Item 1.01 Entry into a Material Definitive Agreement
As previously disclosed in a Current Report on Form 8-K, filed on July 19, 2019, Siebert Financial Corp. (the “Company”) (NASDAQ: SIEB) and StockCross Financial
Services, Inc., a Massachusetts corporation (“StockCross”), entered into a binding letter of intent (the “Letter of Intent”), setting forth the basic terms under which the Company will acquire from the StockCross shareholders (the “Acquisition”),
all of the issued and outstanding shares of common stock of StockCross (the “StockCross Shares”) owned by the StockCross shareholders in exchange for shares of common stock of the Company. The Letter of Intent provides that the completion of the
Acquisition is subject to preparation and execution of agreements setting forth the definitive terms of the Acquisition.
As of December 31, 2019, the Company entered into an Agreement and Plan of Merger by and between the Company, Muriel Siebert & Co, Inc., a Delaware corporation and wholly-owned
subsidiary of the Company (“MSCO”), StockCross and Michael J. Colombino, on behalf of himself and as representative of the other StockCross shareholders (the “Merger Agreement”), pursuant to which the Company acquired, from the StockCross
shareholders, all of the StockCross Shares in exchange for a total of 3,298,774 shares of common stock of the Company and StockCross was merged with and into MSCO (the “Merger”). The Merger was effective on January 1, 2020 (the “Closing Date”) and
as a result, StockCross merged with and into MSCO.
Prior to the Merger, MSCO owned 15% of the issued and outstanding common stock of StockCross and the Company and StockCross were affiliated entities through common ownership.
The Merger Agreement was approved by a majority of the uninterested members of the Company’s audit committee and board of directors.
The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by the full text of the Merger Agreement, which is filed as
Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The issuance of the shares of common stock of the Company (the “Company Stock”) pursuant to the Merger Agreement is subject to shareholder approval pursuant to Nasdaq Rule
5635(a)(2). The Company has received the written consent of a majority of shareholders to the issuance and is in the process of filing an Information Statement with the Securities and Exchange Commission (“SEC”) notifying the Company’s other
shareholders of the action by written consent of the holders of a majority of the shares. The Company Stock to be issued pursuant to the Merger Agreement will be held in escrow until no earlier than 20 days after the Information Statement is first
transmitted to the Company’s shareholders.
The failure of the Company to obtain the approvals required by NASDAQ rule 5635(a) was inadvertent and active steps are being made to correct such omission.
Item 2.01 Completion of Acquisition or Disposition of Assets
The information provided in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.