Siebert Financial Corp: Form 10-Q for the period ended Mar 31, 2026

The following discussion provides a narrative of our financial performance and condition that should be read in conjunction with the accompanying financial statements and related notes included under Part I, Item 1 of this Report. In addition to our historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in our 2025 Form 10-K, particularly in Part I, Item 1A – Risk Factors.

Overview

We are primarily a financial services company and provide a wide variety of financial services to our clients. We operate in business lines such as retail brokerage, investment advisory, insurance, and technology development through our wholly-owned subsidiaries. We also operate a media, sports and entertainment business, although financial services remains our primary business.

Results in the businesses in which we operate are highly correlated to general economic conditions and, more specifically, for our financial services businesses, to the direction of the U.S. equity and fixed-income markets. Market volatility, overall market conditions, interest rates, economic, political, and regulatory trends, industry competition, and, with respect to our media, sports and entertainment business, consumer demand for music and entertainment content, are among the factors which could affect us and which are unpredictable and beyond our control. These factors affect the financial decisions made by market participants who include investors and competitors, impacting their level of participation in the financial markets.

In addition, in periods of reduced financial market activity, or lower revenue generation from our developing business lines, profitability is likely to be adversely affected because certain expenses remain relatively fixed, including salaries and related costs, as well as portions of communications costs and occupancy expenses. Accordingly, earnings for any period should not be considered representative of earnings to be expected for any other period.

Financial Overview

In the three months ended March 31, 2026, loss per share was $0.05, compared to earnings per share of $0.22 in the prior-year period. In the first quarter of 2026, our revenues were $23.5 million and operating loss before taxes was $2.9 million, compared to revenues of $28.9 million and operating income of $10.5 million in the prior-year period.

For the three months ended March 31, 2026, our results compared to the prior-year period reflected continued growth in certain business lines, including stock borrow / stock loan and investment banking, offset by lower interest-related revenue, higher operating expenses, impairment of goodwill and an intangible asset related to our Media, Sports, and Entertainment segment, and the $9.2 million unrealized gain recognized during the prior-year period related to our Investment in Equity Security.

During the three months ended March 31, 2026, we continued to invest in the expansion of our business lines and supporting infrastructure, which contributed to higher personnel expenses, commission and payout expenses, technology costs, advertising and promotion expense, and costs associated with the growth of expenses associated with music production, artist development, marketing, distribution, and related operations. These increases were partially offset by higher revenues from stock borrow / stock loan activities and investment banking fees, and the impairment expenses detailed in the sections below. The year-over-year comparison was significantly impacted by the $9.2 million unrealized gain recognized during the three months ended March 31, 2025. See “Investment in Equity Security,” “Segments,” and “Statements of Operations and Financial Condition” below for further discussion of the significant factors affecting our results.

Investment in Equity Security

In the first quarter of 2025, we participated in a private placement and acquired restricted shares of a privately held U.S. company (the “Investment in Equity Security”). These shares were subject to restrictions on transferability and did not have a readily determinable fair value at the time of acquisition. On March 31, 2025, the issuer completed its initial public offering “(IPO”), and our restricted shares converted into restricted publicly traded shares as part of the IPO process. These shares remained subject to resale restrictions and could not be sold unless a registration statement was filed with SEC or an applicable exemption from registration became available. Additional details are provided in the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2025.

There was significant volatility in the price of the shares, and in the three months ended March 31, 2025, we recorded an unrealized gain of approximately $9.2 million as the price per share closed at $85.31 on March 31, 2025. After the lifting of contractual sale restrictions, we sold the majority of our Investment in Equity Security for an average price of $19.00 per share. We recognized a net gain of $2.4 million related to this investment following the sale of our position.

Green Pier Clearing Agreement

RISE executed a fully disclosed clearing agreement with Green Pier, an indirect wholly-owned subsidiary of FMR, effective February 27, 2026. We believe the relationship will provide access to advanced clearing infrastructure and technology solutions that enhance operational capabilities, scalability, and system reliability, supporting the development and execution of RISE’s broker-dealer activities. Refer to Note 1 - Organization and Basis of Presentation for further information.

Arqitech Investment

In the first quarter of 2026, we made a strategic investment in Arqitech. Arqitech is an institutional-grade, non-custodial digital asset infrastructure platform that provides on-chain settlement, cross-chain execution, and decentralized financial technology solutions for regulated financial institution to support its broader technology and digital asset initiatives. We believe this investment provides exposure to institutional-grade digital asset infrastructure and anticipates it will support future growth and strategic opportunities.

Media Partnership

On March 4, 2026, we entered into an agreement with a multimedia news platform operator for $1 million for a media partnership designed to support marketing and promotional initiatives related to our products and services.

Segments

We manage our business through the following reportable segments:

• Financial Services
• Media, Sports, and Entertainment

Segment results are evaluated based on operating income, which reflect the manner in which management assesses performance and allocates resources.

Financial Services

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Results in the Financial Services segment were impacted by continued growth in certain business lines, including stock borrow / stock loan and investment banking, which were more than offset by lower interest-related revenue and higher operating expenses.

The results were significantly impacted by a $9.2 million unrealized gain recognized during the three months ended March 31, 2025 related to our investment in an equity security. This gain significantly affected year-over-year comparability, and is detailed further in the section above titled “Investment in Equity Security.”

Other than the above, the primary factors impacting results in the Financial Services segment included the following:

• Higher stock borrow / stock loan revenues, driven by higher activity levels in that business line.
• Higher investment banking revenues, primarily due to increased investment banking fee activity.
• Lower interest-related revenue, primarily due to a decline in interest rates compared to the prior-year period.
• Higher commission and payout expenses, primarily associated with increased investment banking and stock borrow / stock loan revenue.
• Higher personnel expenses, driven by the continued expansion of our business lines.
• Higher technology costs, reflecting continued investment in platforms, infrastructure, and technology initiatives.
• Higher advertising and promotion expense, reflecting increased marketing, brand, and business development spend.

Media, Sports and Entertainment

Results in the Media, Sports and Entertainment segment were impacted by continued investment in the growth of the Company’s music production, marketing, distribution, artist development, and related operations. The segment did not contribute positively to operating results during the three months ended March 31, 2026 or March 31, 2025, which management believes is consistent with the development stage of the business.

The primary factors impacting results in the Media, Sports and Entertainment segment included the following:

• Personnel and related employee costs associated with building the segment’s operating capabilities and the growth of the business.
• Continued expenses associated with the growth of music production and operations
• NIL-related revenue and associated commission payout expenses, which represented a smaller component of segment activity during the period.
• Increased investment in artist development, including enhanced content production, marketing initiatives, and promotional activities to support emerging talent.
• Continued investment in catalogue and brand development, as management seeks to build a foundation for future recorded music, streaming, licensing, servicing, and other revenue opportunities.
• Impairment charges, including goodwill impairment related to the Media, Sports and Entertainment reporting unit and intangible asset impairment related to a specific artist contract intangible asset.
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A portion of the segment’s costs are fixed or semi-fixed in nature, including personnel, administrative support, and certain infrastructure costs associated with building the segment’s operating platform. Other costs, including distribution and manufacturing-related expenses, artist development, content production, marketing, promotion, and commission payout expenses associated with NIL-related revenues, may vary based on the number of artists, releases, campaigns, NIL arrangements, and related business development activities during a given period. As a result, expenses may be incurred in advance of, or at a higher rate than, revenue recognized from recorded music sales, streaming, licensing, servicing, NIL-related activities, and other related operations.

Management believes these expenditures are important to building the segment’s catalogue, brand, artist relationships, and operating infrastructure. While there can be no assurance regarding the timing or magnitude of future revenues or profitability, management expects that continued development of the segment’s catalogue, artist pipeline, and related revenue opportunities may contribute positively to operating results over time as our catalogue develops and athlete pipeline expands.

The Media, Sports and Entertainment segment remains in an early-stage development phase and continued to incur costs related to artist development, content production, marketing, personnel, and infrastructure. During the three months ended March 31, 2026, management updated its forecast for the segment based on current operating performance, the status of artist/talent contracts, and expected revenue-generating opportunities. The updated forecast reflected higher costs and a slower path to profitability than previously anticipated. As a result, we recorded a non-cash goodwill impairment charge of approximately $330,000 related to the Media, Sports and Entertainment reporting unit. The impairment analysis included significant assumptions related to revenue growth, timing of artist/talent contract activity, artist-development and production costs, marketing spend, personnel and infrastructure costs, expected timing of profitability, and the discount rate.

During the three months ended March 31, 2026, we recorded a noncash intangible asset impairment charge of $454,000 related to a GM artist contract intangible asset within our Media, Sports and Entertainment segment. The impairment was primarily driven by changes in the expected economics of the related artist contract and lower-than-expected performance of related artist revenue opportunities, which reduced expected future cash flows.

Trends and Key Factors Affecting our Operations

Market Risk

Market risk is our risk of loss resulting from the impact of changes in market prices on our trading inventory and investment positions. We have exposure to market risk primarily through our broker-dealer trading operations. Through our broker-dealer subsidiary, we trade debt obligations and equity securities and maintain trading inventories to ensure availability of securities to facilitate client transactions. Inventory levels may fluctuate daily as a result of client demand. Our primary market risks relate to interest rates and equity prices. Equity risk results from changes in prices of equity securities, affecting the value of the equity securities and other instruments that derive their value from a particular stock.

We may enter into underwriting commitments and, as a result, we may be subject to market risk on any unsold securities issued in the offerings to which we are committed. Risk exposure is controlled by limiting our participation, the transaction size, or through the syndication process.

Interest Rates

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

The following table presents simulated changes to net interest revenue over the next 12 months beginning as of March 31, 2026 and December 31, 2025, of a gradual increase or decrease in market interest rates relative to prevailing market rates at the end of each reporting period:

The difference in our simulated incremental increases and decreases in the market interest rates as of March 31, 2026 compared to December 31, 2025 is primarily due to differences in the proportion of segregated cash to segregated securities and differences in the proportion of margin debit balances to cash credit balances.

Technology Initiatives

We have made investments in technology development projects collectively termed as Siebert’s Retail Platform. Technology development projects such as the online platform for Siebert’s retail customer base and corporate service clients have been placed into service during 2025 and several projects are anticipated to go live in 2026. In 2025, we made a minority equity investment in and entered into a strategic partnership with FusionIQ, a provider of engagement solutions and data analytics for wealth management firms, to help with these technology initiatives and new product offerings. We believe these ongoing investments in technology and partnerships will be important in meeting the needs of our retail, correspondent clearing, and corporate services customers and supporting our expansion into new markets and demographics.

In February 2026, RISE entered into a clearing agreement with Green Pier, an indirect wholly owned subsidiary of FMR. The agreement was executed to support RISE’s strategic objectives through collaboration with Green Pier’s clearing infrastructure and technology platform. We believe the relationship enhances RISE’s operational capabilities and scalability and supports the execution of its broker-dealer activities.

Client Account and Activity Metrics

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

Client Account Metrics – Retail Customers

• Retail customer net worth represents the total value of securities and cash in the retail customer accounts after deducting margin debits
• Retail customer margin debit balances represent credit extended to our customers to finance their purchases against current positions
• Retail customer credit balances represent client cash held in brokerage accounts
• Retail customer money market fund value represents all retail customers accounts invested in money market funds
• Retail customer accounts represent the number of retail customers

Statements of Operations and Financial Condition

Statements of Operations for the Three Months Ended March 31, 2026 and 2025

Revenue

Commissions and fees for the three months ended March 31, 2026 were $2,325,000 and increased by $223,000 from the corresponding period in the prior year, primarily due to market conditions.

Interest, marketing and distribution fees for the three months ended March 31, 2026 were $5,874,000 and decreased by $1,071,000 from the corresponding period in the prior year primarily due to a decline in interest rates.

Principal transactions and proprietary trading for the three months ended March 31, 2026 was $3,928,000 and decreased by $9,033,000 from the corresponding period in the prior year, primarily due to the unrealized gain related to the Investment in Equity Security in the first quarter of 2025.

Investment banking for the three months ended March 31, 2026 was $1,573,000 and increased by $1,573,000 from the corresponding period in the prior year, primarily due to new revenue from the business line.

Market making for the three months ended March 31, 2026 was $545,000 and decreased by $7,000 from the corresponding period in the prior year.

Stock borrow / stock loan for the three months ended March 31, 2026 was $6,831,000 and increased by $1,994,000 from the corresponding period in the prior year, primarily due to growth in stock locate services and securities lending businesses.

Advisory fees for the three months ended March 31, 2026 were $1,010,000 and increased by $262,000 from the corresponding period in the prior year, primarily due to growth in platform assets.

Other income for the three months ended March 31, 2026 was $1,384,000 and increased by $610,000 from the corresponding period in the prior year, primarily due to new revenue from music and sports operations.

Operating Expenses

Employee compensation and benefits for the three months ended March 31, 2026 were $16,172,000 and increased by $4,250,000 from the corresponding period in the prior year, primarily due to an increase in commission payouts as well as additional personnel related to new business lines.

Clearing fees, including execution costs for the three months ended March 31, 2026 were $597,000 and increased by $143,000 from the corresponding period in the prior year, primarily due to clearing fees associated with the arrangement with Green Pier.

Technology and communications expenses for the three months ended March 31, 2026 were $1,805,000 and increased by $700,000 from the corresponding period in the prior year, primarily due to an expansion of technological infrastructure.

Other general and administrative expenses for the three months ended March 31, 2026 were $1,733,000 and increased by $224,000 from the corresponding period in the prior year primarily due to expansion of business lines.

Data processing expenses for the three months ended March 31, 2026 were $1,286,000 and increased by $337,000 from the corresponding period in the prior year, primarily due to expansion of technology infrastructure.

Rent and occupancy expenses for the three months ended March 31, 2026 were $454,000 and decreased by $13,000 from the corresponding period in the prior year.

Professional fees for the three months ended March 31, 2026 were $1,698,000 and increased by $339,000 from the corresponding period in the prior year primarily due to legal fees.

Depreciation and amortization expenses for the three months ended March 31, 2026 were $690,000 and increased by $275,000 from the corresponding period in the prior year, primarily due to an increase in amortization for technology projects.

Goodwill impairment for the three months ended March 31, 2026 was $330,000 and increased by $330,000 from the corresponding period in the prior year, due to the goodwill impairment related to the Media, Sports, and Entertainment segment. Refer to Note 9 – Goodwill and Other Intangible Assets, Net for further information.

Intangible asset impairment for the three months ended March 31, 2026 was $454,000 and increased by $454,000 from the corresponding period in the prior year, due to the intangible asset impairment related to the artists contracts in the Media, Sports, and Entertainment segment. Refer to Note 9 – Goodwill and Other Intangible Assets, Net for further information.

Interest expense for the three months ended March 31, 2026 was $218,000 and increased by $129,000 from the corresponding period in the prior year, primarily due to interest related to short term line of credit with East West bank.

Advertising and promotion expense for the three months ended March 31, 2026 was $900,000 and increased by $746,000 from the corresponding period in the prior year, primarily due to an increase in marketing initiatives.

Provision For (Benefit From) Income Taxes

The benefit from income taxes for the three months ended March 31, 2026 was $895,000 and decreased by $2,730,000 from the corresponding period in the prior year, primarily due to a pre-tax loss in the three months ended March 31, 2026. Refer to Note 14 – Income Taxes for additional detail.

Net Income (Loss) Attributable to Noncontrolling Interests

The net loss attributable to noncontrolling interests for the three months ended March 31, 2026 was $0 and decreased by $3,000 from the corresponding period in the prior year, primarily due to Siebert’s noncontrolling interest in RISE for the three months ended March 31, 2025. The net loss attributable to noncontrolling interests represented the portion of RISE’s results attributable to ownership interests not held by Siebert. Siebert consolidates RISE’s financial results and reflects the portion not owned by Siebert as noncontrolling interests. As of March 31, 2026 and December 31, 2025, RISE was wholly owned by Siebert.

Statements of Financial Condition As of March 31, 2026 and December 31, 2025

Assets

Assets as of March 31, 2026 were $597,142,000 and decreased by $161,900,000 from December 31, 2025, primarily due to a decrease in securities borrowed and cash and securities segregated for regulatory purposes, partially offset by an increase in receivables from broker-dealers and clearing organizations and receivables from customers.

Liabilities

Liabilities as of March 31, 2026 were $509,022,000 and decreased by $160,860,000 from December 31, 2025, primarily due to a decrease in securities loaned and payables to customers.

Liquidity and Capital Resources

Overview

As of March 31, 2026, a significant portion of our assets were liquid in nature, providing us with flexibility in financing our business. A significant portion of our assets not held by customers or used for stock borrow / stock loan consisted primarily of cash and cash equivalents, securities owned, at fair value, which are marked-to-market daily, and receivables from and deposits with broker-dealers and clearing organizations.

We expect to use our available cash, cash equivalents, and potential future borrowings under our debt agreements and potential issuance of new debt or equity, to support and invest in our core business, including investing in new ways to serve our customers, potentially seeking strategic acquisitions to leverage existing capabilities, and for general capital needs (including capital, deposit, and collateral requirements imposed by regulators and SROs).

Based on our current level of operations, we believe our available cash, available lines of credit, overall access to capital markets, and cash provided by operations will be adequate to meet our current liquidity needs for the foreseeable future. As of the date of this Report, other than the items detailed in the cash requirements section below, there are no known or material events that would require us to use large amounts of our liquid assets to cover expenses.

Cash and Cash Equivalents

Our cash and cash equivalents were $16.2 million and $22.4 million as of March 31, 2026 and December 31, 2025, respectively.

EWB Credit Agreement

On August 15, 2024, we entered into the EWB Credit Agreement with East West Bank providing a $20 million revolving credit facility. This credit facility allows us to fund acquisitions, execute stock buybacks, and meet general corporate needs up to $10 million, ensuring access to capital for both growth and operational purposes. The maturity date of the EWB Credit Agreement is July 29, 2027. The interest rate structure that is tied to either the one-month Term SOFR plus 3.15% or a minimum of 7.50%. John J. Gebbia and Gloria E. Gebbia, and their trust, provided personal guarantees related to this agreement which further strengthen our borrowing position and help secure favorable terms. As of March 31, 2026, $5 million was outstanding related to the above EWB Credit Agreement. The interest expense for this credit line was $95,000 and $0 for the three months ended March 31, 2026 and 2025, respectively. The interest rate was 7.5% for this credit facility during the three months ended March 31, 2026.

BMO Credit Agreement

On November 22, 2024, MSCO entered into the BMO Credit Agreement with BMO Harris. The BMO Credit Agreement provides for a revolving credit facility of up to $20,000,000. We may use any borrowings under the BMO Credit Agreement to finance NSCC Deposit Requirements (other than an Adequate Assurance Deposit) and withdrawals from a Reserve Account. As part of the agreement, we entered into a Parent Guaranty agreement guaranteeing repayment of any debt issued to MSCO.

Effective November 22, 2025, MSCO renewed the BMO Credit Agreement with BMO Harris until November 20, 2026. Borrowings under the BMO Credit Agreement will bear interest on the outstanding daily balance at a rate of interest per annum equal 2.5% plus the greater of: (a) Term SOFR for such day plus 0.11448% and (b) Federal Funds Target Range – Upper Limit and (c) 0.25%. The annual commitment fee is equal to one half of one percent (0.50%) of the average daily unused portion of the commitment of $20,000,000. The BMO Credit Agreement contains customary affirmative covenants and negative covenants and requires MSCO to maintain minimum total regulatory capital of $45,000,000, excess net capital of 20,000,000, assets to total regulatory capital ratio of not more than 5.0 to 1.0, and a minimum liquidity ratio of not less than 1.0.

Debt Agreements

We have $4.1 million outstanding on our mortgage with East West Bank and an unutilized line of credit for short term overnight demand borrowing of up to $25 million with BMO Harris as of March 31, 2026. As of March 31, 2026, we were in compliance with all covenants related to our mortgage agreement.

Cash Requirements

The following table summarizes our short- and long-term material cash requirements as of March 31, 2026.

(1) Pursuant to the Settlement Agreement with Kakaopay, we will pay Kakaopay a fee of $5 million payable in ten quarterly installments that began in the first quarter of 2024. Refer to Note 6 – Kakaopay Transaction in our 2025 Form 10-K for further detail.

(2) On December 30, 2021, we purchased the Miami office building and financed part of the purchase price with a mortgage with East West Bank.

(3) In November 2025, we entered into an amendment to its service agreement with Broadridge Securities Processing Solutions, LLC with a total minimum expense of approximately $1.7 million for this arrangement.

(4) In March 2026, we entered into a media partnership agreement with a multimedia news platform operator with a total cost of $1.0 million, comprised of $800,000 in cash and $200,000 in stock. Refer to Note 18 – Commitments, Contingencies, and Other for further detail.

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

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

MSCO can transfer funds to Siebert as long as MSCO maintains its liquidity and regulatory capital requirements. RISE can transfer funds to its shareholders, of which Siebert is entitled to its proportional ownership interest, as long as RISE maintains its liquidity and regulatory capital requirements. For the three months ended March 31, 2026 and 2025, MSCO and RISE had sufficient net capital to meet their respective liquidity and regulatory capital requirements. Refer to Note 15 – Capital Requirements for more detail about our capital requirements.

Cash Flows

Cash used in operating activities consisted of net income adjusted for certain non-cash items. Net operating assets and liabilities at any specific point in time are subject to many variables, including variability in customer activity, the timing of cash receipts and payments, and vendor payment terms. The total changes in our statements of cash flows, especially our operating cash flow, are not necessarily indicative of the ongoing results of our business as we have customer assets and liabilities on our statements of financial condition.

For the three months ended March 31, 2026, cash used in operating activities decreased by $8.4 million compared to the prior year period, which was primarily driven by the net change in securities loaned, securities borrowed, securities segregated, and receivables from broker-dealers and clearing organizations.

For the three months ended March 31, 2026, cash used in investing activities decreased by $0.2 million compared to the prior year period, which was primarily driven by less investment in capitalized software development cost, partially offset by the investment in Arqitech.

For the three months ended March 31, 2026, cash flows used in financing activities decreased by $35,000 compared to the prior year period, which was primarily due to a RISE cash distribution in the first quarter of 2025.

Long Term Contracts

Effective September 29, 2025, MSCO entered into an amendment to its clearing agreement with NFS that, among other things, extends the term of their arrangement for an additional five-year period commencing on September 26, 2025 and ending October 1, 2030. As part of this agreement, we received a one-time business development credit of $4.8 million. The amendment also provides for an early termination fee; however, as of March 31, 2026, we do not expect to terminate the contract with NFS before the end of the contract term. For the three months ended March 31, 2026 and 2025, there was no expense recognized for any early termination fees. Refer to Note 12 – Deferred Contract Incentive and Note 18 – Commitments, Contingencies and Other for additional detail.

Effective November 2025, MSCO entered into an amendment to its service agreement with Broadridge Securities Processing Solutions, LLC that, among other things, extends the term of their arrangement for a three-year period ending November 2028, with an option to terminate after three years. As of March 31, 2026, the total remaining minimum expense for this arrangement is estimated at approximately $1.5 million over the duration of the contract.

Off-Balance Sheet Arrangements

We enter into various transactions to meet the needs of customers, conduct trading activities, and manage market risks and are, therefore, subject to varying degrees of market and credit risk. In the normal course of business, our customer activities involve the execution, settlement, and financing of various customer securities transactions. These activities may expose us to off-balance sheet risk in the event the customer or other broker is unable to fulfill their contracted obligations and we are forced to purchase or sell the financial instrument underlying the contract at a loss. There were no material losses for unsettled customer transactions for the three months ended March 31, 2026 and 2025. Refer to Note 16 – Financial Instruments with Off-Balance Sheet Risk for additional detail.

Uncertain Tax Positions

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

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

As of both March 31, 2026 and December 31, 2025, the Company recorded an uncertain tax position of $63,000 related to various tax matters, which is included in the line item “Taxes receivable” in the statements of financial condition.

Critical Accounting Policies and Estimates

Certain of our accounting policies that involve a higher degree of judgment and complexity are discussed in Part I, Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Form 10-K. As of March 31, 2026, there have been no changes to our critical accounting policies or estimates other than the below.

Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations. Goodwill is not amortized but is tested for impairment at least annually, or more frequently when events or circumstances indicate that the fair value of a reporting unit may be below its carrying amount.

We test goodwill at the reporting unit level by comparing the estimated fair value of the reporting unit to its carrying amount. If the carrying amount exceeds the estimated fair value, an impairment charge is recorded, limited to the amount of goodwill allocated to that reporting unit. Estimating fair value requires significant judgment and may include the use of discounted cash flow analyses, market-based approaches, or a combination of valuation methods, depending on the facts and circumstances. Significant assumptions and judgments may include projected revenue, operating costs, future cash flows, timing of profitability, terminal growth rates, discount rates, selected comparable company multiples, and the selection and weighting of valuation methodologies.

During the three months ended March 31, 2026, we recorded a noncash goodwill impairment charge of approximately $330,000 related to the Media, Sports and Entertainment reporting unit. The impairment analysis required management to make significant estimates and assumptions, including projected revenue growth, artist contract activity, expected profitability, terminal growth rate, and discount rate. Following the impairment, no goodwill remained assigned to the Media, Sports and Entertainment reporting unit. We also evaluated our Financial Services reporting unit and concluded that no impairment existed as of March 31, 2026.

New Accounting Standards

In November 2024, the FASB issued ASU “2024-03”, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures” (“ASU 2024-03”). The ASU is intended to enhance the transparency and decision usefulness of income statement expense disclosures by requiring greater disaggregation of certain expense categories. In January 2025, the FASB issued ASU 2025-01, which clarified the effective date of ASU 2024-03. For public business entities, the amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. We are currently evaluating the impact that ASU 2024-03 will have on our consolidated financial statements and we anticipate the amendments will require significant changes to our expense disclosures.

In September 2025, the FASB issued ASU No. 2025-06, “Intangibles-Goodwill and Other- Internal-Use Software” (“ASU 2025-06”). The ASU is intended to modernize and clarify the threshold for when an entity is required to start capitalizing software costs and is based on when (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. ASU 2025-06 will be effective for Siebert for fiscal years beginning after December 15, 2027, and interim reporting periods, with early adoption permitted. We are evaluating the impact of the standard on our disclosures.

Accounting Standards Adopted in Fiscal 2026

In July 2025, the FASB issued ASU No. 2025-05, “Financial Instruments-Credit Losses” (“ASU 2025-05”). The ASU is intended to provide an optional practical expedient when applying the guidance related to the estimation of expected credit losses for current accounts receivable and current contract assets resulting from transactions arising from contracts with customers. ASU 2025-05 will be effective for Siebert for fiscal years beginning after December 15, 2025, and interim reporting periods, with early adoption permitted. We adopted the standard in the three months ended March 31, 2026 and the adoption of ASU 2025-05 did not have a material impact on our financial statements.

Financial Instruments Held For Trading Purposes

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

Financial Instruments Held For Purposes Other Than Trading

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

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

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

See Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of Operations - Trends and Key Factors Affecting our Operations of this Report for our quantitative and qualitative disclosures about market risk.

Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Executive Vice President / Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Report pursuant to Rule 13a-15(e) or Rule 15d-15(e) of the Exchange Act. Based on its evaluation, our management, including our Chief Executive Officer and our Executive Vice President / Chief Financial Officer, concluded that as of the end of the period covered by this quarterly report, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the most recently completed fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In addition to the other information set forth in this Report, investors should carefully consider the risk factors discussed in Part I, Item 1A - Risk Factors in our 2025 Form 10-K. Each of such risk factors could materially affect our business, financial position, and results of operations. As of the date of this Report, there have been no material changes from the risk factors disclosed in our 2025 Form 10-K.