weeden Prime has maintained all of its registrations and licenses with the SEC, CFTC, FINRA, NFA, and SIPC as well as its agreements with some of its clearing broker dealers that were in place before its acquisition by the Company. Effective December 1, 2019, the Company purchased 100% of the member interests of Weeden Prime from WILP and WSC pursuant to an Equity Interests Purchase Agreement and Weeden Prime became a wholly-owned subsidiary of the Company. The purchase price was approximately $7.1 million paid in cash, for which the Company borrowed $3 million in a promissory note payable to Gloria E. Gebbia. The operating results for the 31-day period ending December 31, 2019 were included in the Company’s statement of income for the year ended December 31, 2019. Weeden Prime will provide a new customer base of institutional clients and several strategic clearing relationships for the Company. In addition, there are cross-selling opportunities for the institutional and retail clients, including partnering with institutional clients to generate new product offerings for the retail clients. Weeden Prime will bring economies of scale in terms of operational and administrative functions as well as a skilled management team within the institutional space to the Company. Accounting for Acquisition The merger will be accounted for under the acquisition method of accounting for business combinations pursuant to ASC 805 - Business Combinations. ASC 805, requires, among other things, that the assets acquired and liabilities assumed be recognized at their fair values as of the proposed acquisition date. ASC 820 - Fair Value Measurements, which establishes a framework for measuring fair values, defines fair value as ‘‘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.’’ Allocation of Purchase Price The Company was required to allocate the Weeden Prime purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their fair values as of November 30, 2019. The excess of the purchase price over those fair values is recorded as goodwill. As of December 31, 2019, the Company completed its allocation of the Weeden Prime purchase price. In determining the fair value of assets acquired and liabilities assumed, the Company primarily used discounted cash flow analyses and market approaches. Inputs to the discounted cash flow analyses and other aspects of the allocation of purchase price require judgment. The more significant inputs used in the discounted cash flow analyses and other areas of judgment include assumptions such as future revenue growth or attrition rates, projected margins, discount rates used to present value future cash flows, the amount of synergies expected from the acquisition, and the economic useful life of assets. In accordance with ASC 805, the Company was required to finalize the fair value of net assets of the business combination on the acquisition date. The excess of the fair value purchase price on the date of acquisition was recorded as goodwill. Adjustments were made for tax considerations. The following table summarizes the Company’s allocation of the purchase price as of the date of acquisition: Purchase Price Allocation Estimated Fair Value Cash and cash equivalents $ 301,000 Cash segregated under federal regulations 152,000 Receivables from clearing broker dealers 4,616,000 Furniture, equipment and leasehold improvements, net 41,000 Software, net 51,000 Intangible assets, net 1,057,000 Lease right-of-use assets 214,000 Other assets 271,000 Total Assets acquired 6,703,000 Accounts payable and accrued liabilities 1,353,000 Lease liabilities 214,000 Total Liabilities acquired 1,567,000 Net Assets acquired 5,136,000 Goodwill 1,989,000 Purchase price $ 7,125,000 The transaction resulted in $1,989,000 of goodwill which consisted of Weeden Prime providing a new customer base of institutional clients, several strategic clearing relationships, as well as substantial cross-selling opportunities for the institutional and retail clients. The addition of Weeden Prime will bring economies of scale in terms of operational and administrative functions as well as a skilled management team within the institutional space to Siebert. All of the goodwill is expected to be deductible for tax purposes. Financial Results from Weeden Prime The following table summarizes the revenue and net income from continuing operations of Weeden Prime included in the Company’s statement of income for the year ending December 31, 2019 since the date of acquisition (for the 31-day period ending December 31, 2019): Weeden Prime Revenue $ 968,000 Net income from continuing operations $ 203,000 Pro Forma Statements The following pro forma summary presents consolidated statements of income of the Company as if the acquisition of Weeden Prime had occurred on January 1, 2018, inclusive of pro forma adjustments (unaudited): Year Ended December 31, 2019 2018 Revenue $ 39,746,000 $ 42,987,000 Net income $ 2,485,000 $ 11,102,000 These pro forma results include adjustments made for the consolidation of both entities. These pro forma results align Weeden Prime’s presentation to the Company’s accounting policy in relation to reporting interest revenue net of interest expense and to recalculate Weeden Prime’s depreciation and amortization using the Company’s assumptions for estimated useful lives. These adjustments also take into consideration the amortization of the intangible assets acquired in the transaction as well as the tax effect of pro forma adjustments using an estimated combined statutory rate of 28.0%. Additionally, these pro forma results reflect the method of payment of the purchase price of approximately $7.1 million via cash and the promissory note, the acquisition of intangible assets and goodwill, as well as the elimination of Weeden Prime’s equity upon consummation of the acquisition. The Company notes that pro forma data may not be indicative of the results that would have been obtained had these events occurred at the beginning of the periods presented, nor is it intended to be a projection of future results. |
Receivables from and Payable to
Receivables from and Payable to Clearing Broker Dealers and Related Parties | 12 Months Ended |
Dec. 31, 2019 | |
Due to and from Broker-Dealers and Clearing Organizations [Abstract] | |
Receivables from and Payable to Clearing Broker Dealers and Related Parties | 4. Receivables from and Payable to Clearing Broker Dealers and Related Parties Amounts receivable from / payable to clearing brokers dealers, related parties and other organizations consisted of the following as of the periods indicated: As of December 31, 2019 2018 Receivable from clearing broker dealers NFS $ 1,328,000 $ 1,664,000 StockCross 883,000 310,000 Goldman Sachs 2,841,000 — Pershing Capital 1,192,000 — Other receivables 9,000 56,000 Total Receivable from clearing broker dealers $ 6,253,000 2,030,000 Receivable from related party StockCross $ 1,000,000 $ 1,000,000 Total Receivable from related party $ 1,000,000 $ 1,000,000 Due to clearing broker dealers and related parties NFS $ — $ 58,000 StockCross 7,000 46,000 MSCO — 29,000 Total Due to clearing broker dealers and related parties $ 7,000 $ 133,000 |
Furniture, Equipment and Leaseh
Furniture, Equipment and Leasehold Improvements, Net | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Furniture, Equipment and Leasehold Improvements, Net | 5. Furniture, Equipment and Leasehold Improvements, Net Furniture, equipment and leasehold improvements consisted of the following as of the periods indicated: As of December 31, 2019 2018 Leasehold improvements $ 1,389,000 $ 545,000 Equipment 170,000 52,000 Furniture and fixtures 134,000 — Total Furniture, equipment, and leasehold improvements 1,693,000 597,000 Less accumulated depreciation and amortization (562,000 ) (129,000 ) Total Furniture, equipment, and leasehold improvements, net $ 1,131,000 $ 468,000 |
Software, Net
Software, Net | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Software, Net | 6. Software, Net Software consisted of the following as of the periods indicated: As of December 31, 2019 2018 Robo-Advisor $ 763,000 $ 763,000 Other Software 1,771,000 459,000 Total Software 2,534,000 1,222,000 Less accumulated amortization – Robo-Advisor (254,000 ) — Less accumulated amortization – Other software (392,000 ) (85,000 ) Total Software, net $ 1,888,000 $ 1,137,000 The Company generally recognizes software initially at cost and amortizes it over the estimated useful life of 3 years. In line with the Company’s policy, the basis for determining the amount capitalized for the Robo-Advisor software was determined based on the price paid to acquire STCH. As of December 31, 2019, the Company estimates future amortization of software assets of $852,000, $747,000, $269,000, and $20,000 in the years ended December 31, 2020, 2021, 2022, and 2023, respectively. |
Equity Method Investments
Equity Method Investments | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments | |
Equity Method Investments | 7. Equity Method Investments In January 2019, the Company purchased approximately 15% of StockCross’ outstanding shares. The Company purchased 922,875 shares of StockCross at a per share price of approximately $3.97, which was representative of the fair value as of the transaction date. The Company’s ownership in StockCross is accounted for under the equity method of accounting. In determining whether the investment in StockCross should be accounted for under the equity method of accounting, the Company considered the guidance under ASC 323, Investments – Equity Method and Joint Ventures. Although the Company maintains approximately 15% ownership interest in StockCross, the Company evaluated the positive evidence related to criteria such as common representation on the board of directors, participation in policy-making processes, material intra-entity transactions, interchange of managerial personnel and technological interdependency of the Company and StockCross. Based on these criteria, the Company determined that it was able to exercise significant influence of StockCross, and therefore the equity method of accounting was used for this transaction. Under the equity method, the Company recognizes its share of StockCross’ loss in the loss from equity method investment in related party line item on the statement of income. The Company has elected to classify distributions received from equity method investees using the cumulative earnings approach. For the year ended December 31, 2019, the loss recognized from the Company’s investment in StockCross was $66,000. This investment is reported in the equity method investment in related party asset in the statement of financial condition. In September 2019, StockCross made a $1.6 million cash distribution to its shareholders, of which the Company received $241,000, which reduced the carrying amount of the investment in StockCross. As of December 31, 2019, the carrying amount of the investment in StockCross was approximately $3,360,000. The Company evaluates its equity method investments for impairment when events or changes indicate the carrying value may not be recoverable. If the impairment is determined to be other-than-temporary, the Company will recognize an impairment loss equal to the difference between the expected realizable value and the carrying value of the investment. As of December 31, 2019, the fair value of the investment in StockCross is not estimated because there were no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment and thus, no impairment was recorded. Below is a table showing the summary from the consolidated statements of operations and the consolidated statements of financial condition for StockCross for the periods indicated (unaudited): Year Ended December 31, 2019 2018 Revenue $ 14,823,000 $ 13,340,000 Operating income / (loss) $ (508,000 ) $ (929,000 ) Net income / (loss) $ (420,000 ) $ (691,000 ) As of December 31, 2019 2018 Assets $ 514,925,000 $ 595,091,000 Liabilities $ 499,211,000 $ 577,528,000 Stockholder’s Equity $ 15,714,000 $ 17,563,000 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | 8. Leases A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. On January 1, 2019, the Company adopted ASU 2016-02, Leases (ASC 842) As of December 31, 2019, the Company rents office space under operating leases expiring in 2020 through 2024, and the Company has no financing leases. The leases call for base rent plus escalations as well as other operating expenses. The following table represents the Company’s lease right-of-use assets and lease liabilities on the statement of financial condition. The Company elected not to include short-term leases (i.e., leases with initial terms of twelve months or less), or equipment leases (deemed immaterial) on the statement of financial condition. As of December 31, 2019, the Company does not believe that any of the renewal options under the existing leases are reasonably certain to be exercised; however, the Company will continue to assess and monitor the lease renewal options on an ongoing basis. As of December 31, 2019 Assets Lease right-of-use assets $ 2,810,000 Liabilities Lease liabilities $ 3,114,000 The calculated amounts of the lease right-of-use assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company leases some miscellaneous office equipment, but they are immaterial and therefore the Company records the costs associated with this office equipment on the statement of income rather than capitalizing them as lease right-of-use assets. The Company determined a discount rate of 5.0% would approximate the Company’s cost to obtain financing given its size, growth, and risk profile. Lease Term and Discount Rate Weighted average remaining lease term – operating leases (in years) 3.0 Weighted average discount rate – operating leases 5.0% The following table represents lease costs and other lease information. The Company has elected the practical expedient to not separate lease and non-lease components, and as such, the variable lease cost primarily represents variable payments such as common area maintenance and utilities which are determined by the leased square footage in proportion to the overall office building. Year Ended December 31, 2019 Operating lease cost $ 905,000 Short-term lease cost 446,000 Variable lease cost 50,000 Sublease income — Total Rent and occupancy $ 1,401,000 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 928,000 Lease right-of-use assets obtained in exchange for new lease liabilities Operating leases $ 3,817,000 Lease Commitments Future annual minimum payments for operating leases with initial terms of greater than one year as of December 31, 2019 were as follows: Year Amount 2020 $ 1,410,000 2021 878,000 2022 513,000 2023 493,000 2024 56,000 Thereafter — Remaining balance of lease payments 3,350,000 Difference between undiscounted cash flows and discounted cash flows 236,000 Lease liabilities $ 3,114,000 Rent and occupancy expenses were $1,401,000 and $988,000 for the years ended December 31, 2019 and 2018, respectively. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill And Intangible Assets Net | |
Goodwill and Intangible Assets, Net | 9. Goodwill and Intangible Assets, Net Goodwill As of December 31, 2019, the Company’s carrying amount of goodwill was $1,989,000, all of which came from the Company’s acquisition of Weeden Prime, and there was no goodwill as of December 31, 2018. See “Note 3 – Acquisitions” for more detail on the nature of the goodwill acquired from Weeden Prime. The Company will assess the goodwill recognized as a result of the Weeden Prime acquisition in a future period for potential impairment if there are any indicators that the fair value recorded will be not be recovered. Intangible Assets, Net The Company recorded intangible assets which are subject to amortization over their estimated useful lives. As part of the acquisition of Weeden Prime, the Company acquired two intangible assets, Weeden Prime’s customer relationships and Weeden Prime’s trade name. Weeden Prime is an introducing broker for the transactions of institutional customers and has maintained relationships with these customers. The Company expects to continue to benefit from the customer relationships for a foreseeable future. Weeden Prime has a respected trade name in the financial services industry for providing quality services to clients. The Company will continue to operate Weeden Prime under this trade name for a period of six months from the acquisition date. The following table summarizes information related to the intangible assets as of the dates indicated. As of December 31, 2019 Date Acquired Original Useful Life (Years) Remaining Useful Life (Years) Gross Amount Accumulated Amort Net Amount Weeden Prime Customer Relationships 11/30/19 6.0 years 5.9 years $ 987,000 $ 23,000 $ 964,000 Weeden Prime Trade Name 11/30/19 0.5 years 0.4 years 70,000 12,000 58,000 Total Intangible assets $ 1,057,000 $ 35,000 $ 1,022,000 The amortization expense for the year ended December 31, 2019 was $35,000 and the weighted average amortization period as of December 31, 2019 was 5.6 years. The Company expects its aggregate annual amortization expense for existing amortizable intangible assets for the below periods to be as follows: Amount 2020 $ 223,000 2021 165,000 2022 165,000 2023 165,000 2024 165,000 2025 139,000 Total future amortization expense $ 1,022,000 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 10. Fair Value Measurements ASC 820 defines fair value, establishes a framework for measuring fair value, and establishes a hierarchy of fair value inputs. 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. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Valuation techniques that are consistent with the market, income, or cost approach, as specified by ASC 820, are used to measure fair value. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: Level 1 - Quoted prices (unadjusted) in active markets for an identical asset or liability that the Company can assess at the measurement date. Level 2 - Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 - Unobservable inputs for the asset or liability. The availability of observable inputs can vary from security to security and is affected by a variety of factors, such as the type of security, the liquidity of markets, and other characteristics particular to the security. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. As such, the degree of judgment exercised in determining fair value is greatest for instruments categorized in level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement. Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that the Company believes market participants would use in pricing the asset or liability at the measurement date. A description of the valuation techniques applied to the Company’s major categories of assets and liabilities measured at fair value on a recurring basis is as follows: U.S. Government Securities: Municipal Securities: Corporate Bonds and Convertible Preferred Stock: Exchange-Traded Equity Securities: Certificates of Deposit: Unit Investment Trusts: The following table presents the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis as of December 31, 2019: Securities sold, not yet purchased, at fair value Level 1 Level 2 Level 3 Total Equity securities $ 88,000 — — $ 88,000 Total Securities sold, not yet purchased, at fair value $ 88,000 — — $ 88,000 |
Note Payable - Related Party
Note Payable - Related Party | 12 Months Ended |
Dec. 31, 2019 | |
Notes Payable [Abstract] | |
Note Payable - Related Party | 11. Note Payable - Related Party On December 2, 2019, the Company entered into an agreement with Gloria E. Gebbia, the Company’s principal shareholder, for a promissory note of $3 million to finance part of the acquisition of Weeden Prime. The term of the promissory note was one year and interest accrues at 4% per year. The interest expense incurred for the year ended December 31, 2019 was $10,000. The total interest will be payable upon maturity of the note on December 2, 2020, which is included in the line item “Interest Payable” on the statement of financial condition. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2019 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | 12. Revenue Recognition The primary sources of revenue for the Company are as follows: Margin Interest, Marketing and Distribution fees Margin interest, marketing and distribution fees consists of two components: margin interest and 12b1 fees. Margin interest is the net interest charged to customers for holding financed margin positions, and 12b1 fees are fees paid to the Company related to trailing payments from mutual funds as a result of prior sales of mutual funds to customers. Margin interest, marketing and distribution fees are recorded as earned. Commissions and Fees The Company earns commission revenue for executing trades for clients in individual equities, options, insurance products, futures, fixed income securities, as well as certain third-party mutual funds and ETFs. Commission revenue associated with combined trade execution and clearing services, as well as trade execution services on a standalone basis, is recognized at a point in time on the trade date when the performance obligation is satisfied. The performance obligation is satisfied on the trade date because that is when the underlying financial instrument or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership have been transferred to/from the customer. Principal Transactions Principal transactions primarily represent riskless transactions in which the Company, after executing a solicited order, buys or sells securities as principal and at the same time buys or sells the securities with a markup or markdown to satisfy the order. Principal transactions are recognized at a point in time on the trade date when the performance obligation is satisfied. The performance obligation is satisfied on the trade date because that is when the underlying financial instrument or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership have been transferred to/from the customer. Advisory Fees The Company earns advisory fees associated with managing client assets. The performance obligation related to its revenue stream is satisfied over time; however, the advisory fees are variable as they are charged as a percentage of the client’s total asset value, which is determined at the end of the quarter. Interest and Other Income The Company earns interest from generated in clients’ accounts and on the Company’s bank balances and is recorded as earned. The Company earns miscellaneous income from various sources which is also recorded as earned. The following table presents the major revenue categories and when each category is recognized: Year Ended December 31, Revenue Category 2019 2018 Timing of Recognition Trading Execution and Clearing Services Commissions and fees $ 8,302,000 $ 9,504,000 Recorded on trade date Principal transactions 8,061,000 9,020,000 Recorded on trade date Advisory fees 801,000 478,000 Recorded as earned Total Trading Execution and Clearing Services 17,164,000 19,002,000 Other Income Margin interest, marketing and distribution fees Margin interest 8,134,000 7,663,000 Recorded as earned 12b1 fees 2,987,000 3,265,000 Recorded as earned Total Margin interest, marketing and distribution fees 11,121,000 10,928,000 Interest and other income 308,000 106,000 Recorded as earned Total Other Income 11,429,000 11,034,000 Total Revenue $ 28,593,000 $ 30,036,000 The following table presents each revenue category and its related performance obligation: Revenue Stream Performance Obligation Commissions and fees, Principal transactions, Advisory fees Provide security trading services to customer and act as agent Margin interest, marketing and distribution fees, Interest and other income n/a Disaggregation of Revenue The following table presents a breakdown of the Company’s revenue between the amounts attributed to the retail customer accounts that were originally part of Siebert (“Legacy Siebert”) vs. the retail customer accounts the Company acquired from StockCross as part of the transaction that closed in December 2017 (“StockCross Retail Assets”): Year Ended December 31, 2019 2018 Revenue from Margin interest, marketing and distribution fees Margin interest, marketing and distribution fees – Legacy Siebert $ 9,723,000 $ 9,674,000 Margin interest, marketing and distribution fees – StockCross Retail Assets 1,398,000 1,254,000 Total Revenue from Margin interest, marketing and distribution fees $ 11,121,000 $ 10,928,000 Revenue from Principal transactions Principal transactions – Legacy Siebert $ 2,154,000 $ 1,894,000 Principal transactions – StockCross Retail Assets 5,907,000 7,126,000 Total Revenue from Principal transactions $ 8,061,000 $ 9,020,000 Revenue from Commissions and fees Commissions and fees – Legacy Siebert $ 7,037,000 $ 7,792,000 Commissions and fees – StockCross Retail Assets 1,265,000 1,712,000 Total Revenue from Commissions and fees $ 8,302,000 $ 9,504,000 Additional Revenue: Advisory fees – Legacy Siebert 801,000 478,000 Interest – Legacy Siebert 308,000 106,000 Total Revenue $ 28,593,000 $ 30,036,000 Soft Dollar Arrangement As a result of the acquisition of Weeden Prime, the Company has soft dollar and commission sharing arrangements with customers that fall both within, and outside of, the safe harbor provisions of Rule 28(e) of the Securities Exchange Act of 1934 ("Rule 28(e)"), as amended. These soft dollar arrangements were determined to be a separate performance obligation that should be allocated a portion of the transaction price. Under these arrangements, the Company charges additional dollars on customer trades and uses these fees to pay third parties for research, brokerage services, market data, and related expenses (“research services”) on behalf of clients. The Company is an agent in this arrangement, as it does not control the research services before they are transferred to the customer. As such, the revenue from these agreements are recognized net of cost in the statement of income on the line item titled “Commissions and fees.” For every other revenue transaction, the Company is the principal and there are no agents involved in providing the services; therefore, the revenue is recognized gross. The Company paid client expenses approximately $48,000 for December 2019 and had an outstanding receivable and payable of approximately $31,000 and $158,000, respectively, as of December 31, 2019. The receivable and payable are within the line items titled “Other receivables” and “Accounts payable and accrued liabilities,” respectively, on the statement of financial condition. As of December 31, 2019, no allowance for uncollectible commissions was necessary as management believes all commissions receivable and prepaid research services expenses will be realized. |
Referral Fees
Referral Fees | 12 Months Ended |
Dec. 31, 2019 | |
Referral Fees | |
Referral Fees | 13. Referral Fees Upon the acquisition of Weeden Prime, the Company has agreements with various third parties to share commissions and pay fees as defined in the respective agreements. These expenses totaled approximately $86,000 for the year ended December 31, 2019, which are presented in the line item titled “Referral fees” in the statement of income. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 14. Income Taxes Provision (benefit) for (from) income taxes consists of the following: Current income tax expense, which represents the amount of federal tax and state and local tax currently payable, including interest and penalties and amounts accrued for unrecognized tax benefits, if any, and; Deferred income tax expense (benefit), which represents the net change in the deferred tax assets balance during the year, including any change in the valuation allowance for the deferred tax assets, if any. For the year ended December 31, 2019, there was no change in the valuation allowance for the deferred tax assets. For the year ended December 31, 2018, based on the more likely than not criteria, the Company reversed 100% of the valuation allowance on the deferred tax assets. The following table presents the components of provision (benefit) for (from) income taxes for the periods indicated: Year Ending December 31, 2019 2018 Current income tax expense Federal $ 271,000 $ 948,000 State and local 252,000 26,000 Total Current income tax expense 523,000 974,000 Deferred income tax expense (benefit) Federal $ 312,000 $ (3,248,000 ) State and local 283,000 (2,328,000 ) Total Deferred income tax expense (benefit) 595,000 (5,576,000 ) Total Provision (benefit) for (from) income taxes $ 1,118,000 $ (4,602,000 ) Effective Income Tax Rate Reconciliation A reconciliation of the U.S. federal statutory income tax rate to the effective tax rate applicable to income before provision for income taxes is as follows for the periods indicated: Year Ending December 31, 2019 2018 Federal statutory income tax rate 21.0 % 21.0 % Net effect of Non-deductible expenses 0.2 % 0.2 % Depreciation — (0.9 %) Tax amortization of intangible assets (1.2 %) (3.8 %) Other temporary differences — (1.3 %) Net operating loss — (2.6 %) Increase due to state and local taxes, net of U.S. federal income tax effects 4.0 % 0.6 % Lease liabilities (0.3 %) — Total Current effective income tax rate 23.7 % 13.2 % Reversal of deferred tax assets valuation allowance — (75.8 %) Total Effective income tax rate 23.7 % (62.6 %) Tax Cuts and Jobs Act The statutory federal income tax rate in effect of 21% per the Tax Cuts and Jobs Act as of January 1, 2018 was utilized to calculate the income tax provision for the years ended December 31, 2019 and 2018 as well as the deferred tax assets as of December 31, 2019 and 2018. As such, the change in federal income tax rates affected the valuation of the gross deferred tax assets. Net Operating Losses The Company’s pre-tax federal and state and local NOLs for tax purposes as of December 31, 2019 were approximately $15.2 million and $23.6 million, respectively, which expire by 2036. The Company’s pre-tax federal and state and local NOLs for tax purposes as of December 31, 2018 were approximately $16.1 million and $27.1 million, respectively. The federal NOL carryforwards have been reduced by the impact of annual limitations of approximately $895,000 per year as described in the Internal Revenue Code Section 382 that arose as a result of an ownership change. Deferred tax assets are reported net of NOLs that have expired or are not expected to be utilized in the future. Income Tax Examinations The Company is subject to federal, state, and local tax examinations for a period typically between three and four years. The Company is currently under tax examination by the State of New York for tax years 2012 through 2014. As of December 31, 2019, the State of New York has not proposed any adjustment to the Company’s tax position. Except for the examination described above, the Company is not under any other tax examinations. Unrecognized Tax Benefits 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 consolidated financial statements as of December 31, 2019 and 2018. The Company classifies interest and penalties that would accrue according to the provisions of relevant tax law as income taxes. Deferred Tax Assets The evaluation of the recoverability of the deferred tax assets and the need for a valuation allowance requires the Company to weigh all positive and negative evidence to reach a conclusion that it is more likely than not that all or some portion of the deferred tax assets will be realized. The weight given to the evidence is commensurate with the extent to which it can be objectively verified. The more negative evidence that exists, the more positive evidence is necessary and the more difficult it is to support a conclusion that a valuation allowance is not needed. The Company’s framework for assessing the recoverability of the deferred tax assets requires a determination of whether or not there is sufficient taxable income of appropriate character within the carryback, carryforward period available under tax law. The Company considers of all available evidence, including: • Taxable income in carryback years if carryback is permitted • Future reversals of existing taxable temporary differences • Projected future taxable income exclusive of reversing temporary difference In assessing projected future taxable income, the Company considers all evidence, including: • The nature, frequency, and amount of cumulative financial reporting income and losses in recent years • The sustainability of recent operating profitability of the Company • The predictability of future operating profitability of the character necessary to realize the net deferred tax assets • The carryforward period for the NOLs, including the effect of reversing taxable temporary differences • Prudent and feasible actions and tax planning strategies that would be implemented, if necessary, to protect against the loss of the deferred tax assets In performing the assessment of the recoverability of the deferred tax assets under this framework, the Company also considers tax laws governing the utilization of the NOL in each applicable jurisdiction. For the year ended December 31, 2018, the Company achieved key financial milestones such as having three years of cumulative taxable income and generating four consecutive quarters of pre-tax profitability generally greater than $1 million which led to a re-evaluation of the deferred tax assets. As of December 31, 2018, the Company determined that sufficient positive evidence existed to conclude that it is more likely than not that deferred taxes of $5,576,000 were realizable, and therefore, a valuation allowance was not necessary for the deferred tax assets. As of December 31, 2019, the Company determined that sufficient positive evidence existed to conclude that it is more likely than not that its deferred tax assets were fully realizable, and therefore, a valuation allowance was not necessary. Below is a breakout of the deferred tax assets, net of valuation allowance as of the periods indicated. As of December 31, 2019 2018 Deferred tax assets Net operating loss carryforwards $ 5,322,000 $ 5,811,000 Total Deferred tax assets 5,322,000 5,811,000 Deferred tax liabilities Furniture, equipment and leasehold improvements $ (430,000 ) $ (193,000 ) Lease liabilities 89,000 — Contribution carryover — — Intangible assets — — Other reconciling items — (42,000 ) Total Deferred tax liabilities (341,000 ) (235,000 ) Total Deferred tax assets $ 4,981,000 $ 5,576,000 Weeden Prime Prior to its acquisition by the Company effective December 1, 2019, Weeden Prime was a multi-member limited liability company, filed a U.S. Partnership return, and was not subject to Federal or state taxes. The Internal Revenue Code ("IRC") provides that any income or loss, for either a single member or multi-member limited liability company, is passed through to the members for Federal and state income tax purposes. Weeden Prime was subject to the New York City Unincorporated Business Tax ("UBT"). Effective upon the acquisition of Weeden Prime by the Company, Weeden Prime became aligned with the Company’s tax structure and was obligated to pay the Company for income taxes owed. The results of Weeden Prime’s operations for the 31-day period ending December 31, 2019 are included in the consolidated federal income tax return of the Company and the state and local income tax return of the Company, as appropriate. Federal income taxes are calculated as if the companies filed on a separate return basis, and the amount of current tax or benefit calculated is either remitted to or received from Company. The amount of current and deferred taxes payable or refundable is recognized as of the date of the consolidated financial statements, utilizing currently enacted tax laws and rates. During the 31-day period ending December 31, 2019, income before income taxes was $285,000 for Weeden Prime. As such, there was $82,000 of income tax expense, of which $57,000 was federal income tax and $25,000 was state and local income tax. The income tax amount was recorded by the Company as an income tax expense and corresponding liability of income taxes payable within the statement of income and statement of financial condition, respectively. Prior to the acquisition of Weeden Prime by the Company, Weeden Prime had net operating loss carryforwards which expired starting in 2033, and had a full valuation allowance on its deferred tax assets. As of December 31, 2019, due to the change of ownership, management determined that all prior NOLs will not be recovered by Weeden Prime after its acquisition by the Company. |
Capital Requirements
Capital Requirements | 12 Months Ended |
Dec. 31, 2019 | |
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |
Capital Requirements | 15. Capital Requirements MSCO is subject to the SEC’s Uniform Net Capital Rule (Rule 15c3-1), which requires the maintenance of minimum net capital. MSCO has elected to use the alternative method permitted by the Uniform Net Capital Rule which requires that MSCO maintain minimum net capital, as defined, equal to the greater of $250,000, or 2% of aggregate debit balances arising from customer transactions, as defined. The Uniform Net Capital 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. As of December 31, 2019, MSCO had net capital of approximately $4.4 million, which was $4.2 million in excess of required net capital of $250,000. As of December 31, 2018, MSCO had net capital of approximately $8.9 million, which was $8.7 million in excess of required net capital of $250,000. MSCO claims exemption from the reserve requirements under SEC’s Rule 15c 3-3 pursuant to paragraph (k)(2)(ii) as it clears its customer transactions through one unaffiliated and one affiliated clearing firm on a fully disclosed basis. Weeden Prime, as a member of FINRA, is subject to the SEC Uniform Net Capital Rule 15c3-1. This rule requires the maintenance of minimum net capital and that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1 and that equity capital may not be withdrawn, or cash dividends paid if the resulting net capital ratio would exceed 10 to 1. Weeden Prime is also subject to the CFTC's minimum financial requirements which require that the Company maintain net capital, as defined, equal to the greater of its requirements under Regulation 1.17 under the Commodity Exchange Act or Rule 15c3-1. As of December 31, 2019, the Company's net capital was approximately $3.9 million which was $3.7 million in excess of its minimum requirement of $250,000 under 15c3-1. The Company’s cash and cash equivalents are unrestricted and are used to fund working capital needs. The Company’s total assets as of December 31, 2019 were approximately $28.5 million, of which $3.1 million, or approximately 11%, was highly liquid. The Company’s total assets as of December 31, 2018 were approximately $18.2 million, of which $7.2 million, or approximately 40%, was highly liquid. |
Financial Instruments with Off-
Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk | 12 Months Ended |
Dec. 31, 2019 | |
Financial Instruments With Off-balance-sheet Risk And Concentrations Of Credit Risk | |
Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk | 16. Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk Customer transactions are cleared through a variety of clearing broker dealers on a fully disclosed basis, one of which is an affiliate. In the event that customers are unable to fulfill their contractual obligations, the clearing broker dealer may charge the Company for any loss incurred in connection with the purchase or sale of securities at prevailing market prices to satisfy customers' obligations. The Company regularly monitors the activity in its customer accounts for compliance with its margin requirements. Securities transactions entered into as of December 31, 2019 have settled subsequent thereto with no material adverse effect on the Company's consolidated financial statements. 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. There were no material losses for unsettled customer transactions for the years ended December 31, 2019 and 2018 and t |
Commitments, Contingencies and
Commitments, Contingencies and Other | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Other | 17. Commitments, Contingencies and Other Legal and Regulatory Matters The Company is party to certain claims, suits and complaints arising in the ordinary course of business. As of December 31, 2019, in the opinion of the Company, all such matters are without merit, or involve amounts which would not have a significant effect on the consolidated financial statements of the Company. General Contingencies In the normal course of its business, the Company indemnifies and guarantees certain service providers against specified potential losses in connection with their acting as an agent of, or providing services to, the Company. The maximum potential amount of future payments that the Company could be required to make under these indemnifications cannot be estimated. However, the Company believes that it is unlikely it will have to make material payments under these arrangements and has not recorded any contingent liability in the consolidated financial statements for these indemnifications. The Company provides representations and warranties to counterparties in connection with a variety of commercial transactions and occasionally indemnifies them against potential losses caused by the breach of those representations and warranties. The Company may also provide standard indemnifications to some counterparties to protect them in the event additional taxes are owed or payments are withheld, due either to a change in or adverse application of certain tax laws. These indemnifications generally are standard contractual terms and are entered into in the normal course of business. The maximum potential amount of future payments that the Company could be required to make under these indemnifications cannot be estimated. However, the Company believes that it is unlikely it will have to make material payments under these arrangements and has not recorded any contingent liability in the consolidated financial statements for these indemnifications. The Company is self-insured with respect to employee health claims. The Company maintains stop-loss insurance for certain risks and has a health claim reinsurance limit capped at approximately $50,000 per employee. The estimated liability for self-insurance claims is initially recorded in the year in which the event of loss occurs, and may be subsequently adjusted based upon new information and cost estimates. Reserves for losses represent estimates of reported losses and estimates of incurred but not reported losses based on past and current experience. Actual claims paid and settled may differ, perhaps significantly, from the provision for losses. This adds uncertainty to the estimated reserves for losses. Accordingly, it is at least possible that the ultimate settlement of losses may vary significantly from the amounts included in the consolidated financial statements. As part of this plan, the Company recognized expenses totaling $867,000 and $935,000 for the years ended December 31, 2019 and 2018, respectively. The Company had an accrual of $47,000 as of December 31, 2019, which represents the historical estimate of future claims to be recognized for claims incurred prior to December 31, 2019. The Company believes that its present insurance coverage and reserves are sufficient to cover currently estimated exposures, but there can be no assurance that the Company will not incur liabilities in excess of recorded reserves or in excess of its insurance limits. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | 18. Employee Benefit Plans The Company through its affiliate, KCA, sponsors a defined-contribution retirement plan under Section 401(k) of the Internal Revenue Code that covers substantially all employees. Participant contributions to the plan are voluntary and are subject to certain limitations. The Company may also make discretionary contributions to the plan. No contributions were made by the Company during the years ended December 31, 2019 and 2018. |
Related Party Disclosures
Related Party Disclosures | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Disclosures | 19. Related Party Disclosures StockCross StockCross and the Company are under common ownership and StockCross, prior to January 1,2020, served as one of the clearing broker dealers for the Company. The StockCross clearing agreement with the Company provided that StockCross passed through all revenue and charged the Company for related clearing expenses. Outside of the clearing agreement, the Company had an expense sharing agreement with StockCross for its Beverly Hills and Jersey City offices, and StockCross paid some vendors for miscellaneous expenses which it passed through to the Company. As of December 31, 2019, the Company had receivables from StockCross totaling approximately $2.0 million, consisting of financing for inventory positions, the net monthly clearing fees StockCross owes the Company, and a clearing deposit. As of December 31, 2019, the Company had a payable to StockCross totaling $7,000. In January 2019, the Company purchased approximately 15% of StockCross’ outstanding shares. Effective January 1, 2020, the Company acquired the remaining 85% of StockCross in exchange for 3,298,774 shares of the Company’s Common Stock and StockCross was merged with and into MSCO. For the year ended December 31, 2019, the loss recognized from the Company’s 15% investment in StockCross was $66,000. Kennedy Cabot Acquisition, LLC KCA is an affiliate of the Company and StockCross and is under common ownership with the Company. To gain efficiencies and economies of scale with billing and administrative functions, KCA serves as a paymaster for the Company and StockCross for payroll and related functions, the entirety of which KCA passes through to the Company Park Wilshire Companies, Inc. PWC brokers the insurance policies for related parties. Revenue for PWC from related parties was $69,000 and $28,000 for the years ended December 31, 2019 and 2018, As of December 31, 2019, the Company had a receivable from PWC totaling approximately $11,000. In March 2018, the Company acquired all of the issued and outstanding shares of PWC from three related parties for approximately $110,000. Gloria E. Gebbia On December 2, 2019, the Company entered into an agreement with Gloria E. Gebbia, the Company’s principal shareholder, for a promissory note of $3 million to finance part of the acquisition of Weeden Prime. The term of the promissory note was one year and interest accrues at 4% per year. The interest expense incurred for the year ended December 31, 2019 was $10,000. The total interest will be payable upon maturity of the note on December 2, 2020, which is included in the line item “Interest Payable” on the statement of financial condition. See “Note 11 – Note Payable - Related Party” for additional detail |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 20. Subsequent Events The Company has evaluated events that have occurred subsequent to December 31, 2019 and through March 27, 2020, the date of the filing of this report. As previously disclosed in a Current Report on Form 8-K, filed on January 7, 2020, the Company entered into an Agreement and Plan of Merger by and between the Company, MSCO, StockCross and Michael J. Colombino, on behalf of himself and as representative of the other StockCross shareholders, pursuant to which the Company acquired, from the StockCross shareholders, all of the shares of StockCross owned by the shareholders in exchange for a total of 3,298,774 shares of the Company’s restricted Common Stock and StockCross was merged with and into MSCO (the “Merger”). The Merger was effective on January 1, 2020. Prior to the Merger, the Company owned 15% of the issued and outstanding common stock of StockCross, and the Company and StockCross were affiliated entities through common ownership. As of January 1, 2020, all clearing services provided by StockCross are now performed by MSCO. On January 27, 2020, the Company filed an Information Statement Pursuant to Section 14(c) of the Exchange Act to inform shareholders that holders of 71.4% of the Company’s outstanding Common Stock, acting by written consent, approved an amendment to the Company’s Restated Certificate of Incorporation, as amended (the “Amendment”) to increase the total shares of Common Stock the Company is authorized to issue to 100,000,0000 shares. The Amendment was filed with the New York Department of State on February 21, 2020. Other than the events described above, there have been no material subsequent events that occurred during such period that would require disclosure in this report or would be required to be recognized in the consolidated financial statements as of December 31, 2019. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements are prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as established by the Financial Accounting Standards Board (“FASB”) to ensure consistent reporting of financial condition. The consolidated financial statements include the accounts of Siebert and its wholly-owned subsidiaries and upon consolidation, all intercompany balances and transactions are eliminated. The U.S. dollar is the functional currency of the Company and numbers are rounded for presentation purposes. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company makes significant estimates that affect the reported amounts of assets, liabilities, revenue, and expenses. The estimates relate primarily to revenue and expenses in the normal course of business as to which the Company receives no confirmations, invoices, or other documentation at the time the books are closed. The Company uses its best judgment, based on knowledge of these revenue transactions and expenses incurred, to estimate the amount of such revenue and expenses. The Company is not aware of any material differences between the estimates used in closing the Company’s books for the last five years and the actual amounts of revenue and expenses incurred when the Company subsequently receives the actual confirmations, invoices, or other documentation. Estimates are used in intangible asset valuations and useful lives, depreciation, income taxes, and the contingent liabilities related to legal and healthcare expenses. The Company also estimates the valuation allowance for its deferred tax assets based on the more likely than not criteria. The Company believes that its estimates are reasonable. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents are all cash balances that are unrestricted. The Company has defined cash equivalents as highly liquid investments with original maturities of less than 90 days that are not held for sale in the ordinary course of business. As of December 31, 2019 and 2018, the Company did not hold any cash equivalents. |
Cash Segregated Under Federal Regulations | Cash Segregated Under Federal Regulations As of December 31, 2019, cash of $110,000 has been segregated in a special reserve bank account for the benefit of customers. |
Non-Cash Investing and Financing Activities | Non-Cash Investing and Financing Activities The Company entered into a promissory note of $3 million with Gloria E. Gebbia to finance part of the acquisition of Weeden Prime. This was a non-cash item for the Company for the year ended December 31, 2019 as the $3 million was paid directly from Gloria E. Gebbia to Weeden Prime. See “Note 11 – Note Payable - Related Party” for additional detail. |
Concentrations of Credit Risk | Concentrations of Credit Risk The Company is engaged in various trading and brokerage activities whose contra-parties include broker-dealers, banks and other financial institutions. In the event contra-parties do not fulfill their obligations, the Company may sustain a loss if the market value of the instrument is different from the contract value of the transaction. The risk of default primarily depends upon the credit worthiness of the contra-parties involved in the transactions. It is the Company’s policy to review, as necessary, the credit standing of each contra-party with which it conducts business. The Company has experienced no material historical losses in relation to its contra-parties. As of December 31, 2019, the Company maintains its cash balances at two financial institutions. These balances are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per institution. The Company is subject to credit risk to the extent that the financial institution with which it conducts business is unable to fulfill its contractual obligations and deposits exceed FDIC limits. |
Receivables from Clearing Broker Dealers | Receivables from Clearing Broker Dealers Retail customer transactions for the years ended December 31, 2019 and 2018, cleared, on a fully disclosed basis, through two clearing broker dealers, StockCross and NFS, the former of which is an affiliate. The Company operates on a month to month basis with the clearing broker dealers and their fees are offset against the Company's revenues on a monthly basis. Receivables from clearing broker dealers include amounts receivable as well as cash on deposit. As of the years ended December 31, 2019 and 2018, cash clearing deposits with StockCross and NFS were $75,000 and $50,000, respectively, which are included in the line item titled “Receivables from clearing broker dealers” on the statements of financial condition. Institutional customer transactions for the year ended December 31, 2019 cleared, on a fully disclosed basis, through two clearing broker dealers, The Goldman Sachs Group, Inc. (“Goldman Sachs”) and Pershing LLC (“Pershing”). Amounts due to the clearing broker dealers are offset against amounts due from clearing broker dealers. Receivables from clearing broker dealers are subject to clearance agreements and include the net receivable from monthly revenues as well as cash on deposit. As of the years ended December 31, 2019 and 2018, cash clearing deposits with Goldman Sachs and Pershing were approximately $2 million and $1.1 million, respectively, which are included in the line item titled “Receivables from clearing broker dealers” on the statements of financial condition. The Company evaluates receivables from clearing broker dealers and other receivables for collectability noting no amount was considered uncollectable as of the years ended December 31, 2019 and 2018. No valuation allowance is recognized for these receivables as the Company does not have a history of losses from these receivables and does not anticipate losses in the future. The accounting policies for the revenue related to these receivables are detailed further in the significant accounting policy for revenue recognition. |
Furniture, Equipment and Leasehold Improvements, Net | 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 not exceeding four years. Leasehold improvements are amortized over the shorter of their estimated useful life or the remaining lease term unless the lease transfers ownership of the underlying asset to the lessee, or the lessee is reasonably certain to exercise an option to purchase the underlying asset, in which case the lessee will amortize over the estimated useful life of the leasehold improvements. |
Software, Net | Software, Net The Company capitalizes certain costs for software, such as the Robo-Advisor, software license arrangements with a contract term of greater than 1 year, as well as other software, and amortizes the assets over the estimated useful life of the software or contract term, generally not exceeding 3 years. The Company accounts for software license arrangements with a contract term of 1 year as prepaid assets and amortizes them over the contract term. Other software costs such as routine maintenance and various data services to provide market information to customers are expensed as incurred. The Company acquired the Robo-Advisor from STCH in August 2018. The Robo-Advisor has an estimated useful life of 3 years and the Company started to amortize it on January 1, 2019. |
Equity Method Investments | Equity Method Investments Investments in which the Company has the ability to exercise significant influence, but does not control, are accounted for under the equity method of accounting and are included in the equity method investment in related party asset in the statement of financial condition. Under this method of accounting, the Company’s share of the net earnings or losses of the investee is presented before the income before provision (benefit) for (from) income taxes on the statement of income. The Company evaluates its equity method investments whenever events or changes in circumstance indicate that the carrying amounts of such investments may be impaired. If a decline in the value of an equity method investment is determined to be other than temporary, a loss is recorded in earnings in the current period. |
Intangible Assets, Net | Intangible Assets, Net Certain identifiable intangible assets the Company acquires such as customer relationships and trade names are amortized over their estimated useful lives on a straight-line basis. Amortization expense associated with such intangible assets is included in the “Depreciation and amortization” expense on the statement of income. The Company evaluates intangible assets for impairment on an annual basis or when events or changes indicate the carrying value may not be recoverable. The Company also evaluates the remaining useful lives of intangible assets on an annual basis or when events or changes warrants the remaining period of amortization to be revised. The Company currently does not have any intangible assets with indefinite lives other than goodwill. |
Goodwill | Goodwill Goodwill is recognized as a result of business combinations and represents the excess of the purchase price over the fair value of net tangible assets and identifiable intangible assets. The Company evaluates goodwill for impairment on an annual basis or when events or changes indicate the carrying value may not be recoverable. The Company has the option of performing a qualitative assessment of goodwill to determine whether it is more likely than not that the fair value of its equity is less than the carrying value. If it is more likely than not that the fair value exceeds the carrying value, then no further testing is necessary; otherwise, the Company must perform a two-step quantitative assessment of goodwill. The Company may elect to bypass the qualitative assessment and proceed directly to performing a two-step quantitative assessment. For the year ended December 31, 2019, the Company concluded there have been no impairments to the carrying value of the Company's goodwill during the periods presented. |
Revenue Recognition and Other Income | Revenue Recognition and Other Income On January 1, 2018, the Company adopted the new revenue recognition standard ASC 606, Revenue from Contracts with Customers, on the modified retrospective method (i.e., cumulative method). The Company has elected the modified retrospective method which did not result in a cumulative-effect adjustment at the date of adoption. The implementation of this new standard had no material impact on the Company's consolidated financial statements for the years ended December 31, 2019 and 2018. Revenue from contracts with customers includes commissions and fees, principal transactions, and advisory fees. The recognition and measurement of revenue is based on the assessment of individual contract terms. Significant judgment is required to determine whether performance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance obligations are identified; when to recognize revenue based on the appropriate measure of the Company’s progress under the contract; and whether constraints on variable consideration should be applied due to uncertain future events. For the years ended December 31, 2019 and 2018, there were no costs capitalized related to obtaining or fulfilling a contract with a customer, and thus the Company has no balances for contract assets or contract liabilities. As of December 31, 2019, the acquisition of new entities did not impact the Company’s existing revenue streams as the acquired entities have consistent application of the revenue recognition guidance. |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred and were $2,000 and $45,000 for the years ended December 31, 2019 and 2018, respectively. |
Income Taxes | Income Taxes The results of operations are included in the consolidated federal and state income tax return of the Company as well as the consolidated or standalone state and local income tax returns of the Company and/or its subsidiaries. The amount of current and deferred taxes payable or refundable is recognized as of the date of the consolidated financial statements, utilizing currently enacted tax laws and rates. Deferred tax expenses or benefits are recognized in the consolidated financial statements for the changes in deferred tax liabilities or assets between years. The Company records accruals for uncertain tax positions when the Company believes that it is not more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The Company adjusts these accruals when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. The Company had no uncertain tax positions as of December 31, 2019 and 2018. Income taxes receivable as of December 31, 2019, and 2018, were $141,000 and The Company recognizes deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversal of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. To the extent the Company determines that realization of deferred tax assets is not more likely than not, the Company records a valuation allowance for the deferred tax assets. As a result, the amount of the deferred tax assets considered realizable could be reduced in the near term if estimates of future taxable income are reduced. Such an occurrence could materially impact the Company’s consolidated financial statements. |
Capital Stock | Capital Stock The authorized capital stock of the Company consists of a single class of common stock. |
Per Share Data | 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 has no dilutive securities as of December 31, 2019 and 2018. |
Accounting for Acquisitions | Accounting for Acquisitions ASC 805 is used for accounting in business acquisitions. ASC 805 requires that goodwill be recognized separately from assets acquired and liabilities assumed at their acquisition date fair values. Goodwill, as of the date of acquisition, is determined as the excess of the consideration transferred net of the acquisition date fair values of assets acquired and liabilities assumed. Fair value estimates at acquisition date may be assessed internally or externally using third parties. As part of the valuation and appraisal process, the third-party appraiser prepares a report assigning estimated acquisition date fair values to assets and liabilities. These fair value estimations are subjective and require careful consideration and sound judgment. Management reviews the third-party reports for fairness of the assigned values. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements ASU 2018-15 – In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which requires customers to apply the same criteria for capitalizing implementation costs incurred in a cloud computing arrangement that is hosted by the vendor as they would for an arrangement that has a software license. The standard is effective for interim and annual periods beginning after December 15, 2019 and early adoption is permitted. The standard can be adopted prospectively or retrospectively. The Company is currently evaluating the expected impact of this new standard; however, the Company believes there will be no material impact to its consolidated financial statements. ASU 2017-04 – In January 2017, the FASB amended the guidance to simplify the test for goodwill impairment by eliminating Step 2 from the goodwill impairment test. The amended guidance requires the Company to perform its annual goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized at the amount by which the carrying amount exceeds the fair value of the reporting unit; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Income tax effects resulting from any tax-deductible goodwill should be considered when measuring the goodwill impairment loss, if applicable. The Company will still have the option to perform a qualitative assessment to conclude whether it is more likely than not that the carrying amount of the Company exceeds its fair value. The guidance will be effective for interim and annual periods beginning January 1, 2020, and must be applied prospectively. Early adoption is permitted. The Company is currently evaluating the expected impact of this new standard; however, the Company believes there will be no material impact to its consolidated financial statements. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements ASU 2016-02 The new standard provides a number of optional practical expedients in transition. The Company elected the “package of practical expedients,” which permits the Company not to reassess under the new standard the Company’s prior conclusions about lease identification, lease classification and initial direct costs. The Company has not elected the hindsight practical expedient at transition. The new standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, the Company will not recognize lease right-of-use assets or lease liabilities. |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Acquisitions Abstract | |
Schedule of Allocation of Purchase Price | The following table summarizes the Company’s allocation of the purchase price as of the date of acquisition: Purchase Price Allocation Estimated Fair Value Cash and cash equivalents $ 301,000 Cash segregated under federal regulations 152,000 Receivables from clearing broker dealers 4,616,000 Furniture, equipment and leasehold improvements, net 41,000 Software, net 51,000 Intangible assets, net 1,057,000 Lease right-of-use assets 214,000 Other assets 271,000 Total Assets acquired 6,703,000 Accounts payable and accrued liabilities 1,353,000 Lease liabilities 214,000 Total Liabilities acquired 1,567,000 Net Assets acquired 5,136,000 Goodwill 1,989,000 Purchase price $ 7,125,000 |
Schedule of Revenues and Net Income from Continuing Operations | The following table summarizes the revenue and net income from continuing operations of Weeden Prime included in the Company’s statement of income for the year ending December 31, 2019 since the date of acquisition (for the 31-day period ending December 31, 2019): Weeden Prime Revenue $ 968,000 Net income from continuing operations $ 203,000 |
Schedule of Pro Forma Consolidated Information | The following pro forma summary presents consolidated statements of income of the Company as if the acquisition of Weeden Prime had occurred on January 1, 2018, inclusive of pro forma adjustments (unaudited): Year Ended December 31, 2019 2018 Revenue $ 39,746,000 $ 42,987,000 Net income $ 2,485,000 $ 11,102,000 |
Receivables from and Payable _2
Receivables from and Payable to Clearing Broker Dealers and Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Due to and from Broker-Dealers and Clearing Organizations [Abstract] | |
Schedule of Amounts receivable from / payable to clearing brokers dealers, related parties and other organizations | Amounts receivable from / payable to clearing brokers dealers, related parties and other organizations consisted of the following as of the periods indicated: As of December 31, 2019 2018 Receivable from clearing broker dealers NFS $ 1,328,000 $ 1,664,000 StockCross 883,000 310,000 Goldman Sachs 2,841,000 — Pershing Capital 1,192,000 — Other receivables 9,000 56,000 Total Receivable from clearing broker dealers $ 6,253,000 2,030,000 Receivable from related party StockCross $ 1,000,000 $ 1,000,000 Total Receivable from related party $ 1,000,000 $ 1,000,000 Due to clearing broker dealers and related parties NFS $ — $ 58,000 StockCross 7,000 46,000 MSCO — 29,000 Total Due to clearing broker dealers and related parties $ 7,000 $ 133,000 |
Furniture, Equipment and Leas_2
Furniture, Equipment and Leasehold Improvements, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Furniture, equipment and leasehold improvements | Furniture, equipment and leasehold improvements consisted of the following as of the periods indicated: As of December 31, 2019 2018 Leasehold improvements $ 1,389,000 $ 545,000 Equipment 170,000 52,000 Furniture and fixtures 134,000 — Total Furniture, equipment, and leasehold improvements 1,693,000 597,000 Less accumulated depreciation and amortization (562,000 ) (129,000 ) Total Furniture, equipment, and leasehold improvements, net $ 1,131,000 $ 468,000 |
Software, Net (Tables)
Software, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Software, Net | Software consisted of the following as of the periods indicated: As of December 31, 2019 2018 Robo-Advisor $ 763,000 $ 763,000 Other Software 1,771,000 459,000 Total Software 2,534,000 1,222,000 Less accumulated amortization – Robo-Advisor (254,000 ) — Less accumulated amortization – Other software (392,000 ) (85,000 ) Total Software, net $ 1,888,000 $ 1,137,000 |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments | |
Schedule of Supplemental Operations Information | Below is a table showing the summary from the consolidated statements of operations and the consolidated statements of financial condition for StockCross for the periods indicated (unaudited): Year Ended December 31, 2019 2018 Revenue $ 14,823,000 $ 13,340,000 Operating income / (loss) $ (508,000 ) $ (929,000 ) Net income / (loss) $ (420,000 ) $ (691,000 ) |
Schedule of Supplemental Financial Condition Information | As of December 31, 2019 2018 Assets $ 514,925,000 $ 595,091,000 Liabilities $ 499,211,000 $ 577,528,000 Stockholder’s Equity $ 15,714,000 $ |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of Supplemental Balance Sheet Information Related to Leases | As of December 31, 2019, the Company does not believe that any of the renewal options under the existing leases are reasonably certain to be exercised; however, the Company will continue to assess and monitor the lease renewal options on an ongoing basis. As of December 31, 2019 Assets Lease right-of-use assets $ 2,810,000 Liabilities Lease liabilities $ 3,114,000 |
Schedule of Additional Information Related to Leases | Lease Term and Discount Rate Weighted average remaining lease term – operating leases (in years) 3.0 Weighted average discount rate – operating leases 5.0% |
Schedule of Lease Costs and Other Lease Information | The following table represents lease costs and other lease information. The Company has elected the practical expedient to not separate lease and non-lease components, and as such, the variable lease cost primarily represents variable payments such as common area maintenance and utilities which are determined by the leased square footage in proportion to the overall office building. Year Ended December 31, 2019 Operating lease cost $ 905,000 Short-term lease cost 446,000 Variable lease cost 50,000 Sublease income — Total Rent and occupancy $ 1,401,000 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 928,000 Lease right-of-use assets obtained in exchange for new lease liabilities Operating leases $ 3,817,000 |
Schedule of Maturities of Lease Liabilities | Future annual minimum payments for operating leases with initial terms of greater than one year as of December 31, 2019 were as follows: Year Amount 2020 $ 1,410,000 2021 878,000 2022 513,000 2023 493,000 2024 56,000 Thereafter — Remaining balance of lease payments 3,350,000 Difference between undiscounted cash flows and discounted cash flows 236,000 Lease liabilities $ 3,114,000 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Information Related to Intangible Assets | The following table summarizes information related to the intangible assets as of the dates indicated. As of December 31, 2019 Date Acquired Original Useful Life (Years) Remaining Useful Life (Years) Gross Amount Accumulated Amort Net Amount Weeden Prime Customer Relationships 11/30/19 6.0 years 5.9 years $ 987,000 $ 23,000 $ 964,000 Weeden Prime Trade Name 11/30/19 0.5 years 0.4 years 70,000 12,000 58,000 Total Intangible assets $ 1,057,000 $ 35,000 $ 1,022,000 |
Schedule of Annual Amortization Expense for Intangible Assets | The Company expects its aggregate annual amortization expense for existing amortizable intangible assets for the below periods to be as follows: Amount 2020 $ 223,000 2021 165,000 2022 165,000 2023 165,000 2024 165,000 2025 139,000 Total future amortization expense $ 1,022,000 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Hierarchy for Assets and Liabilities Measured at Fair Value | The following table presents the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis as of December 31, 2019: Securities sold, not yet purchased, at fair value Level 1 Level 2 Level 3 Total Equity securities $ 88,000 — — $ 88,000 Total Securities sold, not yet purchased, at fair value $ 88,000 — — $ 88,000 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Major Revenue Categories | The following table presents the major revenue categories and when each category is recognized: Year Ended December 31, Revenue Category 2019 2018 Timing of Recognition Trading Execution and Clearing Services Commissions and fees $ 8,302,000 $ 9,504,000 Recorded on trade date Principal transactions 8,061,000 9,020,000 Recorded on trade date Advisory fees 801,000 478,000 Recorded as earned Total Trading Execution and Clearing Services 17,164,000 19,002,000 Other Income Margin interest, marketing and distribution fees Margin interest 8,134,000 7,663,000 Recorded as earned 12b1 fees 2,987,000 3,265,000 Recorded as earned Total Margin interest, marketing and distribution fees 11,121,000 10,928,000 Interest and other income 308,000 106,000 Recorded as earned Total Other Income 11,429,000 11,034,000 Total Revenue $ 28,593,000 $ 30,036,000 |
Schedule of Performance Obligation | The following table presents each revenue category and its related performance obligation: Revenue Stream Performance Obligation Commissions and fees, Principal transactions, Advisory fees Provide security trading services to customer and act as agent Margin interest, marketing and distribution fees, Interest and other income n/a |
Disaggregation of revenue | The following table presents a breakdown of the Company’s revenue between the amounts attributed to the retail customer accounts that were originally part of Siebert (“Legacy Siebert”) vs. the retail customer accounts the Company acquired from StockCross as part of the transaction that closed in December 2017 (“StockCross Retail Assets”): Siebert 2019 Form-10K 47 Year Ended December 31, 2019 2018 Revenue from Margin interest, marketing and distribution fees Margin interest, marketing and distribution fees – Legacy Siebert $ 9,723,000 $ 9,674,000 Margin interest, marketing and distribution fees – StockCross Retail Assets 1,398,000 1,254,000 Total Revenue from Margin interest, marketing and distribution fees $ 11,121,000 $ 10,928,000 Revenue from Principal transactions Principal transactions – Legacy Siebert $ 2,154,000 $ 1,894,000 Principal transactions – StockCross Retail Assets 5,907,000 7,126,000 Total Revenue from Principal transactions $ 8,061,000 $ 9,020,000 Revenue from Commissions and fees Commissions and fees – Legacy Siebert $ 7,037,000 $ 7,792,000 Commissions and fees – StockCross Retail Assets 1,265,000 1,712,000 Total Revenue from Commissions and fees $ 8,302,000 $ 9,504,000 Additional Revenue: Advisory fees – Legacy Siebert 801,000 478,000 Interest – Legacy Siebert 308,000 106,000 Total Revenue $ 28,593,000 $ 30,036,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax (Benefit) / Expense | The following table presents the components of provision (benefit) for (from) income taxes for the periods indicated: Year Ending December 31, 2019 2018 Current income tax expense Federal $ 271,000 $ 948,000 State and local 252,000 26,000 Total Current income tax expense 523,000 974,000 Deferred income tax expense (benefit) Federal $ 312,000 $ (3,248,000 ) State and local 283,000 (2,328,000 ) Total Deferred income tax expense (benefit) 595,000 (5,576,000 ) Total Provision (benefit) for (from) income taxes $ 1,118,000 $ (4,602,000 ) |
Schedule of Reconciliation of U.S. Federal Statutory Income Tax Rate | A reconciliation of the U.S. federal statutory income tax rate to the effective tax rate applicable to income before provision for income taxes is as follows for the periods indicated: Year Ending December 31, 2019 2018 Federal statutory income tax rate 21.0 % 21.0 % Net effect of Non-deductible expenses 0.2 % 0.2 % Depreciation — (0.9 %) Tax amortization of intangible assets (1.2 %) (3.8 %) Other temporary differences — (1.3 %) Net operating loss — (2.6 %) Increase due to state and local taxes, net of U.S. federal income tax effects 4.0 % 0.6 % Lease liabilities (0.3 %) — Total Current effective income tax rate 23.7 % 13.2 % Reversal of deferred tax assets valuation allowance — (75.8 %) Total Effective income tax rate 23.7 % (62.6 %) |
Schedule of Deferred Tax Assets (Liabilities) | Below is a breakout of the deferred tax assets, net of valuation allowance as of the periods indicated. As of December 31, 2019 2018 Deferred tax assets Net operating loss carryforwards $ 5,322,000 $ 5,811,000 Total Deferred tax assets 5,322,000 5,811,000 Deferred tax liabilities Furniture, equipment and leasehold improvements $ (430,000 ) $ (193,000 ) Lease liabilities 89,000 — Contribution carryover — — Intangible assets — — Other reconciling items — (42,000 ) Total Deferred tax liabilities (341,000 ) (235,000 ) Total Deferred tax assets $ 4,981,000 $ 5,576,000 |
Organization (Details)
Organization (Details) - USD ($) | 1 Months Ended | ||||||
Jan. 31, 2020 | Aug. 21, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 04, 2019 | Jan. 31, 2019 | Dec. 31, 2018 | |
Business Acquisition [Line Items] | |||||||
Common stock, par value | $ 0.01 | $ 0.01 | |||||
Siebert Technologies, LLC. [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Total consideration of acquisition | $ 690,000 | ||||||
Park Wilshire Companies, Inc. [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Total consideration of acquisition | $ 110,000 | ||||||
StockCross Financial Services, Inc. [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Percentage of acquired interest | 15.00% | ||||||
StockCross Financial Services, Inc. [Member] | Subsequent Event [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Percentage of remaining interest in StockCross purchased under binding letter of intent | 85.00% | ||||||
Issue of common share in exchange under acquisition | 3,298,774 | ||||||
Weeden Prime Services LLC [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Percentage of acquired interest | 100.00% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 02, 2019 | |
Cash segregated in special reserve bank account | $ 110,000 | ||
FDIC insured amount | 250,000 | ||
Advertising costs | 2,000 | 45,000 | |
Income taxes receivable | 141,000 | 79,000 | |
Right-of-use assets | 2,810,000 | ||
Lease liabilities | 3,114,000 | ||
Note payable | $ 3,000,000 | ||
Promissory Note [Member] | Weeden Prime Services LLC [Member] | |||
Note payable | $ 3,000,000 | ||
Robo-Advisor [Member] | |||
Estimated useful life of software | 3 years | ||
StockCross [Member] | |||
Cash clearing deposits | $ 75,000 | 75,000 | |
NFS [Member] | |||
Cash clearing deposits | 50,000 | 50,000 | |
Goldman Sachs [Member] | |||
Cash clearing deposits | 2,000,000 | 2,000,000 | |
Pershing [Member] | |||
Cash clearing deposits | $ 1,100,000 | $ 1,100,000 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Business Acquisition [Line Items] | ||
Note payable | $ 3,000,000 | |
Percentage of statutory rate tax effect | 21.00% | 21.00% |
Weeden Prime Services LLC [Member] | ||
Business Acquisition [Line Items] | ||
Ownership interest acquired | 100.00% | |
Purchase price paid in cash | $ 7,100,000 | |
Percentage of statutory rate tax effect | 28.00% | |
Weeden Prime Services LLC [Member] | Promissory Note [Member] | ||
Business Acquisition [Line Items] | ||
Note payable | $ 3,000,000 |
Acquisitions (Schedule of Alloc
Acquisitions (Schedule of Allocation of Purchase Price) (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Purchase Price Allocation | ||
Goodwill | $ 1,989,000 | |
Weeden Prime Services LLC [Member] | ||
Purchase Price Allocation | ||
Cash and cash equivalents | 301,000 | |
Cash segregated under federal regulations | 152,000 | |
Receivables from clearing broker dealers | 4,616,000 | |
Furniture, equipment and leasehold improvements, net | 41,000 | |
Software, net | 51,000 | |
Intangible assets, net | 1,057,000 | |
Lease right-of-use assets | 214,000 | |
Other assets | 271,000 | |
Total Assets acquired | 6,703,000 | |
Accounts payable and accrued liabilities | 1,353,000 | |
Lease liabilities | 214,000 | |
Total Liabilities acquired | 1,567,000 | |
Net Assets acquired | 5,136,000 | |
Goodwill | 1,989,000 | |
Purchase price | $ 7,125,000 |
Acquisitions (Schedule of Reven
Acquisitions (Schedule of Revenues and Net Income from Continuing Operations) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Business Acquisition [Line Items] | ||
Revenue | $ 28,593,000 | $ 30,036,000 |
Weeden Prime Services LLC [Member] | ||
Business Acquisition [Line Items] | ||
Revenue | 968,000 | |
Net income from continuing operations | $ 203,000 |
Acquisitions (Schedule of Pro F
Acquisitions (Schedule of Pro Forma Consolidated Information) (Details) - Weeden Prime Services LLC [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Business Acquisition [Line Items] | ||
Revenues | $ 39,746,000 | $ 42,987,000 |
Net income | $ 2,485,000 | $ 11,102,000 |
Receivables from and Payable _3
Receivables from and Payable to Clearing Broker Dealers and Related Parties (Schedule of Amounts Receivable) (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Receivables from clearing broker dealers | ||
NFS | $ 1,328,000 | $ 1,664,000 |
StockCross | 883,000 | 310,000 |
Goldman Sachs | 2,841,000 | |
Pershing Capital | 1,192,000 | |
Other receivables | 9,000 | 56,000 |
Receivables from clearing broker dealers | 6,253,000 | 2,030,000 |
Receivable from related party | ||
StockCross | 1,000,000 | 1,000,000 |
Total Receivable from related party | 1,000,000 | 1,000,000 |
Due to clearing brokers and related parties | ||
NFS | 58,000 | |
StockCross | 7,000 | 46,000 |
MSCO | 29,000 | |
Total Due to clearing brokers and related parties | $ 7,000 | $ 133,000 |
Furniture, Equipment and Leas_3
Furniture, Equipment and Leasehold Improvements, Net (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Abstract] | ||
Leasehold improvements | $ 1,389,000 | $ 545,000 |
Equipment | 170,000 | 52,000 |
Furniture and fixtures | 134,000 | |
Total Furniture, equipment and leasehold improvements | 1,693,000 | 597,000 |
Less accumulated depreciation and amortization | (562,000) | (129,000) |
Total Furniture, equipment and leasehold improvements, net | $ 1,131,000 | $ 468,000 |
Software, Net (Narrative) (Deta
Software, Net (Narrative) (Details) - Software [Member] | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life of software | 3 years |
Future amortization expense related to software in 2020 | $ 852,000 |
Future amortization expense related to software in 2021 | 747,000 |
Future amortization expense related to software in 2022 | 269,000 |
Future amortization expense related to software in 2023 | $ 20,000 |
Software, Net (Schedule of Soft
Software, Net (Schedule of Software, Net) (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Total Software | $ 2,534,000 | $ 1,222,000 |
Total Software, net | 1,888,000 | 1,137,000 |
Robo-Advisor [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total Software | 763,000 | 763,000 |
Less accumulated amortization | (254,000) | |
Other purchased software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total Software | 1,771,000 | 459,000 |
Less accumulated amortization | $ (392,000) | $ (85,000) |
Equity Method Investments (Narr
Equity Method Investments (Narrative) (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Loss from equity method investment in related party | $ (66,000) | ||
StockCross [Member] | |||
Percentage of outstanding shares purchased by company | 15.00% | ||
Shares purchased | 922,875 | ||
Per share price | $ 3.97 | ||
Capital distribution | $ 1,600,000 | ||
StockCross [Member] | Siebert [Member] | |||
Capital distribution | $ 241,000 |
Equity Method Investments (Sche
Equity Method Investments (Schedule of Supplemental Operations Information) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue | $ 28,593,000 | $ 30,036,000 |
Net income / (loss) | 3,607,000 | 11,962,000 |
StockCross [Member] | ||
Revenue | 14,823,000 | 13,340,000 |
Operating income / (loss) | (508,000) | (929,000) |
Net income / (loss) | $ (420,000) | $ (691,000) |
Equity Method Investments (Sc_2
Equity Method Investments (Schedule of Supplemental Financial Condition Information) (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | $ 28,473,000 | $ 18,177,000 | |
Liabilities | 7,692,000 | 1,003,000 | |
Stockholder's Equity | 20,781,000 | 17,174,000 | $ 5,212,000 |
StockCross [Member] | |||
Assets | 514,925,000 | 595,091,000 | |
Liabilities | 499,211,000 | 577,528,000 | |
Stockholder's Equity | $ 15,714,000 | $ 17,563,000 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Lessee Disclosure [Abstract] | ||
Rent and occupancy expenses | $ 1,401,000 | $ 988,000 |
Leases (Schedule of Supplementa
Leases (Schedule of Supplemental Balance Sheet Information Related to Leases) (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Lease right-of-use assets | $ 2,810,000 | |
Liabilities | ||
Lease liabilities | $ 3,114,000 |
Leases (Schedule of Additional
Leases (Schedule of Additional Information Related to Leases) (Details) | Dec. 31, 2019 |
Lessee Disclosure [Abstract] | |
Weighted average remaining lease term - Operating leases (in years) | 3 years |
Weighted average discount rate - Operating leases | 5.00% |
Leases (Schedule of Lease Costs
Leases (Schedule of Lease Costs and Other Lease Information) (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Operating lease | |
Operating lease cost | $ 905,000 |
Short-term lease cost | 446,000 |
Variable lease cost | 50,000 |
Sublease income | |
Total Rent and occupancy | 1,401,000 |
Cash paid for amounts included in the measurement of lease liabilities | |
Operating cash flows from operating leases | 928,000 |
Lease right-of-use assets obtained in exchange for new lease liabilities | |
Lease right-of-use assets obtained in exchange for new lease liabilities - operating leases | $ 3,817,000 |
Leases (Schedule of Future Mini
Leases (Schedule of Future Minimum Base Rental Payment) (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
2020 | $ 1,410,000 | |
2021 | 878,000 | |
2022 | 513,000 | |
2023 | 493,000 | |
2024 | 56,000 | |
Thereafter | ||
Remaining balance of lease payments | 3,350,000 | |
Difference between undiscounted cash flows and discounted cash flows | 236,000 | |
Lease liabilities | $ 3,114,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 1,989,000 | |
Amortization expense | $ 35,000 | |
Weighted average amortization period | 5 years 7 months 6 days |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net (Schedule of Information Related to Intangible Assets) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross amount | $ 1,057,000 | |
Accumulated amortization | 35,000 | |
Net amount | $ 1,022,000 | |
Customer Relationships [Member] | Weeden Prime Services LLC [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Date acquired | Nov. 30, 2019 | |
Original useful life | 6 years | |
Remaining useful life | 5 years 10 months 25 days | |
Gross amount | $ 987,000 | |
Accumulated amortization | 23,000 | |
Net amount | $ 964,000 | |
Trade Names [Member] | Weeden Prime Services LLC [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Date acquired | Nov. 30, 2019 | |
Original useful life | 6 months | |
Remaining useful life | 4 months 24 days | |
Gross amount | $ 70,000 | |
Accumulated amortization | 12,000 | |
Net amount | $ 58,000 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net (Schedule of Annual Amortization Expense for Intangible Assets) (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Total future amortization expense | $ 1,888,000 | $ 1,137,000 |
Weeden Prime Services LLC [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
2020 | 223,000 | |
2021 | 165,000 | |
2022 | 165,000 | |
2023 | 165,000 | |
2024 | 165,000 | |
2025 | 139,000 | |
Total future amortization expense | $ 1,022,000 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule of Fair Value Hierarchy for Assets and Liabilities Measured at Fair Value) (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Securities sold, not yet purchased, at fair value | $ 88,000 | |
Level 1 [Member] | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Securities sold, not yet purchased, at fair value | 88,000 | |
Level 2 [Member] | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Securities sold, not yet purchased, at fair value | ||
Level 3 [Member] | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Securities sold, not yet purchased, at fair value | ||
Equity Securities [Member] | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Securities sold, not yet purchased, at fair value | 88,000 | |
Equity Securities [Member] | Level 1 [Member] | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Securities sold, not yet purchased, at fair value | 88,000 | |
Equity Securities [Member] | Level 2 [Member] | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Securities sold, not yet purchased, at fair value | ||
Equity Securities [Member] | Level 3 [Member] | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Securities sold, not yet purchased, at fair value |
Note Payable - Related Party (D
Note Payable - Related Party (Details) - USD ($) | Dec. 02, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Note payable | $ 3,000,000 | ||
Promissory Note [Member] | Weeden Prime Services LLC [Member] | |||
Note payable | $ 3,000,000 | ||
Term of notes payable | 1 year | ||
Interest rate on notes payable | 4.00% | ||
Interest expense | $ 10,000 | ||
Maturity of notes payable | Dec. 2, 2020 |
Revenue Recognition (Narrative)
Revenue Recognition (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Client expenses | $ 48,000 |
Other receivables | 31,000 |
Accounts payable and accrued liabilities | $ 158,000 |
Revenue Recognition (Schedule o
Revenue Recognition (Schedule of Major Revenue Categories) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Trading Execution and Clearing Services | ||
Commissions and fees | $ 8,302,000 | $ 9,504,000 |
Principal transactions | 8,061,000 | 9,020,000 |
Advisory fees | 801,000 | 478,000 |
Total Trading Execution and Clearing Services | 17,164,000 | 19,002,000 |
Margin interest, marketing and distribution fees | ||
Margin interest | 8,134,000 | 7,663,000 |
12b1 fees | 2,987,000 | 3,265,000 |
Total Margin interest, marketing and distribution fees | 11,121,000 | 10,928,000 |
Interest and other income | 308,000 | 106,000 |
Total Other Income | 11,429,000 | 11,034,000 |
Total revenue | $ 28,593,000 | $ 30,036,000 |
Revenue Recognition (Schedule_2
Revenue Recognition (Schedule of Performance Obligation) (Details) | 12 Months Ended |
Dec. 31, 2019 | |
One [Member] | |
Revenue Stream | Commissions and fees, Principal transactions, Advisory fees |
Performance Obligation | Provide security trading services to customer and act as agent |
Two [Member] | |
Revenue Stream | Margin interest, marketing and distribution fees, Interest and other income |
Performance Obligation | n/a |
Revenue Recognition (Disaggrega
Revenue Recognition (Disaggregation of Revenue) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Total Revenue from Margin interest, marketing and distribution fees | $ 11,121,000 | $ 10,928,000 |
Total Revenue from Principal transactions | 8,061,000 | 9,020,000 |
Total Revenue from Commissions and fees | 8,302,000 | 9,504,000 |
Total Revenue from Interest | 308,000 | 106,000 |
Total revenue | 28,593,000 | 30,036,000 |
Legacy Siebert [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue from Advisory fees | 801,000 | 478,000 |
Total Revenue from Interest | 308,000 | 106,000 |
Margin interest, marketing and distribution fees [Member] | Legacy Siebert [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue from Margin interest, marketing and distribution fees | 9,723,000 | 9,674,000 |
Margin interest, marketing and distribution fees [Member] | StockCross accounts [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue from Margin interest, marketing and distribution fees | 1,398,000 | 1,254,000 |
Principal transactions [Member] | Legacy Siebert [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue from Principal transactions | 2,154,000 | 1,894,000 |
Principal transactions [Member] | StockCross accounts [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue from Principal transactions | 5,907,000 | 7,126,000 |
Commissions and fees [Member] | Legacy Siebert [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue from Commissions and fees | 7,037,000 | 7,792,000 |
Commissions and fees [Member] | StockCross accounts [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue from Commissions and fees | $ 1,265,000 | $ 1,712,000 |
Referral Fees (Details)
Referral Fees (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Referral Fees | ||
Referral fees | $ 86,000 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Loss Carryforwards [Line Items] | ||
Net operating losses expiration date | Dec. 31, 2036 | |
Reduction of net operating loss carryforwards from annual limitations | $ 895,000 | |
Income before income taxes | 4,725,000 | $ 7,360,000 |
Income tax expense | 1,118,000 | (4,602,000) |
Weeden Prime Services LLC [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Income before income taxes | 285,000 | |
Income tax expense | 82,000 | |
Federal [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | 15,200,000 | 16,100,000 |
Federal [Member] | Weeden Prime Services LLC [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Income tax expense | 57,000 | |
State [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating losses | 23,600,000 | $ 27,100,000 |
State and Local Jurisdiction [Member] | Weeden Prime Services LLC [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Income tax expense | $ 25,000 |
Income Taxes (Schedule of Incom
Income Taxes (Schedule of Income Tax (Benefit) / Expense) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Current income tax expense | ||
Federal | $ 271,000 | $ 948,000 |
State and local | 252,000 | 26,000 |
Total Current income tax expense | 523,000 | 974,000 |
Deferred income tax expense (benefit) | ||
Federal | 312,000 | (3,248,000) |
State and local | 283,000 | (2,328,000) |
Total Deferred income tax expense (benefit) | 595,000 | (5,576,000) |
Total Provision (benefit) for (from) income taxes | $ 1,118,000 | $ (4,602,000) |
Income Taxes (Schedule of Recon
Income Taxes (Schedule of Reconciliation of U.S. Federal Statutory Income Tax Rate) (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory income tax rate | 21.00% | 21.00% |
Net effect of | ||
Non-deductible expenses | 0.20% | 0.20% |
Depreciation | (0.90%) | |
Tax amortization of intangible assets | (1.20%) | (3.80%) |
Other temporary differences | (1.30%) | |
Net operating loss | (2.60%) | |
Increase due to state and local taxes, net of U.S. federal income tax effects | 4.00% | 0.60% |
Lease liabilities | (0.30%) | |
Total Current effective income tax rate | 23.70% | 13.20% |
Reversal of deferred tax assets valuation allowance | (75.80%) | |
Total Effective income tax rate | 23.70% | (62.60%) |
Income Taxes (Schedule of Defer
Income Taxes (Schedule of Deferred Tax Assets (Liabilities)) (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets | ||
Net operating loss carryforwards | $ 5,322,000 | $ 5,811,000 |
Total Deferred tax assets | 5,322,000 | 5,811,000 |
Deferred tax liabilities | ||
Furniture, equipment and leasehold improvements | (430,000) | (193,000) |
Lease liabilities | 89,000 | |
Contribution carryover | ||
Intangible assets | ||
Other reconciling items | (42,000) | |
Total Deferred tax liabilities | (341,000) | (235,000) |
Total Deferred tax assets | $ 4,981,000 | $ 5,576,000 |
Capital Requirements (Narrative
Capital Requirements (Narrative) (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | $ 28,473,000 | $ 18,177,000 |
Cash and cash equivalents | 3,082,000 | 7,229,000 |
MSCO [Member] | ||
Net capital | 4,400,000 | 8,900,000 |
Minimum net capital required | 250,000 | 250,000 |
Net capital in excess of minimum requirement | 4,200,000 | $ 8,700,000 |
Weeden Prime Services LLC [Member] | ||
Net capital | 3,900,000 | |
Minimum net capital required | 250,000 | |
Net capital in excess of minimum requirement | $ 3,700,000 |
Commitments, Contingencies an_2
Commitments, Contingencies and Other (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Health claim reinsurance limit per employee | $ 50,000 | |
Expense for self-insurance claims | 867,000 | $ 935,000 |
Accrual for self-insurance claims | $ 47,000 |
Related Party Disclosures (Deta
Related Party Disclosures (Details) - USD ($) | Jan. 02, 2020 | Dec. 02, 2019 | Aug. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 31, 2019 |
Related Party Transaction [Line Items] | |||||||
Due from Stockcross to MSCO | $ 883,000 | $ 310,000 | |||||
Receivables from related parties | 1,000,000 | 1,000,000 | |||||
Receivable from StockCross | 1,000,000 | 1,000,000 | |||||
Loss recognized from investment in acquired entity | 66,000 | ||||||
Note payable | 3,000,000 | ||||||
StockCross Shareholders [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of entity acquired | 15.00% | ||||||
Subsequent Event [Member] | StockCross Shareholders [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Issuance of stock in merger | 3,298,774 | ||||||
Park Wilshire Companies, Inc. [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Related party revenues | 69,000 | 28,000 | |||||
Receivables from related parties | 11,000 | ||||||
PWC Interest From Three Related Parties [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Payment to acquire interest of acquired entity | $ 110,000 | ||||||
StockCross [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Receivable from StockCross | 2,000,000 | $ 1,300,000 | |||||
Payable to StockCross | 7,000 | ||||||
Percentage of entity acquired | 15.00% | ||||||
Loss recognized from investment in acquired entity | $ 66,000 | ||||||
StockCross [Member] | Subsequent Event [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of entity acquired | 85.00% | ||||||
Kennedy Cabot Acquisition, LLC [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Payment to acquire interest of acquired entity | $ 690,000 | ||||||
Weeden Prime Services LLC [Member] | Promissory Note [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Note payable | $ 3,000,000 | ||||||
Term of notes payable | 1 year | ||||||
Maturity of notes payable | Dec. 2, 2020 | ||||||
Interest rate on notes payable | 4.00% | ||||||
Interest expense | $ 10,000 |
Subsequent Events (Details)
Subsequent Events (Details) - shares | Jan. 02, 2020 | Jan. 27, 2020 | Dec. 31, 2019 | Jan. 31, 2019 | Dec. 31, 2018 |
Subsequent Event [Line Items] | |||||
Authorized shares | 49,000,000 | 49,000,000 | |||
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Percentage of holders who approved to increase the total shares of Common Stock the Company is authorized to issue | 71.40% | ||||
Authorized shares | 100,000,000 | ||||
StockCross Shareholders [Member] | |||||
Subsequent Event [Line Items] | |||||
Ownership interest acquired | 15.00% | ||||
StockCross Shareholders [Member] | Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Issuance of stock in merger | 3,298,774 | ||||
Merger date | Jan. 1, 2020 |