Item
1.01 Entry into a Material Definitive Agreement.
On
June 26, 2017, Siebert Financial Corp. (the “Company”) (NASDAQ: SIEB), Muriel Siebert & Co., Inc. (“MSCO”),
the Company’s wholly-owned subsidiary, and StockCross Financial Services, Inc., a registered broker-dealer (“StockCross”)
entered into an Asset Purchase Agreement (the “Agreement”), pursuant to which MSCO will acquire (the “Acquisition”)
certain retail broker-dealer assets of StockCross (the “Assets”). StockCross is a self-clearing discount broker dealer
that has many business lines that are similar to MSCO’s. The purchase price for the Assets is approximately $20 million
(the “Purchase Price”). At the closing of the Acquisition (the “Closing”), the Company will issue to StockCross
approximately 5 million shares of its restricted common stock as payment of the Purchase Price. The Company engaged Manorhaven
Capital, LLC (“Manorhaven”), a registered broker-dealer, to provide a fairness opinion regarding the value of the
Assets. The Agreement has been unanimously approved by the boards of directors of the Company and StockCross.
The
Closing of the Acquisition is subject to customary closing conditions including receiving required regulatory approvals and obtaining
approval from the Company’s shareholders of the issuance of common stock in payment of the Purchase Price. Upon the closing
of the Acquisition, MSCO and StockCross will enter into a clearing agreement pursuant to which StockCross will act as the clearing
broker for MSCO with respect to the accounts transferred from StockCross to MSCO in the Acquisition.
The
Company, MSCO and StockCross are affiliated entities through common indirect ownership. Kennedy Cabot Acquisition, LLC (“KCA”),
a Nevada limited liability company, is the owner of approximately 90% of the issued and outstanding common stock of the Company.
Gloria E. Gebbia, is the managing member of KCA and she is a member of the Company’s board of directors and she, along with
other members of the Gebbia family, control StockCross. Manorhaven is under common control with the Company’s counsel Gusrae
Kaplan Nusbaum PLLC who represents all the parties to the Agreement.
The
representations and warranties of the Company and MSCO contained in the Agreement have been made solely for the benefit of StockCross
and should not be relied upon as a disclosure of factual information. In addition, such representations and warranties (a) have
been made only for purposes of the Agreement, (b) may be subject to limits or exceptions agreed upon by the contracting parties,
(c) are subject to materiality qualifications contained in the Agreement which may differ from what may be viewed as material
by investors, (d) were made only as of the date of the Agreement or other specific dates and (e) have been included in the Agreement
for the purpose of allocating risk between the contracting parties rather than establishing matters as facts. Investors should
not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state
of facts or condition of the Company or MSCO or any of their respective affiliates. Additionally, the representations, warranties,
covenants, conditions and other terms of the Agreement may be subject to subsequent waiver or modification. Moreover, information
concerning the subject matter of the representations, warranties and covenants may change after the date of the Agreement, which
subsequent information may or may not be fully reflected in the Company’s public disclosures.
The
foregoing description of the Agreement does not purport to be complete and is qualified in its entirety by the full text of the
Agreement, which is filed as Exhibit 99.1 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’s and its Quarterly
Reports on Form 10-Q’s on file with the SEC.