What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-30 compared with 2025-03-31 · 1100 added, 968 removed, 1176 unchanged (64% of the section changed)

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

FIRM (PCAOB ID 173)

Shareholders and the Board of Directors of

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We have audited the accompanying consolidated

statement of financial condition of Siebert Financial Corp.

and Subsidiaries (the "Company") as of December 31, 2024, the related

consolidated statements of operations, changes in stockholders’ equity, and cash flows for the period then ended, and the related

notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in

all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows

for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

balance sheets of Siebert Financial Corp.

and Subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated

statements of operations, changes in stockholders’ equity, and cash flows for each of the two years in the period ended December

31, 2025, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements

present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of

its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles

generally accepted in the United States of America.

Basis for Opinion

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of the Company’s management.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are

required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and

regulations of the Securities and Exchange Commission and the PCAOB.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

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As part of our audits we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal

control over financial reporting.

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

Accordingly, we express no such opinion.

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challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on

the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion

on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition

As described in Note 2 to the consolidated financial

statements, the Company recognizes revenue from the following types of services:

Commissions and Fees;

Principal Transactions and Proprietary

Market Making;

Stock Borrow and Stock Loan;

Advisory Services;

Interest, Marketing and Distribution Fees;

and Other Income.

of the revenue streams are related to revenues from contracts with customers, which falls under the scope of the accounting standard for

revenue from contracts with customers (ASC 606) while certain revenue streams are generated from financial instruments and are not in

the scope of ASC 606.

The principal considerations for our determination

that revenue recognition is a critical audit matter are the complexities and challenges related to auditing the significant number of

revenue streams with different applications of revenue recognition, the automated processes to record revenue involving multiple information

systems, and the significant volume of information used in the calculation of each revenue stream supported by automated systems to process

and record these transactions.

As previously disclosed by management, there was a material weakness identified over the Company's Information

Technology General Controls (ITGCs) that are used to process the high volume of revenue transactions that existed during the year.

factors resulted in a high level of audit effort required and involvement of professionals with expertise in information technology (IT)

necessary for us to identify, test, and evaluate the Company’s systems and automated controls.

Addressing the matter involved performing procedures

and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures

Performing substantive test of details over all

relevant assertions for revenue streams which included:

o Evaluating management’s revenue recognition policies

for compliance with ASC 606 for contracts with customers.

o Evaluating management's revenue recognition policies for compliance with relevant accounting standards

for revenue from financial instruments.

o Performing transaction testing by agreeing amounts recognized to contractual agreements and testing the

mathematical accuracy of the recorded revenue.

o Confirming related accounts receivable balances directly with counterparties and vouched cash collection.

o Testing the fair values for applicable revenue lines including the fair value of underlying instruments

utilized in the recognition of revenue.

o Testing the completeness of revenue recognized within the period through performing cut-off procedures

around period-end.

o Testing completeness and accuracy of reports utilized in our audit procedures.

The communication of the critical audit matter

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Deferred Tax Assets and Valuation Allowance

As discussed in Notes 1 and 16 to the consolidated

financial statements, the Company recognizes deferred income taxes for the net tax effects of temporary differences between the carrying

amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Deferred tax assets

are recognized to the extent management believes it is more likely than not that such assets will be realized.

In assessing the Company’s

ability to recover its deferred tax assets, management evaluated whether it is more likely than not that some portion or the entire deferred

tax asset will be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income

in those periods in which temporary differences become deductible and/or net operating losses can be utilized.

Management considered

all positive and negative evidence when determining the amount of the net deferred tax assets that are more likely than not to be realized.

This evidence includes, but is not limited to, historical earnings, scheduled reversal of taxable temporary differences, tax planning

strategies and projected future taxable income.

Based on historical operating profitability, positive trend of earnings and projected

future taxable income, management concluded as of December 31, 2025 that its U.S.

deferred tax assets are realizable on a more-likely-than-not

basis with the exception of capital loss carryforward and certain investments that will result in future capital losses.

The amount of

the Company’s valuation allowance decreased by $767,000 during the year ended December 31, 2025.

We identified the auditing of deferred tax assets

and the related valuation allowance as a critical audit matter because of the significant judgment required by management in evaluating

the realizability of deferred tax assets;

which in turn led to significant auditor judgment and a high level of audit effort required

to evaluate management’s assessment, including evaluating the sustainability of profitability, the timing and amount of future taxable

income, and the reversal of taxable temporary differences.

Our audit procedures related to the Company’s

deferred tax assets and valuation allowance included, among others:

o Evaluating management’s application of ASC Topic 740 and the methodology used to assess the realizability

of deferred tax assets.

o Testing the accuracy and completeness of deferred tax asset balances and the related valuation allowance,

including underlying temporary differences and tax attributes.

o Assessing management’s evaluation of positive and negative evidence, including recent operating

results and cumulative income or loss, where applicable.

o Evaluating management’s projections of future taxable income by comparing key assumptions to historical

results, current-year performance, and other audited financial information.

o Assessing the availability and reversal patterns of existing taxable temporary differences supporting

realization of deferred tax assets.

o Evaluating the assumptions underlying tax planning strategies considered by management.

income tax specialists to assist in evaluating management’s assessment and the related

disclosures in the consolidated financial statements.

/s/ Crowe LLP

We have served as the Company's auditor since

We have served as the Company’s auditor

New York, New York

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Cash and securities segregated for regulatory purposes;

(Cash of $ 135.8 million, securities with a fair value of $ 68.8 million as of December 31, 2024;

Cash of $ 158.8 million, securities with a fair value of $ 115.5 million as of December 31, 2023)

(Cash of $ 151.0 million,

securities with a fair value of $ 34.6 million as of December 31, 2025;

Cash of $ 135.8

million, securities with a fair value of $ 68.8 million as of December 31, 2024)

Receivables from customers

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Securities owned, at fair value

Taxes receivable

Total Current assets

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Lease right-of-use assets

Investments, cost

Deferred tax assets

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Securities sold, not yet purchased, at fair value

Current portion of lease liabilities

Current portion of long-term debt

Current portion of deferred contract incentive

Other deferred revenue

Current portion of contract termination liability

Current portion of deferred contract incentive

Current portion of lease liabilities

Current portion of debt

Total Current liabilities

Lease liabilities, less current portion

Long-term debt, less current portion

Deferred contract incentive, less current portion

Contract termination liability, less current portion

Deferred contract incentive, less current portion

Lease liabilities, less current portion

Debt, less current portion

Total Liabilities

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41,435,936 shares issued and 40,435,936 shares outstanding as of December 31, 2025, respectively.

40,580,936 shares issued and 39,580,936 shares outstanding as of December 31, 2023.

41,120,936 shares issued and 40,120,936 shares outstanding as of December 31, 2024, respectively.

Treasury stock, at cost;

1,000,000 and 1,000,000 shares held as of

December 31, 2024 and 2023, respectively.

1,000,000 shares held as of both December 31, 2025 and December 31, 2024.

( 2,510,000 )

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$ 519,668,000

Numbers are rounded for

presentation purposes.

Numbers are rounded for presentation purposes.

See notes to consolidated financial statements.

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Advisory fees

Investment banking

Total Revenue

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Operating income

Earnings of equity method investment in related party

Impairment of investments

( 1,035,000 )

Transaction termination costs

( 5,943,000 )

Non-operating loss

( 6,867,000 )

Income (loss) before provision for (benefit from) income taxes

Provision for (benefit from) income taxes

Net income (loss)

Less net income (loss) attributable to noncontrolling interests

Net income (loss) available to common stockholders

Net income (loss) available to common stockholders per share of common stock

Income before provision for income taxes

Provision for income taxes

Less net income attributable to noncontrolling interests

Net income available to common stockholders

Net income available to common stockholders per share of common stock

Basic and diluted

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’

Paid-In Capital

Stockholders’ Equity

Treasury Stock

Stockholders’

Noncontrolling

Balance – January 1, 2024

Kakaopay transaction, net

of issuance cost

Non-cash consideration due

to Kakaopay transaction

Reacquisition of shares outstanding

$ ( 2,510,000 )

( 2,510,000 )

Transaction with J2 Financial

Share-based compensation

Balance – December 31, 2024

$ ( 2,510,000 )

Transaction with J2 Financial

Share-based compensation

RISE cash distribution

RISE share repurchase, net of tax

( 1,586,000 )

( 2,557,000 )

Balance – December 31, 2025

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Cash Flows from Operating Activities

Net income (loss)

Adjustments to reconcile net income (loss) to net cash (used in) operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Deferred income tax expense

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Interest related to contract termination liability payment

Earnings of equity method investment in related party

Impairment of investments

Transaction termination costs - Kakaopay fee

Securities segregated for regulatory purposes

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( 11,544,000 )

( 20,766,000 )

Receivables from non-customers

( 1,166,000 )

Receivables from and deposits with broker-dealers and clearing organizations

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( 3,347,000 )

( 14,834,000 )

Prepaid expenses and other assets

Payables to customers

( 2,903,000 )

Payables to customers

( 62,648,000 )

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Net lease liabilities

Taxes payable

Taxes payable / receivable

( 2,325,000 )

Deferred contract incentive

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( 2,003,000 )

Technology platform integration

Net cash used in operating activities

( 1,997,000 )

Other deferred revenue

Net cash provided by operating activities

Cash Flows from Investing Activities

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( 2,178,000 )

( 3,234,000 )

Additions to property, office facilities, and equipment

( 1,432,000 )

Acquisition of BMLG assets

Investment in FusionIQ

( 2,350,000 )

Media production cost

Transaction with J2 Financial

Cash paid for GE acquisition, net of cash acquired

Cash paid in a business acquisition, net of cash and cash equivalents acquired

( 1,123,000 )

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Cash Flows from Financing Activities

Kakaopay issuance cost

Bank loan - short term

RISE cash distribution

RISE share repurchase

( 3,566,000 )

Shares issued for Kakaopay transaction

Repayments of long-term debt

( 2,734,000 )

Net cash provided by (used in) financing activities

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Supplemental cash flow information

Cash paid during the year for income taxes

Cash paid, net of refunds received during the year for income taxes

Cash paid during the year for interest

Non-cash investing and financing activities

Kakaopay issuance cost (1)

$ ( 318,000 )

Transaction with J2 Financial (1)

Share-based compensation (2)

Treasury stock (4)

$ ( 2,510,000 )

Non-cash consideration due to Kakaopay transaction (1)

$ ( 560,000 )

Non-cash consideration due to Kakaopay transaction (1)

Numbers are rounded for presentation purposes.

See notes to consolidated financial statements.

(1) Refer to Note 6 – Kakaopay Transaction for further detail

RISE share repurchase - payable portion

RISE tax impact (3)

(1) Refer to Note 10 – Software, net for further detail

(2) Refer to Note 22 – Employee Benefit Plans for further

(4) Refer to Note 4 – Transaction with Tigress for further

(3) Refer to Note 5 – RISE

Numbers are rounded for presentation purposes.

See notes to consolidated financial statements.

SIEBERT FINANCIAL CORP.

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Financial Corp., a New York corporation, incorporated in 1934, is a holding company that conducts the following lines of business through

its wholly-owned and majority-owned subsidiaries:

● Muriel Siebert & Co., Inc.

(“MSCO”) provides

retail brokerage services.

MSCO is a Delaware corporation and broker-dealer registered with the SEC under the Exchange Act and the Commodity

Exchange Act of 1936, and member of FINRA, NYSE, SIPC, Euroclear, NFA, and CFTC.

● Siebert AdvisorNXT, Inc.

(“SNXT”) provides investment

advisory services.

SNXT is a New York corporation registered with the SEC as an RIA under the Advisers Act.

● Park Wilshire Companies, Inc.

(“PW”) provides

insurance services.

PW is a Texas corporation and licensed insurance agency.

● Siebert Technologies, LLC (“STCH”) provides technology

STCH is a Nevada limited liability company.

● RISE Financial Services, LLC (“RISE”) is a Delaware

limited liability company and a broker-dealer registered with the SEC, CFTC, FINRA, SIPC, and NFA.

● StockCross Digital Solutions, Ltd.

an inactive subsidiary headquartered in Bermuda.

● Gebbia Entertainment, LLC (“GE”) is a Florida

limited liability company and provides media entertainment services.

its wholly-owned subsidiaries:

Siebert & Co., LLC.

(“MSCO”) provides retail brokerage services.

a Delaware corporation and broker-dealer registered with the SEC under the Exchange Act and

the Commodity Exchange Act of 1936, and member of FINRA, NYSE, SIPC, Euroclear, NFA, and

AdvisorNXT, LLC.

(“SNXT”) provides investment advisory services.

SNXT is a New

York corporation registered with the SEC as an RIA under the Advisors Act.

Wilshire Companies, Inc.

(“PW”) provides insurance services.

PW is a Texas corporation

and licensed insurance agency.

Technologies, LLC (“STCH”) provides technology development.

STCH is a Nevada

limited liability company.

Financial Services, LLC (“RISE”) is a Delaware limited liability company and

a broker-dealer registered with the SEC, CFTC, FINRA, SIPC, and NFA.

Digital Solutions, Ltd.

(“STXD”) is an inactive subsidiary headquartered in Bermuda.

Media, LLC (“GM”) is a Florida limited liability company and provides management

and promotion of sports and music talent, as well as in-house production and marketing for

● Siebert Crypto, LLC (“SCRYP”) is a Delaware limited liability company formed to provide future

digital asset-related services.

SCRYP has not yet commenced business operations.

purposes of this Report, the terms “Siebert,” “Company,” “we,” “us,” and “our”

refer to Siebert Financial Corp., MSCO, SNXT, PW, STCH, RISE, STXD, and GE, collectively, unless the context otherwise requires.

refer to Siebert Financial Corp., MSCO, SNXT, PW, STCH, RISE, STXD, GM, and SCRYP collectively, unless the context otherwise requires.

May 2025, GM changed its name from Gebbia Entertainment, LLC, to Gebbia Media, LLC.

Effective January 1, 2024,

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to Siebert AdvisorNXT, LLC with their tax status changing from C-Corporations to LLCs under state law.

Effective December 2025, the

Company formed SCRYP by filing a Certificate of Formation in the State of Delaware.

As of December 31, 2025, SCRYP had not commenced any

The Company is headquartered

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share, trades on the Nasdaq Capital Market under the symbol “SIEB.”

The Company engages in a single

line of business as a securities broker-dealer, providing comprehensive brokerage services including custody and clearing of retail accounts,

insurance and advisory services, principal transaction and proprietary trading, market making, and securities lending.

The Company currently

has no other reportable segments.

All of the Company’s revenues for the years ended December 31, 2024 and 2023 were derived from its operations

Company has evaluated the impact of its recent acquisition of GE on its consolidated financial statements and has determined that the

acquisition is immaterial.

As of December 31, 2024, the Company operates as a single reportable segment based on the factors related to

management’s decision-making framework as well as management evaluating performance and allocating resources based on assessments

of the Company from a consolidated perspective.

Management will continue to monitor the financial significance of the GE acquisition and

may report additional segments in accordance with FASB ASC Topic 280 – “Improvements to Reportable Segment Disclosures”

(“Topic 280”).

The Company operates two reportable

segments, Financial Services, and Media, Sports and Entertainment.

Financial Services is the Company’s primary segment and includes

the Company’s broker-dealer and related financial services operations.

Media, Sports and Entertainment includes the Company’s

entertainment and sports management and related marketing, advertising, and production activities.

All of the Company’s revenues

for the years ended December 31, 2025 and 2024 were derived from its operations in the U.S.

Summary of Significant Accounting Policies

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Reclassification

Certain amounts for the year

ended December 31, 2024 and 2023, and certain cash flows within the Investing Activities section have been reclassified to conform to

the presentation of the current period.

The reclassification has not materially impacted the Company’s consolidated financial statements,

and did not result in a change in total revenue, net income or cash flows from operations or investing activities for the periods presented.

Certain prior year amounts

have been reclassified to conform with current year presentation.

The reclassification had no impact on previously reported assets or

liabilities and did not result in a change in revenue or net income for the periods presented.

Principles of Consolidation

The consolidated financial

statements include the accounts of Siebert and all other entities in which we have a controlling financial interest.

The Company determines

whether it has controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity (“VOE”)

or a variable interest entity (“VIE”).

Upon consolidation, all intercompany balances and transactions are eliminated.

Company’s ownership in RISE was 68 % as of both December 31, 2024 and 2023.

Refer to Note 5 – RISE for more information.

statements include the accounts of the Company and all other entities in which the Company has a controlling financial interest.

determines whether it has controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity

(“VOE”) or a variable interest entity (“VIE”).

Upon consolidation, all intercompany balances and transactions

are eliminated.

For consolidated subsidiaries

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in which the Company does not have a controlling financial interest but has significant influence over its operating and financial decisions,

the Company applies the equity method of accounting with net income and losses recorded in earnings of equity method investment in related

the Company applies the equity method of accounting with net income and losses recorded in earnings of equity method investment.

Voting Interest Entities

evaluates whether an entity qualifies as a VOE and determines the appropriateness of consolidation on a quarterly basis.

The Company consolidates

a VOE when it holds a majority voting interest, directly or indirectly, and has the power to direct the activities of the entity that

most significantly impact its economic performance.

When assessing consolidation under the voting interest model, the Company considers

all relevant facts and circumstances, including its ability to exercise control through voting rights and the extent of its ownership

If the Company determines it holds a controlling financial interest in the VOE, the entity is consolidated in the Company’s

financial statements.

Variable Interest Entities

Company evaluates whether an entity is a VIE and determines if the primary beneficiary status is appropriate on a quarterly basis.

Company consolidates a VIE for which it is the primary beneficiary.

When assessing the determination of the primary beneficiary, the Company

considers all relevant facts and circumstances, including factors such as the power to direct the activities of the VIE that most significantly

impact its economic performance, the obligation to absorb the losses and/or the right to receive the expected returns of the VIE.

Company determines that it is the primary beneficiary, the Company will consolidate the entity under the VIE model.

Company evaluates whether an entity qualifies as a voting interest entity (“VOE”) and determines the appropriateness of consolidation

on a quarterly basis.

The Company consolidates a VOE when it holds a majority voting interest, directly or indirectly, and has the power

to direct the activities of the entity that most significantly impact its economic performance.

When assessing consolidation under the

voting interest model, the Company considers all relevant facts and circumstances, including its ability to exercise control through voting

rights and the extent of its ownership interest.

If the Company determines it holds a controlling financial interest in the VOE, the entity

is consolidated in the Company’s financial statements.

Interest Entities

Company evaluates whether an entity is a variable interest entity (“VIE”) and determines if the primary beneficiary status

is appropriate on a quarterly basis.

The Company consolidates a VIE for which it is the primary beneficiary.

When assessing the determination

of the primary beneficiary, the Company considers all relevant facts and circumstances, including factors such as the power to direct

the activities of the VIE that most significantly impact its economic performance, the obligation to absorb the losses and/or the right

to receive the expected returns of the VIE.

If the Company determines that it is the primary beneficiary, the Company will consolidate

the entity under the VIE model.

Segment Information

The Company operates and reports

financial information in one operating segment, consistent with the way the Chief Operating Decision Maker (CODM) allocates resources

and evaluates performance.

Operating segments are determined based on how management organizes the business for decision-making, and the

CODM regularly reviews the Company’s financial information as a whole.

The Company is engaged in a single line of business as a

securities broker-dealer, providing various brokerage services, including custody and clearing of retail accounts, insurance and advisory

services, principal transaction and proprietary trading, market making, and securities lending.

In accordance with Topic 280,

the Company discloses significant expense categories that are regularly reviewed by the CODM.

The CODM evaluates performance primarily

based on net income and considers excess net capital as an operational metric in maintaining capital adequacy.

Since the Company has identified

a single reportable segment, segment disclosures align with the consolidated financial statements, and duplicative information has been

referenced where applicable.

All of the Company’s revenues and substantially all of its assets are attributed to or located in the

United States.

financial information in two operating segments:

Financial Services, and Media, Sports and Entertainment, which is consistent with the

way the Chief Operating Decision Maker (“CODM”) allocates resources and evaluates performance.

Operating segments are determined

based on how management organizes the business for decision-making, and the CODM regularly reviews the Company’s financial information

at the segment level and also as a consolidated entity.

Financial Services, which primarily operates as a securities broker-dealer and

provides brokerage, custody and clearing services for retail accounts, insurance and advisory services, principal transaction and proprietary

trading, market making, securities lending, and investment banking and capital markets services.

Media, Sports and Entertainment, engages

in the production and distribution of music and media content, as well as talent management and music and sports representation.

In accordance with ASC

Topic 280 – “Segment Reporting” (Topic 280”), the Company discloses significant expense categories that are

regularly reviewed by the CODM.

The CODM evaluates performance primarily based on operating income and considers excess net capital

as an operational metric in maintaining capital adequacy.

Reportable segment disclosures align with the consolidated financial

statements, and duplicative information has been referenced where applicable.

All of the Company’s revenues and substantially

all of its assets are attributed to or located in the United States.

Use of Estimates

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Accounting for Acquisitions

FASB ASC Topic 805 – “Accounting

for Contract Assets and Contract Liabilities from Contracts with Customers” (“Topic 805”) is used for accounting in

business acquisitions.

Topic 805 requires that goodwill be recognized separately from assets acquired and liabilities assumed at their

acquisition date fair values.

Goodwill, as of the date of acquisition, is determined as the excess of the consideration transferred net

of the acquisition date fair values of assets acquired and liabilities assumed.

Fair value estimates at acquisition date may be assessed

internally or externally using third parties.

As part of the valuation and appraisal process, the third-party appraiser prepares a report

assigning estimated acquisition date fair values to assets and liabilities.

These fair values estimations are subjective and require careful

consideration and sound judgement.

FASB ASC Topic 805 –

“Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“Topic 805”) is used

for accounting in business acquisitions.

Topic 805 requires that goodwill be recognized separately from assets acquired and liabilities

assumed at their acquisition date fair values.

Goodwill, as of the date of acquisition, is determined as the excess of the consideration

transferred net of the acquisition date fair values of assets acquired and liabilities assumed.

Fair value estimates at acquisition date

may be assessed internally or externally using third parties.

As part of the valuation and appraisal process, the third-party appraiser

prepares a report assigning estimated acquisition date fair values to assets and liabilities.

These fair values estimations are subjective

and require careful consideration and sound judgement.

Management reviews the third-party reports for fairness of the assigned values.

Asset Acquisitions

An asset acquisition is an

acquisition of an asset, or a group of assets, that does not meet the definition of a business.

Asset acquisitions are accounted for by

using the cost accumulation model whereby the cost of the acquisition, including certain transaction costs, is allocated to the assets

acquired on the basis of relative fair values.

The cost of an asset acquisition may differ from the aggregate fair value of the underlying

assets, and any excess cost is allocated to the acquired assets on a relative fair value basis.

Goodwill is not recognized in an asset

acquisition, and bargain purchase gains are not recorded.

Identifiable intangible assets acquired in an asset acquisition are recognized

separately and subsequently amortized in accordance with their estimated useful lives.

ASC Topic 820 – “Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”

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1 - Quoted prices (unadjusted) in active markets for an identical asset or liability that the Company can assess at the measurement date.

2 - Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly.

3 - Unobservable inputs for the asset or liability.

Level 2 - Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 - Unobservable inputs for the asset or liability.

availability of observable inputs can vary from security to security and is affected by a variety of factors, such as the type of security,

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for regulatory purposes and $ 68.8 million in qualified securities segregated for regulatory purposes.

Cash and securities segregated

for regulatory purposes are held in special reserve accounts for the benefit of customers for regulatory purposes.

Cash and securities segregated for

regulatory purposes are held in special reserve accounts for the benefit of customers for regulatory purposes.

Current Expected Credit Losses

The Company accounts for estimated credit losses on financial assets

measured at an amortized cost basis and certain off-balance sheet credit exposures in accordance with FASB ASC Subtopic 326-20 –

“Financial Instruments – Credit Losses” (“Subtopic 326-20”).

Subtopic 326-20 requires the Company to estimate

expected credit losses over the life of its financial assets and certain off-balance sheet exposures as of the reporting date based on

relevant information about past events, current conditions, and reasonable and supportable forecasts.

The Company records the estimate of expected credit

losses as an allowance for credit losses.

For financial assets measured at an amortized cost basis the allowance for credit losses is

reported as a valuation account in the statement of financial condition that adjusts the asset’s amortized cost basis.

the allowance for credit losses if any are reported in credit loss expense.

The Company accounts for estimated

credit losses on financial assets measured at an amortized cost basis and certain off-balance sheet credit exposures in accordance with

FASB ASC Subtopic 326-20 – “Financial Instruments – Credit Losses” (“Subtopic 326-20”).

326-20 requires the Company to estimate expected credit losses over the life of its financial assets and certain off-balance sheet exposures

as of the reporting date based on relevant information about past events, current conditions, and reasonable and supportable forecasts.

The Company records the estimate

of expected credit losses as an allowance for credit losses.

For financial assets measured at an amortized cost basis, the allowance for

credit losses is reported as a valuation account in the statement of financial condition that adjusts the asset’s amortized cost

Changes in the allowance for credit losses if any are reported in credit loss expense.

Receivables from Distribution Companies

Receivables from distribution

companies represent amounts due under distribution and digital service agreements for the sale, streaming, and licensing of the Company’s

recorded music and audiovisual content.

These balances are recorded at amortized cost basis, net of allowance for credit losses and are

recorded in the line item “Other Receivables” in the statements of financial condition.

Receivables are generally collectible

within 30 to 90 days based on reports from distributors and digital service providers.

Estimated unreported activity at period-end is

accrued based on historical patterns and subsequently adjusted when actual data becomes available.

The Company monitors credit

exposure to distribution partners and believes its concentration of credit risk is limited due to the financial and operational strength

of its major distributor.

As of December 31, 2025, the Company did not have an allowance for credit loss for these receivables.

Receivables from and

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in addition to monitoring customer activity.

Receivables from and payables to customers amounts include any amounts received from interest

on credit balances or paid on margin debit balances.

Receivables from and payables to customers include any amounts received from interest on

credit balances or paid on margin debit balances.

The Company elected the practical

expedient for FASB ASC Topic 326 – “Financial Instruments – Credit Losses” (“Topic 326”) which permits

it to compare the amortized cost basis of the loaned amount with the fair value of collateral received at the reporting date to measure

the estimate of expected credit losses.

The Company had no expectation of credit losses for its receivables from customers as of December

31, 2024 and 2023.

Management actively monitors its exposure to credit risk through daily reviews of customer receivables and all transactions

are either fully collateralized or subject to credit risk management protocols, ensuring that no material unsecured or uncollateralized

balances exist.

Additionally, the Company has no historical material credit losses and has not incurred any material credit losses as

of December 31, 2024 and 2023.

Securities beneficially owned by customers, including those that collateralize margin or other similar

transactions, are not reflected in the consolidated statements of financial condition.

expedient for ASC Topic 326 (“Topic 326”) which permits it to compare the amortized cost basis of the loaned amount with the

fair value of collateral received at the reporting date to measure the estimate of expected credit losses.

The Company had no expectation

of credit losses for its receivables from customers as of December 31, 2025 and 2024.

Management actively monitors its exposure to credit

risk through daily reviews of customer receivables and all transactions are either fully collateralized or subject to credit risk management

protocols, ensuring that no material unsecured or uncollateralized balances exist.

Additionally, the Company has no historical material

credit losses and has not incurred any material credit losses as of December 31, 2025 and 2024.

Securities beneficially owned by customers,

including those that collateralize margin or other similar transactions, are not reflected in the consolidated statements of financial

Receivables from and

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As a result, the Company had no expectation of credit losses for these arrangements as of December 31, 2025 and 2024.

Media Production Costs

The Company capitalizes recoupable

costs incurred in the production of recorded music and related audiovisual content, including studio recordings, music videos, concert

films, and other visual media, when such costs are specifically identifiable, recoverable under artist or project agreements, and expected

to provide probable future economic benefits.

Capitalized costs typically

include advances to artists, and payments to producers, directors, and third-party vendors, as well as studio, location, and post-production

Non-recoupable costs, or costs that are promotional in nature, and other media production costs that do not meet the capitalization

criteria are expensed as incurred.

Capitalized media production

costs are amortized over the estimated period of benefit, commencing upon the initial release or availability of the related content.

Amortization is calculated using a method that reflects the pattern in which the expected economic benefits are consumed, or on a straight-line

basis if such pattern cannot be reliably determined, generally over a period not exceeding three years.

Amortization expense is recognized

on a straight-line basis over estimated period of benefit and is included in line item “Depreciation and amortization” in

the consolidated statements of operations.

The Company evaluates capitalized

media production costs for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

If the expected future discontinued cash flows from the related project are less than the carrying amount of the capitalized costs, the

excess is written off as an impairment charge in the period identified and would be recorded in the line item “Depreciation

and amortization” in the consolidated statements of operations.

There has been no impairment to the Company’s media production

costs for the year ended December 31, 2025.

Securities Borrowed

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Substantially

all of the Company’s securities borrowing and securities lending activity is transacted under master agreements that may allow for net

settlement in the ordinary course of business, as well as offsetting of all contracts with a given counterparty in the event of default

all of the Company’s securities borrowing and securities lending activity is transacted under master agreements that may allow for

net settlement in the ordinary course of business, as well as offsetting of all contracts with a given counterparty in the event of default

by one of the parties.

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Type of Security Classification Consolidated Statements of

Financial Condition Recording of Realized and

Unrealized Gain or Loss

Certificates of deposit, Corporate bonds, municipal securities, options Trading Securities owned, at fair value Principal transactions and proprietary trading

Equities Trading Securities owned, at fair value;

Financial Condition Recording of Realized and Unrealized Gain or Loss

Certificates of deposit, Corporate bonds, municipal securities, options Trading Securities owned, at fair value, Securities sold, not yet purchased at fair value Principal transactions and proprietary trading

Equities, options Trading Securities owned, at fair value;

Securities sold, not yet purchased at fair value Market making, Principal transactions and proprietary trading

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Software, Net

Company capitalizes certain costs for certain software and amortizes them over their useful life, generally not exceeding five years .

Depending on the terms of the contract, the Company either records costs from software hosting arrangements as prepaid assets and amortizes

them over the contract term, or the costs are expensed as incurred.

Company enters into certain software hosting arrangements where the associated professional development services work is capitalized and

then amortized over the term of the contract.

Other software costs such as routine maintenance and various data services are expensed

Company capitalizes certain costs incurred to develop internal-use software when management authorizes the project and completion is probable.

Capitalized costs are amortized over their estimated useful life, generally not exceeding five years , and other software-related costs,

including maintenance and training, are expensed as incurred.

For cloud computing and other hosting arrangements that do not convey a

software license, the arrangement is treated as a service contract;

implementation costs that are directly attributable to the service

may be capitalized as a prepaid asset and amortized over the hosting term, while subscription and service fees are expensed as incurred.

The Company reviews all relevant

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in which the Company has the ability to exercise significant influence, but does not control, are accounted for under the equity method

of accounting and are included in the line item “Equity method investment in related party” in the consolidated statements

of financial condition.

Under this method of accounting, the Company’s share of the net income or loss of the investee is presented

before the income before provision for income taxes in the consolidated statements of operations.

Company evaluates its equity method investments whenever events or changes in circumstance indicate that the carrying amounts of such

of accounting.

Under this method of accounting, the Company’s share of the net income or loss of the investee is presented before

the income before provision for income taxes in the consolidated statements of operations.

The Company evaluates its equity method investments whenever events or changes in circumstance indicate that the carrying amounts of such

investments may be impaired.

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of the same issuer, and impairments.

As of December 31, 2024 and 2023, the Company had no investments.

Refer to Note 13 – Investment, Cost for further information.

Other Intangible Assets, Net

The Company accounts for

intangible assets acquired in business combinations or asset acquisitions in accordance with FASB ASC Topic 350 – “Intangibles

– Goodwill and Other” (“Topic 350”).

Certain identifiable intangible assets acquired by the Company, including

artist contracts, are recognized at fair value at the acquisition date and are amortized over their estimated useful lives on a straight-line

The estimated useful lives of these intangible assets are determined based on contractual terms.

The Company assesses intangible

assets for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Additionally, the Company reviews the estimated useful lives of intangible assets annually or whenever circumstances suggest that the

remaining amortization period should be revised.

If a change in useful life is necessary, the asset’s remaining carrying amount

is amortized prospectively over the revised useful life.

The Company accounts for intangible assets

acquired in business combinations or asset acquisitions in accordance with FASB ASC Topic 350 – “Intangibles – Goodwill

Certain identifiable intangible assets acquired by the Company, including artist contracts, are recognized at fair value

at the acquisition date and are amortized over their estimated useful lives on a straight-line basis.

The estimated useful lives of these

intangible assets are determined based on contractual terms.

The Company assesses intangible assets for impairment at least annually or

whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Additionally, the Company reviews

the estimated useful lives of intangible assets annually or whenever circumstances suggest that the remaining amortization period should

If a change in useful life is necessary, the asset’s remaining carrying amount is amortized prospectively over the revised

represents the excess purchase price of businesses acquired over the fair value of the identifiable net assets acquired.

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Company’s annual impairment test date is December 31.

The Company completed a qualitative assessment for its reporting unit during

The Company completed a qualitative assessment for its reporting units during

its most recent annual impairment review.

The Company concluded that it has one reportable segment and tests goodwill on a consolidated

Based on this qualitative assessment, the Company determined that there was no evidence of impairment to the balance of its goodwill

as of both December 31, 2024 and 2023.

The Company concluded that it has two reportable segments.

Based on this qualitative assessment,

the Company determined that there was no evidence of impairment to the balance of its goodwill as of both December 31, 2025 and 2024.

Drafts Payable

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Deferred Contract Incentive

The Company entered into an

amendment with its agreement with NFS whereby the Company received a one-time business development credit of $ 3 million, and NFS will

pay the Company four annual credits of $ 100,000 , which are both recorded in the line item “Deferred contract incentive” in

the consolidated statements of financial condition.

Annual credits shall be paid on the anniversary of the date on which the first credit

The business development credit and annual credits will be recognized as contra expense over four years and one year , respectively,

in the line item “Clearing fees, including execution costs” in the consolidated statements of operations.

The Company entered into amendments

to its agreement with NFS under which it received development credits during the years ended December 31, 2025 and 2024.

These credits

are recorded in “Deferred contract incentive” in the consolidated statements of financial condition and are recognized as

a contra-expense over their respective terms within “Clearing fees, including execution costs” in the consolidated statements

of operations.

The amendment also includes an early termination fee provision.

Refer to Note 20 – Commitments, Contingencies, and

Other for additional information.

Contract Termination Liability

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this transaction as an exit or disposal cost obligation in accordance with FASB ASC Topic 420 – “Exit or Disposal Cost

Obligations” (“Topic 420”).

Accordingly, the Company recognized the liability at fair value by using a present value

technique that used a discount rate equivalent to the bank prime rate as of the date of the agreement.

The liability is recorded on the

line item “Contract termination liability” in the consolidated statements of financial condition.

The expense was recorded

in the line item “Transaction termination costs” in the consolidated statements of operations.

Refer to Note 6 – Transaction

with Kakaopay for further detail.

Obligations”.

Accordingly, the Company recognized the liability at fair value by using a present value technique that used a discount

rate equivalent to the bank prime rate as of the date of the agreement.

The liability is recorded on the line item “Contract termination

liability” in the consolidated statements of financial condition.

Refer to Note 6 – Transaction with Kakaopay for further

Revenue Recognition

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and not included in the revenue figures presented in accordance with Topic 606.

The Company also has fee revenue

and transaction revenue which are within the scope of Topic 606.

Revenue from contracts with customers includes commission income charged

to retail clients for executing transactions, markups on riskless principal transactions charged to retail clients for executing transactions,

distribution income received from mutual funds for client transactions, stock locate fees charged to counterparties for providing locate

services, payment for order flow received for executing transactions, and administrative fees to retail clients including for maintenance

and other ancillary services.

Under Topic 606, Revenue from Contracts with Customers, requires that an entity recognize revenue to depict

the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be

entitled in exchange for those goods or services.

The guidance requires an entity to follow a five-step model to (a) identify the contract(s)

with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction

price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation.

In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant

reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration

The Company also has fee

revenue and transaction revenue which are within the scope of Topic 606, Revenue from Contracts with Customers.

Topic 606 requires

that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the

consideration to which the entity expects to be entitled in exchange for those goods or services.

The guidance requires an entity to

follow a five-step model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract,

(c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e)

recognize revenue when (or as) the entity satisfies a performance obligation.

In determining the transaction price, an entity may

include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative

revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved.

table below presents detailed information on the Company’s recognition of revenue from contracts with customers as well as revenues

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Principal transactions and proprietary trading

Riskless principal transactions with customers

principal transactions with customers

Commissions and fees

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Insurance commissions

Interest, marketing and distribution fees

Marketing and distribution fees

Stock borrow / stock loan

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Stock locate services

Advisory fees

Administrative fees

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Other commissions

Advisory fees

Music and artist services revenue

Investment Banking

Underwriting fees

Financial advisory fees

Total Revenues from contracts with customers

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Principal transactions and proprietary trading

Proprietary trading

Interest, marketing and distribution fees

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Interest income

Marketing and distribution fees

Stock borrow / stock loan

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with a markup or markdown to satisfy the order.

transactions and proprietary trading related to riskless principal transactions are recognized at a point in time on the trade date when

Principal transactions and proprietary trading related to riskless principal transactions

are recognized at a point in time on the trade date when the performance obligation is satisfied.

The performance obligation is satisfied

The performance obligation is satisfied on the trade date because that is when the underlying

financial instrument or purchaser is identified, the pricing is agreed upon, and the risks and rewards of ownership have been transferred

to / from the customer or trading counterparty.

on the trade date because that is when the underlying financial instrument or purchaser is identified, the pricing is agreed upon, and

the risks and rewards of ownership have been transferred to / from the customer or trading counterparty.

The second revenue stream

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Commissions and

Company earns commission revenue for executing trades for clients in individual equities, options, insurance products, futures, fixed

income securities, as well as certain third-party mutual funds and ETFs.

revenue associated with combined trade execution and clearing services, as well as trade execution services on a standalone basis, is

recognized at a point in time on the trade date when the performance obligation is satisfied.

The performance obligation is satisfied

on the trade date because that is when the underlying financial instrument or purchaser is identified, the pricing is agreed upon, and

the risks and rewards of ownership have been transferred to / from the customer.

Company earns commission revenue for executing trades for clients in individual equities, options, insurance products, futures,

fixed income securities, as well as certain third-party mutual funds and ETFs.

Commission revenue associated with combined trade

execution and clearing services, as well as trade execution services on a standalone basis, is recognized at a point in time on the

trade date when the performance obligation is satisfied.

The performance obligation is satisfied on the trade date because that is

when the underlying financial instrument or purchaser is identified, the pricing is agreed upon, and the risks and rewards of

ownership have been transferred to / from the customer.

The Company enters into arrangements

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fees recognized in the current period are primarily related to performance obligations that have been satisfied in prior periods.

Interest, Marketing and Distribution Fees

Interest income consists primarily

of interest earned on client cash balances, margin loans, bank deposits, and securities, net of interest paid to clients.

Interest income

is recognized over time as it accrues based on the applicable interest rates and outstanding balances.

Interest income also includes interest

payouts from introducing relationships related to short interest, net of charges.

The Company earns margin interest

on customer margin balances, which represents the net interest charged to customers for holding financed positions.

Margin interest is

recognized over time as it accrues.

Marketing and distribution

fees consist primarily of 12b-1 fees received from money market mutual funds in connection with distributing fund shares and providing

ongoing shareholder servicing.

The Company receives these fees based on a contractual percentage of client assets invested in the respective

These fees represent variable consideration and are recognized over time as the related distribution and servicing activities are

performed and the customer simultaneously receives and consumes the benefits of those services.

Stock Borrow /

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over the term as services are provided.

For the year ended December

31, 2024, stock borrow / stock loan revenue was $ 19,249,000 ($ 40,714,000 gross revenue less $ 21,465,000 expenses).

For the year ended

December 31, 2023, stock borrow / stock loan revenue was $ 16,172,000 ($ 47,166,000 gross revenue less $ 30,994,000 expenses).

borrowed and securities loaned transactions are recorded at the amount of cash collateral advanced or received, respectively, with all

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Based on the above factors, there is no material current expected

credit loss under Topic 326 for securities borrowed and loaned transactions is not needed as of December 31, 2024.

Company also provides securities locate services to broker dealer counterparties.

The Company charges a fee to their counterparties each

time a locate is placed and the inventory is decremented by such locate quantity.

The Company believes that the performance obligation

is satisfied on the day that the security is located for the customer as that is when the underlying financial instrument or purchaser

is identified, the pricing is agreed upon and the risks and rewards of locate identification have been transferred to the counterparty.

Revenue is recognized at that point in time.

income primarily represents fees generated from consulting services to a technology provider, payment for order flow, and transactional

fees generated from client accounts.

The performance obligation for consulting services to a technology provider is providing consulting

services and is satisfied over time in line with the duration of the consulting contract.

The performance obligation related to payment

for order flow is providing financial services and is satisfied at a point in time.

The performance obligation related to transactional

fees generated from client accounts is providing financial services to clients and is satisfied over time.

Company also earns revenue from an agreement with JonesTrading Institutional Service, LLC (“JonesTrading”) whereby J onesTrading

pays the Company a percentage of the net revenue produced by certain historical institutional customers less any related expenses.

from JonesTrading is determined based on the factors outside of the Company’s control and the Company records the income amount

on a monthly basis when the actual amount of income is known.

credit loss under Topic 326 for securities borrowed and loaned transactions as of December 31, 2025 and 2024.

The Company also provides

securities locate services to broker dealer counterparties.

The Company charges a fee to their counterparties each time a locate is placed

and the inventory is decremented by such locate quantity.

Under these arrangements, the Company identifies and reserves available securities

to facilitate a counterparty’s short sale transaction.

The performance obligation is to provide a locate confirmation for a specified

quantity of securities.

The transaction price is generally fixed at the time the locate is placed and is based on agreed-upon contractual

Revenue is recognized at a point in time on the date the locate confirmation is provided to the counterparty, as this represents

the point at which the Company has satisfied its performance obligation and the counterparty obtains control of the locate service.

For the year ended December

31, 2025, stock borrow / stock loan revenue was $ 29,034,000 ($ 49,103,000 gross revenue less $ 20,069,000 expenses).

For the year ended

December 31, 2024, stock borrow / stock loan revenue was $ 19,249,000 ($ 40,714,000 gross revenue less $ 21,465,000 expenses).

Advisory Fees

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over time as clients receive and consume the benefits as the services are provided.

The advisory fees are variable and calculated as

a percentage of the client’s total asset value, determined as of the last business day of each quarter.

These fees are primarily

billed in advance, based on the average daily balance of the previous quarter and recognized ratably over the period in which services

are provided.

For new accounts or terminated accounts, fees may be prorated based on the number of days the account was active during

the quarter, in accordance with the advisory agreement.

Interest, Marketing

and Distribution Fees

Company earns interest from clients’ accounts, net of interest expense which consists of payments to clients’ accounts, and

on the Company’s bank balances and securities.

Interest income also includes interest payouts from introducing relationships related

to short interest, net of charges.

Company also earns margin interest which is the net interest charged to customers for holding financed margin positions.

Marketing and

distribution fees consist of 12b-1 fees which are trailing payments from money market funds.

The Company enters into arrangements

with money market mutual funds to distribute shares to investors (“Marketing and Distribution Fees”).

The Company may receive

distribution fees paid by the fund over time.

The Company receives Marketing and Distribution Fees based upon the total amount deposited

with the money market mutual fund based on a published interest rate.

Interest, marketing and distribution fees are recorded as earned.

Advisory fees are variable and calculated as a percentage

of the client’s assets under management (“AUM”), generally based on the average daily balance of client accounts during

the prior quarter.

These fees are primarily billed quarterly in advance and recognized ratably over the service period in which the advisory

services are provided.

For new accounts or terminated accounts, fees may be pro-rated based on the number of days the account was active

during the quarter, in accordance with the advisory agreement.

Other income primarily consists

of payment for order flow and various transactional fees earned from client accounts, including account maintenance and foreign exchange

fees, NIL revenue and music and artist services revenue.

Payment for order flow revenue

is earned in connection with routing customer orders to third-party market makers.

The transaction price is generally based on contractual

rates applied to the volume of customer orders executed.

Revenue is recognized at a point in time when the underlying trade is executed

and the routing service is complete.

Activity fees associated with

account maintenance, including foreign exchange spreads and similar fees, are generally determined based on contractual commission schedules

or spreads applied at the time of execution.

Account maintenance and other ongoing service fees are generally fixed and recognized over

time as the related services are provided and the customer simultaneously receives and consumes the benefits of those services.

is recognized at a point in time on the trade date, as the performance obligation is satisfied upon completion of the transaction.

The Company provides name,

image, and likeness (“NIL”) negotiation and marketing services to student-athletes, who are the Company’s customers.

These services include negotiating sponsorship and endorsement agreements and assisting with marketing opportunities.

The Company acts

as a principal in these arrangements because it controls the negotiation and marketing services prior to transferring them to the customer,

and therefore presents revenue on a gross basis.

The Company’s performance obligations consist of negotiation and marketing services

provided in connection with NIL arrangements.

Revenue is recognized at a point in time when the Company has completed the services associated

with securing the NIL arrangement and the athlete’s compensation arrangement is finalized.

Consideration is variable and is generally

a stated contractual percentage of the athlete’s NIL compensation.

Variable consideration is included in the transaction price only

when it is probable that a significant reversal will not occur.

This typically occurs when the athlete’s related NIL arrangement

is finalized and the Company’s fee is determinable and billable.

The Company’s music

revenue primarily consists of income derived from commercial use of sound recordings across various distribution channels, including

digital streaming, physical sales, and downloads, as well as licensing of recorded music for use in film, satellite radio, television,

advertising, and other media.

The Company also provides servicing and support services to artists which may include marketing and radio

promotion services as well as other operational support activities.

These services are based on a fixed fee basis and represent a stand-ready

performance obligation that is satisfied over time and recognized as services are provided.

Revenue is recognized when

control of promised goods or services is transferred to customers in an amount that reflects the consideration expected in exchange.

recorded music sales such as CDs, vinyl, and DVDs are recognized at the point in time control is transferred, generally upon shipment

or delivery, and are recorded net of estimated returns and rebates.

Digital revenues, including streaming and downloads, are derived from

dynamic license arrangements where control is transferred generally when the user consumes the music via the licensee’s portal.

Revenue is recognized based on monthly usage reports from digital service providers or, when usage data is unavailable, is estimated using

historical trends and forecasts.

Due to the timing of the revenue

and the cash received, there is a receivable from distribution companies and servicing clients that is recorded for revenue earned but

not yet collected as of the period end date.

Underwriting Fees

The Company underwrites securities

for business and governmental entities that want to raise funds through a sale of securities.

Revenues are earned from fees arising from

securities offerings in which the Company acts as an underwriter.

Revenue is recognized on the trade date (the date on which the Company

purchases the securities from the issuer) for the portion the Company is contracted to buy.

The Company believes that the trade date is

the appropriate point in time to recognize revenue for securities underwriting transactions as there are no significant actions which

the Company needs to take subsequent to this date and the issuer obtains the control and benefit of the capital markets offering at that

In firm commitment underwriting arrangements, the Company acts as principal, as it commits to purchase securities from the issuer

and assumes the risks and rewards of ownership prior to distribution.

Revenue in these arrangements is recognized on a gross basis at

In certain offerings, including

best efforts or placement agent arrangements, the Company acts as an agent, facilitating the sale of securities on behalf of the issuer

without assuming inventory or market risk.

In these arrangements, the Company earns a commission and recognizes revenue on a net basis

upon completion of the offering when its performance obligation to arrange the transaction has been satisfied.

Underwriting costs that

are deferred under the guidance in FASB ASC 940-340-25-3 are recognized in expense at the time the related revenues are recorded.

event that transactions are not completed and the securities are not issued, the Company immediately expenses those costs.

Financial Advisory Fees

The Company provides advisory

services on mergers and acquisitions and receives valuation advisory fees.

Revenue for advisory arrangements is generally recognized at

the point in time that performance under the arrangement is completed (the closing date of the transaction) or the contract is cancelled.

However, for certain contracts, revenue is recognized over time for advisory arrangements in which the performance obligations are simultaneously

provided by the Company and consumed by the customer.

In some circumstances, significant judgment is needed to determine the timing and

measure of progress appropriate for revenue recognition under a specific contract.

Retainers and other fees received from customers prior

to recognizing revenue are reflected as contract liabilities.

As of December 31, 2025 and 2024, all amounts were immaterial.

Market Making

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or Fulfill a Contract;

For the periods presented, there were no costs

capitalized related to obtaining or fulfilling a contract with a customer, and thus the Company has no balances for contract assets or

contract liabilities.

For the periods presented,

there were no costs capitalized related to obtaining or fulfilling a contract with a customer, and thus the Company has no balances for

contract assets or contract liabilities.

Share-based Compensation

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costs are expensed as incurred and were $ 1,083,000 and $ 348,000 for the years ended December 31, 2025, and 2024, respectively.

The Company accounts 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, the Company determines 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.

The Company recognizes deferred

tax assets to the extent that the Company believes that these assets are more likely than not to be realized.

In making such a determination,

the Company considers 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 the Company determines that it would be

able to realize deferred taxes in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred

tax asset valuation allowance, which would reduce the provision for income taxes.

The Company records uncertain

tax positions in accordance with Topic 740 on the basis of a two-step process in which (1) the Company determines 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, the Company recognizes the largest amount of tax benefit that is more than 50

percent likely to be realized upon ultimate settlement with the related tax authority.

The Company recognizes 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.

Company accounts 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,

the Company determines 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

Company recognizes deferred tax assets to the extent that the Company believes that these assets are more likely than not to be realized.

In making such a determination, the Company considers 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 the Company

determines that it would be able to realize deferred taxes in the future in excess of their net recorded amount, the Company would make

an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

Company records uncertain tax positions in accordance with Topic 740 on the basis of a two-step process in which (1) the Company determines

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, the Company recognizes the largest amount of tax benefit

that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

Company recognizes 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.

Capital Stock

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New Accounting Standards

December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures” (“ASU 2023-09”).

is intended to enhance the transparency and decision usefulness of income tax disclosures.

The amendments in the ASU address investor

requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information.

2023-09 will be effective for the Company for annual periods beginning after December 15, 2024, though early adoption is permitted.

Company is still evaluating the presentational effect that ASU 2023-09 will have on its consolidated financial statements, but the Company

expects considerable changes to its income tax footnote.

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.

ASU 2024-03 will be effective for us for annual periods beginning after

December 15, 2025, though early adoption is permitted.

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 November 2024, the Financial

Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”), “2024-03”, “Income

Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures” (“ASU 2024-03”).

intended to enhance the transparency and decision usefulness of income statement expense disclosures by requiring greater disaggregation

of certain expense categories.

ASU 2024-03 will be effective for us for annual periods beginning after December 15, 2025, though early

adoption is permitted.

The Company is currently evaluating the impact that ASU 2024-03 will have on its consolidated financial statements

and anticipates the amendments will require significant changes to our expense disclosures.

In July 2025, the FASB issued

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 the Company

for fiscal years beginning after December 15, 2025, and interim reporting periods, with early adoption permitted.

The Company expects

to adopt the standard in the first quarter of 2026 and, based on its preliminary assessment, does not expect the adoption of ASU 2025-05

to have a material impact on its financial statements.

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 the Company for fiscal years beginning after December

15, 2027, and interim reporting periods, with early adoption permitted.

The Company is evaluating the impact of the standard on its disclosures.

Accounting Standards Adopted in Fiscal 2025

In November 2023, the FASB

issued ASU 2023-07, Topic 280, which requires all public entities, including those with a single reportable segment, to disclose

additional information about a reportable segment’s significant expense categories in interim and annual periods, as identified

in the information regularly provided to the CODM, among other requirements.

The new guidance does not change how a public entity identifies

its operating segments, aggregates those operating segments or applies the quantitative thresholds to determine its reportable segments.

The guidance also clarifies that when a single operating segment is identified, entities may reference primary financial statements for

overlapping disclosures.

This ASU is effective for all entities for fiscal years beginning after December 15, 2023, and for interim periods

within fiscal years beginning after December 15, 2024.

The Company adopted this guidance effective for the year ended December 31, 2024.

The adoption of this guidance did not have a material impact on our financial condition or financial performance.

Refer to Note 22 –

Segment Reporting for further detail.

In December 2023, the FASB

issued 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.

The Company has adopted ASU 2023-09 prospectively on its annual income tax disclosures for the annual period ending December 31, 2025.

The standard expanded the disclosures provided in the Company’s annual financial statements, particularly in the rate reconciliation

and cash taxes paid sections, but the adoption did not have a material effect on its consolidated results of operations, financial position,

or cash flows.

Asset Acquisition

April 30, 2025, the Company acquired certain assets from Big Machine Label Group RLS LLC (“BMLG”) related to music masters,

including associated copyrights and artwork.

The Company acquired these assets to expand its music business line and this transaction

was accounted for as an asset purchase, in accordance with ASC 805, Business Combinations, because substantially all of

the fair value of the gross assets acquired was concentrated in a single identifiable asset which is the recorded masters.

The total cost

of the acquisition was $ 441,000 , which includes cash consideration of $ 337,000 and direct transaction costs of $ 104,000 .

The entire cost

was allocated to the recorded masters intangible asset, which is included in the line item “Intangible assets, net” and will

be amortized on a straight-line basis over an estimated useful life of 8.5 years, reflecting the contractual licensing periods with the

purchase price was allocated as follows:

Consideration:

Direct transaction costs

Total consideration

Assets acquired:

Recorded masters

Total allocated costs

Business Combinations

Overview of Acquisition

On August 12, 2024, the Company entered into a

Membership Interest Purchase Agreement by and among the Company, GE and members of the Gebbia family, the (“Gebbia Entertainment

Purchase Agreement”), pursuant to which the Company acquired all of the outstanding equity of GE for a purchase price of $ 1,250,000 .

The acquisition will be accounted for under the acquisition method of accounting for business combinations pursuant to Topic 805 which

requires, among other things, that the assets acquired and liabilities assumed be recognized at their fair values as of the proposed acquisition

Allocation of Purchase Price

On August 12, 2024, the Company

entered into a Membership Interest Purchase Agreement by and among the Company, GM and members of the Gebbia family, pursuant to which

the Company acquired all of the outstanding equity of GM for a purchase price of $ 1,250,000 .

The acquisition is accounted for under the

acquisition method of accounting for business combinations pursuant to Topic 805 which requires, among other things, that the assets acquired

and liabilities assumed be recognized at their fair values as of the proposed acquisition date.

The Company was required to

allocate the GE purchase price to tangible and identifiable intangible assets acquired based on their fair values as of August 12, 2024.

allocate the GM purchase price to tangible and identifiable intangible assets acquired based on their fair values as of August 12, 2024.

The excess of the purchase price over those fair values is recorded as goodwill.

The Company acquired intangible assets consisting of

GE artist contracts, the fair value of which was $ 778,000 as of the acquisition date.

GM artist contracts, the fair value of which was $ 778,000 as of the acquisition date.

The fair value of identifiable

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the Company’s allocation of the purchase price as of the date of acquisition:

Estimated Fair Value

Cash and cash equivalents

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Purchase price

Since the date of acquisition, there has been

no material impact on the Company’s consolidated financial statements for the year ended December 31, 2024.

Additionally, on a pro

forma basis, the acquisition would not have had a material impact on the Company’s consolidated revenues or net income for the year ended

December 31, 2024.

Transaction with Tigress

Initial Transaction

On November 16, 2021, the

Company entered into an agreement with Tigress, a Delaware limited liability company, and a disabled and woman-owned financial services

As part of the agreement, (i) Tigress transferred to the Company limited liability company membership interests representing 24 %

of the outstanding membership interests in Tigress;

and (ii) the Company transferred to Tigress limited liability company membership interests

representing 24 % of the outstanding membership interests of RISE and 1,449,525 shares of the Company’s common stock.

The Company’s

common stock was issued pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

Reorganization Agreement

October 18, 2022, the Company entered into a Reorganization Agreement (“Reorganization Agreement”) with Tigress whereby the

Company exchanged 7 % of the outstanding membership interests in Tigress for all of Tigress’ ownership interest in RISE.

of the Reorganization Agreement, the Company’s ownership interest of Tigress decreased from 24 % to 17 %.

the level of the Company’s ownership of Tigress, the Company concluded that it was still able to exercise significant influence

over Tigress following the Reorganization Agreement.

Therefore, the Company continued to account for this investment under the equity

method of accounting through the Company’s sale of its interest in Tigress on July 10, 2023.

Share Redemption Agreement

On July 10, 2023, the

Company entered into a Share Redemption Agreement with Cynthia DiBartolo, CEO of Tigress, pursuant to which the Company repurchased from

DiBartolo one million shares of its common stock held by Ms.

DiBartolo in exchange for conveying to Ms.

DiBartolo the Company’s 17 %

interest in Tigress.

The Company accounted for the Share Redemption Agreement as a sale of a financial asset in accordance with FASB ASC

Topic 860 – “Transfers and Servicing” (“Topic 860”).

The one million shares of Company common stock

that the Company received from Ms.

DiBartolo had a fair value of $ 2,510,000 which was equal to the fair value of the Company’s 17 %

interest in Tigress sold to Ms.

As such, no gain or loss was recognized as a result of the transaction.

Following the transaction,

the Company had no remaining interest in Tigress.

Refer to Note 12 – Equity Method Investment in Related Party for more detail on

these transactions and information that impacted the periods presented.

As a result of the Share Redemption

Agreement described above, the Company recognized an impairment charge for its investment in Tigress of approximately $ 185,000 for

the year ended December 31, 2023.

Refer to Note 8 – Fair Value Measurements for more detail.

As of both December 31, 2024

and 2023, the Company’s ownership in RISE was 68 % and Siebert consolidated RISE under the voting interest model (“VOE model”).

As of both December 31, 2024 and 2023, RISE reported assets of $ 1.3 million and liabilities

As of December 31, 2024, the

Company’s ownership in RISE was 68 % and Siebert consolidated RISE under the VOE model.

of December 31, 2024, RISE reported assets of $ 1.3 million and liabilities of $ 0 .

There are no restrictions on RISE’s assets.

On October 28, 2025, the Company

entered into Membership Interest Purchase Agreements with certain employees, directors and affiliates of the Company and RISE, pursuant

to which the Company purchased the remaining 32 % of the limited liability membership interests in RISE that the Company did not previously

own including 24 % owned by Gloria E.

Gebbia, a director of the Company, and 1 % owned by a family member of Andrew Reich, a director

of the Company.

The aggregate purchase price was $ 3.7 million.

Following the consummation of the transactions, RISE became a wholly-owned

subsidiary of the Company.

The transaction resulted in a tax impact of $ 1,128,000 related to the purchase of the remaining non-controlling

interest at the Company’s statutory tax rate.

The transaction was accounted for as an equity transaction with no impact on net income.

Any difference between the consideration paid and the carrying amount of the noncontrolling interest was recorded in additional paid-in

Kakaopay Transaction

April 27, 2023, the Company entered into a Stock Purchase Agreement with Kakaopay (the “First Tranche Stock Purchase Agreement”),

pursuant to which Siebert agreed to issue to Kakaopay, a company established under the Laws of the Republic of Korea and a fintech subsidiary

of Korean-based conglomerate Kakao Corp., 8,075,607 shares of Siebert’s common stock (the “First Tranche Shares”

and, such transaction, the “First Tranche”) at a per share price of Two Dollars Fifteen Cents ($ 2.15 ), which represented 19.9 %

of the outstanding equity securities of Siebert on a fully diluted basis (taking into account the issuance of the First Tranche Shares).

The First Tranche closed on May 18, 2023 and, in connection therewith, Siebert entered into a Registration Rights and Lock-Up Agreement

(the “Registration Rights Agreement”) and a Stockholders’ Agreement (the “Original Stockholders’ Agreement”)

with Kakaopay.

with the execution of the First Tranche Stock Purchase Agreement, Siebert and Kakaopay entered into a second Stock Purchase Agreement

(the “Second Tranche Stock Purchase Agreement” and, together with the First Tranche Stock Purchase Agreement, the “Stock

Purchase Agreements”), pursuant to which Siebert agreed to issue to Kakaopay an additional 25,756,470 shares of Siebert’s

common stock (the “Second Tranche Shares” and, such transaction, the “Second Tranche”) at a per share price of

Two Dollars Thirty Five Cents ($ 2.35 ), so that Kakaopay would own 51 % of the outstanding equity securities of Siebert on a fully

diluted basis (taking into account the issuance of the First Tranche Shares and the Second Tranche Shares).

December 19, 2023, Siebert entered into a Termination and Settlement Agreement (the “Settlement Agreement”) with Kakaopay,

pursuant to which the Company agreed to issue to Kakaopay, a company established under the Laws of the Republic of Korea and a fintech

subsidiary of Korean-based conglomerate Kakao Corp., 8,075,607 shares of the Company’s common stock (such transaction,

the “First Tranche”).

The First Tranche closed on May 18, 2023.

with the execution of the First Tranche Stock Purchase Agreement, the Company and Kakaopay entered into a second Stock Purchase Agreement

(the “Second Tranche Stock Purchase Agreement”, pursuant to which the Company agreed to issue to Kakaopay an additional 25,756,470 shares

of Siebert’s common stock).

December 19, 2023, the Company entered into a Termination and Settlement Agreement (the “Settlement Agreement”) with Kakaopay,

Kakaopay Securities Corp.

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Under the Settlement Agreement,

the parties mutually agreed to terminate the Second Tranche Stock Purchase Agreement.

The parties terminated the Second Tranche Stock

Purchase Agreement after reaching a compromise regarding their disagreement over, among other things, the occurrence of a “Purchaser

Material Adverse Effect” in the Second Tranche Stock Purchase Agreement, and the ability of the closing conditions in the Second

Tranche Stock Purchase Agreement to be satisfied.

Certain related agreements were also terminated, including the Foreign Broker-Dealer

Fee Sharing Agreement, dated April 27, 2023, between MSCO and Kakaopay Securities, and the Support and Restrictive Covenant Agreements

by certain Gebbia stockholders, each dated April 27, 2023.

The parties also agreed (i) to amend and restate the Original Stockholders’

Agreement as described below, (ii) that the Company will pay Kakaopay a fee of $ 5,000,000 (payable in ten quarterly installments that

began on March 29, 2024) and (iii) to customary releases.

Kakaopay continues to own the 8,075,607 shares of the Company’s common

stock that it purchased from the Company in May 2023, and Kakaopay agreed to certain standstill restrictions with respect to its ownership

of the Company’s common stock, subject to certain conditions.

connection with the foregoing, on December 19, 2023, Siebert entered into an Amended and Restated Stockholders’ Agreement (the “A&R

Stockholders’ Agreement”) with Kakaopay, certain stockholders listed on Schedule I thereto and John J.

Gebbia (in his individual

capacity and as representative of the Gebbia Stockholders (as defined therein)) to amend and restate the Original Stockholders’

Under the A&R Stockholders’ Agreement, Kakaopay retains its right to designate one director to the Company’s

board of directors, subject to certain conditions, but the additional board designation rights in the Original Stockholders’ Agreement

that would have applied following the closing of the Second Tranche have been removed.

The A&R Stockholders’ Agreement also,

among other things, modifies various specified events requiring the prior written consent of Kakaopay, which provided the Company’s

management with additional flexibility to grow the Company with reduced restrictions.

The A&R Stockholders’ Agreement also adds

tag-along rights in favor of Kakaopay and the Gebbia Stockholders.

the time of the issuance, the total deferred issuance cost of $ 2,467,000 related to the First Tranche was reclassified as a reduction

to “Additional paid-in capital” in stockholders’ equity in the consolidated statements of financial condition.

amount consisted of $ 2,149,000 which was recorded within the line item “Prepaid expenses and other assets” in the consolidated

statements of financial condition as of December 31, 2023.

Of the amount incurred during the year ended December 31, 2023, $ 560,000 was

part of non-cash consideration.

Company incurred $ 5,943,000 for the year ended December 31, 2023 associated with the termination of the transaction with Kakaopay which

was recorded in the line item “Transaction termination cost” in the consolidated statements of operations.

This amount consisted

of the $ 5,000,000 fee to Kakaopay (payable in ten quarterly installments that began on March 29, 2024) adjusted for the present value

of the payments as of the date of the agreement, as well as legal and other consulting costs associated with the transaction of approximately

$ 1,481,000 .

The discount rate used for the calculation of the present value of the cash flows was 8.5 %.

May 22, 2023, Gloria E.

Gebbia issued a warrant to BCW Securities LLC, a Delaware limited liability company (“BCW”), to purchase 403,780 shares

of common stock of the Company held by Ms.

Gebbia at an exercise price of $ 2.15 per share.

Gebbia issued the warrant pursuant

to that certain agreement, dated March 27, 2023, by and among Ms.

Gebbia, the Company and BCW relating to the investment by Kakaopay in

The fair value of the warrant of $ 560,000 was recorded as non-cash consideration in the consolidated statements of changes

in stockholders’ equity and the consolidated statements of cash flows, as well as for the deferred issuance cost related to the

First Tranche as described above.

the parties mutually agreed to terminate the Second Tranche Stock Purchase Agreement, and the Company agreed, among other things, to pay

Kakaopay a fee of $ 5,000,000 (payable in ten quarterly installments that began on March 29, 2024).

Receivables from, Payables to, and Deposits with Broker-Dealers

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to, and deposits with broker-dealers and clearing organizations consisted of the following as of the periods indicated:

December 31, 2025

December 31, 2024

Receivables from and deposits with broker-dealers and clearing organizations

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Total Payables to broker-dealers and clearing organizations

(1) Depository Trust and Clearing Corporation is referred to as

(“DTCC”), Options Clearing Corporation is referred to as (“OCC”), and National Securities Clearing Corporation

(1) Depository Trust and Clearing Corporation is referred to

as (“DTCC”), Options Clearing Corporation is referred to as (“OCC”), and National Securities Clearing Corporation

is referred to as (“NSCC”).

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The share value is updated

annually, as of March 20, 2024 and for the year ended December 31, 2024, based on the release of DTCC’s annual amended and restated

annually, as of February 27, 2025 and for the year ended December 31, 2025, based on the release of DTCC’s annual amended and restated

shareholder agreement.

In September 2022, MSCO and

RISE entered into a clearing agreement whereby RISE would introduce clients to MSCO.

Refer to Note 24 – Related Party Disclosures

for more detail.

MSCO and RISE have a clearing

agreement whereby RISE introduces clients to MSCO.

Refer to Note 23 – Related Party Disclosures for more detail.

Fair Value Measurements

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Certificates of deposit

Corporate bonds

Equity securities

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Equity securities

Corporate bonds

Total Securities sold, not yet purchased, at fair value

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government securities

$ 115,515,000

Securities owned, at fair value

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government securities with the market values and maturity dates for the periods indicated below:

As of December 31, 2025

Maturing in 2026

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Total Market value

Maturing in 2023

As of December 31, 2024

Maturing in 2025

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Total Market value

$ 133,151,000

Financial Assets Measured

at Fair Value on a Non-Recurring Basis

As a result of the 2023 transaction

discussed in Note 3 – Transactions with Tigress, the Company recognized an impairment charge for its investment in Tigress of approximately

$ 185,000 during the year ended December 31, 2023, which is included in “Impairment of investments” in the consolidated

statements of operations.

The fair value of the Company’s investment in Tigress was determined using observed current market prices

of Tigress’ membership interests that were below the Company’s carrying value of its equity investment in Tigress.

the transaction, the Company had no remaining interest in Tigress as of December 31, 2024.

Financial Assets and

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Payables to broker-dealers and clearing organizations

Deferred contract incentive

Long-term debt

Contract termination liability

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Receivables from non-customers

Receivables from broker-dealers and clearing

organizations

Receivables from broker-dealers and clearing organizations

Other receivables

Deposits with broker-dealers and clearing

organizations

Deposits with broker-dealers and clearing organizations

Total financial assets, not measured at fair value

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Drafts payable

Payables to broker-dealers and clearing

organizations

Deferred contract incentive

Payables to broker-dealers and clearing organizations

Long-term debt

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( 2,454,000 )

( 1,680,000 )

Total Property, office facilities, and equipment, net

Total depreciation expense

for property, office facilities, and equipment was $ 814,000 and $ 589,000 for the years ended December 31, 2024 and 2023, respectively.

July 7, 2023, the Company entered into a new lease agreement for office space in the World Financial Center in New York City.

years ended December 31, 2024 and 2023, the Company invested $ 828,000 and $ 129,000 to build out the New York office space, respectively.

Depreciation expense commenced in March 2024, when the New York office space was placed into service.

the second quarter of 2024, the Company completed the construction of its office in Omaha, Nebraska, investing $ 211,000 during the year

ended December 31, 2024.

Miami Office Building

December 30, 2021, the Company purchased the Miami office building located at 653 Collins Ave, Miami Beach, FL (“Miami office building”).

The Miami office building contains approximately 12,000 square feet of office space and serves as the headquarters of the Company.

expense commenced in April 2023 when the Miami office building was completed and placed in service.

The Company invested $ 393,000 and

$ 1,313,000 in the years ended December 31, 2024 and 2023, respectively, to build out the Miami office building.

depreciation expense for property, office facilities, and equipment was $ 1,043,000 and $ 814,000 for the years ended December 31, 2025

and 2024, respectively.

improvements generally include build-outs and modifications made to leased office spaces such as interior construction, electrical and

data infrastructure, and other enhancements made to prepare the facilities for the Company’s operational use.

Total additions to

leasehold improvements were $ 479,000 and $ 1,170,000 for the years ended December 31, 2025 and 2024, respectively.

facility additions primarily relate to expenditures for furniture, fixtures, and other physical components of the workplace environment

and were $ 155,000 and $ 272,000 , for the year ended December 31, 2025 and 2024, respectively.

Equipment additions for the year ended December

31, 2025 and 2024 were $ 625,000 and $ 212,000 , respectively.

Software, Net

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( 1,516,000 )

Less impairment – Technology Platform

( 1,031,000 )

Less accumulated amortization – Retail Platform

Total Software, net

The Company capitalized $ 978,000

in software development costs for a technology platform integration as of December 31, 2023.

In the fourth quarter of 2023, the

Company reassessed the strategic direction of the technology platform and determined that an other than temporary impairment had occurred.

The Company recognized an impairment loss of $ 990,000 for the year ended December 31 , 2023,

which is included in “Depreciation and amortization” in the consolidated statements of operations.

The Company contracted with

a technology vendor in the fourth quarter of 2023 to support the development of the Retail Platform, supplementing its internal technology

The total software development expense related to the Retail Platform was $ 4,093,000 as of December 31, 2024, all of which

was capitalized.

Amortization for the Retail Platform will commence once it is placed in service, which is expected to be in the second

quarter of 2025.

Total amortization of software

was $ 485,000 and $ 442,000 for the years ended December 31, 2024 and 2023, respectively.

The Company works with various

technology vendors to support the development of an online platform for the Company’s retail customer base and corporate services

clients, a mobile retail trading application, as well as upgrades to the Company’s technological and operational infrastructure

to support these platforms and future growth (“Retail Platform”).

The total capitalized software development cost related

to the Retail Platform was $ 5,993,000 as of December 31, 2025.

Software development projects

totaling $ 4,265,000 of the Retail Platform were placed into service during the year ended 2025, and the amortization associated with these

projects was $ 618,000 for the year ended December 31, 2025.

Total amortization of software was $ 1,103,000 and $ 485,000 for the years ended

December 31, 2025 and 2024, respectively.

As of December 31, 2025, the

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Company’s leases.

July 7, 2023, the Company entered into a new lease agreement expiring in December 2028 for office space in the World Financial Center

in New York City.

This office replaced the New Jersey office as one of the Company’s key operating centers and the total commitment

of the lease is approximately $ 2.1 million.

October 2024, the Company transitioned its branch office in Omaha, Nebraska from a month-to-month agreement to a fixed-term commitment

of five years expiring in September 2029 .

In November 2024, the Company entered into a new lease agreement expiring in February 2027 for

office space in Chicago.

This office is intended to support the expansion of our retail business and will be utilized upon commencement

of operations.

The total commitment of both leases is approximately 0.5 million.

Lease Term and Discount Rate As of

December 31, 2025

December 31, 2024

Weighted average remaining lease term – operating leases (in years) 2.5 3.3

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Lease liabilities

Equity Method Investment in Related Party

Transaction with Tigress

Company’s investment in Tigress was accounted for under the equity method of accounting.

In determining whether the investment in Tigress should be accounted for under the equity

method of accounting, the Company considered the guidance under FASB ASC 323 – “Investments – Equity Method and

Joint Ventures” (“Topic 323”).

Prior to the Reorganization Agreement, the Company maintained 24 % ownership interest

in Tigress, which represented a significant ownership level, the Company and Tigress had common representation on their respective Board

of Directors, and certain employees of Tigress were also employees of RISE.

Based on these criteria, the Company determined that it was

able to exercise significant influence over Tigress , and therefore the equity method of accounting

applied for this investment.

the Reorganization Agreement, the Company owned 17 % of Tigress.

The Company concluded that it still had significant influence over Tigress

due to the representation of Gloria E.

Gebbia on the Board of Directors of Tigress.

Therefore, the Company continued to account for this

investment under the equity method of accounting through the Company’s sale of its interest in Tigress on July 10, 2023.

the equity method, the Company recognized its share of Tigress ’ income or loss in the

line item “Earnings of equity method investment in related party” in the consolidated statements of operations.

has elected to classify distributions received from equity method investees using the cumulative earnings approach.

The earnings recognized

from the Company’s investment in Tigress was $ 0 and $ 111,000 for the years ended December 31, 2024 and 2023, respectively, which

is in the line item “Earnings of equity method investment in related party” in the consolidated statements of operations.

Company did not receive cash distributions from Tigress for the years ended December 31, 2024 and 2023.

As of both December 31, 2024 and

2023, the carrying amount of the investment in Tigress was $ 0 .

Goodwill and Other Intangible Assets, Net

As of December 31, 2024 and

2023, the Company’s carrying amount of goodwill was $ 2,319,000 and $ 1,989,000 , respectively.

As of December 31, 2024, $ 1,989,000

of the Company’s carrying amount of goodwill came from the Company’s acquisition of RISE and $ 330,000 came from the Company’s

acquisition of GE.

As of December 31, 2024 and 2023, management concluded that there have been no impairments to the carrying value of

the Company’s goodwill and no impairment charges related to goodwill were recognized during the years ended December 31, 2024 and

Refer to Note 2 – Summary of Significant Accounting Policies for further information.

As of both December 31, 2025

and 2024, the Company’s carrying amount of goodwill was $ 2,319,000 .

As of December 31, 2025, $ 1,989,000 of the Company’s carrying

amount of goodwill came from the Company’s acquisition of RISE and $ 330,000 came from the Company’s acquisition of GM.

of December 31, 2025 and 2024, management concluded that there have been no impairments to the carrying value of the Company’s goodwill

and no impairment charges related to goodwill were recognized during the years ended December 31, 2025 and 2024.

Refer to Note 2 –

Summary of Significant Accounting Policies for further information.

Other Intangible Assets, Net

As a result of the Company’s

acquisition of GE, the Company acquired intangible assets consisting of GE artist contracts, the fair value of which were $ 778,000 as

acquisition of GM, the Company acquired intangible assets consisting of GM artist contracts, the fair value of which were $ 778,000 as

of the acquisition date.

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expense for the intangible asset totaled $ 195,000 for the year ended December 31, 2025.

April 30, 2025, the Company acquired certain assets from BMLG related to music masters, including associated copyrights and artwork.

acquisition was accounted for as an asset purchase, in accordance with ASC 805, Business Combinations, because substantially

all of the fair value of the gross assets acquired was concentrated in a single identifiable asset which is the recorded masters.

entire cost of $ 441,000 was allocated to the recorded masters intangible asset, which is amortized on a straight-line basis over an estimated

useful life of 8.5 years, reflecting the contractual licensing periods with the artists.

Amortization expense for this intangible asset

was $ 35,000 for the year ended December 31, 2025.

As of December 31, 2025, the

Company estimates the following future amortization of other intangible assets:

2030 and after

Investments, Cost

As of both December 31, 2024

and 2023, the Company maintained a 2 % ownership interest in the Trading Technology Provider.

June 2023, in view of the Trading Technology Provider’s business performance and near-term business outlook that were below the

Company’s previous expectations, as well as observed market transactions of the Trading Technology Provider’s equity that

were below the carrying value of the Company’s investment of the Trading Technology Provider, the Company determined that an other

than temporary impairment existed.

For the year ended December 31, 2024, the Company did not recognize any impairment charges related

to its investment in the Trading Technology Provider.

For the year ended December 31 , 2023,

the Company recognized an impairment charge for its investment in the Trading Technology Provider of $ 850,000 , which is included in “Impairment

of investments” in the consolidated statements of operations.

As of December 31, 2024 and 2023, the Company had no investment basis

in the Trading Technology Provider.

In the second quarter of 2025,

the Company made strategic investments for a total of $ 2.0 million in Fusion IQ, a cloud-native

digital wealth management platform for financial advisors and institutions.

As of December 31, 2025, the Company maintained a 3 %

ownership interest in FusionIQ.

As part of its investment in FusionIQ, the Company has certain voting rights as protective provisions

requiring the Company’s consent to amend the operating agreement, pay dividends, incur indebtedness in excess of $ 750,000 or enter

into a related party transaction of $ 100,000 or more.

The investment does not have a readily determinable fair value since FusionIQ is

a private company and its shares are not publicly traded.

Accordingly, the Company elected the measurement alternative under ASC 321,

whereby the investment is measured at cost, less impairment, if any, and adjusted for observable price changes in orderly transactions

for the identical or similar investment of the same issuer.

In December 2025, Fusion IQ

issued a convertible promissory note to the Company in the principal amount of $ 350,000 .

The note accrues interest at a simple annual

rate of 12 % from the date of issuance.

The principal balance and accrued interest are payable at any time on or after the one-year anniversary

of the issuance date, at the election of FusionIQ or upon demand by the holder, unless earlier converted into equity interests.

As of December 31, 2025, management

concluded that its investment in FusionIQ was not impaired and that no additional events or changes in circumstances were identified that

could have a significant effect on the original valuation of the investment.

Long-Term Debt

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(“East West Bank”).

The mortgage was for approximately $ 4 million with a commitment

for another $ 338,000 to finance part of the build out of the Miami office building.

The mortgage was approximately $ 4 million with a commitment for

another $ 338,000 to finance part of the build out of the Miami office building.

As of December 31, 2025 and 2024, the Company’s

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Deferred Contract Incentive

August 1, 2021, MSCO entered into an amendment to its clearing agreement with NFS that, among other things, extends 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,

the Company received a one-time business development credit of $ 3 million from NFS, and NFS will pay the Company four annual credits of

$ 100,000 , which are recorded in the line item “Deferred contract incentive” in the consolidated statements of financial condition.

Annual credits shall be paid on the anniversary of the date on which the first credit was paid.

The business development credit and annual

credits will be recognized as contra expense over four years and one year , respectively, in the line item “Clearing fees, including

execution costs” in the consolidated statements of operations.

The amendment also provides for an early termination fee if the Company

chooses to end its agreement before the end of the contract term.

In relation to this agreement,

the Company recognized $ 850,000 in contra expense for both the years ended December 31, 2024, and 2023.

The balance of the deferred contract

incentive was approximately $ 0.5 million and $ 1.2 million as of December 31, 2024 and 2023, respectively.

Company’s provision for (benefit from) income taxes is comprised of the following:

August 1, 2021, MSCO entered into an amendment to its clearing agreement with NFS that, among other things, extended the term of the arrangement

for an additional four-year period ending July 31, 2025.

Under this amendment, the Company received a one-time business development credit

of $ 3.0 million and four annual credits of $ 100,000 .

These amounts were recorded in the line item “Deferred contract incentive”

on the statements of financial condition and were recognized as contra expense within “Clearing fees, including execution costs”

on the statements of operations - the business development credit over four years and the annual credits over one year .

For the year ended

December 31, 2024, there was no expense recognized for any early termination fees.

The 2021 amendment term was completed as of July 31,

September 29, 2025, MSCO entered into a subsequent amendment to its clearing agreement with NFS, extending the term of the arrangement

for an additional five-year period, commencing September 26, 2025 and ending October 1, 2030.

In connection with this amendment, the Company

received a one-time business development credit of $ 4.8 million, which is recorded in “Deferred contract incentive” on the

statements of financial condition and will be recognized as a contra expense over the five-year contract term within “Clearing fees,

including execution costs.” The amendment also includes an early termination fee provision.

Refer to Note 20 – Commitments,

Contingencies, and Other for further information.

In relation to these agreements,

the Company recognized $ 736,000 and $ 850,000 in contra expense for the years ended December 31, 2025, and 2024, respectively.

of the deferred contract incentive was approximately $ 4.6 million and $ 0.5 million as of December 31, 2025 and 2024, respectively.

The Company’s provision for (benefit from)

income taxes is comprised of the following:

Year Ended December 31,

$ ( 1,676,000 )

State and local

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Total Deferred

Total Provision for (benefit from) income taxes

The Company’s effective tax rate differs

from the U.S.

federal statutory income tax rate of 21 % for the periods indicated are as follows:

Total Provision for income taxes

The Company does not have

pre-tax income from foreign operations and as such, does not have any foreign income tax expense.

A reconciliation of the provision for income taxes

to the amount computed by applying the 21 % statutory U.S.

federal income tax rate to income before income taxes after the adoption of

ASU 2023-09 is as follows:

Year Ended December 31, 2025

Income tax at statutory federal tax rate

State and local income tax, net of federal income tax effect (1)

Change in valuation allowances

Changes in unrecognized tax benefits

Nontaxable or nondeductible items:

Section 162m limitation

Other nontaxable of nondeductible items

Effective tax rate

A reconciliation of the provision

for income taxes to the amount computed by applying the 21 % statutory U.S.

federal income tax rate to income before income taxes for years

prior to the adoption of ASU 2023-09 is as follows:

Year Ended December 31,

Federal statutory income tax rate

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Effective tax rate

State taxes in California, Florida, New York, and

New York City made up the majority (greater than 50%) of the tax effect in this category.

Deferred income taxes reflect

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Significant components of the Company’s deferred tax assets and liabilities are as follows:

As of December 31,

Year Ended December 31,

Deferred tax assets:

Net operating losses

Net operating loss carryforward

Lease liabilities

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Investment in RISE

Investment in Trading Technology Provider

R&D costs capitalization

Settlement liability related to Kakaopay

Capital loss carryover

Investment in OpenHand

R&D cost capitalization

Settlement liability

Capital loss carryforward

valuation allowance

( 1,104,000 )

( 1,243,000 )

Total Deferred tax assets

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Net Deferred tax assets

assessing the Company’s ability to recover its deferred tax assets, the Company evaluated whether it is more likely than not that

some portion or the entire deferred tax asset will be realized.

The ultimate realization of deferred tax assets is dependent upon the

generation of future taxable income in those periods in which temporary differences become deductible and/or net operating losses can

The Company considered all positive and negative evidence when determining the amount of the net deferred tax assets that

are more likely than not to be realized.

This evidence includes, but is not limited to, historical earnings, scheduled reversal of taxable

temporary differences, tax planning strategies and projected future taxable income.

on historical operating profitability, positive trend of earnings and projected future taxable income, the Company concluded as of December

31, 2024 that its U.S.

deferred tax assets are realizable on a more-likely-than-not basis with the exception of capital loss carryforward

and certain investments that will result in future capital losses.

The amount of the Company’s valuation allowance decreased by

$ 139,000 during 2024.

The Company will continue to evaluate its deferred tax assets to determine whether any changes in circumstances

could affect the realization of their future benefit.

If it is determined in future periods that portions of the Company’s deferred

income tax assets satisfy the realization standards, the valuation allowance will be reduced accordingly.

of December 31, 2024, the Company had U.S.

federal net operating loss carryforwards of approximately $ 3.7 million which expire in varying

amounts starting in 2035 to 2036 if not utilized.

These net operating losses are available to offset 100 % of future taxable

In assessing the Company’s

ability to recover its deferred tax assets, the Company evaluated whether it is more likely than not that some portion or the entire deferred

tax asset will be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income

in those periods in which temporary differences become deductible and/or net operating losses can be utilized.

The Company considered

all positive and negative evidence when determining the amount of the net deferred tax assets that are more likely than not to be realized.

This evidence includes, but is not limited to, historical earnings, scheduled reversal of taxable temporary differences, tax planning

strategies and projected future taxable income.

Based on historical operating

profitability, positive trend of earnings and projected future taxable income, the Company concluded as of December 31, 2025 that its

deferred tax assets are realizable on a more-likely-than-not basis with the exception of capital loss carryforward and certain investments

that will result in future capital losses.

The amount of the Company’s valuation allowance decreased by $ 767,000 during 2025.

Company will continue to evaluate its deferred tax assets to determine whether any changes in circumstances could affect the realization

of their future benefit.

If it is determined in future periods that portions of the Company’s deferred income tax assets become

realizable on a more-likely-than-not basis, the valuation allowance will be reduced accordingly.

As of December 31, 2025, the

Company had U.S.

federal net operating loss carryforwards of approximately $ 4.8 million of which $ 3.7 million will expire in varying amounts

starting in 2035 to 2036 if not utilized and are available to offset 100 % of future taxable income.

However, these U.S.

federal net operating loss carryforwards are subject to annual limitation under Section 382.

federal net operating

loss carryforwards are subject to annual limitation under Section 382.

The remaining $ 1.1 million not subject to limitation under Section

382 but may only be used to offset 80 % of future taxable income and can be carried forward indefinitely.

The Company had total state net

operating loss carryforward of $ 20.9 million, which will begin to expire in varying amounts starting in 2034.

A reconciliation of the beginning

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Expirations of statutes of limitations

( 1,293,000 )

Balance as of December 31, 2025

unrecognized tax benefit of $ 1,354,000 and $ 1,405,000 as of December 31, 2024 and 2023, respectively, are recorded in the line item “Taxes

payable” in the consolidated statements of financial condition.

Of the amounts reflected above as of December 31, 2024 and 2023,

the entire amount would reduce the Company’s effective tax rate if recognized.

The Company records accrued interest and penalties

related to income tax matters as part of the provision for income taxes.

For the years ended December 31, 2024 and 2023, the Company recognized

expense related to interest and penalties on unrecognized tax benefits of $ 153,000 and $ 118,000 , respectively.

For the years ended December

31, 2024 and 2023, the accrued balance of interest and penalties on unrecognized tax benefits was $ 397,000 and $ 245,000 , respectively.

In the next 12 months, the amount of unrecognized tax benefits is expected to decrease by $ 1,292,000 due to lapse in statute of limitations

Company files a federal income tax return and income tax returns in various state tax jurisdictions.

The Company is not currently under

examination by the IRS or any state or local taxing authority for any tax year.

The open tax years for the federal and state income tax

filings are generally 2021 through 2024.

October 8, 2021, the Organization for Economic Co-operation and Development (OECD) announced the OECD/G20 Inclusive Framework on Base

Erosion and Profit Shifting which agreed to a two-pillar solution to address tax challenges arising from digitalization of the economy.

On December 20, 2021, the OECD released Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of a minimum

rate of 15 % for multinational companies with consolidated revenue above € 750 million.

The Company continues to evaluate the Pillar

Two Framework and its potential impact on future periods, however based on the fact that the Company’s operations are all located

within the United States and is below current revenue thresholds contained in the Pillar Two Model Rules, the Company expects to be outside

the scope of the implementation of the reporting requirements.

The unrecognized tax benefit

of $ 63,000 and $ 1,354,000 as of December 31, 2025 and 2024, respectively, are recorded in the line item “Taxes payable” in

the consolidated statements of financial condition.

As of December 31, 2025, the entire amount of unrecognized tax benefit would reduce

the Company’s effective tax rate if recognized.

The Company records accrued interest and penalties related to income tax matters

as part of the provision for income taxes.

For the years ended December 31, 2025 and 2024, the accrued balance of interest and penalties

on unrecognized tax benefits was $ 28,000 and $ 398,000 , respectively.

The Company files a federal

income tax return and income tax returns in various state tax jurisdictions.

The Company is not currently under examination by the IRS

or any state or local taxing authority for any tax year.

The open tax years for the federal and state income tax filings are generally

2022 through 2025.

Income taxes paid, net of refunds received, consisted of the following:

December 31, 2025

State and local

Income taxes paid, net of refunds received

The Company has certain other

non-income taxes such as California LLC fees that are not included in the Company’s income tax provision and income taxes paid,

net of refunds received schedule but are disclosed in the income taxes paid in the statements of cash flows.

Capital Requirements

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of aggregate debit balances to net capital was 65.84 %.

MSCO is also subject to CFTC’s

minimum financial requirements which require that the Company maintain net capital, as defined, equal to the greater of its requirements

under Regulation 1.17 under the Commodity Exchange Act or Rule 15c3-1.

As of December 31, 2025, MSCO’s net capital was $ 61.7 million,

which was approximately $ 61.7 million in excess of its required net capital of $ 45,000 .

As of December 31, 2024, MSCO’s

net capital was $ 63.9 million, which was approximately $ 63.9 million in excess of its required net capital of $ 45,000 .

Special Reserve Account

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million) in the special reserve accounts which was $ 15.1 million in excess of the deposit requirement of $ 169.2 million.

After adjustments

for deposit(s) and / or withdrawal(s) made on January 2, 2025, MSCO had $ 1.7 million in excess of the deposit requirement.

The Company made

no subsequent deposits or withdrawals on January 2, 2026.

of December 31, 2024, MSCO had cash and securities deposits of $ 203.3 million (cash of $ 134.5 million, securities with a fair value

1 unchanged sentence

After adjustments for deposit(s) and / or withdrawal(s) made on January 2, 2025, MSCO had $ 1.7 million in excess of the deposit requirement.

As of December 31, 2024, the

Company was subject to the PAB Account Rule 15c3-3 of the SEC which requires segregation of funds in a special reserve account for the

exclusive benefit of proprietary accounts of introducing broker-dealers.

As of December 31, 2024, the Company had $ 1.3 million in the

special reserve account which was approximately $ 0.1 million in excess of the deposit requirement of approximately $ 1.2 million.

made no subsequent deposits or withdrawals on January 2, 2025.

of December 31, 2023, the Company had $ 1.2 million in the special reserve account which was approximately $ 0.2 million in excess of the

deposit requirement of approximately $ 1.0 million.

MSCO is subject to the PAB

Account Rule 15c3-3 of the SEC which requires segregation of funds in a special reserve account for the exclusive benefit of proprietary

accounts of introducing broker-dealers.

As of December 31, 2025, MSCO had $ 1.3 million in the special reserve account which was approximately

$ 0.2 million in excess of the deposit requirement of approximately $ 1.1 million.

The Company made no subsequent deposits or withdrawals

on January 2, 2026.

of December 31, 2024, MSCO had $ 1.3 million in the special reserve account which was approximately $ 0.1 million in excess of the deposit

requirement of approximately $ 1.2 million.

The Company made no subsequent deposits or withdrawals on January 2, 2025.

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Exchange Act or Rule 15c3-1.

As of both December 31, 2024

and 2023, RISE’s net capital was approximately $ 1.3 million which was $ 1.0 million in excess of its minimum requirement of $ 250,000

under 15c3-1.

As of December 31, 2025, RISE’s

net capital was approximately $ 1.2 million which was approximately $ 0.9 million in excess of its minimum requirement of $ 250,000 under

15c3-1 and approximately $ 1.1 million in excess of its minimum requirement of $ 45,000 under CFTC 1.17.

As of December 31, 2024, RISE’s

net capital was approximately $ 1.3 million which was approximately $ 1.0 million in excess of its minimum requirement of $ 250,000 under

15c3-1 and approximately $ 1.2 million in excess of its minimum requirement of $ 45,000 under CFTC 1.17.

Financial Instruments with Off-Balance

1 unchanged sentence

various trading and brokerage activities whose counterparties include broker-dealers, banks and other financial institutions.

In the event the counterparties

do not fulfill their obligations, the Company may sustain a loss if the market value of the instrument is different from the contract

value of the transaction.

The risk of default primarily depends upon the credit worthiness of the counterparties involved in the transactions.

It is the Company’s policy to review, as necessary, the credit standing of each counterparty with which it conducts business.

Company experienced no material historical losses in relation to its counterparties for the years ended December 31, 2024 and 2023.

the counterparties do not fulfill their obligations, the Company may sustain a loss if the market value of the instrument is different

from the contract value of the transaction.

The risk of default primarily depends upon the credit worthiness of the counterparties involved

in the transactions.

It is the Company’s policy to review, as necessary, the credit standing of each counterparty with which it

conducts business.

The Company experienced no material historical losses in relation to its counterparties for the years ended December

31, 2025 and 2024.

Off-Balance Sheet

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of Recognized

Assets and Liabilities

Gross Amounts Offset

in the Consolidated

Amounts Offset in the

Statements of

12 unchanged sentences

As of December 31, 2024

Gross Amounts of Recognized Assets and Liabilities

Gross Amounts Offset in the Consolidated Statements of Financial Condition 1

Net Amounts Presented in the Consolidated Statements of Financial Condition

Collateral Received or Pledged 2

Gross Amounts

of Recognized

Amounts Offset in the

Statements of

Financial Condition 1

Presented in the

Statements of

Financial Condition

Securities borrowed

29 unchanged sentences

for the potential dilutive effect of securities, including the effect of unvested shares, if applicable.

For the years ended December

31, 2024 and 2023, the Company had no antidilutive shares outstanding.

As of December 31, 2025, the

Company had 300,000 antidilutive shares outstanding.

These restricted stock units were excluded from the computation of diluted net income

per share because the effect would be anti-dilutive.

The Company had no anti-dilutive shares outstanding as of December 31, 2024.

Commitments, Contingencies and Other

Legal and Regulatory Matters

In the normal course of business, the Company may

be subject to various proceedings and claims arising from its business activities, including lawsuits, arbitration claims and regulatory

The Company is also involved in other reviews, investigations and proceedings by governmental and self-regulatory organizations

regarding the business, which may result in adverse judgments, settlements, fines, penalties, injunctions and other relief.

In many cases,

however, it is inherently difficult to determine whether any loss is probable or reasonably possible or to estimate the amount or range

of any potential loss, particularly where proceedings may be in relatively early stages.

In the Company’s opinion, based on currently

available information, the ultimate resolution of current matters will not have a material adverse impact on the Company’s financial

position and results of operations as of December 31, 2024.

However, resolution of one or more of these matters may have a material effect

on the results of operations in any future period, depending upon the ultimate resolution of those matters and depending upon the level

of income for such period.

Overnight Financing

and Regulatory Matters

the normal course of business, the Company may be subject to various proceedings and claims arising from its business activities, including

lawsuits, arbitration claims and regulatory matters.

The Company is also involved in other reviews, investigations and proceedings by

governmental and self-regulatory organizations regarding the business, which may result in adverse judgments, settlements, fines, penalties,

injunctions and other relief.

In many cases, however, it is inherently difficult to determine whether any loss is probable or reasonably

possible or to estimate the amount or range of any potential loss, particularly where proceedings may be in relatively early stages.

In the Company’s opinion, based on currently available information, the ultimate resolution of current matters will not have a

material adverse impact on the Company’s financial position and results of operations as of December 31, 2025.

However, resolution

of one or more of these matters may have a material effect on the results of operations in any future period, depending upon the ultimate

resolution of those matters and depending upon the level of income for such period.

of both December 31, 2025 and 2024, MSCO had an available line of credit for short term overnight demand borrowings with BMO Harris of

4 unchanged sentences

interest expense for this credit line was $ 3,000 and $ 5,000 for the years ended December 31, 2025 and 2024, respectively.

There were no

fees associated with the utilization of this credit line for the years ended December 31, 2024 and 2023.

Additionally, on November 22, 2024, MSCO entered

into a Credit Agreement (the “BMO Credit Agreement”) with BMO Bank N.A.

(the “Lender”), a national banking association.

commitment fees of $ 12,000 and $ 0 associated with the utilization of this credit line for the years ended December 31, 2025 and 2024,

respectively.

Credit Agreement

November 22, 2024, MSCO entered into a Credit Agreement (the “BMO Credit Agreement”) with BMO Bank N.A.

a national banking association.

The BMO Credit Agreement provides for a revolving credit facility of up to $ 20,000,000 .

The Company 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, the Company entered into a Parent Guaranty agreement guaranteeing repayment of any debt issued to MSCO.

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 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 .

The Company satisfied its condition precedent to deliver a legal option to the Lender on December 18, 2024.

There was no interest expense for the BMO Credit

Agreement for the year ended December 31, 2024.

There was a commitment fee of $ 3,000 for the year ended December 31, 2024.

The Company 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, the MSCO entered into a Parent Guaranty agreement with Siebert guaranteeing

repayment of any debt issued to MSCO.

Effective November 22, 2025, MSCO renewed the BMO Credit Agreement with BMO until November 20,

under the BMO Credit Agreement bears interest on the outstanding daily balance at a rate of interest per annum equal 2.5 % plus the greater

(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 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 .

The Company was in compliance with the requirements of the BMO credit agreement as of December

was no interest expense for the BMO Credit Agreement for the year ended December 31, 2025 or 2024.

There were commitment fees of $ 163,000

and $ 3,000 for the years ended December 31, 2025 and 2024, respectively.

Credit Agreement

On August 15, 2024, the Company

entered into a Loan and Security Agreement (the “Credit Agreement”) with East West Bank (the “Lender”), a California

entered into a Loan and Security Agreement (the “EWB Credit Agreement”) with East West Bank (“EWB”), a California

banking corporation, dated as of July 29, 2024.

The Credit Agreement provides for a revolving credit facility of up to $ 20,000,000 .

initial term of the Credit Agreement is two years.

The Company may use any borrowings under the Credit Agreement for acquisitions, stock

buybacks, and for general corporate purposes in an amount not to exceed $ 10,000,000 .

Obligations under the Credit Agreement shall be guaranteed

The EWB Credit Agreement provides for a revolving credit facility of up to $ 20,000,000 .

The maturity date of the EWB Credit Agreement is July 29, 2027.

The Company may use any borrowings under the EWB Credit Agreement for

acquisitions, stock buybacks, and for general corporate purposes in an amount not to exceed $ 10,000,000 .

Obligations under the EWB Credit

Agreement are guaranteed by John J.

Gebbia, the Company’s Chief Executive Officer, Gloria E.

Gebbia, a Director of the Company, and John J.

Gebbia and Gloria

Gebbia, a Director of the Company,

Gebbia and Gloria E.

Gebbia, as co-trustees of the John and Gloria Living Trust.

Borrowings under the Credit

Agreement will bear interest on the outstanding daily balance at a rate of interest per annum equal to the greater of:

(a) the one-month

Term Secured Overnight Financing Rate (“Term SOFR”), as administered by CME Group Benchmark Administration plus 3.15 % and

As of December 31, 2025, and 2024, $ 5 million

and $ 0 was outstanding related to the 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.

under the EWB Credit Agreement bear interest on the outstanding daily balance at a rate of interest per annum equal to the greater of:

(a) the one-month Term Secured Overnight Financing Rate (“Term SOFR”), as administered by CME Group Benchmark Administration

plus 3.15 % and (b) 7.50 %.

The origination fee is equal to one half of one percent ( 0.50 %) of the $ 20,000,000 revolver cap.

The Credit Agreement contains

customary affirmative covenants and negative covenants and requires the Company to maintain a minimum debt service coverage ratio of not

less than 1.35:1.00 and minimum net capital of $ 43,000,000 .

At the Market Offering

May 27, 2022, the Company entered into a Capital on Demand TM Sales Agreement (the “Sales Agreement”) with JonesTrading

as agent, pursuant to which the Company may offer and sell, from time to time through JonesTrading, shares of the Company’s common

stock having an aggregate offering amount of up to $ 9.6 million under the Company’s shelf registration statement on Form S-3.

Company is not obligated to make any sales of shares under the Sales Agreement.

The Company agreed to pay JonesTrading a commission rate

equal to 3.0 % of the aggregate gross proceeds from each sale of shares.

The Company or JonesTrading may suspend or terminate the offering

upon notice to the other party and subject to other conditions.

Whether the Company sells securities under the Sales Agreement will depend

on a number of factors, including the market conditions at that time, the Company’s cash position at that time and the availability

and terms of alternative sources of capital.

both the years ended December 31, 2024 and 2023, the Company did not sell any shares pursuant to this Sales Agreement.

For both the years

ended December 31, 2024 and 2023, the Company did not incur any legal or audit fees related to this Sales Agreement.

the Company filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2023 after its scheduled due date, the Company

no longer satisfied the eligibility requirements for use of registration statements on Form S-3, which requires that the Company files

in a timely manner all reports required to be filed during the prior twelve calendar months.

As a result, the Company has suspended use

of the shelf registration statement and the Company is not able to access the At the Market program as of the date of this Report.

The EWB Credit

Agreement contains customary affirmative covenants and negative covenants and requires the Company to maintain a minimum debt service

coverage ratio of not less than 1.35:1.00 and minimum net capital of $ 43,000,000 .

Registration Statement and At the Market Offering

May 30, 2025, the Company 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 of up to $ 100.0 million of our common stock, preferred stock, warrants to purchase the Company’s

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.

On June 27, 2025, the Company entered into a Sales Agreement (“Sales Agreement”) with its

subsidiary, MSCO, and Ladenburg Thalmann & Co.

Inc., as agents, under which the Company may offer and sell, through

or to the agents, shares of its common stock having an aggregate offering price of up to $ 50.0 million, from time to time.

the Company has utilized $ 50 million of the $ 100 million capacity under the shelf registration statement.

the year ended December 31, 2025, the Company did not sell any shares pursuant to this Sales Agreement.

For the year ended December 31,

2025, the Company incurred approximately $ 310,000 in legal and audit fees related to the shelf registration statement and Sales Agreement.

of the filing of this Report, the Company 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 the Company can sell through primary public offerings of securities

in any 12-month period using the Company’s registration statement on Form S-3 is limited to one-third of the aggregate market value

of the shares of its common stock held by non-affiliates.

Therefore, the Company will be limited in the amount of proceeds it is able

to raise by selling shares of its common stock using Form S-3, including under the Sales Agreement, so long as the Company’s public

float is less than $75 million.

August 1, 2021, MSCO entered into an amendment to its clearing agreement with NFS that, among other things, extends the term of the arrangement

through July 31, 2025, and NFS’s fees are offset against MSCO’s revenues on a monthly basis.

If the MSCO chooses to exit this

agreement before the end of the contract term, MSCO is under the obligation to pay an early termination fee upon occurrence pursuant to

the table below:

Date of Termination

Early Termination Fee

Prior to August 1, 2025

For the years ended December

31, 2024 and 2023, there has been no expense recognized for any early termination fees.

MSCO believes that it is unlikely it will have

to make material payments related to early termination fees and has not recorded any contingent liability in the consolidated

financial statements related to this arrangement.

Technology Vendors

Company has entered into agreements with technology vendors for software development related to its Retail Platform.

As of December 31,

2024, the Company incurred costs of approximately $ 3.4 million for these vendors.

General Contingencies

September 29, 2025, MSCO entered into an amendment to its clearing agreement with NFS that, among other things, extends the term of the

arrangement for an additional five-year period commencing on September 26, 2025 and ending October 1, 2030.

If the Company chooses to

exit this agreement before the end of the contract term, the Company is under the obligation to pay an early termination fee upon occurrence

pursuant to the table below:

of Termination

Termination Fee

Prior to October

Prior to October 2, 2027

Prior to October 2, 2028

Prior to October 2, 2029

Prior to October 2, 2030

the year ended December 31, 2025, and 2024, there has been no expense recognized for any early termination fees.

The Company believes

that it is unlikely it will have to make material payments related to early termination fees and has not recorded any contingent liability

in the financial statements related to this arrangement.

Contingencies

the normal course of its business, the Company indemnifies and guarantees certain service providers against specified potential losses

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indemnifies them against potential losses caused by the breach of those representations and warranties.

The Company may also provide standard

indemnifications to some counterparties to protect them in the event additional taxes are owed or payments are withheld, due either to

a change in or adverse application of certain tax laws.

These indemnifications generally are standard contractual terms and are entered

into in the normal course of business.

The maximum potential amount of future payments that the Company could be required to make under

these indemnifications cannot be estimated.

However, the Company believes that it is unlikely it will have to make material payments under

these arrangements and has not recorded any contingent liability in the consolidated financial

statements for these indemnifications.

The Company may also provide

standard indemnifications to some counterparties to protect them in the event additional taxes are owed or payments are withheld, due

either to a change in or adverse application of certain tax laws.

These indemnifications generally are standard contractual terms and

are entered into in the normal course of business.

The maximum potential amount of future payments that the Company could be required

to make under these indemnifications cannot be estimated.

However, the Company believes that it is unlikely it will have to make material

payments under these arrangements and has not recorded any contingent liability in the consolidated

financial statements for these indemnifications.

Company is self-insured with respect to employee health claims.

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but not reported losses based on past and current experience.

Actual claims paid and settled may differ, perhaps significantly, from the

provision for losses.

Actual claims paid and settled may differ, perhaps significantly, from

the provision for losses.

This adds uncertainty to the estimated reserves for losses.

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31, 2025 and 2024 , respectively.

Company had an accrual of $ 76,000 and $ 64,000 as of December 31 , 2024 and 2023, respectively,

which represents the estimate of future expenses to be recognized for claims incurred during the period.

The Company had an accrual of $ 71,000 and $ 76,000 as of December

31 , 2025 and 2024, respectively, which represents the estimate of future expenses to be recognized for claims incurred during

Company believes that its present insurance coverage and reserves are sufficient to cover currently estimated exposures, but there can

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Segment Reporting

The Company operates as a

wholly-owned subsidiary of the Parent and is engaged in a single line of business as a securities broker-dealer providing comprehensive

brokerage services including custody and clearance of retail accounts, principal transaction and proprietary trading, market making, and

securities lending.

The Company’s CODM, its Chief Financial Officer, reviews operating and financial information using net income

as the key measure to evaluate the results of the business, predominately in the forecasting process, to manage the Company.

has determined that all activities contribute to the core brokerage business and the Company operates as a single reportable segment.

The Company’s operations constitute a single operating segment and therefore, a single reportable segment, because the CODM manages

the business activities using information of the Company as a whole.

The accounting policies used to measure the profit and loss of the

segment are the same as those described in the summary of significant accounting policies.

Company operates two reportable segments, Financial Services, and Media, Sports and Entertainment.

The Financial Services segment includes

the Company’s broker-dealer and related financial services operations.

The Media, Sports and Entertainment segment includes the

Company’s entertainment and sports management and related marketing, advertising, and production activities.

The CODM is the Company’s

Chief Executive Officer and evaluates segment performance and allocates resources using operating income, which represents the Company’s

measure of segment profit or loss (the “Segment Measure”).

The CODM also considers excess net capital as an operational metric

in maintaining capital adequacy.

Although asset information is provided to the CODM, segment performance is not evaluated based on asset

therefore, segment asset disclosures are not presented.

In accordance with ASC Topic

280, the Company discloses significant expense categories that are regularly reviewed by the CODM.

Year Ended December 31, 2025

Media, Sports

Entertainment

Commissions and fees

Interest, marketing and distribution fees

Principal transactions and proprietary trading

Investment banking

Market making

Consolidated overhead

Stock borrow / stock loan

Advisory fees

Music and artist services revenue

Total Revenue

Significant segment expenses:

Employee compensation and benefits

Clearing fees, including execution costs

Technology and communications

Other general and administrative

Data processing

Rent and occupancy

Professional fees

Depreciation and amortization

Interest expense

Advertising and promotion

Music production, manufacturing and distribution

Total Expenses

Operating income (loss)

$ ( 1,186,000 )

Year Ended December 31, 2024

Financial Services

Media, Sports

and Entertainment

Commissions and fees

Interest, marketing and distribution fees

Principal transactions and proprietary trading

Investment banking

Market making

Consolidated overhead

Stock borrow / stock loan

Advisory fees

Music and artist services revenue

Total Revenue

Significant segment expenses:

Employee compensation and benefits

Clearing fees, including execution costs

Technology and communications

Other general and administrative

Data processing

Rent and occupancy

Professional fees

Depreciation and amortization

Interest expense

Advertising and promotion

Music production, manufacturing and distribution

Total Expenses

Operating income

Operating income (loss)

$ ( 100,000 )

Employee Benefit Plans

The Company sponsors a defined-contribution

retirement plan under Section 401(k) of the Internal Revenue Code that covers substantially all employees of the Company (“401(k)

Participant contributions to the 401(k) plan are voluntary and are subject to certain limitations.

The Company may also

make discretionary contributions to the 401(k) plan.

For 401(k) employee contribution matching, the Company incurred an expense of $ 196,000

and $ 173,000 the years ended December 31, 2024 and 2023, respectively.

Company sponsors a defined-contribution retirement plan under Section 401(k) of the Internal Revenue Code that covers substantially

all employees of the Company (“401(k) plan”).

Participant contributions to the 401(k) plan are voluntary and are subject

to certain limitations.

The Company may also make discretionary contributions to the 401(k) plan.

For 401(k) employee contribution matching,

the Company incurred $ 244,000 and $ 196,000 in the years ended December 31, 2025 and 2024, respectively.

September 17, 2021, the Company’s shareholders approved the Siebert Financial Corp.

2021 Equity Incentive Plan (the “Plan”).

The Plan provides for the grant of stock options, restricted stock, and other equity awards of the Company’s common stock to employees,

officers, consultants, directors, affiliates and other service providers of the Company.

There were 3 million shares reserved under the

Plan and 2,214,000 and 2,704,000 shares remained as of December 31, 2024 and 2023, respectively.

The Plan authorizes the issuance of stock options, restricted stock, and other equity-based awards to employees, officers, directors,

consultants, affiliates, and other service providers.

The Plan originally provided for up to 3,000,000 shares of the Company’s

common stock.

As of December 31, 2024, 2,214,000 shares remained available for issuance under the Plan.

November 18, 2025, at the Annual Shareholder Meeting, shareholders approved an amendment and restatement of the Plan (the “Amended

Plan”) to increase the number of shares available and reserved for issuance to 5,000,000 .

As of December 31, 2025, 2,699,000 shares

remained available for issuance under the Amended Plan.

table below presents the Plan restricted stock awards granted and the related fair values for the year ended December 31, 2025.

Weighted- Average Grant Date Fair Value

Nonvested as of December 31, 2023 (1)

Nonvested as of December 31, 2024

(1) The Company did not issue any share-based compensation for

the year ended December 31, 2023.

Average Grant Date Fair Value

Nonvested as of

December 31, 2024

as of December 31, 2025

of December 31, 2025, there was $ 2,881,000 of total unrecognized compensation cost related to nonvested shares granted.

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to be recognized over a weighted average period of 3.25 years.

Company recognized stock-based compensation expense of $ 730,000 for the year ended December 31, 2024, which included $ 460,000 within the

line item “Employee compensation and benefits” and $ 270,000 fully capitalized within the line item “Software, net”

in the consolidated statements of financial condition.

Company recognized stock-based compensation expense of $ 1,539,000 and $ 730,000 for the years ended December 31, 2025 and 2024, respectively.

For the years ended December 31, 2025 and 2024, $ 1,539,000 and $ 460,000 of this expense is included within the line item “Employee

compensation and benefits”, respectively.

The Company did not capitalize any stock-based compensation for the year ended December

For the year ended December 31, 2024, $ 270,000 was fully capitalized within the line item “Software, net” in the

consolidated statements of financial condition.

Related Party Disclosures

Gebbia, who is a director of Siebert, is the managing member of KCA.

As a result, KCA is an affiliate of the Company and is under common

ownership with the Company.

To gain efficiencies and economies of scale with billing and administrative functions, during 2023 KCA had

an agreement with the Company to serve as a paymaster for the Company for payroll and related functions including serving as the sponsor

for the Company’s 401(k) plan.

KCA passed through any expense or revenue related to this function to the subsidiaries of the Company

proportionally.

The Company incurred $ 40,000 of expenses related to these services for the year ended December 31, 2023.

This agreement

was terminated as of January 1, 2024.

owns a license from the Muriel Siebert Estate / Foundation to use the names “Muriel Siebert & Co., LLC” and “Siebert”

within business activities, which expires in 2026.

For the use of these names, KCA passed through to the Company its cost of $ 60,000 for

both the years ended December 31, 2024 and 2023.

than the above arrangements, KCA has earned no profit for providing any services to the Company for the years ended December 31, 2024

and 2023 as KCA passes through any revenue or expenses to the Company’s subsidiaries.

For the use of these names, KCA passed through to the Company its cost of $ 0 and $ 60,000

for the years ended December 31, 2025 and 2024, respectively.

Other than this arrangement, KCA has earned no profit for providing any

services to the Company for the years ended December 31, 2025 and 2024 as KCA passes through any revenue or expenses to the Company’s

subsidiaries.

brokers the insurance policies for related parties.

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31, 2025 and 2024, respectively.

Gebbia, John J.

Gebbia, and Gebbia Family Members

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Gebbia issued a warrant to BCW to purchase 403,780 shares of common stock of the Company held by Ms.

Gebbia at an exercise price of $ 2.15 per share.

Refer to Note 6 – Kakaopay Transaction for more detail.

Gebbia Sullivan County Land Trust

The Company operates on a

five-year lease agreement for its branch office in Omaha, Nebraska with the Gebbia Sullivan County Land Trust, the trustee of which is

a member of the Gebbia Family.

For both the years ended December 31, 2024 and 2023, rent expense was $ 60,000 for this branch office.

The Company has completed

construction of its branch office in Omaha, Nebraska.

Refer to Note 9 – Property, Office Facilities, and Equipment, net for further

Gebbia at an exercise price of $ 2.15 per share in connection to the transaction with Kakaopay.

Sullivan County Land Trust

Company operates on a five-year lease agreement for its branch office in Omaha, Nebraska with the Gebbia Sullivan County Land Trust,

the trustee of which is a member of the Gebbia Family.

For both the years ended December 31, 2025 and 2024, rent expense was $ 60,000

for this branch office.

The Company built out its office in Omaha for $ 211,000 for the year ended December 31, 2024.

did not incur any costs for the year ended December 31, 2025 associated with the Omaha office build-out.

Credit Agreement

On August 15, 2024, the Company entered into the

Credit Agreement with the Lender whereby John J.

August 15, 2024, the Company entered into the Credit Agreement with EWB whereby John J.

Gebbia and Gloria E.

Gebbia, along with the John and Gloria Living Trust, are guaranteeing

the Company’s obligations under the Credit Agreement with the Lender.

Refer to Note 21 - Commitments, Contingencies, and Other for

more information.

Gebbia Entertainment, LLC

On August 12, 2024, the Company acquired 100 % of

GE, a music and entertainment company owned by John J.

Gebbia, Gloria E.

Gebbia, and David Gebbia.

Gebbia, along with the John

and Gloria Living Trust, guaranteed the Company’s obligations under the Credit Agreement with EWB.

Refer to Note 20 - Commitments,

Contingencies, and Other for more information.

August 12, 2024, the Company acquired 100 % of GM, a music and entertainment company owned by members of the Gebbia family.

to providing management and promotion of sports and music talent, and music catalogue acquisition, it also provides in-house marketing

and advertising services for the Company.

Refer to Note 4 – Business Combinations.

for further detail.

Kakaopay and Affiliates

and Affiliates

April 27, 2023, the Company entered into the First Tranche Stock Purchase Agreement, pursuant to which the Company agreed to issue to

Kakaopay the First Tranche Shares at a per share price of Two Dollars Fifteen Cents ($ 2.15 ).

Refer to Note 6 – Kakaopay Transaction

for more detail.

Kakaopay the First Tranche Shares at a per share price of Two Dollars Fifteen Cents ($ 2.15 ), and then entered into a subsequent termination

of this agreement.

Refer to Note 6 – Kakaopay Transaction for more detail.

entered into an agreement whereby it would provide an omnibus trading account for Kakaopay’s subsidiary, Kakao Pay Securities Corp.,

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laws, rules and regulations.

Company has entered into various agreements and subsequent terminations with Tigress.

Refer to Note 4 – Transaction with Tigress

for further detail.

In September 2022, MSCO and

RISE entered into a clearing agreement whereby RISE would introduce clients to MSCO.

As part of the agreement, RISE deposited a clearing

fund escrow deposit of $ 50,000 to MSCO, and had excess cash of approximately $ 1.2 and $ 1.0 million in its brokerage account at MSCO as

of December 31, 2024 and 2023, respectively.

and RISE have a clearing agreement whereby RISE introduces clients to MSCO.

As part of the agreement, RISE deposited a clearing fund

escrow deposit of $ 50,000 to MSCO, and had excess cash of approximately $ 1.1 and $ 1.2 million in its brokerage account at MSCO as of

December 31, 2025 and 2024, respectively.

The resulting asset of RISE and liability of MSCO is eliminated in consolidation.

an interest expense of $ 33,000 and $ 25,000 related to this clearing agreement for the years ended December 31, 2024 and 2023, respectively.

an interest expense of $ 33,000 related to this clearing agreement for both of the years ended December 31, 2025 and 2024.

October 28, 2025, the Company purchased the remaining 32 % interest in RISE for $ 3.7 million from members of the Gebbia family and employees

of the Company.

Part of the purchase of the 32 % interest in RISE included 24 % owned by Gloria E.

Gebbia, a director of the Company, for

approximately $ 2.9 million, and 1 % owned by a family member of Andrew Reich, a director of the Company, for approximately $ 0.1 million.

Upon completion of the transaction, RISE became a wholly-owned subsidiary of Siebert, refer to Note 5 – RISE for further information.

Subsequent Events

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events that have occurred subsequent to December 31, 2025 and through March 30, 2026, the date of the filing of this Report.

During the first quarter of

2025, the Company established an Investment Banking and Capital Markets division as part of its strategic expansion.

has hired several experienced professionals to lead and develop this growth initiative.

In connection with these hires, the Company granted

an aggregate of 117,000 shares of RSUs and 950,000 RSAs under the Plan.

These shares vest in accordance with the terms of the grant agreements,

and the related compensation expense will be recognized over the respective vesting periods in accordance with Topic 718.

represent a significant investment in the Company’s future operations, however, as these employment decisions and grants occurred

after the balance sheet date, they do not impact the financial position or results of operations presented in these consolidated financial

The Company has concluded

that apart from the above, there have been no material subsequent events that occurred during such period that would require disclosure

in this Report or would be required to be recognized in the financial statements as of December 31, 2024.

CHANGES IN AND DISAGREEMENTS WITH

ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

In January 2026, the Company

granted 185,000 shares of fully vested restricted common stock to employees as compensation.

During the first two months of 2026, 320,000

previously granted shares of restricted common stock vested.

January 2026, the Company entered into a ten-year lease agreement for an office space located in West Hollywood, California with a commencement

date of July 2026.

This branch office contains approximately 10,000 square feet of interior and exterior space, and the average annual

rent is $ 681,000 .

the first quarter of 2026, the Company made a $ 2.5 million investment in Arqitech, Inc.

(“Arqitech”), consisting of $ 0.5 million in equity and $ 2.0 million in debt.

institutional-grade, non-custodial digital asset infrastructure platform that provides on-chain settlement, cross-chain execution,

and decentralized financial technology solutions for regulated financial institutions.

As part of the investment, the Company expects to receive repayment of $ 2.0 million of debt commencing in July

RISE executed a fully disclosed

clearing agreement with Green Pier Fintech LLC (“Green Pier”), an indirect wholly-owned subsidiary of FMR LLC (“FMR”),

effective February 27, 2026, subject to approval by the Financial Industry Regulatory Authority, Inc.

In consideration for terms in the

afore-mentioned agreement, RISE entered into a warrant agreement, dated March 2, 2026, wherein RISE issued FMR a warrant to purchase

700 units, subject to a three year vesting schedule.

RISE also entered into a side letter with FMR providing certain information rights

and participation rights in future securities issuances and a Technology Products and Services Agreement with Green Pier.

is evaluating the accounting treatment and related disclosure requirements for these arrangements.

March 4, 2026, the Company entered into an agreement with Newsmax Media, Inc.

(“Newsmax”) for a comprehensive media partnership

consisting of sponsored programming, branded financial content, and promotional integrations.

This agreement has a total cost of $ 1 million,

payable in a combination of cash and shares of the Company’s common stock.

Company has concluded that apart from the above, there have been no material subsequent events that occurred during such period that

would require disclosure in this Report or would be required to be recognized in the financial statements as of December 31, 2025.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data