# SIEBERT FINANCIAL CORP (SIEB)

Informational only - not investment advice.

CIK: 0000065596
SIC: 6211 Security Brokers, Dealers & Flotation Companies
SIC breadcrumb: [Finance, Insurance, And Real Estate](/division/H/) > [Security And Commodity Brokers, Dealers, Exchanges, And Services](/major-group/62/) > [SIC 6211 Security Brokers, Dealers & Flotation Companies](/industry/6211/)
Latest 10-K filed: 2026-03-30
SEC page: https://www.sec.gov/edgar/browse/?CIK=65596
Filing source: https://www.sec.gov/Archives/edgar/data/65596/000121390026036500/ea0281594-10k_siebert.htm

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 94202000 | USD | 2025 | 2026-03-30 |
| Net income | 5121000 | USD | 2025 | 2026-03-30 |
| Assets | 759042000 | USD | 2025 | 2026-03-30 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-30. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000065596.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue |  |  |  | 9,812,000 | 13,110,000 | 30,036,000 | 42,777,000 | 54,872,000 | 67,507,000 | 50,102,000 | 71,514,000 | 83,901,000 | 94,202,000 |
| Net income |  |  | -2,869,000 | -5,578,000 | 2,157,000 |  | 4,284,000 | 2,975,000 | 5,033,000 | -2,990,000 | 7,844,000 | 13,303,000 | 5,121,000 |
| Operating income | -5,828,000 | -6,624,000 | -3,092,000 | -5,578,000 | 2,310,000 |  |  |  | 6,582,000 | 440,000 | 18,126,000 | 17,468,000 | 5,566,000 |
| Diluted EPS |  |  |  |  |  |  |  |  | 0.16 | -0.06 | 0.21 | 0.33 | 0.13 |
| Operating cash flow |  |  |  | -3,261,000 | 1,452,000 | 4,866,000 | 24,352,000 | 96,717,000 | 5,543,000 | -24,615,000 | -4,804,000 | 10,053,000 | 10,242,000 |
| Capital expenditures |  |  |  | 38,000 | 417,000 | 277,000 | 1,010,000 | 13,000 | 296,000 | 284,000 | 223,000 | 223,000 | 552,000 |
| Assets |  |  |  | 3,816,000 | 6,025,000 | 18,177,000 | 538,067,000 | 1,372,987,000 | 1,404,235,000 | 728,048,000 | 801,800,000 | 519,668,000 | 759,042,000 |
| Liabilities |  |  |  | 1,563,000 | 813,000 | 1,003,000 | 504,932,000 | 1,335,001,000 | 1,353,729,000 | 678,128,000 | 731,091,000 | 434,576,000 | 669,882,000 |
| Stockholders' equity |  |  |  | 2,253,000 | 5,212,000 | 17,174,000 | 33,135,000 | 37,986,000 | 49,263,000 | 48,949,000 | 69,720,000 | 84,086,000 | 89,160,000 |
| Cash and cash equivalents |  |  |  | 2,730,000 | 3,765,000 | 7,229,000 | 4,670,000 | 3,632,000 | 3,758,000 | 23,672,000 | 5,735,000 | 32,629,000 | 22,408,000 |
| Free cash flow |  |  |  | -3,299,000 | 1,035,000 | 4,589,000 | 23,342,000 | 96,704,000 | 5,247,000 | -24,899,000 | -5,027,000 | 9,830,000 | 9,690,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin |  |  |  | -56.85% | 16.45% |  | 10.01% | 5.42% | 7.46% | -5.97% | 10.97% | 15.86% | 5.44% |
| Operating margin |  |  |  | -56.85% | 17.62% |  |  |  | 9.75% | 0.88% | 25.35% | 20.82% | 5.91% |
| Return on equity |  |  |  | -247.58% | 41.39% |  | 12.93% | 7.83% | 10.22% | -6.11% | 11.25% | 15.82% | 5.74% |
| Return on assets |  |  |  | -146.17% | 35.80% |  | 0.80% | 0.22% | 0.36% | -0.41% | 0.98% | 2.56% | 0.67% |
| Liabilities / equity |  |  |  | 0.69 | 0.16 | 0.06 | 15.24 | 35.14 | 27.48 | 13.85 | 10.49 | 5.17 | 7.51 |
| Current ratio |  |  |  |  |  |  | 1.03 | 1.02 | 1.02 | 1.05 | 1.07 | 1.15 | 1.10 |

## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-15. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000065596.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q2 | 2022-06-30 |  |  | 0.02 | reported discrete quarter |
| 2022-Q3 | 2022-09-30 |  |  | 0.03 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | 0.10 | reported discrete quarter |
| 2023-Q2 | 2023-03-31 |  | 3,215,000 |  | reported discrete quarter |
| 2023-Q2 | 2023-06-30 | 17,592,000 |  | 0.07 | reported discrete quarter |
| 2023-Q3 | 2023-06-30 |  | 2,728,000 |  | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 18,050,000 |  | 0.07 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 19,702,000 | -856,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 20,456,000 | 3,687,000 | 0.09 | reported discrete quarter |
| 2024-Q2 | 2024-03-31 |  | 3,687,000 |  | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 20,863,000 |  | 0.10 | reported discrete quarter |
| 2024-Q3 | 2024-06-30 |  | 4,047,000 |  | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 22,560,000 |  | 0.10 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 20,022,000 | 1,735,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 28,919,000 | 8,661,000 | 0.22 | reported discrete quarter |
| 2025-Q2 | 2025-03-31 |  | 8,661,000 |  | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 14,874,000 |  | -0.12 | reported discrete quarter |
| 2025-Q3 | 2025-06-30 |  | -4,719,000 |  | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 26,847,000 |  | 0.04 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 23,562,000 | -445,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 23,470,000 | -1,972,000 | -0.05 | reported discrete quarter |

## Macro Cross-References
- [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- [UNRATE](/indicator/UNRATE/): Unemployment Rate
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit
- [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit
- [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food
- [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy
- [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter
- [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index
- [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
- [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate
- [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm
- [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate
- [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio
- [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed
- [CE16OV](/indicator/CE16OV/): Employment Level
- [ICSA](/indicator/ICSA/): Initial Claims
- [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm
- [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period
- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units
- [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade
- [PCE](/indicator/PCE/): Personal Consumption Expenditures
- [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income
- [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate
- [M2SL](/indicator/M2SL/): M2
- [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance
- [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States
- [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States
- [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States
- [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States
- [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States
- [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized
- [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized
- [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks
- [GDP](/indicator/GDP/): Gross Domestic Product
- [GPDI](/indicator/GPDI/): Gross Private Domestic Investment
- [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment
- [PCEC](/indicator/PCEC/): Personal Consumption Expenditures
- [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services
- [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt
- [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit
- [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts
- [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures
- [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing
- [USCONS](/indicator/USCONS/): All Employees, Construction
- [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade
- [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities
- [USGOVT](/indicator/USGOVT/): All Employees, Government
- [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private
- [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods
- [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- [BUSINV](/indicator/BUSINV/): Total Business Inventories
- [EXPGS](/indicator/EXPGS/): Exports of Goods and Services
- [IMPGS](/indicator/IMPGS/): Imports of Goods and Services
- [IR](/indicator/IR/): Import Price Index (End Use): All Commodities
- [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/65596/000121390026057679/ea0288206-10q_siebert.htm

Extracted from Part I Item 2 to the first post-MD&A boundary after HTML sanitization.
Confidence: high
Filing date: 2026-05-15
Report date: 2026-03-31

ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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.

- 28 -

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

Three Months Ended March 31,

2026

2025

Commissions and fees

$

2,325,000

$

2,102,000

Interest, marketing and distribution fees

5,874,000

6,945,000

Principal transactions and proprietary trading

3,928,000

12,961,000

Investment banking

1,573,000

—

Market making

545,000

552,000

Stock borrow / stock loan

6,831,000

4,837,000

Advisory fees

1,010,000

748,000

Other income

1,041,000

774,000

Total Revenue

23,127,000

28,919,000

Significant segment expenses:

Employee compensation and benefits

15,643,000

11,922,000

Clearing fees, including execution costs

597,000

454,000

Technology and communications

1,799,000

1,105,000

Other general and administrative

1,395,000

1,499,000

Data processing

1,286,000

949,000

Rent and occupancy

417,000

451,000

Professional fees

1,617,000

1,344,000

Depreciation and amortization

677,000

415,000

Interest expense

218,000

89,000

Advertising and promotion

580,000

154,000

Total Expenses

24,229,000

18,382,000

Operating income (loss)

$

(1,102,000

)

$

10,537,000

- 29 -

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

Three Months Ended March 31,

2026

2025

Music and artist services revenue

$

248,000

$

—

NIL revenue

95,000

—

Total Revenue

343,000

—

Significant segment expenses:

Employee compensation and benefits

529,000

—

Technology and communications

6,000

—

Other general and administrative

160,000

10,000

Rent and occupancy

37,000

16,000

Professional fees

81,000

15,000

Depreciation and amortization

13,000

—

Goodwill impairment

330,000

—

Intangible asset impairment

454,000

—

Advertising and promotion

320,000

—

Music production, manufacturing and distribution costs

178,000

—

Total Expenses

2,108,000

41,000

Operating income (loss)

$

(1,765,000

)

$

(41,000

)

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.

- 30 -

A
portion of the segment’s costs are fixed or semi-fixed in nature, including personnel, administrative sup

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A

Extracted from Item 7 to the first post-MD&A boundary after HTML sanitization.
Confidence: high

ITEM
7. MANAGEMENT’S DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The
following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial
statements and the related notes included in Part II, Item 8 - Financial Statements and Supplementary Data 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 this Report, 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 and majority-owned subsidiaries.
We also operate a smaller Media, Entertainment, and Sports segment that provides talent management and related services. This segment
represents a limited portion of our overall operations, and its results may vary based on the timing of projects and broader industry
conditions.

Results
in the businesses in which we operate are highly correlated to general economic conditions and, more specifically, to the direction of
the U.S. equity and fixed-income markets. Market volatility, overall market conditions, interest rates, economic, political, and regulatory
trends, and industry competition 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, 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
2025, earnings per share were $0.13, compared to earnings per share of $0.33 in 2024. In 2025, our net revenues were $94.2 million and
net income was $5.1 million, compared to net revenues of $83.9 million and net income of $13.3 million in 2024.

Financial
highlights as of December 31, 2025:

●

Retail
customer net worth increased by 9% to $19.5 billion compared to 2024

●

Revenue
related to stock borrow / stock loan increased by 51% to 29.0 million compared to 2024

●

Revenue
related to principal transactions and proprietary trading increased by 20% to $17.5 million
compared to 2024

Investment
in Equity Security

In
the first quarter of 2025, Siebert participated in a private placement and acquired restricted shares of a privately held U.S. company
(the “Investment in Equity Security”). In June 2025, after the lifting of contractual sale restrictions, Siebert sold the
majority of its Investment in Equity Security for an average price of $19.00 per share, with the remaining position sold by August
2025. Siebert recognized a total realized gain related to this transaction of $2.4 million for the year ended December 31, 2025.

Developments in 2025

Acquisition
of BMLG Assets

To
expand upon our 2024 acquisition of GM, in the second quarter of 2025, we acquired certain assets from BMLG related to music masters,
including associated copyrights and artwork. This acquisition gives Siebert ownership of recorded masters from artists such as Daughtry,
Badflower, Sammy Hagar, Olive Vox, and Ryan Perdz, among others. The total cost of the acquisition was $441,000, which includes
cash consideration of $337,000 and direct transaction costs of $104,000.

20

NIL
Revenue

In
the third quarter of 2025, we began earning a new revenue stream relating to Name, Image and Likeness (“NIL”) negotiation
services on behalf of student-athletes with university athletic departments or NIL collectives totaling $594,000 in the year ended December
31, 2025.

RISE
Transaction

Siebert
purchased the remaining 32% ownership interest in RISE on October 28, 2025, for $3.7 million. After the transaction, RISE became a wholly-owned
subsidiary of Siebert, which allows Siebert to fully benefit from any future operations and economic benefit of this subsidiary. Refer
to Note 5 – RISE for further information.

Agreement
with NFS

Effective
September 29, 2025, MSCO amended its clearing agreement with NFS, extending the term of the arrangement through October 1, 2030. As part
of the amendment, Siebert received a one-time $4.8 million business development credit. Refer to Note 15 – Deferred Contract Incentive
and Note 20 – Commitments, Contingencies and Other for additional detail.

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

2025

2024

Commissions and fees

$

8,941,000

$

9,615,000

Interest, marketing and distribution fees

27,624,000

32,407,000

Principal transactions and proprietary trading

17,479,000

14,616,000

Investment banking

769,000

—

Market making

2,196,000

2,255,000

Stock borrow / stock loan

29,034,000

19,249,000

Advisory fees

3,324,000

2,369,000

Other income

3,625,000

3,390,000

Total Revenue

92,992,000

83,901,000

Significant segment expenses:

Employee compensation and benefits

57,541,000

43,999,000

Clearing fees, including execution costs

2,149,000

1,607,000

Technology and communications

5,243,000

3,940,000

Other general and administrative

6,382,000

4,465,000

Data processing

3,989,000

3,200,000

Rent and occupancy

1,788,000

1,631,000

Professional fees

5,669,000

5,501,000

Depreciation and amortization

2,341,000

1,380,000

Interest expense

452,000

262,000

Advertising and promotion

686,000

348,000

Total Expenses

86,240,000

66,333,000

Operating income

$

6,752,000

$

17,568,000

21

Financial
services operating income decreased year over year primarily due to:

●

Higher
personnel expenses driven by the launch and expansion of new business lines

●

Lower
interest income on customer balances resulting from declining interest rates

●

Increased
technology expenditures and higher general and administrative costs

●

Partially
offset by:

○

Higher
revenues from stock loan and stock borrow activities

○

Increased
principal transaction revenues attributable to market conditions and the gain on investment
in equity security

Management
continues to focus on:

●

Expanding
into complementary growth areas such as investment banking, to diversify revenue and reduce
reliance on transaction-based brokerage activity

●

Investing
in technology through both internal innovation and strategic partnerships to modernize our
platforms, enhance automation, and support scalable growth.

●

Driving
disciplined expense management and operational efficiency initiatives to improve margins
and long-term profitability.

Media,
Sports and Entertainment

2025

2024

Music and artist services revenue

$

616,000

$

—

NIL revenue

594,000

—

Total Revenue

1,210,000

—

Significant segment expenses:

Employee compensation and benefits

934,000

—

Technology and communications

12,000

—

Other general and administrative

197,000

23,000

Rent and occupancy

67,000

—

Professional fees

364,000

77,000

Depreciation and amortization

58,000

—

Advertising and promotion

397,000

—

Music production, manufacturing and distribution costs

367,000

—

Total Expenses

2,396,000

100,000

Operating income (loss)

$

(1,186,000

)

$

(100,000

)

22

Media,
Sports and Entertainment operating income decreased year over year primarily due to:

●

Expenses
associated with the first full year of music production and operations

●

Onboarding
and related personnel costs associated with integrating the marketing and distribution team
from BMLG

●

Increased
investment in artist development, including enhanced content production, marketing initiatives,
and promotional activities to support emerging talent.

Management
continues to focus on:

●

Investing
in the development of new artists and talent while maximizing the commercial potential of
established, high-performing creators.

●

Expanding
recurring, service-based revenue streams to enhance revenue stability and predictability.

●

Growing
its NIL athlete pipeline through targeted sourcing, relationship development, and brand partnership
opportunities.

Management
notes that this segment did not contribute positively to operating results during the years ended December 31, 2025 and 2024, which is
consistent with expectations for early-stage record labels. Management believes these expenditures are essential to building the label’s
catalogue and brand, and anticipates that future revenues from recorded music sales, streaming, and licensing will drive profitability
over time. While there is no assurance regarding the timing or magnitude of future earnings, we expect this segment to have positive
impact on operating results as our catalogue develops and athlete pipeline expands.

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.

23

The
following table presents simulated changes to net interest revenue over the next 12 months beginning December 31, 2025 and 2024 of a
gradual increase or decrease in market interest rates relative to prevailing market rates at the end of each reporting period:

As of December 31,

2025

2024

Increase of 200 basis points

34

%

32

%

Increase of 100 basis points

18

%

18

%

Increase of 50 basis points

9

%

11

%

Decrease of 50 basis points

(7

)%

(4

)%

Decrease of 100 basis points

(15

)%

(11

)%

Decrease of 200 basis points

(31

)%

(26

)%

The
difference in our simulated incremental increases and decreases in the market interest rates as of December 31, 2025 compared to 2024
is primarily due to an increase in the proportion of segregated cash to segregated securities.

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 the year ended December 31, 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.

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

As of December 31,

2025

2024

Retail customer net worth (in billions)

$

19.5

$

18.0

Retail customer margin debit balances (in billions)

$

0.4

$

0.4

Retail customer credit balances (in billions)

$

0.5

$

0.4

Retail customer money market fund value (in billions)

$

1.0

$

0.8

Retail customer accounts

166,217

160,054

●

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

24

Consolidated
Statements of Operations and Financial Condition

Consolidated
Statements of Operations for the Years Ended December 31, 2025 and 2024

Revenue

Commissions
and fees for the year ended December 31, 2025 were $8,941,000 and decreased by $674,000 from the
corresponding period in the prior year, primarily due to market conditions.

Interest,
marketing and distribution fees for the year ended December 31, 2025 were $27,624,000 and decreased
by $4,783,000 from the corresponding period in the prior year primarily due to a decline in interest rates.

Principal
transactions and proprietary trading for the year ended December 31, 2025 were $17,479,000 and
increased by $2,863,000 from the corresponding period in the prior year, primarily due to market conditions and the gain on our Investment
in Equity Security.

Investment
banking for the year ended December 31, 2025
was $769,000 which was a new business line in 2025.

Market
making for the year ended December 31, 2025 was $2,196,000 and decreased by $59,000 from the corresponding
period in the prior year.

Stock
borrow / stock loan for the year ended December 31, 2025 was $29,034,000 and increased by $9,785,000
from the corresponding period in the prior year, primarily due to a growth in stock locate services and securities lending businesses.

Advisory
fees for the year ended December 31, 2025 were $3,324,000 and increased by $955,000 from the corresponding
period in the prior year, primarily due to growth in platform assets.

Other
income for the year ended December 31, 2025 was $4,835,000 and increased by $1,445,000 from the
corresponding period in the prior year, primarily due to new revenue from our media, sports and entertainment segment.

Operating
Expenses

Employee
compensation and benefits for the year ended December 31, 2025 were $58,475,000 and increased by
$14,476,000 from the corresponding period in the prior year, primarily due to an increase
in commission payouts as well as additional personnel related to technology initiatives, expansion into investment banking and servicing
active trader customers, and other new business lines.

Clearing
fees, including execution costs for the year ended December 31, 2025 were $2,149,000 and increased by $542,000 from the corresponding
period in the prior year, primarily due to increased market activity.

Technology
and communications expenses for the year ended December 31, 2025 were $5,255,000 and increased
by $1,315,000 from the corresponding period in the prior year, primarily due to additional software costs and an expansion of
technological infrastructure.

Other
general and administrative expenses for the year ended December 31, 2025 were $6,946,000 and increased
by $2,458,000 from the corresponding period in the prior year primarily due to the start-up cost and expansion of new business
lines.

Data
processing expenses for the year ended December 31, 2025 were $3,989,000 and increased by $789,000
from the corresponding period in the prior year, primarily due to expansion of technology infrastructure.

Rent
and occupancy expenses for the year ended December 31, 2025 were $1,855,000 and increased by $224,000
from the corresponding period in the prior year, primarily due to the expansion into new office space.

Professional
fees for the year ended December 31, 2025 were $6,033,000 and increased by $455,000 from the corresponding
period in the prior year, primarily due to increase in accounting and legal fees.

25

Depreciation
and amortization expenses for the year ended December 31, 2025 were $2,399,000 and increased by
$1,019,000 from the corresponding period in the prior year, primarily due to an increase
in amortization for the technology projects placed in service.

Interest
expense for the year ended December 31, 2025 was $452,000 and increased by $190,000 from the corresponding
period in the prior year primarily related to the termination agreement with Kakaopay in 2024. Refer
to Note 6 – Kakopay Transaction for further information.

Advertising
and promotion expenses for the year ended December 31, 2025 were $1,083,000 and increased by $735,000 from the corresponding period in
the prior year, primarily due to an increase in marketing initiatives.

Provision
For (Benefit From) Income Taxes

The
provision for income taxes for the year ended December 31, 2025 was $445,000 and decreased by $3,720,000 from the corresponding period
in the prior year. The change from the corresponding period in the prior year is primarily due to a decrease in pre-tax earnings year
over year. Refer to Note 16 – Income Taxes for additional detail.

Net
Income (Loss) Attributable to Noncontrolling Interests

The net income attributable to noncontrolling interests for the year
ended December 31, 2025 was $0 and decreased by $17,000 from the corresponding period in the prior year due to lower income in RISE. As
further discussed in Note 2 – Summary of Significant Accounting Policies, we consolidate RISE’s financial results into our
consolidated financial statements and reflect the portion of RISE that was previously not
held by Siebert as a noncontrolling interests in our consolidated financial statements. As
of December 31, 2025, RISE was wholly-owned by Siebert.

Consolidated
Statements of Financial Condition as of December 31, 2025 and 2024

Assets

Assets
as of December 31, 2025 were $759,042,000 and increased by $239,374,000 from December 31, 2024,
primarily due to an increase in securities borrowed partially offset by a decrease in cash and cash equivalents and cash and securities
segregated for regulatory purposes.

Liabilities

Liabilities
as of December 31, 2025 were $669,882,000 and increased by $235,306,000 from December 31, 2024,
primarily due to an increase in securities loaned and payables to customers.

Liquidity
and Capital Resources

Overview

As
of December 31, 2025, 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, and 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 section below, there are no known or material events that would require us to use large amounts
of our liquid assets to cover expenses.

26

Cash
and Cash Equivalents

Our
cash and cash equivalents were $22.4 million and $32.6 million as of December 31, 2025 and 2024, 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 December 31, 2025, $5 million was outstanding related to the above EWB Credit Agreement. The interest expense
for this credit line was $41,000 and $0 for the years ended December 31, 2025 and 2024, respectively. The interest rate was 7.5% for this credit facility during the year ended December 31, 2025. The Company did not use this credit facility
during the year ended December 31, 2024.

BMO
Credit Agreement

On
November 22, 2024, MSCO entered into a Credit Agreement (the “BMO Credit Agreement”) with BMO Harris Bank (“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. We were in compliance with the requirements of the BMO Credit Agreement as of December 31, 2025.

Other
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 December 31, 2025. As of December 31, 2025, we were in compliance with all covenants related
to our debt agreements.

Cash
Requirements

The
following table summarizes our short and long-term material cash requirements as of December 31, 2025.

Payments Due by Period

2026

2027

2028

2029

2030

Thereafter

Total

Operating lease commitments

$

1,233,000

$

885,000

$

568,000

$

58,000

$

—

$

—

$

2,744,000

Kakaopay fee (1)

1,000,000

—

—

—

—

—

1,000,000

Mortgage with East West Bank (2)

91,000

95,000

98,000

112,000

117,000

3,627,000

4,140,000

Broadridge contract (3)

170,000

—

—

—

—

—

170,000

Total

$

2,494,000

$

980,000

$

666,000

$

170,000

$

117,000

$

3,627,000

$

8,054,000

(1)

Pursuant
to the Settlement Agreement with Kakaopay, we are obligated to 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 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
June 2023, we entered into an amendment to its service agreement with Broadridge Securities Processing Solutions, LLC with a total minimum
expense of approximately $1.2 million for this arrangement.

27

Shelf
Registration Statement; At the Market Offering

On
May 30, 2025, we filed a shelf registration statement on Form S-3 that was declared effective by the SEC on June 9, 2025 for the potential
offering, issuance and sale by us of up to $100.0 million of our common stock, preferred stock, warrants to purchase our common stock
and/or preferred stock, units consisting of all or some of these securities and subscription rights to purchase all or some of these
securities. As noted below under “At the Market Offering,” we have utilized $50 million of the $100 million capacity under
the shelf registration statement for our At the Market program.

On
June 27, 2025, we entered into a Sales Agreement (“Sales Agreement”) with our subsidiary, Muriel Siebert & Co.,
LLC, and Ladenburg Thalmann & Co. Inc., as agents, under which we may offer and sell, through or to the agents,
shares of our common stock having an aggregate offering price of up to $50.0 million, from time to time. For the year ended December
31, 2025, we did not sell any shares pursuant to this Sales Agreement. Refer to Note 20 – Commitments, Contingencies and Other
for additional detail.

As
of the filing of this Report, we will be subject to General Instruction I.B.6 of Form S-3 known as the “baby shelf rules.”
Under the baby shelf rules, the aggregate market value of securities we can sell through primary public offerings of securities in any
12-month period using our registration statement on Form S-3 is limited to one-third of the aggregate market value of the shares of our
common stock held by non-affiliates. Therefore, we will be limited in the amount of proceeds we are able to raise by selling shares of
our common stock using our Form S-3 so long as our public float is less than $75 million.

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 Depository Trust and Clearing Corporation (“DTCC”) and the Options Clearing Corporation (“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 it maintains its liquidity and regulatory capital requirements. RISE can transfer funds to Siebert
as long as RISE maintains its liquidity and regulatory capital requirements. For the years ended December 31, 2025 and 2024, MSCO and
RISE had sufficient net capital to meet their respective liquidity and regulatory capital requirements. Refer to Note 17 – Capital
Requirements for more detail on our capital requirements.

Cash
Flows

Cash
provided by and used in operating activities consisted of net income (loss) 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 consolidated 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 consolidated statements of financial condition.

For the year ended December
31, 2025, cash provided by operating activities increased by $0.2 million compared to 2024, which was primarily driven by the net changes
in securities loaned and borrowed, receivables and payables to customers and non-customers, securities segregated for regulatory purposes,
and other working capital adjustments.

For the year ended December
31, 2025, cash used in investing activities increased by $0.6 million compared to 2024, which was primarily driven by our investment in
IQvestment Holdings, LLC, (“FusionIQ”). FusionIQ, partially offset by a decrease in investments in software development costs
and office facilities in 2025.

For the year ended December 31, 2025, cash flows
provided by financing activities increased by $1.4 million compared to 2024, which was primarily driven by a short-term bank loan partially
offset by the purchase of RISE interests.

28

Long
Term Contracts

Effective
August 1, 2021, MSCO entered into an amendment to its clearing agreement with NFS that, among other things, extended the term of their
arrangement for an additional four-year period commencing on August 1, 2021 and ending July 31, 2025. As part of this agreement, we received
a one-time business development credit of $3 million, and NFS paid us four annual credits of $100,000 over the term of the agreement.
Refer to Note 15 – Deferred Contract Incentive and Note 20 – Commitments, Contingencies and Other for additional detail.

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 December 31, 2025, we do not expect to terminate the contract with NFS before the end of the contract term. For the years ended
December 31, 2025 and 2024, there was no expense recognized for any early termination fees. Refer to Note 15 – Deferred Contract
Incentive and Note 20 – Commitments, Contingencies and Other for additional detail.

Effective
June 2023, 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 five-year period ending June 2028, with an option to terminate after three years.
The total minimum expense for this arrangement is estimated at approximately $1.2 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 years ended December
31, 2025 and 2024. Refer to Note 18 – 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 consolidated 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 consolidated
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 in the statements of operations.
Accrued interest and penalties would be included on the related tax liability line in the statements of financial condition.

As
of both December 31, 2025 and 2024, we recorded an uncertain tax position of $63,000 and $1,354,000, respectively, related to various
tax matters, which is included in the line item “Taxes payable” in the statements of financial condition.

29

Tax
Legislation

On
July 4, 2025, OBBBA was enacted and introduced several taxpayer-favorable modifications including making key changes to provisions originally
enacted under the Tax Cuts and Jobs Act (“TCJA”) of 2017. These modifications include: (i) restoration of the tax adjusted
EBITDA standard as the limitation for interest expense deductibility under Section 163(j) for tax years beginning after December 31,
2024; (ii) repeal of the mandatory capitalization and amortization of domestic research and experimental expenditures under Section 174
and the adoption of immediate expensing for domestic R&E costs under new Section 174A for tax years beginning after December 31,
2024; (iii) permanent reinstatement of 100% bonus depreciation for qualified property placed in service after January 19, 2025. Although
the OBBBA had many taxpayer-favorable provisions, the OBBBA did not have a material impact on our effective tax rate.

Critical
Accounting Policies and Estimates

We
generally follow accounting policies standard in the brokerage industry and believe that our policies appropriately reflect our financial
position and results of operations. Our management team makes significant estimates that affect the reported amounts of assets, liabilities,
and expenses, and the related disclosure of contingent assets and liabilities included in the consolidated financial statements. The
estimates relate primarily to expense items in the normal course of business as to which we receive no confirmations, invoices, or other
documentation, at the time the books are closed for a period. We use our best judgment, based on our knowledge of expenses incurred,
to estimate the amount of such expenses. We are not aware of any material differences between the estimates used in closing our books
for the periods presented and the actual amounts of expenses incurred when we subsequently receive the actual confirmations, invoices
or other documentation.

Our
consolidated financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America (“U.S. GAAP”). The preparation of our consolidated financial statements
requires us to make judgments and estimates that may have a significant impact on our financial results. We believe that the critical
accounting policies listed below are particularly subject to management’s judgments and estimates and could materially affect our
results of operations and financial position. Refer to Note 2 – Summary of Significant Accounting Policies for additional detail
on our significant accounting policies.

Estimates
of effective income tax rates, uncertain tax positions, deferred income taxes and related valuation allowances

We
account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities
for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method,
we determine deferred tax assets and liabilities on the basis of the differences between the consolidated financial statements and tax
bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The
effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment
date.

We
recognize deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making such
a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences,
projected future taxable income, tax-planning strategies, and results of recent operations. If we determine that we would be able to
realize deferred taxes in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation
allowance, which would reduce the provision for income taxes.

We
record uncertain tax positions in accordance with FASB ASC Topic 740 – “Improvements to Income Tax Disclosures” (“Topic
740”) on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will
be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not
recognition threshold we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate
settlement with the related tax authority.

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

30

Disregarded
entities and income tax treatment

Starting
in 2024, both MSCO and SNXT are single member limited liability companies that will be treated as disregarded entities for tax purposes.
As such, both MSCO and SNXT will no longer be subject to direct taxation and will be disregarded by the relevant tax authorities. The
guidance in Accounting Standards Update 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes specifies that
an entity is not required to allocate income tax provision to a legal entity that is both not subject to tax and disregarded by the taxing
authority, but an entity may elect to do so. MSCO and SNXT are not making the available election to allocate income taxes. Accordingly,
on a prospective basis, MSCO and SNXT will no longer record current or deferred income taxes.

New
Accounting Standards

In
December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09,
Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires more detailed income tax disclosures. The guidance
requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information
on income taxes paid by jurisdiction. The disclosure requirements will be applied on a prospective basis, with the option to apply them
retrospectively. The standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted. We have
adopted ASU 2023-09 prospectively on our annual income tax disclosures for the annual period ending December 31, 2025. The standard expanded
the disclosures provided in our annual financial statements, particularly in the rate reconciliation and cash taxes paid sections, but
the adoption did not have a material effect on our consolidated results of operations, financial position, or cash flows.

Recent
Accounting Pronouncements

Refer
to Note 2 – Summary of Significant
Accounting Policies for information regarding new Accounting Standards Updates (“ASU”s) issued by the FASB.