UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934


Date of Report (Date of earliest event reported):  December 2, 2019


SIEBERT FINANCIAL CORP.
(Exact name of registrant as specified in its charter)


New York
0-5703
11-1796714
(State or other jurisdiction of
incorporation)
(Commission File Number)
(IRS Employer Identification
Number)

 
 120 Wall Street, New York, NY
 
 10005
 
 
 (Address of principal executive offices)
 
 (Zip Code)
 
          
        
 
 Registrant’s telephone number, including area code:
 
 (212) 644-2400

 

 (Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐  Written communications pursuant to Rule 425 under the Securities Act

☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act

☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock - $0.01 par value
SIEB
The Nasdaq Capital Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company      ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.01 Completion of Entry into a Material Definitive Agreement

As previously disclosed in a Current Report on Form 8-K, filed on October 3, 2019, Siebert Financial Corp. (the “Company”) (NASDAQ: SIEB), Weeden Investors L.P., a Delaware limited partnership (“LP”), and Weeden Securities Corporation, a Delaware corporation (“GP” and together with LP, each, a “Seller” and collectively, the “Sellers”) entered into an Equity Interests Purchase Agreement (the “Agreement”), pursuant to which the Company acquired (the “Acquisition”) all of the Sellers’ member interests in Weeden Prime Services, LLC (the “Equity Interests”), a broker-dealer registered with the SEC offering prime brokerage services, for cash consideration of $7,124,996 (the “Purchase Price”).
On December 2, 2019, pursuant to the terms of the Agreement, the Company acquired the Equity Interests from the Sellers in exchange for the Purchase Price. In connection therewith, the Company entered into an unsecured promissory note (the “Note”) with Gloria E. Gebbia, pursuant to which the Company borrowed $3,000,000 to finance part of the Acquisition. Interest on the note accrues at the rate of 4% per annum and all principal and accrued unpaid interest is due and payable by the Company in full on December 2, 2020. The Company may prepay the Note at any time without a penalty. The balance of the Purchase Price, $4,124,996, was provided to the Company by its wholly-owned subsidiary, Muriel Siebert & Co., Inc.
Gloria E. Gebbia is a member of the Company’s board of directors and is the direct beneficial owner of 7,658,500 shares of the Company’s Common Stock, representing approximately 28.2% of the Company’s outstanding Common Stock. Gloria E. Gebbia is also the Managing Member of Kennedy Cabot Acquisition, LLC (“KCA”) and may be deemed to be the indirect beneficial owner of 3,577,283 shares of the Company’s Common Stock, representing approximately 13.2% of the outstanding Common Stock of the Company, owned by KCA, and she may be deemed to share indirect beneficial ownership of a total of 5,901,194 additional shares of the Company’s Common Stock, owned by family trusts and certain members of Gloria E. Gebbia’s family. Accordingly, Gloria E. Gebbia may be deemed to beneficially own, directly and indirectly, an aggregate of 17,136,977 shares of Common Stock, representing approximately 63.1% of the Company’s outstanding Common Stock.
The foregoing descriptions of the Agreement and the Note do not purport to be complete and are qualified in their entirety by the full texts of the Agreement and the Note, filed as Exhibits 99.1 and 99.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
Item 2.03  Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information contained in Item 1.01 above is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
On December 4, 2019, the Company issued a press release announcing the completion of the Acquisition. A copy of the press release is attached as Exhibit 99.3 to this Current Report on Form 8-K and is incorporated herein by reference.
Forward-Looking Statements.
This Current Report on Form 8-K contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements typically are identified by use of terms such as “may,” “project,” “should,” “plan,” “expect,” “anticipate,” “believe,” “estimate” and similar words. Except as required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The Company’s actual results could differ materially from those contained in forward-looking statements due to a number of factors, including the statements under “Risk Factors” found in the Company’s Annual Reports on Form 10-K and its Quarterly Reports on Form 10-Q filed with the SEC.
Item 9.01. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
The Company will file the financial statements required by Item 9.01(a) of Form 8-K by an amendment to this Current Report on Form 8-K no later than 71 days from the date this Current Report on Form 8-K is required to be filed.
(b) Pro forma financial information.
The Company will file the pro forma financial information required by Item 9.01(b) of Form 8-K by an amendment to this Current Report on Form 8-K no later than 71 days from the date this Current Report on Form 8-K is required to be filed.
(d) Exhibits
 Exhibit No.
 Description
 
 
 99.1
 
 
 99.2
 
 
 99.3
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


 
 
       
Dated:  December 4, 2019
By:
/s/ Andrew H. Reich  
    Andrew H. Reich  
    EVP, Chief Operating Officer, Chief Financial Officer  
    and Secretary  

 
 Exhibit 99.2



THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE TRANSFERRED UNTIL (i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) SHALL HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (ii) RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER NOR IS IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS. THIS LEGEND SHALL BE ENDORSED UPON ANY NOTE ISSUED IN EXCHANGE FOR THIS NOTE.



4% Promissory Note


$3,000,000.00
 As of December 2, 2019


FOR VALUE RECEIVED, Siebert Financial Corp., Inc., a New York corporation (the “Company”) with its principal executive office at 120 Wall Street, New York, NY 10005, promises to pay to the order of  Gloria E. Gebbia, or her assigns (the “Holder”), the principal amount of Three Million Dollars ($3,000,000.00) (the “Principal Amount”) in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts. Interest on this note (the “Note”) shall accrue on the Principal Amount outstanding from time to time at a rate per annum computed in accordance with, and shall be payable as provided in, Section 2 hereof. Nothing in this paragraph shall be construed as the consent by the Holder of this Note to any action otherwise prohibited by the terms of this Note or as a waiver of any such prohibition.

1. Note Issuance.  This Note is issued by the Company in connection with its acquisition of Weeden Prime Services, LLC, pursuant to that certain Equity Interests Purchase Agreement (the “Agreement”), dated as of September 27, 2019, by and among the Company, Weeden Investors, L.P. and Weeden Securities Corporation.  Capitalized terms used in this Note and not otherwise defined shall have the meanings ascribed to such terms in the Agreement.
2. Payment of the Note.
A. Principal and Interest Payments.  The Principal Amount an all accrued and unpdaid interest and any other amounts payable pursuant to this Note shall be paid by the Company to the Holder on December 2, 2020 (the one year anniversary of the date of this Note).
B. Interest Rate.  The outstanding Principal Amount shall bear interest at the rate of four (4.0%) percent per annum calculated on the basis of a 360 day year.
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C. Payment.  Each payment by the Company pursuant to this Note shall be made without set-off or counterclaim and in immediately available funds.  If any payment due date falls on a day that is not a Business Day, then the payment shall be due and payable on the next following Business Day.  For purposes of this Note, “Business Day” means any day that is not a Saturday, a Sunday or a day on which banks are required or permitted to be closed in the State of New York.
3. Prepayment.  All or any portion of the Principal Amount may be prepaid by the Company at any time or from time to time.
4. Events of Default; Default.
  A.   The term “Event of Default” shall mean any of the following events:

(i) Non-Payment of Obligations. The Company shall default in the payment of the Principal Amount or accrued interest on this Note when and as the same shall become due and payable, whether by acceleration or otherwise and such failure shall not be remedied within ten (10) calendar days of the applicable due date; or
(ii) Bankruptcy, Insolvency, etc. The Company shall:
(a) generally fail or be unable to pay, or admit in writing its inability to pay, its debts as they become due;
(b) apply for, consent to, or acquiesce in, the appointment of a trustee, receiver, sequestrator or other custodian for the Company or any of its property, or make a general assignment for the benefit of creditors;
(c) in the absence of such application, consent or acquiesce in, permit or suffer to exist the appointment of a trustee, receiver, sequestrator or other custodian for the Company or for any part of its property, and such trustee, receiver, sequestrator or other custodian shall not be discharged within thirty (30) days;
(d) permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy, insolvency or comparable law, or any dissolution, winding up or liquidation proceeding, in respect of the Company, and, if such case or proceeding is not commenced by the Company or converted to a voluntary case, such case or proceeding shall be consented to or acquiesced in by the Company or shall result in the entry of an order for relief or shall remain for sixty (60) days undismissed; or
(e) take any corporate action authorizing, or in furtherance of, any of the foregoing.
B. Action if Bankruptcy, Insolvency, etc. If any Event of Default described in clause (ii) of Section 4A shall occur, the outstanding Principal Amount of this Note together with all interest accrued thereon and all other obligations hereunder shall automatically be and become immediately due and payable, without notice or demand.
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C. Action if Other Event of Default. If any Event of Default described in clause (i) of Section 4A shall occur for any reason, and be continuing, the Holder may, upon notice to the Company, declare all or any portion of the outstanding Principal Amount of the Note together with interest accrued thereon and any or all other obligations hereunder to be due and payable, whereupon the full unpaid Principal Amount (or any portion thereof so demanded), such accrued interest and any and all other such obligations which shall be so declared due and payable shall be and become immediately due and payable, without further notice, demand, or presentment.
5.    Amendments; Waivers; Severability.

A.   Amendments.
(i) The provisions of this Note may from time to time be amended, modified or waived, if such amendment, modification or waiver is in writing and consented to by the Company and Holder.
B. Waivers.
(i) No failure or delay on the part of Holder in exercising any power or right under this Note shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right. No notice to or demand on the Company, in any case shall entitle it to any notice or demand in similar or other circumstances. No waiver or approval by Holder shall, except as may be otherwise stated in such waiver or approval, be applicable to subsequent transactions. No waiver or approval hereunder shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder.
(ii) The Company hereby waives presentment for payment, demand, notice of nonpayment, notice of dishonor, protest of any dishonor, notice of protest and protest of this Note, and all other notices in connection with the delivery, acceptance, performance, default or enforcement of the payment of this Note and shall pay all costs of collection, when incurred, including, without limitation, reasonable attorney’s fees, costs and other expenses.
C. Severability.  The unenforceability or invalidity of any provision of this Note shall not affect the enforceability or validity of any other provision of this Note and the invalidity or unenforceability of any provision of this Note to any person or circumstance shall not affect the enforceability or validity of such provision to any other persons or circumstances.
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6. Miscellaneous.
A. Parties in Interest. All covenants, agreements and undertakings in this Note binding upon the Company or Holder shall bind and inure to the benefit of the successors and permitted assigns of the Company and Holder, respectively, whether so expressed or not.
B. Governing Law; Consent to Forum. This Note shall be governed exclusively by the laws of the State of New York without giving effect to any choice of law rules thereof.
D. Waiver of Jury Trial. THE HOLDER AND THE COMPANY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS NOTE OR ANY OTHER DOCUMENT OR INSTRUMENT EXECUTED AND DELIVERED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE HOLDER OR THE COMPANY.



[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, this Note has been executed and delivered on the date specified above by the duly authorized representative of the Company.

  Siebert Financial Corp., Inc., a New York corporation  
       

By:
                            
    Name:  Andrew Reich  
    Title:  CFO  
       


AGREED AND ACCCEPTED:

   
Gloria E. Gebbia
 

 


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 Exhibit 99.3


Siebert Financial Corp. Completes Acquisition of Weeden Prime Services, LLC

  • Effective December 2, 2019, Siebert acquired Weeden Prime, a leading prime brokerage services provider, for a total purchase price of approximately $7.1 million in cash
  • Weeden Prime has generated approximately $12-14 million in annual revenue
  • Through its acquisition of Weeden Prime, Siebert will gain approximately $1.5 billion in assets under management, two branch offices and 25 employees

NEW YORK--(BUSINESS WIRE)--December 4, 2019--Siebert Financial Corp. (NASDAQ:SIEB) (“Siebert”), a provider of financial services, today announced the completion of the acquisition of Weeden Prime Services, LLC (“Weeden Prime”), a leading prime brokerage services provider. The acquisition was effective on December 2, 2019, and Weeden Prime will be a wholly-owned subsidiary of Siebert.

The acquisition of Weeden Prime will provide a new customer base of institutional clients as well as several strategic clearing relationships. Weeden Prime’s technology, including their Armor solution, will be added to Siebert’s technology portfolio.

In addition, there are substantial cross selling opportunities for the institutional and retail clients, including partnering with institutional clients to generate new product offerings for the retail clients. The addition of Weeden Prime will bring economies of scale in terms of operational and administrative functions as well as a skilled management team to Siebert.

Gloria E. Gebbia, controlling shareholder and board member of Siebert, commented on the completion of the acquisition saying, “We are excited to have the Weeden Prime team officially on board and are looking forward to achieving the benefits of the combined company. Combining Siebert’s and Weeden Prime’s complementary business lines creates a powerful and dynamic company able to meet the needs of a rapidly changing market.“

Andrew Formato, the President of Weeden Prime, said, “The entire team at Weeden Prime is excited to combine with the Siebert family and build on the strength of both of our respective firms. With Siebert’s strong positioning in the marketplace and our shared vision, we look forward to growing our business for the future.”

Andrew Reich, CFO of Siebert, commented on the transaction saying, “We are very excited about the financial benefit this transaction will deliver to Siebert. Currently, Weeden Prime generates approximately $12-14 million in annual revenue and it has achieved significant organic growth over the past few years. By integrating Weeden Prime into the Siebert infrastructure, we will be well positioned to continue that growth as well as achieve significant economies of scale. We are excited for the future of Siebert and capitalizing on the opportunities ahead.”

Notice to Investors

This communication is provided for informational purposes only and is neither an offer to sell nor a solicitation of an offer to buy any securities in the United States or elsewhere.

About Siebert Financial Corp.

Siebert Financial Corp. is a holding company that conducts its retail brokerage business through its wholly-owned subsidiary, Muriel Siebert & Co., Inc., which became a member of the New York Stock Exchange (“NYSE”) in 1967 when Ms. Siebert became the first woman to own a seat on the NYSE and the first to head one of its member firms. The company conducts its investment advisory business through its wholly-owned subsidiary, Siebert AdvisorNXT, Inc., a registered investment advisor, and its insurance business through its wholly-owned subsidiary, Park Wilshire Companies, Inc., a licensed insurance agency. Siebert’s fourth wholly-owned subsidiary, Siebert Technologies, LLC., is a developer of robo-advisory technology. Siebert is headquartered in New York City with 13 offices throughout the continental U.S. Siebert is under common control with StockCross Financial Services, Inc. More information is available at www.siebertnet.com.

About Weeden Prime Services, LLC

Weeden Prime is a technology-powered prime brokerage business focused on providing institutional quality services to hedge funds and family offices. With a focus on capital raising and cutting-edge technology, Weeden Prime has successfully created an ideal platform which clients can leverage in seeking to grow their businesses. Weeden Prime offers a comprehensive global platform that includes dynamic proprietary risk management and analytics technology (“Armor”), institutional equity, outsourced trading, automated allocation technology and sophisticated portfolio reporting. More information is available at www.weedenprime.com.

Cautionary Note Regarding Forward-Looking Statements

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

These forward-looking statements, which reflect our management’s beliefs, objectives, and expectations as of the date hereof, are based on the best judgment of our management. All forward-looking statements speak only as of the date on which they are made. Such forward-looking statements are subject to certain risks, uncertainties and assumptions relating to factors that could cause actual results to differ materially from those anticipated in such statements, including, without limitation, the following: economic, social and political conditions and other securities industry risks; interest rate risks; liquidity risks; credit risk with clients and counterparties; risk of liability for errors in clearing functions; systemic risk; systems failures, delays and capacity constraints; network security risks; competition; reliance on external service providers; new laws and regulations affecting our business; net capital requirements; extensive regulation, regulatory uncertainties and legal matters; failure to maintain relationships with employees, customers, business partners or governmental entities; the inability to achieve synergies or to implement integration plans and other consequences associated with risks and uncertainties detailed in our filings with the SEC, including our most recent filings on Forms 10-K and 10-Q.

The forward-looking statements contained herein speak only as of the date on which the statements were made. We caution that the foregoing list of factors is not exclusive, and new factors may emerge, or changes to the foregoing factors may occur, that could impact our business. We undertake no obligation to publicly update or revise these statements, whether as a result of new information, future events or otherwise, except to the extent required by the federal securities laws.

Contacts

Siebert Financial Corp.
120 Wall Street
New York, NY 10005

Investor Relations:
Siebert Financial Corp.
John T. Gebbia
(310) 432-2196