Item 1.01 Entry into a Material Definitive Agreement
On December 30, 2021, Siebert Financial Corp. (the "Company") completed a
purchase agreement (the "Agreement") to acquire a commercial office building and
associated property (the "Office Building") located at 653 Collins Ave, Miami
Beach, FL. The Office Building contains approximately 12,000 square feet of
office space, which will be used as one of the primary operating centers for the
Company. The seller of the property is City National Bank of Florida, a national
banking association, as trustee under the provisions of a certain Trust
Agreement, dated 22nd day of March, 1993 (the "Seller"). The Seller has no
material relationship with the Company.
Pursuant to the terms of the Agreement, the Company's obligation to close the
acquisition of the Office Building was subject to customary closing conditions.
The Agreement contains customary representations and warranties by the Seller.
The contract purchase price for the Office Building was $6,750,000, exclusive of
customary real estate transaction costs. The Company funded the purchase price
via approximately $750,000 of the Company's cash, a loan agreement with Gloria
E. Gebbia, and a loan agreement with East West Bank, which are summarized below.
On December 30, 2021, Gloria E. Gebbia, the Company's principal stockholder,
entered into a note agreement to lend the Company $2 million to finance part of
the purchase of the Office Building. The annual interest rate is 4% which will
be paid monthly. The note matures on 12/30/2022 and can be renewed at any time.
On December 30, 2021, the Company entered into a loan agreement with East West
Bank for approximately $4 million to finance part of the purchase of the Office
Building.
The Company's obligations under the loan agreement are secured by a lien on the
Office Building and the term of the loan is 10 years. The repayment schedule
will utilize a 30-year amortization period, with a balloon on the remaining
amount due at the end of ten years. The interest rate is 3.6% for the first 7
years, and thereafter the interest rate shall be at the prime rate as reported
by the Wall Street Journal, provided that the minimum interest rate on any term
loan will not be less than 3.6%. As part of the loan agreement, the Company must
maintain a debt service coverage ratio of 1.4 to 1. The loan is subject to a
prepayment penalty over the first five years which is calculated as a percentage
of the principal amount outstanding at the time of prepayment. This percentage
is 5% in the first year and decreases by 1% each year thereafter, with the
prepayment penalty ending after 5 years.
Item 8.01 Other Items
A copy of the press release associated with the above is furnished with this
Form 8-K as Exhibit 99.1.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements typically are identified by use
of terms such as "may," "project," "should," "plan," "expect," "anticipate,"
"believe," "estimate" and similar words. Forward-looking statements include
statements regarding the impact of disruptions to the Company's operations
caused by the COVID-19 pandemic. Such forward-looking statements are based on
the Company's current expectations and assumptions regarding capital market
conditions, our business, the economy and other future conditions. Because
forward-looking statements relate to the future, by their nature, they are
subject to inherent uncertainties, risks and changes in circumstances that are
difficult to predict. As a result, our actual results may differ materially from
those contemplated by the forward-looking statements. Important factors that
could cause actual results to differ materially from those in the
forward-looking statements include, but are not limited to, the impact of the
COVID-19 pandemic on the Company and the United States and global financial
markets and economies as a whole. Except as required by law, the Company
undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information regarding COVID-19, future
events or otherwise. The Company's actual results could differ materially from
those contained in forward-looking statements due to a number of factors,
including the statements under "Risk Factors" found in the Company's Annual
Reports on Form 10-K and its Quarterly Reports on Form 10-Q filed with the SEC.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description of Exhibit
104 Cover Page Interactive Data File (embedded with Inline XBRL
document).
99.1 Press Release issued by Siebert Financial Corp., dated
January 3, 2022.
10.20 Purchase Agreement , dated as of December 30, 2021, for 653
Collins Ave, Miami Beach, FL, between Siebert Financial Corp.
and City National Bank of Florida, a national banking
association, as trustee under the provisions of a certain Trust
Agreement, dated 22nd day of March, 1993
10.21 Promissory Note , dated as of December 30, 2021, made by
Siebert Financial Corp. in favor of Gloria E. Gebbia
10.22 Promissory Note and Loan and Security Agreement, dated as
of December 30, 2021, between East West Bank and Siebert
Financial Corp.
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