Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 13, 2015 | Jun. 30, 2014 | |
Document And Entity Information | |||
Entity Registrant Name | Siebert Financial Corp | ||
Entity Central Index Key | 65596 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Is Entity a Well-known Seasoned Issuer? | Yes | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $5,517,182 | ||
Entity Common Stock, Shares Outstanding | 22,085,126 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2014 |
CONSOLIDATED_STATEMENTS_OF_FIN
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
ASSETS | ||
Cash and cash equivalents | $6,749,000 | $15,424,000 |
Cash equivalents - restricted | 1,532,000 | 1,532,000 |
Receivable from brokers | 788,000 | 1,105,000 |
Receivable from business sold to affiliate net of unamortized discount of $1,143,000 | 1,857,000 | |
Securities owned, at fair value | 488,000 | 406,000 |
Furniture, equipment and leasehold improvements, net | 609,000 | 712,000 |
Investments in and advances to affiliates | 7,979,000 | 8,022,000 |
Prepaid expenses and other assets | 718,000 | 751,000 |
Intangibles, net | 8,000 | 18,000 |
Assets | 20,728,000 | 27,970,000 |
Liabilities: | ||
Accounts payable and accrued liabilities | 2,176,000 | 2,861,000 |
Commitments and contingent liabilities | ||
Stockholders' equity: | ||
Common stock, $.01 par value; 49,000,000 shares authorized, 23,211,846 shares issued, 22,085,126 shares outstanding | 232,000 | 232,000 |
Additional paid-in capital | 19,490,000 | 19,490,000 |
Retained earnings | 3,590,000 | 10,147,000 |
Less: 1,126,720 shares of treasury stock, at cost | -4,760,000 | -4,760,000 |
Stockholders' equity | 18,552,000 | 25,109,000 |
Liabilities and Stockholders' equity | 20,728,000 | 27,970,000 |
Siebert, Brandford, Shank Financial, LLC and Subsidiary | ||
ASSETS | ||
Cash and cash equivalents | 20,065,062 | |
Accounts receivable | 1,593,614 | |
Due from broker | 2,522,557 | |
Secured demand note | 1,200,000 | |
Goodwill - Note B | 1,001,000 | |
Issuer relationships, net of amortization of $41,212 - Note B | 777,788 | |
Furniture, equipment and leasehold improvements, net | 684,736 | |
Other assets | 673,276 | |
Assets | 28,518,033 | |
Liabilities: | ||
Payable to affiliate | 104,320 | |
Asset purchase obligation payable to affiliate, net of unamortized discount of $1,143,359 | 1,856,641 | |
Accounts payable and accrued liabilities | 4,747,648 | |
Bank overdraft | ||
Deferred rent | 549,287 | |
Current liabilities | 7,257,896 | |
Subordinated debt | 5,200,000 | |
Total liabilities | 12,457,896 | |
Commitments and contingent liabilities | ||
Stockholders' equity: | ||
Members' capital | 16,060,137 | |
Liabilities and Stockholders' equity | 28,518,033 | |
Siebert, Brandford, Shank and Co, LLC | ||
ASSETS | ||
Cash and cash equivalents | 19,787,407 | |
Accounts receivable | 562,147 | |
Due from broker | 8,158 | |
Secured demand note | 1,200,000 | |
Goodwill - Note B | ||
Issuer relationships, net of amortization of $41,212 - Note B | ||
Furniture, equipment and leasehold improvements, net | 822,133 | |
Other assets | 618,743 | |
Assets | 22,998,588 | |
Liabilities: | ||
Payable to affiliate | 28,264 | |
Asset purchase obligation payable to affiliate, net of unamortized discount of $1,143,359 | ||
Accounts payable and accrued liabilities | 4,006,608 | |
Bank overdraft | 1,225,779 | |
Deferred rent | 622,075 | |
Current liabilities | 5,882,726 | |
Subordinated debt | 1,200,000 | |
Total liabilities | 7,082,726 | |
Commitments and contingent liabilities | ||
Stockholders' equity: | ||
Members' capital | 15,915,862 | |
Liabilities and Stockholders' equity | $22,998,588 |
CONSOLIDATED_STATEMENTS_OF_FIN1
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Unamortized discount | $1,143,000 | |
Stockholder's equity: | ||
Common stock, par value | $0.01 | $0.01 |
Common stock, authorized shares | 49,000,000 | 49,000,000 |
Common stock, issued shares | 23,211,846 | 23,211,846 |
Common stock, outstanding shares | 22,085,126 | 22,085,126 |
Treasury Stock Shares | 1,126,720 | 1,126,720 |
SBS | ||
Unamortized discount | 1,143,359 | |
Issuer relationships, net of amortization | $41,212 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Revenue: | |||
Commissions and fees | $10,757,000 | $11,945,000 | $14,630,000 |
Investment banking | 1,830,000 | 2,418,000 | 3,917,000 |
Trading gains, net | 1,351,000 | 1,976,000 | 2,360,000 |
Gain on the disposition of business to affiliate | 1,820,000 | ||
Interest and dividends | 57,000 | 62,000 | 76,000 |
Total | 15,815,000 | 16,401,000 | 20,983,000 |
Expenses: | |||
Employee compensation and benefits | 8,267,000 | 9,262,000 | 10,045,000 |
Clearing fees, including floor brokerage | 1,665,000 | 2,382,000 | 2,742,000 |
Professional fees | 4,310,000 | 5,293,000 | 3,106,000 |
Loss related to arbitration settlement | 4,300,000 | ||
Advertising and promotion | 248,000 | 405,000 | 418,000 |
Communications | 865,000 | 1,296,000 | 1,601,000 |
Occupancy | 788,000 | 1,046,000 | 907,000 |
Impairment of intangibles | 300,000 | 300,000 | |
Write off of software development costs | 433,000 | ||
Other general and administrative | 2,033,000 | 2,245,000 | 2,374,000 |
Total | 22,476,000 | 22,229,000 | 21,926,000 |
Income (loss) from equity investees, including, in 2014, interest on receivable of $37,000 | 104,000 | -65,000 | 806,000 |
Loss before income taxes | -6,557,000 | -5,893,000 | -137,000 |
Provision for income taxes | 19,000 | 34,000 | |
Net loss | -6,557,000 | -5,912,000 | -171,000 |
Net loss per share of common stock - basic and diluted | ($0.30) | ($0.27) | ($0.01) |
Weighted average shares outstanding - basic and diluted | 22,085,126 | 22,087,324 | 22,100,759 |
Siebert, Brandford, Shank Financial, LLC and Subsidiary | |||
Revenue: | |||
Investment banking | 20,949,508 | ||
Trading gains, net | 3,670,726 | ||
Commissions | 182,771 | ||
Interest and dividends | 3,395 | ||
Total | 24,806,400 | ||
Expenses: | |||
Employee compensation and benefits | 17,819,595 | ||
Clearing fees, including floor brokerage | 383,538 | ||
Professional fees | 895,951 | ||
Communications | 929,496 | ||
Occupancy | 1,186,967 | ||
Interest | 136,936 | ||
State and local income tax | 31,901 | ||
General and administrative including ($100,000, 100,000 and 75,000 to affiliate) | 3,251,269 | ||
Total | 24,635,653 | ||
Net loss | 170,747 | ||
Siebert, Brandford, Shank and Co LLC | |||
Revenue: | |||
Investment banking | 20,847,546 | 23,092,819 | |
Trading gains, net | 4,114,958 | 5,149,140 | |
Commissions | |||
Interest and dividends | 2,817 | 4,389 | |
Total | 24,965,321 | 28,246,348 | |
Expenses: | |||
Employee compensation and benefits | 18,619,549 | 20,541,452 | |
Clearing fees, including floor brokerage | 122,209 | 129,694 | |
Professional fees | 528,313 | 591,175 | |
Communications | 889,207 | 905,970 | |
Occupancy | 1,088,755 | 1,052,908 | |
Interest | 48,000 | 66,718 | |
State and local income tax | 36,326 | 78,706 | |
General and administrative including ($100,000, 100,000 and 75,000 to affiliate) | 3,440,071 | 3,300,549 | |
Total | 24,772,430 | 26,667,172 | |
Net loss | $192,891 | $1,579,176 |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (USD $) | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Total |
Begining Balance, Amount at Dec. 31, 2011 | $232,000 | $19,490,000 | $16,230,000 | ($4,728,000) | $31,224,000 |
Begining Balance, Shares at Dec. 31, 2011 | 23,211,846 | 1,106,347 | |||
Net loss | -171,000 | -171,000 | |||
Treasury share purchases, Shares | 8,107 | ||||
Treasury share purchases, Amount | -13,000 | -13,000 | |||
Ending Balance, Amount at Dec. 31, 2012 | 232,000 | 19,490,000 | 16,059,000 | -4,741,000 | 31,040,000 |
Ending Balance, Shares at Dec. 31, 2012 | 23,211,846 | 1,114,454 | |||
Net loss | -5,912,000 | -5,912,000 | |||
Treasury share purchases, Shares | 12,266 | ||||
Treasury share purchases, Amount | -19,000 | -19,000 | |||
Ending Balance, Amount at Dec. 31, 2013 | 232,000 | 19,490,000 | 10,147,000 | -4,760,000 | 25,109,000 |
Ending Balance, Shares at Dec. 31, 2013 | 23,211,846 | 1,126,720 | |||
Net loss | -6,557,000 | -6,557,000 | |||
Ending Balance, Amount at Dec. 31, 2014 | $232,000 | $19,490,000 | $3,590,000 | ($4,760,000) | $18,552,000 |
Ending Balance, Shares at Dec. 31, 2014 | 23,211,846 | 1,126,720 |
Statements_of_Changes_in_Membe
Statements of Changes in Members' Capital (USD $) | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Net income | $948,000 | $28,000 | ($1,546,000) | ($1,369,000) | ($6,557,000) | ($5,912,000) | ($171,000) |
SBS | |||||||
Members' capital, Beginning | 15,915,862 | 18,196,500 | 15,915,862 | 18,196,500 | 16,811,116 | ||
Distributions to members | -26,472 | -2,473,529 | -193,792 | ||||
Net income | 170,747 | 192,891 | 1,579,176 | ||||
Members' capital, Ending | $16,060,137 | $15,915,862 | $16,060,137 | $15,915,862 | $18,196,500 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Cash flows from operating activities: | |||
Net loss | ($6,557,000) | ($5,912,000) | ($171,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 267,000 | 130,000 | 284,000 |
Gain on the disposition of business sold to affiliate | -1,820,000 | ||
(Income) loss from equity investees | -67,000 | 65,000 | -806,000 |
Interest accrued on receivable from business sold to affiliate | -37,000 | ||
Distributions from equity investees | 13,000 | 1,212,000 | 97,000 |
Write off of software development costs | 433,000 | ||
Impairment of intangibles | 300,000 | 300,000 | |
Changes in: | |||
Securities owned, at fair value | -82,000 | -151,000 | -5,000 |
Receivable from affiliate | -76,000 | ||
Receivable from brokers | 317,000 | 818,000 | -890,000 |
Prepaid expenses and other assets | 33,000 | 149,000 | -73,000 |
Accounts payable and accrued liabilities | -685,000 | 445,000 | -1,183,000 |
Net cash used in operating activities | -8,694,000 | -2,944,000 | -2,014,000 |
Cash Flows From Investing Activities: | |||
Purchase of furniture, equipment and leasehold improvements | -154,000 | -520,000 | -262,000 |
Distributions from equity investees | 173,000 | 6,000 | |
(Payment) collection of advances made to equity investees | -1,000 | 24,000 | |
Net cash provided by/ (used in) investing activities | 19,000 | -515,000 | -238,000 |
Cash flows from financing activities: | |||
Purchase of treasury shares | -19,000 | -13,000 | |
Net decrease in cash and cash equivalents | -8,675,000 | -3,478,000 | -2,265,000 |
Cash and cash equivalents - beginning of year | 15,424,000 | 18,902,000 | 21,167,000 |
Cash and cash equivalents - end of year | 6,749,000 | 15,424,000 | 18,902,000 |
Supplemental Cash Flow Disclosures: | |||
Income taxes paid (received), net | 19,000 | 34,000 | |
Siebert, Brandford, Shank Financial LLC and Subsidiary | |||
Cash flows from operating activities: | |||
Net loss | 170,747 | ||
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Amortization of discount on obligation due affiliate | 36,641 | ||
Depreciation and amortization | 267,973 | ||
Changes in: | |||
Accounts receivable | -1,031,467 | ||
Due to/from broker | -2,514,399 | ||
Securities owned, at fair value | 0 | ||
Other assets | -54,533 | ||
Payable to (receivable from) affiliates | 76,056 | ||
Bank overdraft | -1,225,779 | ||
Deferred rent | -72,788 | ||
Accounts payable and accrued liabilities | 741,040 | ||
Net cash used in operating activities | -3,606,509 | ||
Cash Flows From Investing Activities: | |||
Purchase of furniture, equipment and leasehold improvements | -89,364 | ||
Cash flows from financing activities: | |||
Distributions to members | -26,472 | ||
Subordinated borrowings | 9,000,000 | ||
Subordinated repayments | -5,000,000 | ||
Net cash (used in) provided by financing activities | 3,973,528 | ||
Net decrease in cash and cash equivalents | 277,655 | ||
Cash and cash equivalents - beginning of year | 19,787,407 | ||
Cash and cash equivalents - end of year | 20,065,062 | ||
Supplemental Cash Flow Disclosures: | |||
Income taxes paid (received), net | 24,323 | ||
Interest paid | 100,295 | ||
Non-cash investing and financing activities: | |||
Note payable for purchase of business from affiliate | 1,820,000 | ||
Intangible assets acquired related to business acquired from affiliate issuer relationships | -819,000 | ||
Goodwill | -1,001,000 | ||
Siebert, Brandford, Shank and Co LLC | |||
Cash flows from operating activities: | |||
Net loss | 192,891 | 1,579,176 | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Amortization of discount on obligation due affiliate | |||
Depreciation and amortization | 250,154 | 266,093 | |
Changes in: | |||
Accounts receivable | 395,913 | -739,538 | |
Due to/from broker | -2,328,918 | 2,323,885 | |
Securities owned, at fair value | 11,264,998 | -11,264,998 | |
Other assets | 139,264 | 81,554 | |
Payable to (receivable from) affiliates | 36,929 | -27,506 | |
Bank overdraft | 1,225,779 | ||
Deferred rent | -9,740 | -54,848 | |
Accounts payable and accrued liabilities | -1,368,577 | -1,277,796 | |
Net cash used in operating activities | 9,798,693 | -9,113,978 | |
Cash Flows From Investing Activities: | |||
Purchase of furniture, equipment and leasehold improvements | -47,759 | -63,381 | |
Cash flows from financing activities: | |||
Distributions to members | -2,473,529 | -193,792 | |
Subordinated borrowings | |||
Subordinated repayments | -6,000,000 | ||
Net cash (used in) provided by financing activities | -2,473,529 | -6,193,792 | |
Net decrease in cash and cash equivalents | 7,277,405 | -15,371,151 | |
Cash and cash equivalents - beginning of year | 12,510,002 | 27,881,153 | |
Cash and cash equivalents - end of year | 19,787,407 | 12,510,002 | |
Supplemental Cash Flow Disclosures: | |||
Income taxes paid (received), net | 28,177 | 101,517 | |
Interest paid | $48,000 | $66,718 |
A_BUSINESS_ORGANIZATION
A. BUSINESS ORGANIZATION | 12 Months Ended | |
Dec. 31, 2014 | ||
A. BUSINESS ORGANIZATION | ||
Siebert Financial Corp. (“Financial”), through its wholly - owned subsidiary, Muriel Siebert &Co., Inc. (“Siebert”), engages in the business of providing discount brokerage services for customers, investment banking and equity execution services for institutional clients (representing the capital markets business) and trading securities for its own account. On November 4, 2014, Siebert sold its capital markets business to an affiliate (see Note B). Another wholly owned subsidiary, Siebert’s Women’s Financial Network Inc. (“WFN”) engaged in providing products, services and information devoted to women’s financial needs. In the fourth quarter of 2013, management decided to substantially reduce the resources allocated to the WFN operation (see Note F). In addition, in 2014 we began business as a registered investment advisor through our wholly-owned subsidiary, Siebert Investment Advisors, Inc. (“SIA”). The accompanying consolidated financial statements include the accounts of Financial and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. Financial, Siebert, WFN and SIA collectively are referred to herein as the “Company”. | ||
The municipal bond investment banking business is conducted by Siebert, Brandford, Shank &Co., L.L.C., a wholly-owned subsidiary of Siebert, Brandford, Shank Financial, L.L.C. (“SBSF”), and related derivatives transactions were conducted by SBS Financial Products Company, LLC (“SBSFP”), non - controlled investees in which the company has a 49% and 33% equity interest respectively, which are accounted for by the equity method of accounting (see Note D). The equity method provides that the Company records its share of the investees’ earnings or losses in its results of operations with a corresponding adjustment to the carrying value of its investment. In addition, the investment is adjusted for capital contributions to and distributions from the investees. Operations of equity investee SBSF are considered integral to the Company’s operations. Operations of equity investee SBSFP ceased in December 2014. | ||
Siebert, Brandford, Shank Financial LLC and Subsidiary | ||
A. BUSINESS ORGANIZATION | Siebert, Brandford, Shank Financial, L.L.C. (“SBSF” or the “Company”) was organized on November 4, 2014 and through its wholly owned subsidiary, Siebert, Brandford, Shank & Co., L.L.C. (“SBS”), engages in the business of tax-exempt underwriting and related trading activities and, commencing on November 4, 2014, the capital markets business (see Note B). The Company qualifies as a Minority and Women Owned Business Enterprise in certain municipalities. |
B_SALE_OF_BUSINESS
B. SALE OF BUSINESS | 12 Months Ended | |
Dec. 31, 2014 | ||
Discontinued Operations and Disposal Groups [Abstract] | ||
B. SALE OF BUSINESS | ||
On November 4, 2014, the Company, which held a 49% membership interest in, and the other members of, Siebert Brandford Shank &Co., LLC (“SBS”), contributed their SBS membership interest into a newly formed Delaware limited liability company, Siebert Brandford Shank Financial, L.L.C. (“SBSF”), in exchange for the same percentage interests in SBSF. On the same day the Company entered an Asset Purchase Agreement (the “Purchase Agreement”) with SBS and SBSF, pursuant to which the Company sold substantially all of the assets relating to the Company’s capital markets business to SBSF. Pursuant to the Purchase Agreement, SBSF assumed post-closing liabilities relating to the transferred business. | ||
The Purchase Agreement provides for an aggregate purchase price for the disposition of $3,000,000, payable by SBSF after closing in annual installments commencing on March 1, 2016 and continuing on each of March 1, 2017, 2018, 2019 and 2020. The transferred business was contributed by SBSF to, and operated by SBS. The amount payable to the Company on each annual payment date will equal 50% of the net income attributable to the transferred business recognized by SBS in accordance with generally accepted accounting principles during the fiscal year ending immediately preceding the applicable payment date; provided that, if net income attributable to the transferred business generated prior to the fifth annual payment date is insufficient to pay the remaining balance of the purchase price in full on the fifth annual payment date, then the unpaid amount of the purchase price will be paid in full on March 1, 2021.Transferred assets of the Company’s capital markets business, consisted of customer accounts and goodwill, which had no carrying value to the Company, and the Company recorded a gain on sale of $1,820,000, which reflected the fair value of the purchase obligation. Such fair value (Level 3) was based on the present value of estimated annual installments to be received during 2016 through 2020 from forecasted net income of the transferred business plus a final settlement in 2021, discounted at 11.5% (representing SBS’s weighted average cost of capital). | ||
The discount recorded for the purchase obligation will be amortized as interest income using an effective yield initially calculated based on the original carrying amount of the obligation and estimated annual installments to be received and adjusted in future periods to reflect actual installments received and changes in estimates of future installments. Interest income recognized on the obligation for the period from November 4, 2014 to December 31, 2014 amounted to $36,641 based on a yield of approximately 12%. | ||
As a result of the Company’s continuing involvement in the capital markets business through the its 49% ownership in SBSF, results of operations of the capital markets business and the gain on sale were not reflected as discontinued operations in the accompanying financial statements. |
B_BUSINESS_ACQUISITION
B. BUSINESS ACQUISITION (Siebert, Brandford, Shank Financial LLC and Subsidiary) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Siebert, Brandford, Shank Financial LLC and Subsidiary | |||||
B. BUSINESS ACQUISITION | On November 4, 2014, the members of SBS contributed their membership interest into a newly formed Delaware limited liability company, Siebert Brandford Shank Financial, L.L.C. (“SBSF”), in exchange for the same percentage interests in SBSF. On the same day Muriel Siebert & Co., Inc., (“Siebert”) entered an Asset Purchase Agreement (the “Purchase Agreement”) with SBS and SBSF, pursuant to which Siebert sold substantially all of the assets relating to Siebert’s capital markets business to SBSF. Pursuant to the Purchase Agreement, SBSF assumed post-closing liabilities relating to the transferred business. An individual having a 25.5% membership interest in SBS prior to the contribution of membership interests to SBSF, is Siebert’s chief executive officer. | ||||
The Purchase Agreement provides for an aggregate purchase price for the disposition of $3,000,000, payable by SBSF after closing in annual installments commencing on March 1, 2016 and continuing on each of March 1, 2017, 2018, 2019 and 2020. The transferred business was contributed by SBSF to, and operated by SBS. The amount payable on each annual payment date will equal 50% of the net income attributable to the transferred business recognized by SBS in accordance with generally accepted accounting principles during the fiscal year ending immediately preceding the applicable payment date; provided that, if net income attributable to the transferred business generated prior to the fifth annual payment date is insufficient to pay the remaining balance of the purchase price in full on the fifth annual payment date, then the unpaid amount of the purchase price will be paid in full on March 1, 2021. | |||||
The fair value (Level 3 – see Note C(3)) of the purchase obligation was determined to be $1,820,000, based on the present value of estimated annual installments to be paid during 2016 through 2020 from forecasted net income of the transferred business plus a final settlement in 2021, discounted at 11.5% (representing SBS’s weighted average cost of capital). The discount of $1,180,000 recorded for the purchase obligation is being amortized as interest expense using an effective yield initially calculated based on the original carrying amount of the obligation and estimated annual installments to be paid and adjusted in future periods to reflect actual installments paid and changes in estimates of future installments. Interest expense recognized on the obligation for the period from November 4, 2014 to December 31, 2014 amounted to $36,641 based on a yield of approximately 12%. | |||||
Transferred assets of Siebert’s capital markets business, consisted of issuer relationships and goodwill. Issuer relationships, representing their fair value at the date of acquisition determined based on a discounted cash flow analysis (Level 3). Goodwill, which includes employees of Siebert who transferred to SBS was recorded at $1,001,000, representing the excess of the fair value ($1,820,000) of SBSF’s purchase obligation to Siebert over the fair value of the issuer relationships. | |||||
Since the date of acquisition, revenue of $199,000 and net loss of $129,000 attributable to the capital markets business is included in the accompanying statement of operations. | |||||
The following represents the unaudited pro forma amounts of revenue and net income of the Company for the year ended December 31, 2014, assuming the capital markets business had been acquired as of January 1, 2014: | |||||
Revenue | $ | 27,729,000 | |||
Net Income | $ | 672,000 | |||
The above net income reflects the additional amortization that would have been charged assuming the fair value adjustment to customer accounts had been applied as of January 1, 2014 and amortization of discount on the purchase obligation for the entire year. |
C_SUMMARY_OF_SIGNIFICANT_ACCOU
C. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||
[1] | Cash Equivalents: | |||||||
Cash equivalents consist of highly liquid investments purchased with an original maturity of 3 months or less. Cash equivalents are carried at fair value and amount to $6,179,000 and $14,839,000 at December 31, 2014 and 2013, respectively, consisting of money market funds. | ||||||||
Cash equivalents – restricted of $1,532,000 at December 31, 2014 and 2013 representing cash invested in a money market fund which serves as collateral for a secured demand note payable in the amount of $1,200,000 to SBS (see Note J). | ||||||||
[2] | Securities: | |||||||
Securities owned are carried at fair value with realized and unrealized gains and losses reflected in trading profits. Siebert clears all its security transactions through unaffiliated clearing firms on a fully disclosed basis. Accordingly, Siebert does not hold funds or securities for, or owe funds or securities to, its customers. Those functions are performed by the clearing firms. | ||||||||
[3] | Fair value of financial instruments: | |||||||
Authoritative accounting guidance defines fair value, establishes a framework for measuring fair value and establishes a fair value hierarchy. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between participants at the measurement date. Fair value measurements are not adjusted for transaction costs. The fair value hierarchy prioritizes inputs to valuation techniques used to measure fair value into three levels: | ||||||||
Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities. | ||||||||
Level 2 – Inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available. | ||||||||
Level 3 – Unobservable inputs which reflect the assumptions that management develops based on available information about the assumptions market participants would use in valuing the asset or liability. | ||||||||
The classification of financial instruments valued at fair value as of December 31, 2014 is as follows: | ||||||||
2014 | 2013 | |||||||
Financial Instrument | Level 1 | Level 1 | ||||||
Cash equivalents | $ | 7,711,000 | $ | 16,371,000 | ||||
Securities | 488,000 | 406,000 | ||||||
$ | 8,199,000 | $ | 16,777,000 | |||||
Securities consist of common stock, which is valued on the last business day of the year at the last available reported sales price on the primary securities exchange. | ||||||||
[4] | Income Taxes: | |||||||
The Company accounts for income taxes utilizing the asset and liability approach requiring the recognition of deferred tax assets and liabilities for the expected future tax consequences of net operating loss carryforwards and temporary differences between the basis of assets and liabilities for financial reporting purposes and tax purposes. | ||||||||
[5] | Furniture, Equipment and Leasehold Improvements: | |||||||
Furniture, equipment and leasehold improvements are stated at cost, net of accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, generally five years. Leasehold improvements are amortized over the shorter of the estimated useful life of the improvements or period of the lease. | ||||||||
[6] | Advertising Costs: | |||||||
Advertising costs are charged to expense as incurred. | ||||||||
[7] | Use of Estimates: | |||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||||||||
[8] | Per Share Data: | |||||||
Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average outstanding common shares during the year. Diluted earnings per share is calculated by dividing net income by the number of shares outstanding under the basic calculation and adding all dilutive securities, which consist of options. As the Company incurred a net loss for each of the years ended December 31, 2014, 2013 and 2012, basic and diluted net loss per common share are the same for each year as the effect of stock options is anti-dilutive. In 2014, 2013 and 2012, 265,000, 350,000 and 400,000 common shares, respectively, issuable upon the exercise of options were not included in the computation. | ||||||||
[9] | Revenue: | |||||||
Commission revenues and related clearing expenses are recorded on a trade-date basis. Fees, consisting principally of revenue participation with the Company’s clearing broker in distribution fees, and interest are recorded as earned. | ||||||||
Investment banking revenue includes gains and fees, net of syndicate expenses, arising from underwriting syndicates in which the Company participates. Investment banking management fees are recorded on the offering date, sales concessions on the settlement date and underwriting fees at the time the underwriting is completed and the income is reasonably determinable. | ||||||||
Trading gains and losses are also recorded on a trade-date basis and principally represent riskless principal transactions which the Company, after receiving an order, buys or sells securities as principal and at the same time sells or buys the securities with a markup or markdown to satisfy the order. | ||||||||
Interest is recorded on an accrual basis and dividends are recorded on the ex-dividend date. | ||||||||
[10] | Stock-Based Compensation: | |||||||
Share-based payments to employees, including grants of employee stock options, are recognized in the statement of operations as an operating expense, based on their fair values on the grant date. Share-based compensation costs are recognized on a straight-line basis over the requisite service periods of awards which would normally be the vesting period of the options. | ||||||||
[11] | Intangibles: | |||||||
Purchased intangibles which have finite useful lives are principally being amortized using the straight-line method over estimated useful lives of three to five years. Domain names and other intellectual property which are deemed to have an indefinite useful life are not amortized but are tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test for indefinite-lived intangibles consists of a comparison of their fair value with their carrying amount (see note F). | ||||||||
[12] | Valuation of Long-Lived Assets: | |||||||
The Company evaluates the recoverability of its long-lived assets including amortizable intangibles and recognizes an impairment loss in the event the carrying value of these assets exceeds the estimated future undiscounted cash flows attributable to these assets. The Company assesses potential impairment to its long-lived assets when events or changes in circumstances indicate that its carrying value may not be recoverable. Should impairment exist, the impairment loss would be measured based on the excess of the carrying value of the assets over their fair value. | ||||||||
Siebert, Brandford, Shank Financial LLC and Subsidiary | ||||||||
C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||
[1] | Principles of Consolidation: | |||||||
Commencing on November 4, 2014, the accompanying financial statements include the accounts of SBSF and its wholly-owned subsidiary SBS after elimination of intercompany balances and transactions. Prior thereto, the financial statements represent those of SBS. The creation of SBSF and related transfer thereto of the members’ interest in SBS did not result in any change in the carrying value of the existing assets or liabilities of SBS in the consolidated financial statements as both entities were under common control. | ||||||||
[2] | Revenues: | |||||||
Investment banking revenues include gains and fees, net of syndicate expenses, arising primarily from municipal bond offerings in which the Company acts as an underwriter or agent. Investment banking management fees are recorded on the offering date, sales concessions on the settlement date, and underwriting fees at the time the underwriting is completed and the income is reasonably determinable | ||||||||
Security transactions are recorded on a trade-date basis. Securities owned are valued at fair value. The resulting realized and unrealized gains and losses are reflected as trading profits. | ||||||||
Commission revenue which relates to the capital market business are recorded on a trade date basis. | ||||||||
Dividends are recorded on the ex-dividend date, and interest income is recognized on an accrual basis. | ||||||||
[3] | Fair value: | |||||||
See Note C(3) for financial instruments measured at fair value. | ||||||||
Authoritative accounting guidance defines fair value, establishes a framework for measuring fair value and establishes a fair value hierarchy. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are not adjusted for transaction costs. The fair value hierarchy prioritizes inputs to valuation techniques used to measure fair value into three levels: | ||||||||
Level 1 | Unadjusted quoted prices in active markets for identical assets or liabilities. | |||||||
Level 2 | Inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available. | |||||||
Level 3 | Unobservable inputs which reflect the assumptions that the managing members develop based on available information about the assumptions market participants would use in valuing the asset or liability. | |||||||
[4] | Cash equivalents: | |||||||
Cash equivalents represent short-term, highly liquid investments which are readily convertible to cash and have maturities of three months or less at time of purchase. Cash equivalents, which are valued at fair value, consist of money market funds which amounted to $15,965,885 and $19,787,407 at December 31, 2014 and 2013, respectively (Level 1). The Company maintains its assets with financial institutions which may at times exceed federally insured limits. In the event of financial institutions insolvency, recovery of the assets may be limited. | ||||||||
[5] | Furniture, equipment and leasehold improvements, net: | |||||||
Furniture, equipment and leasehold improvements are stated at cost, net of accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, generally five years. Leasehold improvements are amortized over the period of the lease. | ||||||||
[6] | Intangible Assets | |||||||
Issuer relationships, which were recorded in connection with the acquisition of the capital markets business (see Note B), are being amortized by the straight-line method over 2.9 years. | ||||||||
Intangible assets with finite lives are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company assesses the recoverability of its intangible assets by determining whether the unamortized balance can be recovered over the assets’ remaining useful life through undiscounted estimated future cash flows. If undiscounted estimated future cash flows indicate that the unamortized amounts will not be recovered, an adjustment will be made to reduce such amounts to fair value based on estimated future cash flows discounted at a rate commensurate with the risk associated with achieving such cash flows. | ||||||||
[7] | Goodwill | |||||||
Goodwill, which was recorded in connection with the acquisition of the capital markets business (see Note B), is not subject to amortization and is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired. The impairment test consists of a comparison of the fair value of the reporting unit with the carrying amount its net assets, including goodwill. Fair value is typically based upon estimated future cash flows discounted at a rate commensurate with the risk involved or market-based comparables. If the carrying amount of the Company’s net assets exceeds the fair value of the reporting unit, then an analysis will be performed to compare the implied fair value of goodwill with the carrying amount of goodwill. An impairment loss will be recognized in an amount equal to the excess of the carrying amount over its implied fair value. | ||||||||
[8] | Use of estimates: | |||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||||||||
[9] | Income taxes: | |||||||
The Company is not subject to federal income taxes. Instead, the members are required to include in their income tax returns their respective share of the Company’s income or loss. The Company is subject to tax in certain state and local jurisdictions. Deferred taxes are not significant. |
D_INVESTMENT_IN_AFFILIATES
D - INVESTMENT IN AFFILIATES | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | ||||||||||||
D - INVESTMENT IN AFFILIATES | Investment in and advances to, equity in income / (loss) of, and distributions received from, affiliates consist of the following: | |||||||||||
31-Dec-14 | SBSF | SBSFPC | TOTAL | |||||||||
Investment and advances | $ | 7,979,000 | — | 7,979,000 | ||||||||
Income (loss) from equity investees | $ | 84,000 | (17,000 | ) | 67,000 | |||||||
Distributions | $ | 13,000 | 173,000 | 186,000 | ||||||||
31-Dec-13 | SBS | SBSFPC | TOTAL | |||||||||
Investment and advances | $ | 7,832,000 | 190,000 | 8,022,000 | ||||||||
Income (loss) from equity investees | $ | 94,000 | (159,000 | ) | (65,000 | ) | ||||||
Distributions | $ | 1,212,000 | 6,000 | 1,218,000 | ||||||||
31-Dec-12 | SBS | SBSFPC | TOTAL | |||||||||
Income from equity investees | $ | 774,000 | $ | 32,000 | $ | 806,000 | ||||||
Distributions | $ | 95,000 | $ | 2,000 | $ | 97,000 | ||||||
Siebert and two individuals (the “Principals”) formed SBS to succeed to the tax-exempt underwriting business of the Siebert Brandford Shank division of Siebert. The agreements with the Principals provide that profits will be shared 51% to the Principals and 49% to Siebert. | ||||||||||||
Pursuant to the terms of the Operating Agreement, Financial and each of the Principals owned a 33.33% interest in SBSFPC which engaged in derivatives transactions related to the municipal underwriting business. The Operating Agreement provides that income/(loss) be shared 66.66% by the Principals and 33.33% by Financial. SBSFPC ceased operations in December 2014. | ||||||||||||
Summarized consolidated financial data of SBSF and SBS in 2014 and financial data for SBS in 2013 and 2012 is as follows: | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Total assets, including secured demand note of $1,200,000 in each year due from Siebert | $ | 28,518,000 | $ | 22,999,000 | ||||||||
Total liabilities, including subordinated liabilities $1,200,000 in each year and a purchase obligation of $1,857,000 in 2014 due to Siebert | 12,458,000 | 7,083,000 | ||||||||||
Total members’ capital | 16,060,000 | 15,916,000 | ||||||||||
Regulatory minimum net capital requirement | 250,000 | 250,000 | ||||||||||
Total revenue | 24,806,000 | 24,965,000 | $ | 28,246,000 | ||||||||
Net income | 171,000 | 193,000 | 1,579,000 | |||||||||
During 2014, 2013 and 2012 Siebert charged SBSF $100,000, $100,000, and $75,000 for each year, respectively, for general and administrative services, which Siebert believes approximates the cost of furnishing such services. In addition, during each of the years 2014, 2013 and 2012, Siebert earned interest income of $48,000 from SBS in connection with subordinated loans available or made to SBS and Siebert paid SBS interest earned on restricted cash equivalents of $1,028, $1,500 and $2,900 in 2014, 2013 and 2012, respectively. In addition, in 2014, Siebert earned interest income of $36,641 from SBSF on the purchase obligation in connection with the sale of the capital markets business (see Note B). | ||||||||||||
Siebert’s share of undistributed earnings from SBSF at December 31, 2014 amounted to $7,477,000 and from SBS at December 31, 2013 amounted to $7,407,000. Undistributed earnings may not be immediately available for distribution to Siebert for various reasons including the amount of SBSF’s available cash, the provisions of the agreement between Siebert and the Principals and SBSF’s continued compliance with its regulatory net capital requirements. | ||||||||||||
Summarized financial data of SBSFPC is as follows: | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Total assets | $ | 26,000 | $ | 584,000 | ||||||||
Total liabilities | 26,000 | 15,000 | ||||||||||
Total members’ capital | 0 | 569,000 | ||||||||||
Total revenue | 0 | (222,000 | )* | $ | 293,000 | |||||||
Net income (loss) | (51,000 | ) | (478,000 | ) | 98,000 | |||||||
*Negative balance was attributable to loss in derivative contracts | ||||||||||||
In July 2013, as a result of the filing of a bankruptcy petition by the City of Detroit, SBSFPC unwound certain derivative contracts with a financial institution pursuant to the terms of the contracts. The contracts were recorded as liabilities with a carrying value of $123,063,000. In connection therewith, SBSFPC assigned certain derivative contracts with the City of Detroit to the financial institution, which were recorded as assets with a carrying value of $123,063,000. No gain or loss was recognized by SBSFPC as a result of the unwinding and assignment of these derivative contracts and SBSFPC has no continuing obligations or rights with respect to the derivative contracts. During the quarter ended March 31, 2013 SBSFPC incurred a loss of $241,000 on the write down in value of the derivative contracts with the City of Detroit to adjust their carrying value to the carrying value of the derivative contracts with the financial institution. The Company received distributions from SBSFP of $173,000 during 2014 and $6,000 during 2013 which is shown on the statement of cash flows as an investing activity as they represent a return of capital. | ||||||||||||
Effective September 16, 2013, Suzanne Shank, one of the Principals having 25.5% ownership in SBS and 33.3% interest in SBSFP became the Company’s chief executive officer. On March 3, 2015 Ms. Shank completed her role as acting chief executive officer of the Company to devote full time to her continuing position as chief executive officer of SBSF. |
D_SUBORDINATED_BORROWINGS_AND_
D - SUBORDINATED BORROWINGS AND SECURED DEMAND NOTE RECEIVABLE (Siebert, Brandford, Shank Financial LLC and Subsidiary) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Siebert, Brandford, Shank Financial LLC and Subsidiary | ||||||||
D - SUBORDINATED BORROWINGS AND SECURED DEMAND NOTE RECEIVABLE | The subordinated debt at December 31, consists of the following: | |||||||
2014 | 2013 | |||||||
Payable to affiliate (a) | $ | 1,200,000 | $ | 1,200,000 | ||||
Payable to clearing broker (b) | $ | 4,000,000 | — | |||||
$ | 5,200,000 | $ | 1,200,000 | |||||
(a) | Consists of a Secured Demand Note Collateral Agreement payable to Siebert, an indirect member of the Company, bearing 4% interest and due August 31, 2015, at which time SBS is obligated to repay Siebert any amounts borrowed. Interest expense paid to Siebert in each of 2014, 2013 and 2012 amounted to $48,000. | |||||||
The secured demand note receivable of $1,200,000 is collateralized by cash equivalents of Siebert of approximately $1,544,000 at December 31, 2014. Interest earned on the collateral amounted to approximately $1,028, $1,500 and $2,900 in 2014, 2013 and 2012, respectively. | ||||||||
(b) | On December 9, 2014, SBS entered into a temporary subordinated loan agreement with National Financial Services, its clearing broker, in the amount of $4,000,000 bearing interest at the federal funds rate plus 6% and maturing January 22, 2015. The note was repaid on January 22, 2015. Interest expense accrued in 2014 amounted to approximately $16,000. | |||||||
The subordinated borrowings are available in computing net capital under the Securities and Exchange Commission’s (“SEC”) Uniform Net Capital Rule. To the extent that such borrowing is required for the Company’s continued compliance with minimum net capital requirements, it may not be repaid. | ||||||||
On March 24, 2014, SBS entered into a temporary subordinated loan agreement with National Financial Services, its clearing broker, in the amount of $5,000,000 bearing interest at the federal funds rate plus 6% and maturing May 5, 2014. The note was repaid on May 5, 2014. Interest expense paid was $36,542. |
E_FURNITURE_EQUIPMENT_AND_LEAS
E - FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
C - FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | Furniture, equipment and leasehold improvements consist of the following: | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Equipment | $ | 524,000 | $ | 518,000 | ||||
Leasehold improvements | 546,000 | 427,000 | ||||||
Furniture and fixtures | 43,000 | 14,000 | ||||||
1,113,000 | 959,000 | |||||||
Less accumulated depreciation and amortization | (504,000 | ) | (247,000 | ) | ||||
$ | 609,000 | $ | 712,000 | |||||
Depreciation and amortization expense for the years ended December 31, 2014, 2013 and 2012 amounted to $257,000, $120,000 and $274,000, respectively. | ||||||||
Due to the Company’s discontinuation of its relationship with a software vendor on June 30, 2012, which had developed and maintained the Company’s website, the Company wrote-off remaining related software development costs of $433,000. The unamortized carrying value of such development costs consisted of $1,856,000 of cost net of $1,423,000 of accumulation amortization. Effective July 1, 2012, such services are provided by the Company’s clearing broker. | ||||||||
Siebert, Brandford, Shank Financial LLC and Subsidiary | ||||||||
C - FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | Furniture, equipment, and leasehold improvements consist of the following: | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Equipment | $ | 926,654 | $ | 896,376 | ||||
Furniture and leasehold improvements | 1,718,826 | 1,659,740 | ||||||
2,645,480 | 2,556,116 | |||||||
Less accumulated depreciation and amortization | 1,960,744 | 1,733,983 | ||||||
$ | 684,736 | $ | 822,133 | |||||
Depreciation and amortization expense for 2014, 2013 and 2012 amounted to $226,761, $250,154 and $266,093 respectively. |
F_INTANGIBLE_ASSETS
F - INTANGIBLE ASSETS | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||
F - INTANGIBLE ASSETS | In 2000, WFN acquired the stock of Women’s Financial Network, Inc. and HerDollar.com, Inc., companies in the development stage which had yet to commence principal operations and had no significant revenue for aggregate consideration of $2,310,000, including costs. The transactions were accounted for as purchases of assets consisting of domain name, website and content, and a non-compete agreement (the “Acquired Intangible Assets”). Related deferred tax assets attributable to net operating loss carryforwards of the acquired companies and deferred tax liabilities attributable to the excess of the statement bases of the acquired assets over their tax bases were reflected as an adjustment to the carrying amount of such intangibles (see Note G). | |||||||||||||
Intangible assets consist of the following: | ||||||||||||||
31-Dec-14 | 31-Dec-13 | |||||||||||||
Gross | Accumulated | Gross | Amortization | |||||||||||
Carrying | Amortization | Carrying | Accumulated | |||||||||||
Amount | Amount | |||||||||||||
Amortizable intangible assets: | ||||||||||||||
Website, content and non-compete | $ | 1,850,000 | 1,850,000 | $ | 1,850,000 | $ | 1,850,000 | |||||||
Retail brokerage accounts | 2,638,000 | 2,630,000 | 2,638,000 | 2,620,000 | ||||||||||
$ | 4,488,000 | 4,480,000 | $ | 4,488,000 | $ | 4,470,000 | ||||||||
Amortization expense | $ | 10,000 | $ | 10,000 | ||||||||||
During 2012, the Company recorded impairment charges and wrote down the carrying value of its unamortized intangible assets consisting of domain name and intellectual property by $300,000, representing the excess of carrying value over its fair value due to a continuing decline in the Company’s revenue attributable to such intangibles. During the fourth quarter of 2013, as a result of management’s continuing strategic review of its operations, the Company determined to substantially reduce the amount of resources allocated to the WFN domain. Accordingly, the Company wrote off the remaining carrying value of the intangible asset of $300,000. No significant residual value is estimated for the asset. |
F_NET_CAPITAL
F - NET CAPITAL (Siebert, Brandford, Shank Financial LLC and Subsidiary) | 12 Months Ended |
Dec. 31, 2014 | |
Siebert, Brandford, Shank Financial LLC and Subsidiary | |
D - NET CAPITAL | SBS is subject to the SEC’s Uniform Net Capital Rule 15c3-1, which requires the maintenance of minimum net capital and that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. At December 31, 2014 and 2013, SBS had net capital of $22,807,796 and $18,271,172, respectively, which was $22,557,796 and $18,021,172, respectively, in excess of its required net capital and its ratio of aggregate indebtedness to net capital was 0.10 and 0.16 to 1, respectively. SBS claims exemption from the reserve requirements under Section 15c3-3(k)(2)(ii). |
G_INCOME_TAXES
G - INCOME TAXES | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Tax Disclosure [Abstract] | |||||||||||
G - INCOME TAXES | Note G - Income Taxes | ||||||||||
Financial files a consolidated federal income tax return with its subsidiaries. | |||||||||||
Income tax expense consists of the following: | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Federal income tax expense: | |||||||||||
Current | $ | — | $ | 19,000 | $ | — | |||||
Deferred | — | — | — | ||||||||
— | 19,000 | — | |||||||||
State and local: | |||||||||||
Current | — | — | 34,000 | ||||||||
Deferred | — | — | — | ||||||||
— | — | 34,000 | |||||||||
Total: | |||||||||||
Current | — | 19,000 | 34,000 | ||||||||
Deferred | — | — | — | ||||||||
$ | — | $ | 19,000 | $ | 34,000 | ||||||
Reconciliation between the income tax provision and income taxes computed by applying the statutory Federal income tax rate to loss before income taxes is as follows: | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Expected income tax benefit at statutory Federal tax rate (34%) | $ | (2,229,000 | ) | $ | (2,004,000 | ) | $ | (47,000 | ) | ||
State and local taxes, net of Federal tax effect | (459,000 | ) | (413,000 | ) | 22,000 | ||||||
Increase in valuation allowance | 2,551,000 | 2,342,000 | — | ||||||||
Permanent difference | 39,000 | 46,000 | 36,000 | ||||||||
Other | 98,000 | 48,000 | 23,000 | ||||||||
Income tax expense | $ | 0 | $ | 19,000 | $ | 34,000 | |||||
The principal items giving rise to deferred tax assets (liabilities) are as follows: | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Deferred tax assets: | |||||||||||
Net operating loss credit carryforwards | $ | 8,046,000 | $ | 4,670,000 | |||||||
Alternative minimum tax carryforward | 9,000 | 15,000 | |||||||||
Employee stock based compensation | 237,000 | 237,000 | |||||||||
Retail brokerage accounts | 211,000 | 281,000 | |||||||||
Contribution carryover | 223,000 | 347,000 | |||||||||
Furniture, equipment and leasehold improvements | 115,000 | 96,000 | |||||||||
Accrued expenses | 337,000 | 83,000 | |||||||||
Investment in affiliate (a) | 736,000 | 1,001,000 | |||||||||
Accrued compensation and other | — | 44,000 | |||||||||
Capital loss carryforwards | 24,000 | — | |||||||||
Other | 30,000 | — | |||||||||
Total | 9,968,000 | 6,774,000 | |||||||||
Valuation allowance | (9,218,000 | ) | (6,774,000 | ) | |||||||
Net deferred tax assets | 750,000 | — | |||||||||
Deferred tax liability: | |||||||||||
Receivable from affiliate (b) | (750,000 | ) | — | ||||||||
$ | 0 | $ | 0 | ||||||||
(a) | Attributable to non-deductible bonus accrued at December 31, 2014 and 2013 by an affiliate, which will be deductible in 2015 and 2014, respectively. | ||||||||||
(b) | Relates to receivable from business sold to affiliate treated as an installment sale for tax purposes. | ||||||||||
Due to cumulative losses incurred by the Company during the current and prior two years, the Company is unable to conclude that it is more likely than not that it will realize its deferred tax asset in excess of the deferred tax liability and, accordingly, has recorded a valuation allowance to fully offset such amount at December 31, 2014 and 2013. | |||||||||||
At December 31, 2014, the Company has state net operating loss carryforwards aggregating $23.6 million, which expires through 2034 in various states. In addition, the Company has federal net operating loss carryforwards of $18.1 million at December 31, 2014, which expires through 2034. The Company also has additional federal net operating loss carryforwards of $410,000 at December 31, 2014 which is attributable to WFN and expires through 2020. Utilization of WFN’s federal net operating loss carryforwards is subject to annual limitations under Section 382 of the Internal Revenue Code. | |||||||||||
The Company applied the “more-likely-than not” recognition threshold to all tax positions taken or expected to be taken in a tax return which resulted in no unrecognized tax benefits reflected in the financial statements as of December 31, 2014. The Company classifies interest and penalties that would accrue according to the provisions of relevant tax law as income taxes. | |||||||||||
The provision for income taxes in 2013 represents a federal minimum tax assessment of $19,000 including $4,000 of interest and penalties, relating to the year 2012.The provision for income taxes in 2012 represents a state tax assessment of 34,000 relating to years 2007, 2008 and 2009 based on a tax examination completed by New York State in 2012. Tax years 2011 and thereafter are subject to examinations by federal and certain state authorities. For other states the 2009 through 2013 tax years remain open for examinations. The Company is currently under tax examination by New York State for the tax years 2010 and 2011. |
H_STOCKHOLDERS_EQUITY
H - STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2014 | |
Equity [Abstract] | |
H - STOCKHOLDERS' EQUITY | Note H - Stockholders’ Equity |
Siebert is subject to the SEC’s Uniform Net Capital Rule (Rule 15c3-1), which requires the maintenance of minimum net capital. Siebert has elected to use the alternative method, permitted by the rule, which requires that Siebert maintain minimum net capital, as defined, equal to the greater of $250,000 or 2 percent of aggregate debit balances arising from customer transactions, as defined. The Net Capital Rule of the New York Stock Exchange also provides that equity capital may not be withdrawn or cash dividends paid if resulting net capital would be less than 5% of aggregate debits. At December 31, 2014 and 2013, Siebert had net capital of approximately $5,100,000 and $13,000,000, respectively, as compared with net capital requirements of $250,000. Siebert claims exemption from the reserve requirement under Section 15c3-3(k)(2)(ii) as it clears its customer transactions through an unaffiliated clearing firm on a fully disclosed basis. | |
On January 23, 2008, the Board of Directors of the Company authorized a buy back of up to 300,000 shares of common stock. Shares will be purchased from time to time in the open market and in private transactions. During 2012 and 2013, the Company repurchased 8,107 and 12,266 shares of common stock at an average price of $1.67 and $1.56, respectively. No shares were purchased during 2014. As of December 31, 2014, 129,137 of common shares have been repurchased pursuant to such authorization. |
H_ACCOUNTS_PAYABLE_AND_ACCRUED
H - ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Siebert, Brandford, Shank Financial LLC and Subsidiary) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Siebert, Brandford, Shank Financial LLC and Subsidiary | ||||||||
F - ACCOUNTS PAYABLE AND ACCRUED EXPENSES | Accounts payable and accrued expenses consist of the following: | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Accounts payable | $ | 313,285 | $ | 171,761 | ||||
Accrued bonus and other employee compensation | 4,233,521 | 3,785,271 | ||||||
Other accrued expenses | 200,842 | 49,576 | ||||||
$ | 4,747,648 | $ | 4,006,608 |
I_OPTIONS
I - OPTIONS | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||
I - OPTIONS | The Company’s 2007 Long-Term Incentive Plan (the “Plan”) authorizes the grant of options to purchase up to an aggregate of 2,000,000 shares, subject to adjustment in certain circumstances. Both non-qualified options and options intended to qualify as “Incentive Stock Options” under Section 422 of the Internal Revenue Code may be granted under the Plan. A Stock Option Committee of the Board of Directors administers the Plan. The committee has the authority to determine when options are granted, the term during which an option may be exercised (provided no option has a term exceeding 10 years), the exercise price and the exercise period. The exercise price shall not be less than the fair market value on the date of grant. No option may be granted under the Plan after December 2017. Generally, employee options vest 20% per year for five years and expire ten years from the date of grant. At December 31, 2014, options for 1,760,000 shares of common stock are available for grant under the Plan. | |||||||||||||||||||
A summary of the Company’s stock option transactions for the three years ended December 31, 2014 is presented below: | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Shares | Weighted | Shares | Weighted | Shares | Weighted | |||||||||||||||
Average | Average | Average | ||||||||||||||||||
Exercise | Exercise | Exercise | ||||||||||||||||||
Price | Price | Price | ||||||||||||||||||
Outstanding - beginning of the year | 350,000 | 3.1 | 400,000 | 3.33 | 1,228,200 | $ | 3.88 | |||||||||||||
Cancelled | (60,000 | ) | 3.05 | — | — | — | — | |||||||||||||
Forfeited | — | (25,000 | ) | 5.06 | — | — | ||||||||||||||
Expired | (25,000 | ) | 4.04 | (25,000 | ) | 4.75 | (828,200 | ) | $ | 4.14 | ||||||||||
Outstanding - end of year | (a) | 265,000 | 3.02 | 350,000 | 3.1 | 400,000 | $ | 3.33 | ||||||||||||
Fully vested and exercisable at end of year | (a) | 265,000 | 3.02 | 350,000 | 3.1 | 400,000 | $ | 3.33 | ||||||||||||
(a) | Weighted average remaining contractual terms of 3.51 years and no aggregate intrinsic value. | |||||||||||||||||||
For the year ended December 31, 2014, 2013 and 2012, no stock options were granted. | ||||||||||||||||||||
As of December 31, 2014, there was no unrecognized compensation cost. |
I_OTHER
I - OTHER (Siebert, Brandford, Shank Financial LLC and Subsidiary) | 12 Months Ended |
Dec. 31, 2014 | |
Siebert, Brandford, Shank Financial LLC and Subsidiary | |
I - OTHER | During each of 2014 and 2013, SBS was charged $100,000 by Siebert for general and administrative services. During 2012 SBS was charged $75,000 by Siebert for general and administrative services. In January 2014, SBS transferred funds from its money market accounts to its bank account to cover the $1,225,779 overdraft at December 31, 2013. |
J_COMMITMENTS_CONTINGENCIES_AN
J - COMMITMENTS, CONTINGENCIES AND OTHER | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
J - COMMITMENTS, CONTINGENCIES AND OTHER | |||||
-1 | Retail customer transactions are cleared through clearing brokers on a fully disclosed basis. If customers do not fulfill their contractual obligations, the clearing broker may charge Siebert for any loss incurred in connection with the purchase or sale of securities at prevailing market prices to satisfy the customer obligations. Siebert regularly monitors the activity in its customer accounts for compliance with its margin requirements. Siebert is exposed to the risk of loss on unsettled customer transactions if customers are unable to fulfill their contractual obligations. There were no material losses for unsettled customer transactions in 2014, 2013 or 2012. Credit risk represents the potential loss that would occur if counterparties fail to perform pursuant to the terms of their obligations. The Company is subject to credit risk to the extent a custodian or broker with whom it conducts business is unable to fulfill contractual obligations. | ||||
-2 | In 2012, Siebert was named as one of the defendants in a class action pending in the United States District Court, Southern District of New York. The complaint was brought on behalf of a class of purchasers in a public offering by Lehman Brothers Holdings, Inc. of $1,500,000,000 of 6.75% Subordinated Notes due 2017 (the “Notes”) as to Siebert and certain smaller issuances of other securities. The complaint asserted that Siebert and other underwriters of the Notes violated Section 11 of The Securities Act of 1933 in that relevant offering materials were false and misleading. Siebert had agreed to purchase $15 million of the Notes and $462,953 of the other securities as an underwriter in the offerings. Siebert and the plaintiffs’ class agreed to resolve all claims against Siebert in consideration of a $1 million payment by Siebert which was accrued and | ||||
charged to expense in 2011 and paid in 2012. In the prior year certain plaintiffs did not agree to a settlement or purchased securities which were not covered by the settlement. In 2013, all such claims were either dismissed or settled for an amount that was not material. | |||||
Siebert is party to certain claims, suits and complaints arising in the ordinary course of business. In the opinion of management, all such claims, suits and complaints are without merit, or involve amounts which would not have a significant effect on the financial position or results of operations of the Company. | |||||
-3 | In July 2014, the Company entered into a settlement agreement in regards to a dispute with a former employee, in which the former employee sought, among other things, damages arising from his separation from the Company. The Company asserted counter claims in the arbitration. Pursuant to the settlement, the Company paid $4,300,000 to the former employee, and the claims and counterclaims have been dismissed and released. The accompanying 2014 statement of operations reflects a charge to give effect to the settlement. | ||||
-4 | The Company rents discount retail brokerage and other office space under long-term operating leases expiring in various periods through 2017. These leases call for base rent plus escalations for taxes and operating expenses. | ||||
Future minimum base rental payments under these operating leases are as follows: | |||||
Year Ending | Amount | ||||
December 31, | |||||
2015 | 615,000 | ||||
2016 | 482,000 | ||||
2017 | 80,000 | ||||
$ | 1,177,000 | ||||
Rent expense, including escalations for operating costs, amounted to approximately $788,000, $1,046,000 and $907,000 for the years ended December 31, 2014, 2013 and 2012, respectively. Rent is being charged to expense over the entire lease term on a straight-line basis. | |||||
-5 | Siebert sponsors a defined contribution retirement plan under Section 401(k) of the Internal Revenue Code that covers substantially all employees. Participant contributions to the plan are voluntary and are subject to certain limitations. Siebert may also make discretionary contributions to the plan. No contributions were made by Siebert in 2014, 2013 and 2012. | ||||
-6 | Siebert is party to a Secured Demand Note Collateral Agreement with SBS which obligates Siebert to lend SBS, on a subordinated basis, up to $1,200,000. The secured demand note payable held by SBS and a related $1,200,000 receivable due from SBS are included in investments in and advances to equity investees in the accompanying consolidated statement of financial condition. Amounts that Siebert is obligated to lend under this arrangement are collateralized by cash equivalents of $1,532,000. Any amounts loaned will bear interest at 4% per annum and are repayable on August 31, 2015. | ||||
-7 | During 2012, commission income earned from one customer accounted for approximately 12% of total revenue. | ||||
Siebert, Brandford, Shank Financial LLC and Subsidiary | |||||
J - COMMITMENTS, CONTINGENCIES AND OTHER | SBS rents office space under long-term operating leases expiring through 2020. These leases call for base rent plus escalations for property taxes and other operating expenses. Future minimum base rent under these operating leases as of December 31, 2014 are as follows: | ||||
Year Ending | |||||
December 31, | Amount | ||||
2015 | 1,043,000 | ||||
2016 | 886,000 | ||||
2017 | 639,000 | ||||
2018 | 627,000 | ||||
2019 | 587,000 | ||||
Thereafter | 185,000 | ||||
$ | 3,967,000 | ||||
Rent expense, including taxes and operating expenses for 2014, 2013 and 2012 amounted to $1,186,967, $1,088,755, and $1,052,908 respectively. | |||||
In prior years, SBS purchased leasehold improvements of approximately $620,000 which were reimbursed by the landlord. SBS recorded such reimbursement as a credit to deferred rent liability, which is being recognized as a reduction of rental expense on a straight-line basis over the term of the lease. | |||||
Rent expense is being charged to operations on a straight-line basis resulting in a deferred rent liability which, including the reimbursement discussed above amounted to $549,287 at December 31, 2014 and $622,075 at December 31, 2013. |
K_SUMMARIZED_QUARTERLY_FINANCI
K - SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||||||||
K - SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED) | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
First | Second | Third | Fourth | First | Second | Third | Fourth | |||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | |||||||||||||||||||
Revenue | $ | 3,718,000 | 3,705,000 | 3,454,000 | 4,975,000 | $ | 4,266,000 | 4,278,000 | 3,666,000 | 4,191,000 | ||||||||||||||||
Net income (loss) | $ | 28,000 | (6,077,000 | )* | (1,456,000 | ) | 948,000 | $ | (1,369,000 | ) | (1,353,000 | ) | (1,644,000 | ) | (1,546,000 | ) | ||||||||||
Earnings (loss) per share: | ||||||||||||||||||||||||||
Basic | $ | 0 | (.28 | ) | (.07 | ) | 0.04 | $ | (.06 | ) | (.06 | ) | (.07 | ) | (.07 | ) | ||||||||||
Diluted | $ | 0 | (.28 | ) | (.07 | ) | 0.04 | $ | (.06 | ) | (.06 | ) | (.07 | ) | (.07 | ) | ||||||||||
• Includes $4,300,000 (0.19 per share) loss related to arbitration settlement (see Note J3). |
C_SUMMARY_OF_SIGNIFICANT_ACCOU1
C. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Cash Equivalents | Cash equivalents consist of highly liquid investments purchased with an original maturity of 3 months or less. Cash equivalents are carried at fair value and amount to $6,179,000 and $14,839,000 at December 31, 2014 and 2013, respectively, consisting of money market funds. | |||||||
Cash equivalents – restricted of $1,532,000 at December 31, 2014 and 2013 representing cash invested in a money market fund which serves as collateral for a secured demand note payable in the amount of $1,200,000 to SBS (see Note J). | ||||||||
Securities | Securities owned are carried at fair value with realized and unrealized gains and losses reflected in trading profits. Siebert clears all its security transactions through unaffiliated clearing firms on a fully disclosed basis. Accordingly, Siebert does not hold funds or securities for, or owe funds or securities to, its customers. Those functions are performed by the clearing firms. | |||||||
Fair value of financial instruments | Authoritative accounting guidance defines fair value, establishes a framework for measuring fair value and establishes a fair value hierarchy. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between participants at the measurement date. Fair value measurements are not adjusted for transaction costs. The fair value hierarchy prioritizes inputs to valuation techniques used to measure fair value into three levels: | |||||||
Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities. | ||||||||
Level 2 – Inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available. | ||||||||
Level 3 – Unobservable inputs which reflect the assumptions that management develops based on available information about the assumptions market participants would use in valuing the asset or liability. | ||||||||
The classification of financial instruments valued at fair value as of December 31, 2014 is as follows: | ||||||||
2014 | 2013 | |||||||
Financial Instrument | Level 1 | Level 1 | ||||||
Cash equivalents | $ | 7,711,000 | $ | 16,371,000 | ||||
Securities | 488,000 | 406,000 | ||||||
$ | 8,199,000 | $ | 16,777,000 | |||||
Securities consist of common stock, which is valued on the last business day of the year at the last available reported sales price on the primary securities exchange. | ||||||||
Income Taxes | The Company accounts for income taxes utilizing the asset and liability approach requiring the recognition of deferred tax assets and liabilities for the expected future tax consequences of net operating loss carryforwards and temporary differences between the basis of assets and liabilities for financial reporting purposes and tax purposes. | |||||||
Furniture, Equipment and Leasehold Improvements | Furniture, equipment and leasehold improvements are stated at cost, net of accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, generally five years. Leasehold improvements are amortized over the shorter of the estimated useful life of the improvements or period of the lease. | |||||||
Advertising Costs | Advertising costs are charged to expense as incurred. | |||||||
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |||||||
Per Share Data | Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average outstanding common shares during the year. Diluted earnings per share is calculated by dividing net income by the number of shares outstanding under the basic calculation and adding all dilutive securities, which consist of options. As the Company incurred a net loss for each of the years ended December 31, 2014, 2013 and 2012, basic and diluted net loss per common share are the same for each year as the effect of stock options is anti-dilutive. In 2014, 2013 and 2012, 265,000, 350,000 and 400,000 common shares, respectively, issuable upon the exercise of options were not included in the computation. | |||||||
Revenue | Commission revenues and related clearing expenses are recorded on a trade-date basis. Fees, consisting principally of revenue participation with the Company’s clearing broker in distribution fees, and interest are recorded as earned. | |||||||
Investment banking revenue includes gains and fees, net of syndicate expenses, arising from underwriting syndicates in which the Company participates. Investment banking management fees are recorded on the offering date, sales concessions on the settlement date and underwriting fees at the time the underwriting is completed and the income is reasonably determinable. | ||||||||
Trading gains and losses are also recorded on a trade-date basis and principally represent riskless principal transactions which the Company, after receiving an order, buys or sells securities as principal and at the same time sells or buys the securities with a markup or markdown to satisfy the order. | ||||||||
Interest is recorded on an accrual basis and dividends are recorded on the ex-dividend date. | ||||||||
Stock-Based Compensation | Share-based payments to employees, including grants of employee stock options, are recognized in the statement of operations as an operating expense, based on their fair values on the grant date. Share-based compensation costs are recognized on a straight-line basis over the requisite service periods of awards which would normally be the vesting period of the options. | |||||||
Intangible | Purchased intangibles which have finite useful lives are principally being amortized using the straight-line method over estimated useful lives of three to five years. Domain names and other intellectual property which are deemed to have an indefinite useful life are not amortized but are tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test for indefinite-lived intangibles consists of a comparison of their fair value with their carrying amount (see note F). | |||||||
Valuation of Long-Lived Assets | The Company evaluates the recoverability of its long-lived assets including amortizable intangibles and recognizes an impairment loss in the event the carrying value of these assets exceeds the estimated future undiscounted cash flows attributable to these assets. The Company assesses potential impairment to its long-lived assets when events or changes in circumstances indicate that its carrying value may not be recoverable. Should impairment exist, the impairment loss would be measured based on the excess of the carrying value of the assets over their fair value. | |||||||
Siebert, Brandford, Shank Financial LLC and Subsidiary | ||||||||
Principles of Consolidation | Commencing on November 4, 2014, the accompanying financial statements include the accounts of SBSF and its wholly-owned subsidiary SBS after elimination of intercompany balances and transactions. Prior thereto, the financial statements represent those of SBS. The creation of SBSF and related transfer thereto of the members’ interest in SBS did not result in any change in the carrying value of the existing assets or liabilities of SBS in the consolidated financial statements as both entities were under common control. | |||||||
Cash Equivalents | Cash equivalents represent short-term, highly liquid investments which are readily convertible to cash and have maturities of three months or less at time of purchase. Cash equivalents, which are valued at fair value, consist of money market funds which amounted to $15,965,885 and $19,787,407 at December 31, 2014 and 2013, respectively (Level 1). The Company maintains its assets with financial institutions which may at times exceed federally insured limits. In the event of financial institutions insolvency, recovery of the assets may be limited. | |||||||
Fair value of financial instruments | ||||||||
See Note C(3) for financial instruments measured at fair value. | ||||||||
Authoritative accounting guidance defines fair value, establishes a framework for measuring fair value and establishes a fair value hierarchy. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are not adjusted for transaction costs. The fair value hierarchy prioritizes inputs to valuation techniques used to measure fair value into three levels: | ||||||||
Level 1 | Unadjusted quoted prices in active markets for identical assets or liabilities. | |||||||
Level 2 | Inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available. | |||||||
Level 3 | Unobservable inputs which reflect the assumptions that the managing members develop based on available information about the assumptions market participants would use in valuing the asset or liability. | |||||||
Income Taxes | The Company is not subject to federal income taxes. Instead, the members are required to include in their income tax returns their respective share of the Company’s income or loss. The Company is subject to tax in certain state and local jurisdictions. Deferred taxes are not significant. | |||||||
Furniture, Equipment and Leasehold Improvements | Furniture, equipment and leasehold improvements are stated at cost, net of accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, generally five years. Leasehold improvements are amortized over the period of the lease. | |||||||
Goodwill | Goodwill, which was recorded in connection with the acquisition of the capital markets business (see Note B), is not subject to amortization and is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired. The impairment test consists of a comparison of the fair value of the reporting unit with the carrying amount its net assets, including goodwill. Fair value is typically based upon estimated future cash flows discounted at a rate commensurate with the risk involved or market-based comparables. If the carrying amount of the Company’s net assets exceeds the fair value of the reporting unit, then an analysis will be performed to compare the implied fair value of goodwill with the carrying amount of goodwill. An impairment loss will be recognized in an amount equal to the excess of the carrying amount over its implied fair value. | |||||||
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |||||||
Revenue | Investment banking revenues include gains and fees, net of syndicate expenses, arising primarily from municipal bond offerings in which the Company acts as an underwriter or agent. Investment banking management fees are recorded on the offering date, sales concessions on the settlement date, and underwriting fees at the time the underwriting is completed and the income is reasonably determinable | |||||||
Security transactions are recorded on a trade-date basis. Securities owned are valued at fair value. The resulting realized and unrealized gains and losses are reflected as trading profits. Commission revenue which relates to the capital market business are recorded on a trade date basis. | ||||||||
Dividends are recorded on the ex-dividend date, and interest income is recognized on an accrual basis. | ||||||||
Intangible | Issuer relationships, which were recorded in connection with the acquisition of the capital markets business (see Note B), are being amortized by the straight-line method over 2.9 years. | |||||||
Intangible assets with finite lives are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company assesses the recoverability of its intangible assets by determining whether the unamortized balance can be recovered over the assets’ remaining useful life through undiscounted estimated future cash flows. If undiscounted estimated future cash flows indicate that the unamortized amounts will not be recovered, an adjustment will be made to reduce such amounts to fair value based on estimated future cash flows discounted at a rate commensurate with the risk associated with achieving such cash flows. |
C_SUMMARY_OF_SIGNIFICANT_ACCOU2
C. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Financial instruments | ||||||||
2014 | 2013 | |||||||
Financial Instrument | Level 1 | Level 1 | ||||||
Cash equivalents | $ | 7,711,000 | $ | 16,371,000 | ||||
Securities | 488,000 | 406,000 | ||||||
$ | 8,199,000 | $ | 16,777,000 |
B_BUSINESS_ACQUISITION_Tables
B - BUSINESS ACQUISITION (Tables) (Siebert, Brandford, Shank Financial LLC and Subsidiary) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Siebert, Brandford, Shank Financial LLC and Subsidiary | |||||
Pro forma amounts of revenue | |||||
Revenue | $ | 27,729,000 | |||
Net Income | $ | 672,000 |
D_INVESTMENT_IN_AFFILIATES_Tab
D - INVESTMENT IN AFFILIATES (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | ||||||||||||
Investment In and Advances to Affiliate | Investment in and advances to, equity in income / (loss) of, and distributions received from, affiliates consist of the following: | |||||||||||
31-Dec-14 | SBSF | SBSFPC | TOTAL | |||||||||
Investment and advances | $ | 7,979,000 | — | 7,979,000 | ||||||||
Income (loss) from equity investees | $ | 84,000 | (17,000 | ) | 67,000 | |||||||
Distributions | $ | 13,000 | 173,000 | 186,000 | ||||||||
31-Dec-13 | SBS | SBSFPC | TOTAL | |||||||||
Investment and advances | $ | 7,832,000 | 190,000 | 8,022,000 | ||||||||
Income (loss) from equity investees | $ | 94,000 | (159,000 | ) | (65,000 | ) | ||||||
Distributions | $ | 1,212,000 | 6,000 | 1,218,000 | ||||||||
31-Dec-12 | SBS | SBSFPC | TOTAL | |||||||||
Income from equity investees | $ | 774,000 | $ | 32,000 | $ | 806,000 | ||||||
Distributions | $ | 95,000 | $ | 2,000 | $ | 97,000 | ||||||
Summarized financial data of affiliates | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Total assets, including secured demand note of $1,200,000 in each year due from Siebert | $ | 28,518,000 | $ | 22,999,000 | ||||||||
Total liabilities, including subordinated liabilities $1,200,000 in each year and a purchase obligation of $1,857,000 in 2014 due to Siebert | 12,458,000 | 7,083,000 | ||||||||||
Total members’ capital | 16,060,000 | 15,916,000 | ||||||||||
Regulatory minimum net capital requirement | 250,000 | 250,000 | ||||||||||
Total revenue | 24,806,000 | 24,965,000 | $ | 28,246,000 | ||||||||
Net income | 171,000 | 193,000 | 1,579,000 | |||||||||
Summarized financial data of SBSFPC is as follows: | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Total assets | $ | 26,000 | $ | 584,000 | ||||||||
Total liabilities | 26,000 | 15,000 | ||||||||||
Total members’ capital | 0 | 569,000 | ||||||||||
Total revenue | 0 | (222,000 | )* | $ | 293,000 | |||||||
Net income (loss) | (51,000 | ) | (478,000 | ) | 98,000 | |||||||
D_SUBORDINATED_BORROWINGS_AND_1
D - SUBORDINATED BORROWINGS AND SECURED DEMAND NOTE RECEIVABLE (Tables) (Siebert, Brandford, Shank Financial, LLC and Subsidiary) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Siebert, Brandford, Shank Financial, LLC and Subsidiary | ||||||||
Subordinated debt | The subordinated debt at December 31 consists of the following: | |||||||
2014 | 2013 | |||||||
Payable to affiliate (a) | $ | 1,200,000 | $ | 1,200,000 | ||||
Payable to clearing broker | $ | 4,000,000 | — | |||||
$ | 5,200,000 | $ | 1,200,000 | |||||
E_FURNITURE_EQUIPMENT_AND_LEAS1
E - FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Furniture, equipment and leasehold improvements | Furniture, equipment and leasehold improvements consist of the following: | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Equipment | $ | 524,000 | $ | 518,000 | ||||
Leasehold improvements | 546,000 | 427,000 | ||||||
Furniture and fixtures | 43,000 | 14,000 | ||||||
1,113,000 | 959,000 | |||||||
Less accumulated depreciation and amortization | (504,000 | ) | (247,000 | ) | ||||
$ | 609,000 | $ | 712,000 | |||||
SBS | ||||||||
Furniture, equipment and leasehold improvements | Furniture, equipment, and leasehold improvements consist of the following: | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Equipment | $ | 926,654 | $ | 896,376 | ||||
Furniture and leasehold improvements | 1,718,826 | 1,659,740 | ||||||
2,645,480 | 2,556,116 | |||||||
Less accumulated depreciation and amortization | 1,960,744 | 1,733,983 | ||||||
$ | 684,736 | $ | 822,133 |
F_INTANGIBLE_ASSETS_Tables
F - INTANGIBLE ASSETS (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||
Intangible assets | Intangible assets consist of the following: | |||||||||||||
31-Dec-14 | 31-Dec-13 | |||||||||||||
Gross | Accumulated | Gross | Amortization | |||||||||||
Carrying | Amortization | Carrying | Accumulated | |||||||||||
Amount | Amount | |||||||||||||
Amortizable intangible assets: | ||||||||||||||
Website, content and non-compete | $ | 1,850,000 | 1,850,000 | $ | 1,850,000 | $ | 1,850,000 | |||||||
Retail brokerage accounts | 2,638,000 | 2,630,000 | 2,638,000 | 2,620,000 | ||||||||||
$ | 4,488,000 | 4,480,000 | $ | 4,488,000 | $ | 4,470,000 | ||||||||
Amortization expense | $ | 10,000 | $ | 10,000 |
F_INCOME_TAXES_Tables
F - INCOME TAXES (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Tax Disclosure [Abstract] | |||||||||||
Income tax expense (benefit) provision | Income tax expense consists of the following: | ||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Federal income tax expense: | |||||||||||
Current | $ | — | $ | 19,000 | $ | — | |||||
Deferred | — | — | — | ||||||||
— | 19,000 | — | |||||||||
State and local: | |||||||||||
Current | — | — | 34,000 | ||||||||
Deferred | — | — | — | ||||||||
— | — | 34,000 | |||||||||
Total: | |||||||||||
Current | — | 19,000 | 34,000 | ||||||||
Deferred | — | — | — | ||||||||
$ | — | $ | 19,000 | $ | 34,000 | ||||||
Reconciliation between income tax benefit and income taxes | Reconciliation between the income tax provision and income taxes computed by applying the statutory Federal income tax rate to loss before income taxes is as follows: | ||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Expected income tax benefit at statutory Federal tax rate (34%) | $ | (2,229,000 | ) | $ | (2,004,000 | ) | $ | (47,000 | ) | ||
State and local taxes, net of Federal tax effect | (459,000 | ) | (413,000 | ) | 22,000 | ||||||
Increase in valuation allowance | 2,551,000 | 2,342,000 | — | ||||||||
Permanent difference | 39,000 | 46,000 | 36,000 | ||||||||
Other | 98,000 | 48,000 | 23,000 | ||||||||
Income tax expense | $ | 0 | $ | 19,000 | $ | 34,000 | |||||
Deferred tax assets (liabilities) | The principal items giving rise to deferred tax assets (liabilities) are as follows: | ||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Deferred tax assets: | |||||||||||
Net operating loss credit carryforwards | $ | 8,046,000 | $ | 4,670,000 | |||||||
Alternative minimum tax carryforward | 9,000 | 15,000 | |||||||||
Employee stock based compensation | 237,000 | 237,000 | |||||||||
Retail brokerage accounts | 211,000 | 281,000 | |||||||||
Contribution carryover | 223,000 | 347,000 | |||||||||
Furniture, equipment and leasehold improvements | 115,000 | 96,000 | |||||||||
Accrued expenses | 337,000 | 83,000 | |||||||||
Investment in affiliate (a) | 736,000 | 1,001,000 | |||||||||
Accrued compensation and other | — | 44,000 | |||||||||
Capital loss carryforwards | 24,000 | — | |||||||||
Other | 30,000 | — | |||||||||
Total | 9,968,000 | 6,774,000 | |||||||||
Valuation allowance | (9,218,000 | ) | (6,774,000 | ) | |||||||
Net deferred tax assets | 750,000 | — | |||||||||
Deferred tax liability: | |||||||||||
Receivable from affiliate (b) | (750,000 | ) | — | ||||||||
$ | 0 | $ | 0 |
H_ACCOUNTS_PAYABLE_AND_ACCRUED1
H - ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) (Siebert, Brandford, Shank Financial LLC and Subsidiary) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Siebert, Brandford, Shank Financial LLC and Subsidiary | ||||||||
Accounts payable and accrued expenses | Accounts payable and accrued expenses consist of the following: | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Accounts payable | $ | 313,285 | $ | 171,761 | ||||
Accrued bonus and other employee compensation | 4,233,521 | 3,785,271 | ||||||
Other accrued expenses | 200,842 | 49,576 | ||||||
$ | 4,747,648 | $ | 4,006,608 |
I_OPTIONS_Tables
I - OPTIONS (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||
Stock option transactions | A summary of the Company’s stock option transactions for the three years ended December 31, 2014 is presented below: | |||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Shares | Weighted | Shares | Weighted | Shares | Weighted | |||||||||||||||
Average | Average | Average | ||||||||||||||||||
Exercise | Exercise | Exercise | ||||||||||||||||||
Price | Price | Price | ||||||||||||||||||
Outstanding - beginning of the year | 350,000 | 3.1 | 400,000 | 3.33 | 1,228,200 | $ | 3.88 | |||||||||||||
Cancelled | (60,000 | ) | 3.05 | — | — | — | — | |||||||||||||
Forfeited | — | (25,000 | ) | 5.06 | — | — | ||||||||||||||
Expired | (25,000 | ) | 4.04 | (25,000 | ) | 4.75 | (828,200 | ) | $ | 4.14 | ||||||||||
Outstanding - end of year | (a) | 265,000 | 3.02 | 350,000 | 3.1 | 400,000 | $ | 3.33 | ||||||||||||
Fully vested and exercisable at end of year | (a) | 265,000 | 3.02 | 350,000 | 3.1 | 400,000 | $ | 3.33 | ||||||||||||
J_COMMITMENTS_CONTINGENCIES_AN1
J - COMMITMENTS, CONTINGENCIES AND OTHER (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Future minimum base rental payments | Future minimum base rental payments under these operating leases are as follows: | ||||
Year Ending | Amount | ||||
December 31, | |||||
2015 | 615,000 | ||||
2016 | 482,000 | ||||
2017 | 80,000 | ||||
$ | 1,177,000 | ||||
SBS | |||||
Future minimum base rental payments | Future minimum base rent under these operating leases as of December 31, 2014 are as follows: | ||||
Year Ending | |||||
December 31, | Amount | ||||
2015 | 1,043,000 | ||||
2016 | 886,000 | ||||
2017 | 639,000 | ||||
2018 | 627,000 | ||||
2019 | 587,000 | ||||
Thereafter | 185,000 | ||||
$ | 3,967,000 |
B_BUSINESS_ACQUISITION_Details
B - BUSINESS ACQUISITION (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Revenue | $4,975,000 | $3,454,000 | $3,705,000 | $3,718,000 | $4,191,000 | $3,666,000 | $4,278,000 | $4,266,000 | $15,815,000 | $16,401,000 | $20,983,000 |
Net Income | 948,000 | -1,456,000 | -6,077,000 | 28,000 | -1,546,000 | -1,644,000 | -1,353,000 | -1,369,000 | -6,557,000 | -5,912,000 | -171,000 |
SBS | |||||||||||
Revenue | 24,965,000 | 28,246,000 | |||||||||
Net Income | 193,000 | 1,579,000 | |||||||||
Pro Forma [Member] | SBS | |||||||||||
Revenue | 27,729,000 | ||||||||||
Net Income | $672,000 |
C_SUMMARY_OF_SIGNIFICANT_ACCOU3
C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Cash equivalents | $6,749,000 | $15,424,000 |
Financial instruments | 488,000 | 406,000 |
Level 1 | ||
Cash equivalents | 7,711,000 | 16,371,000 |
Securities | 488,000 | 406,000 |
Financial instruments | $8,199,000 | $16,777,000 |
D_INVESTMENT_IN_AFFILIATES_Det
D - INVESTMENT IN AFFILIATES (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Investment and advances | $7,979,000 | $8,022,000 | |
Income from equity investees | 104,000 | -65,000 | 806,000 |
Distributions | 186,000 | 1,218,000 | 97,000 |
Siebert, Brandford, Shank Financial LLC and Subsidiary | |||
Income from equity investees | 84,000 | ||
Distributions | 13,000 | ||
SBSFPC | |||
Investment and advances | 190,000 | ||
Income from equity investees | -17,000 | -159,000 | 32,000 |
Distributions | 173,000 | 6,000 | 2,000 |
SBS | |||
Investment and advances | 7,979,000 | 7,832,000 | |
Income from equity investees | 94,000 | 774,000 | |
Distributions | $1,212,000 | $95,000 |
D_INVESTMENT_IN_AFFILIATES_Det1
D - INVESTMENT IN AFFILIATES (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Total assets | $20,728,000 | $27,970,000 | $20,728,000 | $27,970,000 | |||||||
Regulatory minimum net capital requirement | 250,000 | 250,000 | 250,000 | 250,000 | |||||||
Total revenue | 4,975,000 | 3,454,000 | 3,705,000 | 3,718,000 | 4,191,000 | 3,666,000 | 4,278,000 | 4,266,000 | 15,815,000 | 16,401,000 | 20,983,000 |
Net income | 948,000 | -1,456,000 | -6,077,000 | 28,000 | -1,546,000 | -1,644,000 | -1,353,000 | -1,369,000 | -6,557,000 | -5,912,000 | -171,000 |
Siebert, Brandford, Shank Financial LLC and Subsidiary | |||||||||||
Total revenue | 24,806,000 | ||||||||||
Net income | 171,000 | ||||||||||
SBS | |||||||||||
Total assets | 28,518,000 | 22,999,000 | 28,518,000 | 22,999,000 | |||||||
Total liabilities | 12,458,000 | 7,083,000 | 12,458,000 | 7,083,000 | |||||||
Total members' capital | 16,060,000 | 15,916,000 | 16,060,000 | 15,916,000 | |||||||
Regulatory minimum net capital requirement | 250,000 | 250,000 | 250,000 | 250,000 | |||||||
Total revenue | 24,965,000 | 28,246,000 | |||||||||
Net income | 193,000 | 1,579,000 | |||||||||
SBSFPC | |||||||||||
Total assets | 26,000 | 584,000 | 26,000 | 584,000 | |||||||
Total liabilities | 26,000 | 15,000 | 26,000 | 15,000 | |||||||
Total members' capital | 0 | 569,000 | 0 | 569,000 | |||||||
Total revenue | 0 | -222,000 | 293,000 | ||||||||
Net income | ($51,000) | ($478,000) | $98,000 |
D_SUBORDINATED_BORROWINGS_AND_2
D - SUBORDINATED BORROWINGS AND SECURED DEMAND NOTE RECEIVABLE (Details) (SBS, USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
SBS | ||
Payable to affiliate (a) | $1,200,000 | $1,200,000 |
Payable to clearing broker | 4,000,000 | |
Subordinated debt | $5,200,000 | $1,200,000 |
E_FURNITURE_EQUIPMENT_AND_LEAS2
E - FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Equipment | $524,000 | $518,000 |
Leasehold improvements | 546,000 | 427,000 |
Furniture and fixtures | 43,000 | 14,000 |
Furniture, equipment and leasehold improvements, gross | 1,113,000 | 959,000 |
Less accumulated depreciation and amortization | -504,000 | -247,000 |
Furniture, equipment and leasehold improvements, net | 609,000 | 712,000 |
SBS | ||
Equipment | 926,654 | 896,376 |
Leasehold improvements | 1,718,826 | 1,659,740 |
Furniture, equipment and leasehold improvements, gross | 2,645,480 | 2,556,116 |
Less accumulated depreciation and amortization | 1,960,744 | 1,733,983 |
Furniture, equipment and leasehold improvements, net | $684,736 | $822,133 |
E_FURNITURE_EQUIPMENT_AND_LEAS3
E - FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET (Details Narrative) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Depreciation and amortization expense | $257,000 | $120,000 | $274,000 |
Siebert, Brandford, Shank Financial LLC and Subsidiary | |||
Depreciation and amortization expense | 226,761 | ||
SBS | |||
Depreciation and amortization expense | $250,154 | $266,093 |
F_INTANGIBLE_ASSETS_Details
F - INTANGIBLE ASSETS (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Amortization expense | $10,000 | $10,000 |
Website, content and non-compete | ||
Gross Carrying Amount | 1,850,000 | 4,488,000 |
Accumulated Amortization | 1,850,000 | 4,480,000 |
Retail brokerage accounts | ||
Gross Carrying Amount | 2,638,000 | 2,638,000 |
Accumulated Amortization | 2,630,000 | 2,620,000 |
Amortizable assets | ||
Gross Carrying Amount | 4,480,000 | |
Accumulated Amortization | 4,470,000 | |
Intellectual property | ||
Gross Carrying Amount | 1,850,000 | |
Accumulated Amortization | $1,850,000 |
F_NET_CAPITAL_Details_Narrativ
F - NET CAPITAL (Details Narrative) (SBS, USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
SBS | ||
Net capital | $22,807,796 | $18,271,172 |
Excess of required capital | $22,557,796 | $18,021,172 |
G_INCOME_TAXES_Details
G - INCOME TAXES (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Federal income tax expense (benefit): | |||
Current | $19,000 | ||
Deferred | |||
Federal income tax provision (benefit) | 19,000 | ||
State and local: | |||
Current | 34,000 | ||
Deferred | |||
State and local | 34,000 | ||
Current | 19,000 | 34,000 | |
Deferred | |||
Total | $19,000 | $34,000 |
G_INCOME_TAXES_Details_1
G - INCOME TAXES (Details 1) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
G - Income Taxes Details 1 | |||
Expected income tax benefit at statutory Federal tax rate (34%) | ($2,229,000) | ($2,004,000) | ($47,000) |
State and local taxes, net of Federal tax effect | -459,000 | -413,000 | 22,000 |
Increase in valuation allowance | 2,551,000 | 2,342,000 | |
Permanent difference | 39,000 | 46,000 | 36,000 |
Other | 98,000 | 48,000 | 23,000 |
Income tax expense | $0 | $19,000 | $34,000 |
G_INCOME_TAXES_Details_2
G - INCOME TAXES (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred tax asset: | ||
Net operating loss credit carryforwards | $8,046,000 | $4,670,000 |
Alternative minimum tax carryforward | 9,000 | 15,000 |
Employee stock based compensation | 237,000 | 237,000 |
Retail brokerage accounts | 211,000 | 281,000 |
Contribution carryover | 223,000 | 347,000 |
Furniture, equipment and leasehold improvements | 115,000 | 96,000 |
Accrued expenses | 337,000 | 83,000 |
Investment in affiliate (a) | 736,000 | 1,001,000 |
Accrued compensation and other | 44,000 | |
Capital loss carryforwards | 24,000 | |
Other | 30,000 | |
Deferred tax asset, gross | 9,968,000 | 6,774,000 |
Valuation allowance | -9,218,000 | -6,774,000 |
Net deferred tax assets | 750,000 | |
Deferred tax liability: | ||
Receivable from affiliate (b) | -750,000 | |
Deferred tax liability, net | $0 | $0 |
H_STOCKHOLDERS_EQUITY_Details_
H - STOCKHOLDERS' EQUITY (Details Narrative) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
H - Stockholders Equity Details Narrative | ||
Net capital | $5,100,000 | $13,000,000 |
Net capital requirements | $250,000 | $250,000 |
H_ACCOUNTS_PAYABLE_AND_ACCRUED2
H - ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Accounts payable and accrued liabilities | $2,176,000 | $2,861,000 |
SBS | ||
Accounts payable | 313,285 | 171,761 |
Accrued bonus and other employee compensation | 4,233,521 | 3,785,271 |
Other accrued expenses | 200,842 | 49,576 |
Accounts payable and accrued liabilities | $4,747,648 | $4,006,608 |
I_OPTIONS_Details
I - OPTIONS (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Number of Options | |||
Number of Options Outstanding, Beginning balance | 350,000 | 400,000 | 1,228,200 |
Number of Options Expired | -60,000 | ||
Number of Options Expired | -25,000 | ||
Number of Options Forfeited | -25,000 | -25,000 | -828,200 |
Number of Options Outstanding, Ending balance | 265,000 | 350,000 | 400,000 |
Fully vested and exercisable at end of year | 265,000 | 350,000 | 400,000 |
Weighted Average Exercise Price | |||
Weighted Average Exercise Price Outstanding, Beginning | $3.10 | $3.33 | $3.88 |
Weighted Average Exercise PriceCancelled | $3.05 | ||
Weighted Average Exercise Price Expired | $5.06 | ||
Weighted Average Exercise Price Forfeited | $4.04 | $4.75 | $4.14 |
Weighted Average Exercise Price Outstanding, Ending | $3.02 | $3.10 | $3.33 |
Weighted Average Exercise Price vest and exercisable | $3.02 | $3.10 | $3.33 |
I_OTHER_Details_Narrative
I - OTHER (Details Narrative) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
General and administrative services | $2,033,000 | $2,245,000 | $2,374,000 |
Siebert, Brandford, Shank Financial LLC and Subsidiary | |||
General and administrative services | 100,000 | ||
SBS | |||
General and administrative services | $100,000 | $75,000 |
Recovered_Sheet1
J - Commitments, Contingencies And Othe (Details) (USD $) | Dec. 31, 2014 |
2015 | $615,000 |
2016 | 482,000 |
2017 | 80,000 |
Future minimum base rental payments under these operating leases | 1,177,000 |
SBS | |
2015 | 1,043,000 |
2016 | 886,000 |
2017 | 639,000 |
2018 | 627,000 |
2019 | 587,000 |
Thereafter | 185,000 |
Future minimum base rental payments under these operating leases | $3,967,000 |
Recovered_Sheet2
J - Commitments, Contingencies And Other (Details Narrative) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Rent expense | $788,000 | $1,046,000 | $907,000 |
Siebert, Brandford, Shank Financial LLC and Subsidiary | |||
Rent expense | 1,186,967 | ||
SBS | |||
Rent expense | $1,088,755 | $1,052,908 |
K_SUMMARIZED_QUARTERLY_FINANCI1
K - SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
K - Summarized Quarterly Financial Data Details | |||||||||||
Revenue | $4,975,000 | $3,454,000 | $3,705,000 | $3,718,000 | $4,191,000 | $3,666,000 | $4,278,000 | $4,266,000 | $15,815,000 | $16,401,000 | $20,983,000 |
Net income | $948,000 | ($1,456,000) | ($6,077,000) | $28,000 | ($1,546,000) | ($1,644,000) | ($1,353,000) | ($1,369,000) | ($6,557,000) | ($5,912,000) | ($171,000) |
Earnings (loss) per share: | |||||||||||
Basic | $0.04 | ($0.07) | ($0.28) | $0 | ($0.07) | ($0.07) | ($0.06) | ($0.06) | |||
Diluted | $0.04 | ($0.07) | ($0.28) | $0 | ($0.07) | ($0.07) | ($0.06) | ($0.06) |