|                                  
|----------------------------------
|UNITED
STATES                     
|SECURITIES
AND EXCHANGE COMMISSION
|Washington, D.C. 20549            

|
|
|

|                                                               
|---------------------------------------------------------------
|                                                               
|Form 10-K/A                                                    
|(Amendment No. 1)                                              
|                                                               
|                                                               
|(Mark
 One)                                                    
|                                                               
|xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)                 
|OF THE SECURITIES EXCHANGE ACT OF 1934                         
|                                                               
|For the fiscal year ended: December 31, 2011                   
|                                                               
|oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)             
|OF THE SECURITIES EXCHANGE ACT OF 1934                         
|                                                               
|For
 the transition period from______________to________________
|                                                               
|Commission file number 0-5703                                  

|
|
|

|                                                      
|------------------------------------------------------
|Siebert Financial Corp.                               
|(Exact name of registrant as specified in its charter)

|
|
|

|                                         |  |                    
|---------------------------------------- |  | -------------------
|New York                                 |  | 11-1796714         
|(State or other jurisdiction of          |  | (I.R.S. Employer   
|incorporation or organization)           |  | Identification No.)
|                                         |  |                    
|885 Third Avenue, New York, New York     |  | 10022              
|(Address of principal executive offices) |  | (Zip Code)         

(212) 644-2400Registrants telephone number

|
|
|

Securities registered pursuant to Section 12(b) of the Exchange Act:

|                                       |                                           
|-------------------------------------- | ------------------------------------------
|Title
 of each class                   | Name
 of each exchange on which registered
|COMMON STOCK, PAR VALUE $.01 PER SHARE | THE NASDAQ CAPITAL MARKET                 

Securities registered under Section 12(g) of the Exchange Act:

NONE(Title of class)

Indicate by check mark if
the registrant is a well- known seasoned issuer, as defined in Rule 405 of the
Securities Act. YES o NO x

Indicate by check mark if
the registrant is not required to file reports pursuant to Section 13 or
Section 15(d) of the Act.


YES o NO x




Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days. YES x NO o

Indicate by check mark
whether the registrant has submitted electronically and posted on its corporate
Web site, if any, every Interactive Data File required to be submitted and
posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post
such files). YES x NO o

Indicate by check mark if
disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of registrants
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer or a smaller reporting company. See the definitions of large
accelerated filer, accelerated filer and smaller reporting company in Rule
12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company x

Indicate by check mark
whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES o NO x







The aggregate market value of
the Common Stock held by non-affiliates of the registrant
(based upon the last sale price of the Common Stock reported on the
NASDAQ Capital Market as of the last business day of the registrants
most recently completed second fiscal quarter (June 30, 2011)), was
$3,641,491.

The
number of shares of the registrants outstanding Common Stock, as of March 13,
2012, was 22,103,176 shares.

Documents Incorporated by Reference:
Definitive Proxy Statement to be filed pursuant to Regulation 14A of the Exchange Act on or before April 29, 2012 is incorporated
by reference into Part III.



Explanatory
Note


This
Amendment No. 1 on Form 10-K/A (this “Amendment”) amends the Annual Report on Form 10-K of Siebert Financial Corp.
(the “Company”) for the year ended December 31, 2011, originally filed with the Securities and Exchange Commission
on March 30, 2012 (the “Original Report”). This Amendment is being filed solely to add the conformed name and signature
of the Company’s independent registered public accounting firm to the Report of Independent Registered Public Accounting
Firm to the Board of Managers of Siebert, Brandford, Shank & Co., L.L.C. on page F-15 of the Original Report as filed on EDGAR.
The original signature of the Company’s independent registered public accounting firm was received as of the date of its
report and is maintained in the Company’s files. In addition, the Company has amended Item 15 of Part IV to reflect the
filing of currently dated certifications. No other changes are being made by means of this filing. This Amendment speaks as of
the filing date of the Original Report and does not modify or update any other disclosures subsequent to the date of the Original
Report.






---







PART IV

|         |                                        
|-------- | ---------------------------------------
|Item 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES



The
exhibits required by Item 601 of Regulation S-K filed as part of, or
incorporated by reference in, this Annual Report are listed in the accompanying
Exhibit Index.

| |     |                                                           
| | --- | ----------------------------------------------------------
| | (a) | The
 following documents are filed as part of this report:
| |     |                                                           
| | 1.  | Financial
 Statements                                     

The
consolidated Financial statements for the year ended December 31, 2011 commence
on page F-1 of this Annual Report on Form 10-K.

| |    |                               
| | -- | ------------------------------
| | 2. | Financial
 Statement Schedules
| |    |                               
| |    | None.                         
| |    |                               
| | 3. | Exhibits                      



The exhibits required by Item
601 of Regulation S-K filed as part of, or incorporated by reference in,
this report are listed in the accompanying Exhibit Index. Exhibit Numbers 10.1,
10.2 and 10.6 are management contracts, compensatory plans or arrangements.



---



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

|                                                                                                                                    |  |     
|----------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                                                    |  | Page
|                                                                                                                                    |  |     
|SIEBERT FINANCIAL CORP.                                                                                                             |  |     
|                                                                                                                                    |  |     
|Report of
 Independent Registered Public Accounting Firm                                                                            |  | F-1 
|                                                                                                                                    |  |     
|Consolidated
 Statements of Financial Condition at December 31, 2011 and 2010                                                       |  | F-2 
|                                                                                                                                    |  |     
|Consolidated
 Statements of Operations for each of the years in the three-year period ended
 December 31, 2011                      |  | F-3 
|                                                                                                                                    |  |     
|Consolidated
 Statements of Changes in Stockholders Equity for each of the years in the
 three-year period ended December 31, 2011 |  | F-4 
|                                                                                                                                    |  |     
|Consolidated
 Statements of Cash Flows for each of the years in the three-year period ended
 December 31, 2011                      |  | F-5 
|                                                                                                                                    |  |     
|Notes to
 Consolidated Financial Statements                                                                                         |  | F-6 
|                                                                                                                                    |  |     
|SIEBERT, BRANDFORD, SHANK & CO., L.L.C.                                                                                             |  |     
|                                                                                                                                    |  |     
|Report of
 Independent Registered Public Accounting Firm                                                                            |  | F-15
|                                                                                                                                    |  |     
|Statements of
 Financial Condition at December 31, 2011 and 2010                                                                    |  | F-16
|                                                                                                                                    |  |     
|Statements of
 Operations for each of the years in the three-year period ended December 31,
 2011                                   |  | F-17
|                                                                                                                                    |  |     
|Statements of
 Changes in Members Capital for each of the years in the three-year period
 ended December 31, 2011                  |  | F-18
|                                                                                                                                    |  |     
|Statements of
 Changes in Subordinated Borrowings                                                                                   |  | F-19
|                                                                                                                                    |  |     
|Statements of
 Cash Flows for each of the years in the three-year period ended December 31,
 2011                                   |  | F-20
|                                                                                                                                    |  |     
|Notes to
 Financial Statements                                                                                                      |  | F-21

---



REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of
Directors and Shareholders 
Siebert Financial Corp.

We have audited the accompanying consolidated balance sheets of Siebert Financial Corp. and subsidiaries (the Company) as of
December 31, 2011 and 2010, and the related consolidated statements of operations, stockholders equity, and
cash flows for each of the years in the three-year period ended December 31, 2011. These financial statements are the responsibility of
the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. The
Company is not required to have, nor were we engaged to perform, an
audit of its internal control over financial reporting. Our audits
included consideration of internal control over financial reporting
as a basis for designing audit procedures that are appropriate in the
circumstances, 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. An
audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial
position of Siebert Financial Corp. and subsidiaries as of December 31, 2011 and 2010, and the consolidated results of their
operations and their cash flows for each of the years in the three-year period ended December 31, 2011, in conformity with accounting
principles generally accepted in the United States of America.

/s/
EisnerAmper LLP

New York, New
York March 29, 2012

F-1

---



SIEBERT FINANCIAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL
CONDITION

|                                                                                                                                                                                 |  |               |            |      |   |            |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ---------- | ---- | - | ---------- | -
|                                                                                                                                                                                 |  | December
 31, |           
|                                                                                                                                                                                 |  |               |           
|                                                                                                                                                                                 |  | 2011          |            | 2010 |  
|                                                                                                                                                                                 |  |               |            |      |  
|ASSETS                                                                                                                                                                           |  |               |            |      |   |            |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|Cash and cash equivalents                                                                                                                                                        |  | $             | 21,167,000 |      | $ | 22,646,000 |  
|Cash equivalents - restricted                                                                                                                                                    |  |               | 1,532,000  |      |   | 1,532,000  |  
|Receivable from brokers                                                                                                                                                          |  |               | 1,033,000  |      |   | 1,563,000  |  
|Securities owned, at fair value                                                                                                                                                  |  |               | 250,000    |      |   | 1,116,000  |  
|Furniture, equipment and leasehold
 improvements, net                                                                                                                            |  |               | 757,000    |      |   | 1,246,000  |  
|Investments in and advances to affiliates                                                                                                                                        |  |               | 8,619,000  |      |   | 9,816,000  |  
|Income tax refund receivable                                                                                                                                                     |  |               |           |      |   | 795,000    |  
|Prepaid expenses and other assets                                                                                                                                                |  |               | 827,000    |      |   | 741,000    |  
|Intangibles, net                                                                                                                                                                 |  |               | 638,000    |      |   | 648,000    |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|                                                                                                                                                                                 |  | $             | 34,823,000 |      | $ | 40,103,000 |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                             |  |               |            |      |   |            |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|Liabilities:                                                                                                                                                                     |  |               |            |      |   |            |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|Accounts payable and accrued liabilities                                                                                                                                         |  | $             | 3,599,000  |      | $ | 3,477,000  |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|Commitments and contingent liabilities - Note I                                                                                                                                  |  |               |            |      |   |            |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|Stockholders
 equity:                                                                                                                                                           |  |               |            |      |   |            |  
|Common stock, $.01 par value; 49,000,000
 shares authorized, 23,211,846 shares issued, 22,105,499 and 22,122,678 shares
 outstanding at December 31, 2011 and 2010, respectively |  |               | 232,000    |      |   | 232,000    |  
|Additional paid-in capital                                                                                                                                                       |  |               | 19,490,000 |      |   | 19,484,000 |  
|Retained earnings                                                                                                                                                                |  |               | 16,230,000 |      |   | 21,609,000 |  
|Less: 1,106,347 and 1,089,168 shares of
 treasury stock, at cost, at December 31, 2011 and 2010, respectively                                                                    |  |               | (4,728,000 | )    |   | (4,699,000 | )
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|                                                                                                                                                                                 |  |               | 31,224,000 |      |   | 36,626,000 |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  
|                                                                                                                                                                                 |  | $             | 34,823,000 |      | $ | 40,103,000 |  
|                                                                                                                                                                                 |  |               |            |      |   |            |  

See notes to consolidated financial
statements.

F-2

---



CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                         |  |                          |            |      |   |            |   |   |            |  
|-------------------------------------------------------- |  | ------------------------ | ---------- | ---- | - | ---------- | - | - | ---------- | -
|                                                         |  | Year
 Ended December 31, |           
|                                                         |  |                          |           
|                                                         |  | 2011                     |            | 2010 |   | 2009       |  
|                                                         |  |                          |            |      |   |            |  
|Revenue:                                                 |  |                          |            |      |   |            |   |   |            |  
|Commissions and fees                                     |  | $                        | 14,314,000 |      | $ | 17,144,000 |   | $ | 18,244,000 |  
|Investment banking                                       |  |                          | 3,801,000  |      |   | 2,238,000  |   |   | 5,387,000  |  
|Trading profits                                          |  |                          | 2,005,000  |      |   | 1,237,000  |   |   | 1,636,000  |  
|Interest and dividends                                   |  |                          | 79,000     |      |   | 151,000    |   |   | 123,000    |  
|                                                         |  |                          |            |      |   |            |   |   |            |  
|                                                         |  |                          |            |      |   |            |   |   |            |  
|                                                         |  |                          | 20,199,000 |      |   | 20,770,000 |   |   | 25,390,000 |  
|                                                         |  |                          |            |      |   |            |   |   |            |  
|                                                         |  |                          |            |      |   |            |   |   |            |  
|Expenses:                                                |  |                          |            |      |   |            |   |   |            |  
|Employee compensation and benefits                       |  |                          | 9,993,000  |      |   | 9,189,000  |   |   | 12,219,000 |  
|Clearing fees, including floor brokerage                 |  |                          | 2,842,000  |      |   | 3,139,000  |   |   | 5,545,000  |  
|Professional fees                                        |  |                          | 5,057,000  |      |   | 6,517,000  |   |   | 6,726,000  |  
|Advertising and promotion                                |  |                          | 402,000    |      |   | 400,000    |   |   | 813,000    |  
|Communications                                           |  |                          | 2,144,000  |      |   | 2,359,000  |   |   | 2,606,000  |  
|Occupancy                                                |  |                          | 1,095,000  |      |   | 1,274,000  |   |   | 1,279,000  |  
|Impairment of intangibles                                |  |                          |           |      |   | 150,000    |   |   |           |  
|Other general and administrative                         |  |                          | 3,051,000  |      |   | 2,851,000  |   |   | 2,926,000  |  
|Provision for loss related to settlement of litigation   |  |                          | 1,000,000  |      |   |           |   |   |           |  
|                                                         |  |                          |            |      |   |            |   |   |            |  
|                                                         |  |                          |            |      |   |            |   |   |            |  
|                                                         |  |                          | 25,584,000 |      |   | 25,879,000 |   |   | 32,114,000 |  
|                                                         |  |                          |            |      |   |            |   |   |            |  
|                                                         |  |                          |            |      |   |            |   |   |            |  
|Income from
 equity investees                            |  |                          | 29,000     |      |   | 4,078,000  |   |   | 4,224,000  |  
|                                                         |  |                          |            |      |   |            |   |   |            |  
|                                                         |  |                          |            |      |   |            |   |   |            |  
|Loss before
 income taxes                                |  |                          | (5,356,000 | )    |   | (1,031,000 | ) |   | (2,500,000 | )
|Income tax
 expense (benefit)                            |  |                          | 23,000     |      |   | 1,609,000  |   |   | (1,317,000 | )
|                                                         |  |                          |            |      |   |            |   |   |            |  
|                                                         |  |                          |            |      |   |            |   |   |            |  
|Net loss                                                 |  | $                        | (5,379,000 | )    | $ | (2,640,000 | ) | $ | (1,183,000 | )
|                                                         |  |                          |            |      |   |            |   |   |            |  
|                                                         |  |                          |            |      |   |            |   |   |            |  
|Net loss per
 share of common stock  basic and diluted  |  | $                        | (0.24      | )    | $ | (0.12      | ) | $ | (0.05      | )
|                                                         |  |                          |            |      |   |            |   |   |            |  
|Weighted
 average shares outstanding  basic and diluted |  |                          | 22,114,121 |      |   | 22,167,218 |   |   | 22,193,845 |  

See notes to consolidated financial
statements.

F-3

---



CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS EQUITY

|                            |  |                    |            |                  |   |                               |  |                    |            |                    |   |            |   |       |           |  |   |            |   |   |            |  
|--------------------------- |  | ------------------ | ---------- | ---------------- | - | ----------------------------- |  | ------------------ | ---------- | ------------------ | - | ---------- | - | ----- | --------- |  | - | ---------- | - | - | ---------- | -
|                            |  | Common
 Stock      |            |                  |   |                               |  |                    |            | Treasury
 Stock    |   |            |   |      
|                            |  |                    |            |                  |   |                               |  |                    |            |                    |   |            |   |      
|                            |  | Number
 Of
 Shares |            | $.01
 Par
 Value |   | Additional
 Paid -In
 Capital |  | Retained
 Earnings |            | Number
 Of
 Shares |   | Amount     |   | Total |          
|                            |  |                    |            |                  |   |                               |  |                    |            |                    |   |            |   |       |          
|Balance - January 1, 2009   |  |                    | 23,211,846 |                  | $ | 232,000                       |  | $                  | 19,454,000 |                    | $ | 25,432,000 |   |       | 1,009,731 |  | $ | (4,534,000 | ) | $ | 40,584,000 |  
|Net loss                    |  |                    |            |                  |   |                               |  |                    |            |                    |   | (1,183,000 | ) |       |           |  |   |            |   |   | (1,183,000 | )
|Treasury share purchases    |  |                    |            |                  |   |                               |  |                    |            |                    |   |            |   |       | 16,790    |  |   | (33,000    | ) |   | (33,000    | )
|Stock based compensation    |  |                    |            |                  |   |                               |  |                    | 20,000     |                    |   |            |   |       |           |  |   |            |   |   | 20,000     |  
|                            |  |                    |            |                  |   |                               |  |                    |            |                    |   |            |   |       |           |  |   |            |   |   |            |  
|                            |  |                    |            |                  |   |                               |  |                    |            |                    |   |            |   |       |           |  |   |            |   |   |            |  
|Balance - December 31, 2009 |  |                    | 23,211,846 |                  |   | 232,000                       |  |                    | 19,474,000 |                    |   | 24,249,000 |   |       | 1,026,521 |  |   | (4,567,000 | ) |   | 39,388,000 |  
|Net loss                    |  |                    |            |                  |   |                               |  |                    |            |                    |   | (2,640,000 | ) |       |           |  |   |            |   |   | (2,640,000 | )
|Treasury share purchases    |  |                    |            |                  |   |                               |  |                    |            |                    |   |            |   |       | 62,647    |  |   | (132,000   | ) |   | (132,000   | )
|Stock based compensation    |  |                    |            |                  |   |                               |  |                    | 10,000     |                    |   |            |   |       |           |  |   |            |   |   | 10,000     |  
|                            |  |                    |            |                  |   |                               |  |                    |            |                    |   |            |   |       |           |  |   |            |   |   |            |  
|                            |  |                    |            |                  |   |                               |  |                    |            |                    |   |            |   |       |           |  |   |            |   |   |            |  
|Balance - December 31, 2010 |  |                    | 23,211,846 |                  |   | 232,000                       |  |                    | 19,484,000 |                    |   | 21,609,000 |   |       | 1,089,168 |  |   | (4,699,000 | ) |   | 36,626,000 |  
|Net loss                    |  |                    |            |                  |   |                               |  |                    |            |                    |   | (5,379,000 | ) |       |           |  |   |            |   |   | (5,379,000 | )
|Treasury share purchases    |  |                    |            |                  |   |                               |  |                    |            |                    |   |            |   |       | 17,179    |  |   | (29,000    | ) |   | (29,000    | )
|Stock based compensation    |  |                    |            |                  |   |                               |  |                    | 6,000      |                    |   |            |   |       |           |  |   |            |   |   | 6,000      |  
|                            |  |                    |            |                  |   |                               |  |                    |            |                    |   |            |   |       |           |  |   |            |   |   |            |  
|Balance - December 31, 2011 |  |                    | 23,211,846 |                  | $ | 232,000                       |  | $                  | 19,490,000 |                    | $ | 16,230,000 |   |       | 1,106,347 |  | $ | (4,728,000 | ) | $ | 31,224,000 |  
|                            |  |                    |            |                  |   |                               |  |                    |            |                    |   |            |   |       |           |  |   |            |   |   |            |  

See notes to consolidated financial statements.

F-4

---



CONSOLIDATED
STATEMENTS OF CASH FLOWS

|                                                                             |  |                         |            |      |   |             |   |   |            |  
|---------------------------------------------------------------------------- |  | ----------------------- | ---------- | ---- | - | ----------- | - | - | ---------- | -
|                                                                             |  | Year Ended December 31, |           
|                                                                             |  |                         |           
|                                                                             |  | 2011                    |            | 2010 |   | 2009        |  
|                                                                             |  |                         |            |      |   |             |  
|Cash Flows From Operating Activities:                                        |  |                         |            |      |   |             |   |   |            |  
|                                                                             |  |                         |            |      |   |             |   |   |            |  
|Net loss                                                                     |  | $                       | (5,379,000 | )    | $ | (2,640,000  | ) | $ | (1,183,000 | )
|Adjustments
 to reconcile net loss to net cash used in operating activities: |  |                         |            |      |   |             |   |   |            |  
|Depreciation
 and amortization                                               |  |                         | 520,000    |      |   | 525,000     |   |   | 482,000    |  
|Income from
 equity investees                                                |  |                         | (29,000    | )    |   | (4,078,000  | ) |   | (4,224,000 | )
|Distributions
 from equity investees                                         |  |                         | 1,185,000  |      |   | 3,346,000   |   |   | 1,539,000  |  
|Impairment
 of intangibles                                                   |  |                         |            |      |   | 150,000     |   |   |            |  
|Deferred
 taxes                                                              |  |                         |            |      |   | 1,323,000   |   |   | (175,000   | )
|Stock based
 compensation                                                    |  |                         | 6,000      |      |   | 10,000      |   |   | 20,000     |  
|Changes in:                                                                  |  |                         |            |      |   |             |   |   |            |  
|Cash and cash equivalents  restricted                                       |  |                         |            |      |   |             |   |   | (232,000   | )
|Securities owned, at fair value                                              |  |                         | 866,000    |      |   | 491,000     |   |   | (849,000   | )
|Receivable from clearing broker                                              |  |                         | 530,000    |      |   | 391,000     |   |   | (272,000   | )
|Income tax refund receivable                                                 |  |                         | 795,000    |      |   | 279,000     |   |   | 238,000    |  
|Prepaid expenses and other assets                                            |  |                         | (86,000    | )    |   | 309,000     |   |   | (24,000    | )
|Accounts payable and accrued liabilities                                     |  |                         | 122,000    |      |   | (1,218,000  | ) |   | (300,000   | )
|                                                                             |  |                         |            |      |   |             |   |   |            |  
|                                                                             |  |                         |            |      |   |             |   |   |            |  
|Net cash used in operating activities                                        |  |                         | (1,470,000 | )    |   | (1,112,000  | ) |   | (4,980,000 | )
|                                                                             |  |                         |            |      |   |             |   |   |            |  
|                                                                             |  |                         |            |      |   |             |   |   |            |  
|Cash Flows From Investing Activities:                                        |  |                         |            |      |   |             |   |   |            |  
|                                                                             |  |                         |            |      |   |             |   |   |            |  
|Purchase of
 customer list                                                   |  |                         |            |      |   | (50,000     | ) |   |            |  
|Purchase of
 furniture, equipment and leasehold improvements                 |  |                         | (21,000    | )    |   | (200,000    | ) |   | (545,000   | )
|Subordinated
 loan to investee                                               |  |                         |            |      |   | (10,000,000 | ) |   |            |  
|Repayment of
 subordinated loan to investee                                  |  |                         |            |      |   | 10,000,000  |   |   |            |  
|(Payment)
 collection of advances made to equity investees                   |  |                         | 41,000     |      |   | (44,000     | ) |   | 125,000    |  
|                                                                             |  |                         |            |      |   |             |   |   |            |  
|                                                                             |  |                         |            |      |   |             |   |   |            |  
|Net cash provided by (used in) investing
 activities                         |  |                         | 20,000     |      |   | (294,000    | ) |   | (420,000   | )
|                                                                             |  |                         |            |      |   |             |   |   |            |  
|                                                                             |  |                         |            |      |   |             |   |   |            |  
|Cash Flows From Financing Activities:                                        |  |                         |            |      |   |             |   |   |            |  
|                                                                             |  |                         |            |      |   |             |   |   |            |  
|Purchase of
 treasury shares                                                 |  |                         | (29,000    | )    |   | (132,000    | ) |   | (33,000    | )
|                                                                             |  |                         |            |      |   |             |   |   |            |  
|                                                                             |  |                         |            |      |   |             |   |   |            |  
|Net cash used in financing activities                                        |  |                         | (29,000    | )    |   | (132,000    | ) |   | (33,000    | )
|                                                                             |  |                         |            |      |   |             |   |   |            |  
|                                                                             |  |                         |            |      |   |             |   |   |            |  
|Net decrease in cash and cash equivalents                                    |  |                         | (1,479,000 | )    |   | (1,538,000  | ) |   | (5,433,000 | )
|Cash and
 cash equivalents - beginning of year                               |  |                         | 22,646,000 |      |   | 24,184,000  |   |   | 29,617,000 |  
|                                                                             |  |                         |            |      |   |             |   |   |            |  
|                                                                             |  |                         |            |      |   |             |   |   |            |  
|Cash and cash equivalents - end of year                                      |  | $                       | 21,167,000 |      | $ | 22,646,000  |   | $ | 24,184,000 |  
|                                                                             |  |                         |            |      |   |             |   |   |            |  
|Supplemental Cash Flow Disclosures:                                          |  |                         |            |      |   |             |   |   |            |  
|Cash for:                                                                    |  |                         |            |      |   |             |   |   |            |  
|Income taxes (received) paid, net                                            |  | $                       | (717,000   | )    | $ | 16,000      |   | $ | 239,000    |  

See notes to consolidated financial
statements.

F-5

---



SIEBERT FINANCIAL CORP. AND SUBSIDIARIES

NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

Note A - Summary Of Significant Accounting Policies

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|[1] | Business and Principles of Consolidation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Siebert
 Financial Corp. (Financial), through its wholly owned subsidiary, Muriel Siebert
 & Co., Inc. (Siebert), engages in the business of providing discount
 brokerage services for customers, investment banking services for
 institutional clients and trading securities for its own account, and,
 through its wholly owned subsidiary, Siebert Womens Financial Network, Inc.
 (WFN), engages in providing products, services and information devoted to
 womens financial needs. The accompanying consolidated financial statements
 includes the accounts of Financial and its subsidiaries. All significant
 intercompany accounts and transactions have been eliminated. Financial,
 Siebert and WFN collectively are referred to herein as the Company.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | The
 municipal bond investment banking business is conducted by Siebert,
 Brandford, Shank & Co., L.L.C. (SBS), and related derivatives
 transactions are conducted by SBS Financial Products Company, LLC (SBSFP),
 investees not controlled or majority-owned, which are accounted for by the
 equity method of accounting (see Note B). The equity method provides that the
 Company records its share of the investees earnings or losses in its results
 of operations with a corresponding adjustment to the carrying value of its
 investment. In addition, the investment is adjusted for capital contributions
 to and distributions from the investees. Operations of equity investees are
 considered integral to Sieberts operations.                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|[2] | Cash Equivalents:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Cash
 equivalents consist of highly liquid investments purchased with an original
 maturity of three months or less. Cash equivalents are carried at fair value
 and amounted to $19,726,000 and $20,896,000 at December 31, 2011 and 2010,
 respectively, consisting of money market funds.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Cash
 equivalents  restricted represents $1,532,000 of cash invested in a money
 market account which serves as collateral for a secured demand note payable
 in the amount of $1,200,000 to SBS (see Note I).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|[3] | Securities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Securities
 owned are carried at fair value with realized and unrealized gains and losses
 reflected in trading profits. Siebert clears all its security transactions
 through unaffiliated clearing firms on a fully disclosed basis. Accordingly,
 Siebert does not hold funds or securities for, or owe funds or securities to,
 its customers. Those functions are performed by the clearing firms.                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|[4] | Fair value of financial instruments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Authoritative
 accounting guidance defines fair value, establishes a framework for measuring
 fair value and establishes a fair value hierarchy. Fair value is the price
 that would be received to sell an asset or paid to transfer a liability in an
 orderly transaction between participants at the measurement date. Fair value
 measurements are not adjusted for transaction costs. The fair value hierarchy
 prioritizes inputs to valuation techniques used to measure fair value into
 three levels:                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Level 1 
 Unadjusted quoted prices in active markets for identical assets or
 liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Level 2 
 Inputs other than quoted market prices that are observable, either directly
 or indirectly, and reasonably available.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Level 3 
 Unobservable inputs reflect the assumptions that management develops based on
 available information about the assumptions market participants would use in
 valuing the asset or liability.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

F-6

---



Note A - Summary Of Significant Accounting Policies (CONTINUED)

| |                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------
| | The
 classification of financial instruments valued at fair value as of December
 31, 2011 and 2010 is as follows:

|                      |  |         |            |         |         |         |       |   |            |  | 
|--------------------- |  | ------- | ---------- | ------- | ------- | ------- | ----- | - | ---------- |  | 
|                      |  |         | 2011       |         |         |        
|                      |  |         |            |         |         |        
|Financial
 Instrument |  |         | Level 1    |         | Level 2 |         | Total |  
|                      |  |         |            |         |         |         |       |  
|Cash
 equivalents     |  | $       | 19,726,000 |         |         |        |       | $ | 19,726,000 | 
|Securities            |  |         | 250,000    |         | $       |        |       | $ | 250,000    | 
|                      |  |         |            |         |         |         |       |   |            | 
|                      |  | $       | 19,976,000 |         | $       |        |       | $ | 19,976,000 | 
|                      |  |         |            |         |         |         |       |   |            | 
|                      |  |         |            |         |         |         |       |   |            | 
|                      |  | 2010    |            |         |         |        
|                      |  |         |            |         |         |        
|                      |  | Level 1 |            | Level 2 |         | Total   |      
|                      |  |         |            |         |         |         |      
|Cash
 equivalents     |  | $       | 20,896,000 |         |         |        |       | $ | 20,896,000 | 
|Securities            |  |         | 242,000    |         | $       | 874,000 |       |   | 1,116,000  | 
|                      |  |         |            |         |         |         |       |   |            | 
|                      |  | $       | 21,138,000 |         | $       | 874,000 |       | $ | 22,012,000 | 
|                      |  |         |            |         |         |         |       |   |            | 

At December
31, 2011 and 2010 respectively, securities include common stock of $250,000 and $242,000 valued on the last
business day of the year at the last available reported sales price on the
primary securities exchange (Level 1) and at December 31, 2010 also includes municipal bonds of $874,000 valued
based on prices obtained from pricing sources, which derive values from
observable inputs (Level 2).

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|[5]  | Income Taxes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     | The Company
 accounts for income taxes utilizing the asset and liability approach
 requiring the recognition of deferred tax assets and liabilities for the
 expected future tax consequences of net operating loss carryforwards and
 temporary differences between the basis of assets and liabilities for
 financial reporting purposes and tax purposes.                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|[6]  | Furniture, Equipment and Leasehold Improvements:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     | Furniture,
 equipment and leasehold improvements are stated at cost, net of accumulated
 depreciation and amortization. Depreciation is calculated using the
 straight-line method over the estimated useful lives of the assets, generally
 five years. Leasehold improvements are amortized over the shorter of the
 estimated useful life of the improvements or period of the lease.                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|[7]  | Advertising Costs:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     | Advertising
 costs are charged to expense as incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|[8]  | Use of Estimates:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     | The
 preparation of financial statements in conformity with accounting principles
 generally accepted in the United States of America requires management to
 make estimates and assumptions that affect the reported amounts of assets and
 liabilities and disclosure of contingent assets and liabilities at the date
 of the financial statements and the reported amounts of revenues and expenses
 during the reporting period. Actual results could differ from those
 estimates.                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|[9]  | Per Share Data:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     | Basic
 earnings (loss) per share is calculated by dividing net income (loss) by the
 weighted average outstanding common shares during the year. Diluted earnings
 per share is calculated by dividing net income by the number of shares
 outstanding under the basic calculation and adding all dilutive securities,
 which consist of options. The Company incurred a net loss for each of the
 years ended December 31, 2011, 2010 and 2009. Accordingly, basic and diluted
 net loss per common share are the same for each year as the effect of stock
 options is anti-dilutive. In 2011, 2010 and 2009, 1,228,200, 1,503,200 and
 1,719,700 common shares, respectively, issuable upon the exercise of options
 were not included in the computation.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|[10] | Revenue:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     | Commission revenues and related clearing expenses are recorded on a trade-date basis.
Fees, consisting principally of revenue
participation with the Companys clearing broker in distribution fees and interest, are recorded as earned.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     | Investment
 banking revenue includes gains and fees, net of syndicate expenses, arising
 from underwriting syndicates in which the Company participates. Investment
 banking management fees are recorded on the offering date, sales concessions
 on the settlement date and underwriting fees at the time the underwriting is
 completed and the income is reasonably determinable.                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     | Trading profits are also recorded on a trade-date basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     | Interest is
 recorded on an accrual basis and dividends are recorded on the ex-dividend
 date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

F-7

---



Note A - Summary Of Significant Accounting Policies (CONTINUED)

|     |                                                                                                                                                                                                       
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|[11] | Stock-Based Compensation:                                                                                                                                                                             
|     |                                                                                                                                                                                                       
|     | Share-based
 payments to employees, including grants of employee stock options, are
 recognized in the statement of operations as an operating expense, based on
 their fair values on the grant date.

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | Share-based
 compensation costs are recognized on a straight-line basis over the requisite
 service periods of awards which would normally be the vesting period of the
 options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | Cash flows
 resulting from the tax benefits of the tax deduction in excess of the
 compensation cost recognized for these options are classified as financing
 cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|[12] | Intangibles:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | Purchased
 intangibles which have finite useful lives are principally being amortized
 using the straight-line method over estimated useful lives of three to five
 years (see Note D). Domain names and other intellectual property which are
 deemed to have an indefinite useful life are not amortized but are tested for
 impairment annually or more frequently if events or changes in circumstances
 indicate that the asset might be impaired. The impairment test for
 indefinite-lived intangibles consists of a comparison of their fair value
 with their carrying amount.                                                                                                                                                                                                                                                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|[13] | Valuation of Long-Lived Assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | The Company
 evaluates the recoverability of its long-lived assets including amortizable
 intangibles and recognizes an impairment loss in the event the carrying value
 of these assets exceeds the estimated future undiscounted cash flows
 attributable to these assets. The Company assesses potential impairment to
 its long-lived assets when events or changes in circumstances indicate that
 its carrying value may not be recoverable. Should impairment exist, the
 impairment loss would be measured based on the excess of the carrying value
 of the assets over their fair value.                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|[14] | New Accounting Standards:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | In June
 2009, the Financial Accounting Standards Board (FASB) finalized guidance in
 determining whether an enterprise has a controlling financial interest in a
 variable interest entity. This determination identifies the primary
 beneficiary of a variable interest entity as the enterprise that has both the
 power to direct the activities of a variable interest entity that most
 significantly impacts the entitys economic performance, and the obligation
 to absorb losses or the right to receive benefits of the entity that could
 potentially be significant to the variable interest entity. This guidance
 also requires ongoing reassessments of whether an enterprise is the primary
 beneficiary and eliminates the quantitative approach previously required for
 determining the primary beneficiary. New provisions of this guidance were
 effective January 1, 2010. The adoption of the new guidance did not have any
 impact on the Companys financial statements.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | In June
 2009, the FASB issued guidance to improve transparency about transfers of
 financial assets and a transferors continuing involvement, if any, with
 transferred financial assets. This guidance removes the concept of a
 qualifying special-purpose entity and removes the exception from applying
 previous guidance to variable interest entities that are qualifying
 special-purpose entities; limits the circumstances in which a transferor
 derecognizes a portion or component of a financial asset; defines a
 participating interest; requires a transferor to recognize and initially
 measure at fair value all assets obtained and liabilities incurred as a
 result of a transfer accounted for as a sale; and requires enhanced
 disclosures. This guidance was adopted by the Company beginning January 1,
 2010 and did not have any impact on the Companys financial statements.                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | In January 2010, the FASB issued guidance that requires
some new disclosures and clarifies some existing disclosure requirements
about fair value measurements which is effective for interim and annual
reporting periods beginning after December 15, 2009. The
guidance was adopted by the Company as of January 1, 2010 and
did not have any impact on the Companys disclosures. Additionally,
these amended standards require presentation of disaggregated activity
within the reconciliation for fair value measurements using
significant unobservable inputs (Level 3) and is effective for fiscal
years beginning after December 15, 2010. The guidance was
adopted by the Company on January 1, 2011 and did not have any impact on its disclosures.                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     | In May 2011, the FASB issued guidance to expand disclosures
for Level 3 measurements based on unobservable inputs. The guidance is
effective for fiscal years beginning after December 15, 2011. The Company will
adopt this standard in January 2012, and does not expect
the adoption of this standard to have a material impact on the Companys disclosures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

F-8

---



Note
B - Investment In Affiliates

Investment in
and advances to, equity in income of, and distributions received from,
affiliates consist of the following:

|                                     |  |   |           |  |        |         |       |   |           |  | 
|------------------------------------ |  | - | --------- |  | ------ | ------- | ----- | - | --------- |  | 
|December
 31, 2011                   |  |   | SBS       |  | SBSFPC |         | TOTAL |  
|                                     |  |   |           |  |        |         |       |  
|                                     |  |   |           |  |        |         |       |   |           | 
|Investment
 and advances             |  | $ | 8,295,000 |  | $      | 324,000 |       | $ | 8,619,000 | 
|                                     |  |   |           |  |        |         |       |   |           | 
|Income from
 equity investees        |  | $ | 8,000     |  | $      | 21,000  |       | $ | 29,000    | 
|                                     |  |   |           |  |        |         |       |   |           | 
|Distributions                        |  | $ | 1,185,000 |  | $      |        |       | $ | 1,185,000 | 
|                                     |  |   |           |  |        |         |       |   |           | 
|                                     |  |   |           |  |        |         |       |   |           | 
|December
 31, 2010                   |  |   | SBS       |  | SBSFPC |         | TOTAL |  
|                                     |  |   |           |  |        |         |       |  
|                                     |  |   |           |  |        |         |       |   |           | 
|Investment
 and advances             |  | $ | 9,512,000 |  | $      | 304,000 |       | $ | 9,816,000 | 
|                                     |  |   |           |  |        |         |       |   |           | 
|Income (loss)
 from equity investees |  | $ | 4,102,000 |  | $      | (24,000 | )     | $ | 4,078,000 | 
|                                     |  |   |           |  |        |         |       |   |           | 
|Distributions                        |  | $ | 3,344,000 |  | $      | 2,000   |       | $ | 3,346,000 | 
|                                     |  |   |           |  |        |         |       |   |           | 
|                                     |  |   |           |  |        |         |       |   |           | 
|December
 31, 2009                   |  |   | SBS       |  | SBSFPC |         | TOTAL |  
|                                     |  |   |           |  |        |         |       |  
|                                     |  |   |           |  |        |         |       |   |           | 
|Income
 (loss) from equity investees |  | $ | 4,287,000 |  | $      | (63,000 | )     | $ | 4,224,000 | 
|                                     |  |   |           |  |        |         |       |   |           | 
|Distributions                        |  | $ | 1,539,000 |  | $      |        |       | $ | 1,539,000 | 
|                                     |  |   |           |  |        |         |       |   |           | 

Siebert and
two individuals (the Principals) formed SBS to succeed to the tax-exempt
underwriting business of the Siebert Brandford Shank division of Siebert. The
agreements with the Principals provide that profits will be shared 51% to the
Principals and 49% to Siebert.

Pursuant to
the terms of the Operating Agreement, Financial and each of the Principals own
a 33.33% initial interest in SBSFPC which engages in derivatives transactions
related to the municipal underwriting business. The Operating Agreement
provides that income/(loss) be shared 66.66% by the Principals and 33.33% by
Financial.

Summarized
financial data of SBS is as follows:

|                                                                                              |  |      |            |      |   |            |  |   |            | 
|--------------------------------------------------------------------------------------------- |  | ---- | ---------- | ---- | - | ---------- |  | - | ---------- | 
|                                                                                              |  | 2011 |            | 2010 |   | 2009       | 
|                                                                                              |  |      |            |      |   |            | 
|                                                                                             
|Total assets, including secured demand note
 of 1,200,000 in each year due from Siebert       |  | $    | 31,403,000 |      | $ | 37,741,000 |  |   |            | 
|Total liabilities, including subordinated
 liabilities $1,200,000 in each year due to Siebert |  |      | 14,592,000 |      |   | 18,530,000 |  |   |            | 
|Total members capital                                                                        |  |      | 16,811,000 |      |   | 19,211,000 |  |   |            | 
|Regulatory minimum net capital requirement                                                    |  |      | 493,000    |      |   | 1,122,000  |  |   |            | 
|Total revenue                                                                                 |  |      | 26,441,000 |      |   | 48,769,000 |  | $ | 45,391,000 | 
|Net income                                                                                    |  |      | 17,000     |      |   | 8,372,000  |  |   | 8,749,000  | 

During 2011,
2010 and 2009, Siebert charged SBS $75,000 for each year, respectively for
general and administrative services, which Siebert believes approximates the
cost of furnishing such services. In addition, during each of the years 2011,
2010 and 2009, Siebert earned interest income of $48,000 from SBS in connection with Sieberts obligation to make a
subordinated loan for up to $1,200,000 available to SBS and Siebert paid SBS
interest earned on the restricted cash equivalents of $4,000, $4,000 and
$10,000, respectively (see Note I). Further, on November 1, 2010, Siebert entered into a
temporary subordinated loan agreement with SBS in the amount of $10 million
bearing interest at 2% and maturing on December 15, 2010. The note was repaid
in December 2010 and interest received from SBS amounted to $25,000.

Sieberts
share of undistributed earnings from SBS amounted to $7,845,000 and $9,021,000
at December 31, 2011 and 2010, respectively. Such amounts may not be immediately
available for distribution to Siebert for various reasons including the amount
of SBSs available cash, the provisions of the agreement between Siebert and
the Principals and SBSs continued compliance with its regulatory net capital
requirements.

Summarized
financial data of SBSFPC is as follows:

|                        |  |      |             |      |   |             |   |   |          |  
|----------------------- |  | ---- | ----------- | ---- | - | ----------- | - | - | -------- | -
|                        |  | 2011 |             | 2010 |   | 2009        |  
|                        |  |      |             |      |   |             |  
|                        |  |      |             |      |   |             |   |   |          |  
|Total assets            |  | $    | 238,290,000 |      | $ | 165,308,000 |   |   |          |  
|Total
 liabilities      |  |      | 237,317,000 |      |   | 164,396,000 |   |   |          |  
|Total
 members capital |  |      | 974,000     |      |   | 913,000     |   |   |          |  
|Total
 revenue          |  |      | 610,000     |      |   | 124,000     |   | $ | 23,000   |  
|Net income
 (loss)      |  |      | 61,000      |      |   | (72,000     | ) |   | (188,000 | )

F-9

---



At December
31, 2011 and 2010, SBSFPC had an accumulated loss of $226,000 and $287,000,
respectively of which Sieberts share was $75,000 and $96,000, respectively.

Note C - Furniture,
Equipment And Leasehold
Improvements, Net

Furniture,
equipment and leasehold improvements consist of the following:

|                                                |  |              |            |      |   |            |  
|----------------------------------------------- |  | ------------ | ---------- | ---- | - | ---------- | -
|                                                |  | December 31, |           
|                                                |  |              |           
|                                                |  | 2011         |            | 2010 |  
|                                                |  |              |            |      |  
|                                                |  |              |            |      |  
|Equipment                                       |  | $            | 2,307,000  |      | $ | 2,524,000  |  
|Leasehold
 improvements                         |  |              | 29,000     |      |   | 36,000     |  
|Furniture
 and fixtures                         |  |              | 23,000     |      |   | 28,000     |  
|                                                |  |              |            |      |   |            |  
|                                                |  |              |            |      |   |            |  
|                                                |  |              | 2,359,000  |      |   | 2,588,000  |  
|Less
 accumulated depreciation and amortization |  |              | (1,602,000 | )    |   | (1,342,000 | )
|                                                |  |              |            |      |   |            |  
|                                                |  |              |            |      |   |            |  
|                                                |  | $            | 757,000    |      | $ | 1,246,000  |  
|                                                |  |              |            |      |   |            |  

Depreciation
and amortization expense for the years ended December 31, 2011, 2010 and 2009
amounted to $510,000, $523,000 and $457,000, respectively.

Note D - Intangible
Assets

In 2000, WFN acquired
the stock of WFN Womens Financial Network, Inc. (WFNI) and HerDollar.com,
Inc., respectively, companies in the development stage which had yet to
commence principal operations, had no significant revenue and had assets
consisting principally of websites, content and domain names, for aggregate
consideration of $2,310,000, including costs. The transactions have been
accounted for as purchases of assets consisting of domain name, website and
content, and a non-compete agreement (the Acquired Intangible Assets).
Related deferred tax assets attributable to net operating loss carryforwards of
the acquired companies and deferred tax liabilities attributable to the excess
of the statement bases of the acquired assets over their tax bases have been
reflected in the accompanying consolidated financial statements as an
adjustment to the carrying amount of such intangibles (see Note E).

Intangible
assets consist of the following:

|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|---------------------------------- |  | ----------------------- | --------- | ------------------------- | - | ----------------------- |  | ------------------------- | --------- |  | - | --------- | 
|                                   |  | December 31, 2011       |           | December 31, 2010         |  
|                                   |  |                         |           |                           |  
|                                   |  | Gross
 Carrying
 Amount |           | Accumulated
 Amortization |   | Gross
 Carrying
 Amount |  | Amortization
 Accumulated |          
|                                   |  |                         |           |                           |   |                         |  |                           |          
|Amortizable
 assets:               |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|Website,
 content and non-compete  |  | $                       | 1,850,000 |                           | $ | 1,850,000               |  | $                         | 1,850,000 |  | $ | 1,850,000 | 
|Retail
 brokerage accounts         |  |                         | 2,638,000 |                           |   | 2,600,000               |  |                           | 2,638,000 |  |   | 2,590,000 | 
|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|                                   |  | $                       | 4,488,000 |                           | $ | 4,450,000               |  | $                         | 4,488,000 |  | $ | 4,440,000 | 
|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|Unamortized
 intangible assets:    |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|Domain
 name/intellectual property |  | $                       | 600,000   |                           |   |                         |  | $                         | 600,000   |  |   |           | 
|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 
|Amortization
 expense              |  |                         |           |                           | $ | 10,000                  |  |                           |           |  | $ | 2,000     | 
|                                   |  |                         |           |                           |   |                         |  |                           |           |  |   |           | 

During 2010,
the Company recorded an impairment charge and wrote down the carrying value of
its unamortized intangible assets by $150,000 representing the excess of
carrying value over its fair value. Such write down was due to a continuing
decline in the Companys revenue. The Company valued the domain name using the
income approach methodology known as the relief from royalty method. The
premise behind the valuation of these assets is that a buyer would be willing
to pay a royalty for the right to use an established or recognized trade name
in order to gain market acceptance, which a product or service otherwise might
not enjoy.

F-10

---



Note E - Income Taxes

The Company
files a consolidated federal income tax return with its subsidiaries.

Income tax
expense (benefit) provision consists of the following:

|                                                                                                                                                                                    |  |                         |            |      |   |           |   |   |            |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------- | ---------- | ---- | - | --------- | - | - | ---------- | -
|                                                                                                                                                                                    |  | Year Ended December 31, |           
|                                                                                                                                                                                    |  |                         |           
|                                                                                                                                                                                    |  | 2011                    |            | 2010 |   | 2009      |  
|                                                                                                                                                                                    |  |                         |            |      |   |           |  
|                                                                                                                                                                                    |  |                         |            |      |   |           |   |   |            |  
|Federal
 income tax provision (benefit):                                                                                                                                            |  |                         |            |      |   |           |   |   |            |  
|                                                                                                                                                                                    |  |                         |            |      |   |           |   |   |            |  
|Current                                                                                                                                                                             |  | $                       |           |      | $ | 286,000   |   | $ | (656,000   | )
|Deferred                                                                                                                                                                            |  |                         |           |      |   | 731,000   |   |   | 85,000     |  
|                                                                                                                                                                                    |  |                         |            |      |   |           |   |   |            |  
|                                                                                                                                                                                    |  |                         |            |      |   |           |   |   |            |  
|                                                                                                                                                                                    |  |                         |           |      |   | 1,017,000 |   |   | (571,000   | )
|                                                                                                                                                                                    |  |                         |            |      |   |           |   |   |            |  
|                                                                                                                                                                                    |  |                         |            |      |   |           |   |   |            |  
|State and local:                                                                                                                                                                    |  |                         |            |      |   |           |   |   |            |  
|                                                                                                                                                                                    |  |                         |            |      |   |           |   |   |            |  
|Current                                                                                                                                                                             |  |                         | 23,000     |      |   |          |   |   | (486,000   | )
|Deferred                                                                                                                                                                            |  |                         |           |      |   | 592,000   |   |   | (260,000   | )
|                                                                                                                                                                                    |  |                         |            |      |   |           |   |   |            |  
|                                                                                                                                                                                    |  |                         |            |      |   |           |   |   |            |  
|                                                                                                                                                                                    |  |                         | 23,000     |      |   | 592,000   |   |   | (746,000   | )
|                                                                                                                                                                                    |  |                         |            |      |   |           |   |   |            |  
|                                                                                                                                                                                    |  |                         |            |      |   |           |   |   |            |  
|Total:                                                                                                                                                                              |  |                         |            |      |   |           |   |   |            |  
|Current                                                                                                                                                                             |  |                         | 23,000     |      |   | 286,000   |   |   | (1,142,000 | )
|Deferred                                                                                                                                                                            |  |                         |           |      |   | 1,323,000 |   |   | (175,000   | )
|                                                                                                                                                                                    |  |                         |            |      |   |           |   |   |            |  
|                                                                                                                                                                                    |  |                         |            |      |   |           |   |   |            |  
|                                                                                                                                                                                    |  | $                       | 23,000     |      | $ | 1,609,000 |   | $ | (1,317,000 | )
|                                                                                                                                                                                    |  |                         |            |      |   |           |   |   |            |  
|                                                                                                                                                                                    |  |                         |            |      |   |           |   |   |            |  
|A
 reconciliation between the income tax expense (benefit) and income taxes
 computed by applying the statutory Federal income tax rate to loss before
 income taxes is as follows:
|                                                                                                                                                                                    |  |                         |            |      |   |           |   |   |            |  
|                                                                                                                                                                                    |  | Year Ended December 31, |           
|                                                                                                                                                                                    |  |                         |           
|                                                                                                                                                                                    |  | 2011                    |            | 2010 |   | 2009      |  
|                                                                                                                                                                                    |  |                         |            |      |   |           |  
|                                                                                                                                                                                    |  |                         |            |      |   |           |   |   |            |  
|Expected
 income tax benefit at statutory Federal tax rate (34%)                                                                                                                    |  | $                       | (1,812,000 | )    | $ | (351,000  | ) | $ | (850,000   | )
|State and
 local taxes, net of Federal tax effect                                                                                                                                   |  |                         | (406,000   | )    |   | (67,000   | ) |   | (163,000   | )
|Reversal of
 overaccrual of prior years taxes                                                                                                                                      |  |                         |           |      |   |          |   |   | (330,000   | )
|Increase in
 valuation allowance                                                                                                                                                    |  |                         | 2,177,000  |      |   | 1,980,000 |   |   |           |  
|Permanent
 difference                                                                                                                                                               |  |                         | 36,000     |      |   | 47,000    |   |   | 51,000     |  
|Other                                                                                                                                                                               |  |                         | 28,000     |      |   |          |   |   | (25,000    | )
|                                                                                                                                                                                    |  |                         |            |      |   |           |   |   |            |  
|                                                                                                                                                                                    |  |                         |            |      |   |           |   |   |            |  
|Income tax
 expense (benefit)                                                                                                                                                       |  | $                       | 23,000     |      | $ | 1,609,000 |   | $ | (1,317,000 | )
|                                                                                                                                                                                    |  |                         |            |      |   |           |   |   |            |  

F-11

---



Note E -
Income Taxes (Continued)

Deferred income taxes
reflect the impact of temporary differences between the amounts of assets and
liabilities for financial reporting purposes and their tax basis. The principal
items giving rise to deferred tax assets (liabilities) are as follows:

|                                                 |  |              |            |      |   |            |  
|------------------------------------------------ |  | ------------ | ---------- | ---- | - | ---------- | -
|                                                 |  | December 31, |           
|                                                 |  |              |           
|                                                 |  | 2011         |            | 2010 |  
|                                                 |  |              |            |      |  
|Deferred tax asset:                              |  |              |            |      |   |            |  
|Net operating loss
 carryforwards                |  | $            | 3,060,000  |      | $ | 1,592,000  |  
|Employee stock based
 compensation               |  |              | 231,000    |      |   | 234,000    |  
|Retail brokerage accounts                        |  |              | 430,000    |      |   | 515,000    |  
|Contribution carryover                           |  |              | 252,000    |      |   | 162,000    |  
|Furniture, equipment and leasehold improvements  |  |              | 68,000     |      |   |           |  
|Accrued expenses                                 |  |              | 400,000    |      |   |           |  
|Accrued compensation and
 other                  |  |              | 59,000     |      |   | 47,000     |  
|                                                 |  |              |            |      |   |            |  
|                                                 |  |              |            |      |   |            |  
|                                                 |  |              | 4,500,000  |      |   | 2,550,000  |  
|Valuation allowance                              |  |              | (4,260,000 | )    |   | (2,083,000 | )
|                                                 |  |              |            |      |   |            |  
|                                                 |  |              |            |      |   |            |  
|                                                 |  |              | 240,000    |      |   | 467,000    |  
|Deferred tax liability:                          |  |              |            |      |   |            |  
|Acquired intangible assets                       |  |              | (240,000   | )    |   | (243,000   | )
|Furniture, equipment and
 leasehold improvements |  |              |           |      |   | (224,000   | )
|                                                 |  |              |            |      |   |            |  
|                                                 |  |              |            |      |   |            |  
|                                                 |  | $            | 0          |      | $ | 0          |  
|                                                 |  |              |            |      |   |            |  

Due to cumulative losses
incurred by the Company during the current and prior two years, the Company is
unable to conclude that it is more likely than not that it will realize its net
deferred tax asset and, accordingly, has recorded a valuation allowance to
fully offset its deferred tax asset at December 31, 2011 and 2010.

At December 31, 2011, the
Company has state net operating loss carryforwards aggregating $13.6 million,
which expire through 2031 in various states. In addition, the Company has
federal net operating loss carryforwards of $5.7 million at December 31, 2011, which
expire through 2031. The Company also has additional federal net operating loss
carryforwards of $775,000 at December 31, 2011 which is attributable to WFN and
expires through 2020. Utilization of WFNs federal net operating loss
carryforwards is subject to annual limitations under Section 382 of the
Internal Revenue Code.

The Company applied the more-likely-than not recognition
threshold to all tax positions taken or expected to be taken in a tax
return which resulted in no unrecognized tax benefits reflected in the financial statements as of December 31, 2011. The Company
classifies interest and penalties that would accrue according to the provisions of relevant tax law as income taxes.

For federal and certain state and local jurisdictions, the 2008
through 2011 tax years remain open for examination by the taxing
authorities. For other states the 2007 through 2011 tax years remain
open for examination. The Company is currently under tax
examinations by New York State for the years 2007 to 2009.

Note F - Stockholders
Equity

Siebert is subject to the
SECs Uniform Net Capital Rule (Rule 15c3-1), which requires the maintenance of
minimum net capital. Siebert has elected to use the alternative method,
permitted by the rule, which requires that Siebert maintain minimum net
capital, as defined, equal to the greater of $250,000 or 2 percent of aggregate
debit balances arising from customer transactions, as defined. The Net Capital
Rule of the New York Stock Exchange also provides that equity capital may not
be withdrawn or cash dividends paid if resulting net capital would be less than
5% of aggregate debits. At December 31, 2011 and 2010, Siebert had net capital
of approximately $17,814,000 and $20,352,000, respectively, as compared with
net capital requirements of $250,000. Siebert claims exemption from the reserve
requirement under Section 15c3-3(k)(2)(ii).

On January 23, 2008, the
Board of Directors of the Company authorized a buy back of up to 300,000 shares
of common stock. Shares will be purchased from time to time in the open market
and in private transactions. During 2009, 2010 and 2011, the Company
repurchased 16,790, 62,647 and 17,179 shares of common stock at an average
price of $1.99, $2.10 and $1.68, respectively.

F-12

---



Note G - Options

The Companys 2007 Long-Term
Incentive Plan (the Plan) authorizes the grant of options to purchase up to
an aggregate of 2,000,000 shares, subject to adjustment in certain
circumstances. Both non-qualified options and options intended to qualify as
Incentive Stock Options under Section 422 of the Internal Revenue Code may
be granted under the Plan. A Stock Option Committee of the Board of Directors
administers the Plan. The committee has the authority to determine when options
are granted, the term during which an option may be exercised (provided no
option has a term exceeding 10 years), the exercise price and the exercise
period. The exercise price shall not be less than the fair market value on the
date of grant. No option may be granted under the Plan after December 2017.
Generally, employee options vest 20% per year for five years and expire ten
years from the date of grant. At December 31, 2011, options for 1,700,000
shares of common stock are available for grant under the Plan.

A summary of the Companys
stock option transactions for the three years ended December 31, 2011 is
presented below:

|                                     |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |   |   |     
|------------------------------------ | --- | ------ | --------- | ---------------------------------- | - | ------ |  | ---------------------------------- | --------- | ------ | - | ---------------------------------- |  |  | --------- | - | - | ----
|                                     |     | 2011   |           | 2010                               |   | 2009  
|                                     |     |        |           |                                    |   |       
|                                     |     | Shares |           | Weighted
 Average
 Exercise
 Price |   | Shares |  | Weighted
 Average
 Exercise
 Price |           | Shares |   | Weighted
 Average
 Exercise
 Price
|                                     |     |        |           |                                    |   |        |  |                                    |           |        |   |                                   
|Outstanding - beginning of
 the year |     |        | 1,503,200 |                                    | $ | 4.14   |  |                                    | 1,719,700 |        | $ | 4.00                               |  |  | 1,767,200 |   | $ | 4.07
|Forfeited                            |     |        | (275,000  | )                                  | $ | 5.33   |  |                                    | (216,500  | )      | $ | 2.98                               |  |  | (47,500   | ) | $ | 6.91
|                                     |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |   |   |     
|                                     |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |   |   |     
|Outstanding - end of year            | (a) |        | 1,228,200 |                                    | $ | 3.88   |  |                                    | 1,503,200 |        | $ | 4.14                               |  |  | 1,719,700 |   | $ | 4.00
|                                     |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |   |   |     
|                                     |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |   |   |     
|Fully vested at year end             | (a) |        | 1,228,200 |                                    | $ | 3.88   |  |                                    |           |        |   |                                    |  |  |           |   |   |     
|                                     |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |   |   |     
|                                     |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |   |   |     
|Exercisable at end of year           | (a) |        | 1,228,200 |                                    | $ | 3.88   |  |                                    | 1,498,200 |        | $ | 4.15                               |  |  | 1,709,700 |   | $ | 4.00
|                                     |     |        |           |                                    |   |        |  |                                    |           |        |   |                                    |  |  |           |   |   |     

|    |                                                                                            
|--- | -------------------------------------------------------------------------------------------
|(a) | Weighted average remaining
 contractual terms of one year and no aggregate intrinsic value.

As of December 31, 2011,
there was no unrecognized compensation cost.

Note H  New Clearing Agreement

As part of the negotiations
with one of the Companys clearing brokers on a fully disclosed clearing
agreement which was entered into on May 5, 2010, the Company resolved at $3
million the amount due to the Company from the clearing firm on past
transactions cleared by the Company. This amount is included in commissions and
fees revenue for the year ended December 31, 2010.

Note I - Commitments, Contingencies And Other

Retail customer transactions
are cleared through clearing brokers on a fully disclosed basis. If customers
do not fulfill their contractual obligations, the clearing broker may charge
Siebert for any loss incurred in connection with the purchase or sale of
securities at prevailing market prices to satisfy the customer obligations.
Siebert regularly monitors the activity in its customer accounts for compliance
with its margin requirements. Siebert is exposed to the risk of loss on
unsettled customer transactions if customers are unable to fulfill their
contractual obligations. There were no material losses for unsettled customer
transactions in 2011, 2010 or 2009.

In a prior year, Siebert had been named as one of the defendants in a
class action pending in the United States District Court, Southern District of
New York. Among other claims, the third amended complaint in the action asserted
on behalf of a class of purchases in a public offering of $1,500,000,000, 6.75%
Subordinated Notes due 2017 (the Notes), issued by Lehman Brothers Holdings,
Inc.,  (LBHI) and certain smaller issuances of other securities that Siebert and other
underwriters of the Notes violated Section 11 of the Securities Act of 1933,
and other applicable law in that relevant offering materials were false and
misleading. Siebert had purchased $15 million of the Notes and $462,953 of
other securities as an underwriter in the offerings. Siebert and other
underwriters moved to dismiss the third amended complaint on various grounds.
The Court granted in part and denied in part the motion by an order dated July
27, 2011. On November 3, 2011, Siebert and the plaintiffs class agreed to
resolve all claims against Siebert in consideration of a $1 million payment by
Siebert. The settlement is subject to court approval. As of December 31, 2011,
the Company had accrued a $1 million provision for loss to reflect the
settlement. As certain defendants did not agree to a settlement,  additional liability to
the  Company is  possible.  At present,  the Company is  uncertain  as to the  potential
liability, if any, in connection with the non-settling defendants.

F-13

---



Note I - Commitments, Contingencies And Other (continued)

Siebert is party to certain
claims, suits and complaints arising in the ordinary course of business
including individual actions related to various offerings of notes by LBHI. In
the opinion of management, all such claims, suits and complaints are without
merit, or involve amounts which would not have a significant effect on the
financial position or results of operations of the Company.

The Company rents discount
retail brokerage and other office space under long-term operating leases
expiring in various periods through 2013. These leases call for base rent plus
escalations for taxes and operating expenses.

Future minimum base rental
payments under these operating leases are as follows:

|                           |  |        |   |        
|-------------------------- |  | ------ | - | -------
|Year Ending 
 December 31, |  | Amount |  
|                           |  |        |  
|                           |  |        |   |        
|2012                       |  |        |   | 642,000
|2013                       |  |        |   | 68,000 
|                           |  |        |   |        
|                           |  |        |   |        
|                           |  |        | $ | 710,000
|                           |  |        |   |        

Rent expense, including
escalations for operating costs, amounted to approximately $1,095,000,
$1,274,000 and $1,279,000 for the years ended December 31, 2011, 2010 and 2009,
respectively. Rent is being charged to expense over the entire lease term on a
straight-line basis.

Siebert sponsors a defined
contribution retirement plan under Section 401(k) of the Internal Revenue Code
that covers substantially all employees. Participant contributions to the plan
are voluntary and are subject to certain limitations. Siebert may also make
discretionary contributions to the plan. No contributions were made by Siebert
in 2011, 2010 and 2009.

Siebert is party to a
Secured Demand Note Collateral Agreement with SBS which obligates Siebert to
lend SBS, on a subordinated basis, up to $1,200,000. The secured demand note
payable held by SBS and a related $1,200,000 receivable due from SBS are
included in investments in and advances to equity investees in the accompanying
consolidated statement of financial condition. Amounts that Siebert is
obligated to lend under this arrangement are collateralized by cash equivalents
of $1,532,000. Any amounts loaned will bear interest at 4% per annum and are
repayable on August 31, 2013.

Note J - Summarized Quarterly Financial Data
(Unaudited)

|                            |  |                |            |                 |   |                |   |                 |           |                |   |                 |   |                |            |                 |   |           |  |   |            |   |   |           | 
|--------------------------- |  | -------------- | ---------- | --------------- | - | -------------- | - | --------------- | --------- | -------------- | - | --------------- | - | -------------- | ---------- | --------------- | - | --------- |  | - | ---------- | - | - | --------- | 
|                            |  | 2011           |            | 2010            |  
|                            |  |                |            |                 |  
|                            |  | First
 Quarter |            | Second
 Quarter |   | Third
 Quarter |   | Fourth
 Quarter |           | First
 Quarter |   | Second
 Quarter |   | Third
 Quarter |            | Fourth
 Quarter |  
|                            |  |                |            |                 |   |                |   |                 |           |                |   |                 |   |                |            |                 |  
|Revenue                     |  | $              | 5,503,000  |                 | $ | 4,498,000      |   | $               | 5,857,000 |                | $ | 4,341,000       |   | $              | 4,313,000  |                 | $ | 7,396,000 |  | $ | 3,742,000  |   | $ | 5,319,000 | 
|Net (loss)
 income          |  | $              | (2,004,000 | )               | $ | (1,790,000     | ) | $               | (591,000  | )              | $ | (994,000        | ) | $              | (1,194,000 | )               | $ | 782,000   |  | $ | (3,558,000 | ) | $ | 1,330,000 | 
|Earnings
 (loss) per share: |  |                |            |                 |   |                |   |                 |           |                |   |                 |   |                |            |                 |   |           |  |   |            |   |   |           | 
|Basic                       |  | $              | (0.09      | )               | $ | (0.08          | ) | $               | (0.03     | )              | $ | (0.04           | ) | $              | (0.05      | )               | $ | 0.04      |  | $ | (0.16      | ) | $ | 0.06      | 
|Diluted                     |  | $              | (0.09      | )               | $ | (0.08          | ) | $               | (0.03     | )              | $ | (0.04           | ) | $              | (0.05      | )               | $ | 0.04      |  | $ | (0.16      | ) | $ | 0.06      | 

F-14

---



REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Managers
Siebert, Brandford, Shank & Co., L.L.C.
New York, New York

We have audited the
accompanying statements of financial condition of Siebert, Brandford, Shank
& Co., L.L.C. (the Company) as of December 31, 2011 and 2010, and
the related statements of operations, changes in members capital, changes in
subordinated borrowings and cash flows for each of the years in the three-year
period ended December 31, 2011. These financial statements are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our
audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate
in the circumstances, 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. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the
financial statements referred to above present fairly, in all material
respects, the financial position of Siebert, Brandford, Shank & Co., L.L.C.
as of December 31, 2011 and 2010, and the results of its operations and
its cash flows for each of the years in the three-year period ended
December 31, 2011 in conformity with accounting principles generally
accepted in the United States of America.



/s/ EisnerAmper LLP




New York, New York
February 28, 2012

F-15

---



SIEBERT, BRANDFORD, SHANK & CO., L.L.C.

Statements of
Financial Condition

|                                                     |  |               |            |      |   |            | 
|---------------------------------------------------- |  | ------------- | ---------- | ---- | - | ---------- | 
|                                                     |  | December
 31, |           
|                                                     |  |               |           
|                                                     |  | 2011          |            | 2010 |  
|                                                     |  |               |            |      |  
|                                                     |  |               |            |      |   |            | 
|ASSETS                                               |  |               |            |      |   |            | 
|Cash and cash equivalents                            |  | $             | 27,881,153 |      | $ | 19,859,779 | 
|Accounts receivable                                  |  |               | 218,522    |      |   | 2,478,545  | 
|Securities owned, at fair value                      |  |               |            |      |   | 11,816,604 | 
|Due from broker                                      |  |               | 3,125      |      |   |            | 
|Receivable from affiliate                            |  |               | 33,595     |      |   | 25,354     | 
|Secured demand note                                  |  |               | 1,200,000  |      |   | 1,200,000  | 
|Furniture, equipment and leasehold improvements, net |  |               | 1,227,240  |      |   | 1,418,348  | 
|Other assets                                         |  |               | 839,561    |      |   | 942,464    | 
|                                                     |  |               |            |      |   |            | 
|                                                     |  |               |            |      |   |            | 
|                                                     |  | $             | 31,403,196 |      | $ | 37,741,094 | 
|                                                     |  |               |            |      |   |            | 
|                                                     |  |               |            |      |   |            | 
|LIABILITIES AND MEMBERS CAPITAL                     |  |               |            |      |   |            | 
|Liabilities:                                         |  |               |            |      |   |            | 
|Payable to affiliate                                 |  | $             | 52,436     |      | $ | 93,627     | 
|Due to broker                                        |  |               |            |      |   | 505,605    | 
|Accounts payable and accrued expenses                |  |               | 6,652,981  |      |   | 15,989,159 | 
|Deferred rent                                        |  |               | 686,663    |      |   | 741,551    | 
|                                                     |  |               |            |      |   |            | 
|                                                     |  |               |            |      |   |            | 
|                                                     |  |               | 7,392,080  |      |   | 17,329,942 | 
|                                                     |  |               |            |      |   |            | 
|Subordinated debt                                    |  |               | 7,200,000  |      |   | 1,200,000  | 
|                                                     |  |               |            |      |   |            | 
|                                                     |  |               |            |      |   |            | 
|Total liabilities                                    |  |               | 14,592,080 |      |   | 18,529,942 | 
|                                                     |  |               |            |      |   |            | 
|Members capital                                     |  |               | 16,811,116 |      |   | 19,211,152 | 
|                                                     |  |               |            |      |   |            | 
|                                                     |  |               |            |      |   |            | 
|                                                     |  | $             | 31,403,196 |      | $ | 37,741,094 | 
|                                                     |  |               |            |      |   |            | 

See notes to financial statements

F-16

---



SIEBERT, BRANDFORD, SHANK & CO., L.L.C.

Statements of
Operations

|                                   |  |               |            |      |   |            |  |   |            | 
|---------------------------------- |  | ------------- | ---------- | ---- | - | ---------- |  | - | ---------- | 
|                                   |  | December
 31, |           
|                                   |  |               |           
|                                   |  | 2011          |            | 2010 |   | 2009       | 
|                                   |  |               |            |      |   |            | 
|Revenues:                          |  |               |            |      |   |            |  |   |            | 
|Investment banking                 |  | $             | 20,625,468 |      | $ | 41,275,623 |  | $ | 36,666,383 | 
|Trading profits                    |  |               | 5,811,327  |      |   | 7,488,092  |  |   | 8,672,233  | 
|Interest and other                 |  |               | 4,278      |      |   | 5,429      |  |   | 52,765     | 
|                                   |  |               |            |      |   |            |  |   |            | 
|                                   |  |               |            |      |   |            |  |   |            | 
|                                   |  |               | 26,441,073 |      |   | 48,769,144 |  |   | 45,391,381 | 
|                                   |  |               |            |      |   |            |  |   |            | 
|                                   |  |               |            |      |   |            |  |   |            | 
|Expenses:                          |  |               |            |      |   |            |  |   |            | 
|Employee compensation and benefits |  |               | 19,878,202 |      |   | 33,076,985 |  |   | 30,660,150 | 
|Clearing fees                      |  |               | 142,648    |      |   | 194,957    |  |   | 235,091    | 
|Communications                     |  |               | 940,907    |      |   | 880,792    |  |   | 772,021    | 
|Occupancy                          |  |               | 1,065,030  |      |   | 1,020,409  |  |   | 757,778    | 
|Professional fees                  |  |               | 623,415    |      |   | 680,673    |  |   | 344,838    | 
|Interest - related party           |  |               | 59,290     |      |   | 73,000     |  |   | 48,000     | 
|State and local income tax         |  |               | 120,907    |      |   | 435,187    |  |   | 225,363    | 
|General and administrative         |  |               | 3,593,466  |      |   | 4,035,029  |  |   | 3,599,343  | 
|                                   |  |               |            |      |   |            |  |   |            | 
|                                   |  |               |            |      |   |            |  |   |            | 
|                                   |  |               | 26,423,865 |      |   | 40,397,032 |  |   | 36,642,584 | 
|                                   |  |               |            |      |   |            |  |   |            | 
|                                   |  |               |            |      |   |            |  |   |            | 
|Net income                         |  | $             | 17,208     |      | $ | 8,372,112  |  | $ | 8,748,797  | 
|                                   |  |               |            |      |   |            |  |   |            | 

See notes to financial statementsF-17

---



SIEBERT, BRANDFORD, SHANK & CO., L.L.C.

Statements of
Changes in Members Capital

|                            |  |   |            |  
|--------------------------- |  | - | ---------- | -
|Balance - January 1, 2009   |  | $ | 12,055,310 |  
|Distributions to members    |  |   | (3,140,888 | )
|Net income                  |  |   | 8,748,797  |  
|                            |  |   |            |  
|                            |  |   |            |  
|Balance - December 31, 2009 |  |   | 17,663,219 |  
|Distributions to members    |  |   | (6,824,179 | )
|Net income                  |  |   | 8,372,112  |  
|                            |  |   |            |  
|                            |  |   |            |  
|Balance - December 31, 2010 |  |   | 19,211,152 |  
|Distributions to members    |  |   | (2,417,244 | )
|Net income                  |  |   | 17,208     |  
|                            |  |   |            |  
|                            |  |   |            |  
|Balance - December 31, 2011 |  | $ | 16,811,116 |  
|                            |  |   |            |  

See notes to financial statementsF-18

---



SIEBERT, BRANDFORD, SHANK & CO., L.L.C.

Statements of
Changes in Subordinated Borrowings

|                            |  |   |             |  
|--------------------------- |  | - | ----------- | -
|Balance - January 1, 2009   |  | $ | 1,200,000   |  
|Borrowings                  |  |   |             |  
|Repayments                  |  |   |             |  
|                            |  |   |             |  
|                            |  |   |             |  
|Balance - December 31, 2009 |  |   | 1,200,000   |  
|Borrowings                  |  |   | 10,000,000  |  
|Repayments                  |  |   | (10,000,000 | )
|                            |  |   |             |  
|                            |  |   |             |  
|Balance - December 31, 2010 |  |   | 1,200,000   |  
|Borrowings                  |  |   | 6,000,000   |  
|Repayments                  |  |   |             |  
|                            |  |   |             |  
|                            |  |   |             |  
|Balance - December 31, 2011 |  | $ | 7,200,000   |  
|                            |  |   |             |  

See notes to financial statementsF-19

---



SIEBERT, BRANDFORD, SHANK & CO., L.L.C.

Statements of
Cash Flows

|                                                                                                                |  |               |            |      |   |             |   |   |            |  
|--------------------------------------------------------------------------------------------------------------- |  | ------------- | ---------- | ---- | - | ----------- | - | - | ---------- | -
|                                                                                                                |  | December
 31, |           
|                                                                                                                |  |               |           
|                                                                                                                |  | 2011          |            | 2010 |   | 2009        |  
|                                                                                                                |  |               |            |      |   |             |  
|                                                                                                                |  |               |            |      |   |             |   |   |            |  
|Cash flows from operating activities:                                                                           |  |               |            |      |   |             |   |   |            |  
|Net income                                                                                                      |  | $             | 17,208     |      | $ | 8,372,112   |   | $ | 8,748,797  |  
|Adjustments to reconcile net income to net cash provided by (used in)
 operating activities:                    |  |               |            |      |   |             |   |   |            |  
|Depreciation and amortization                                                                                   |  |               | 256,161    |      |   | 237,045     |   |   | 99,962     |  
|Changes in:                                                                                                     |  |               |            |      |   |             |   |   |            |  
|Accounts
 receivable                                                                                            |  |               | 2,260,023  |      |   | (142,013    | ) |   | (920,947   | )
|Due
 to/from broker                                                                                             |  |               | (508,730   | )    |   | 1,948,895   |   |   | 2,324,508  |  
|Securities
 owned, at fair value                                                                                |  |               | 11,816,604 |      |   | (11,816,604 | ) |   | 161,873    |  
|Other
 receivable                                                                                               |  |               |            |      |   | 491,441     |   |   |            |  
|Other
 assets                                                                                                   |  |               | 102,903    |      |   | 107,658     |   |   | (448,440   | )
|Payable
 to (receivable from) affiliate                                                                         |  |               | (49,432    | )    |   | 43,429      |   |   | (97,690    | )
|Accounts
 payable and accrued expenses                                                                          |  |               | (9,336,178 | )    |   | (623,750    | ) |   | 8,514,989  |  
|Deferred
 rent                                                                                                  |  |               | (54,888    | )    |   | 250,110     |   |   |            |  
|                                                                                                                |  |               |            |      |   |             |   |   |            |  
|                                                                                                                |  |               |            |      |   |             |   |   |            |  
|Net cash provided by (used in) operating activities                                                             |  |               | 4,503,671  |      |   | (1,131,677  | ) |   | 18,383,052 |  
|                                                                                                                |  |               |            |      |   |             |   |   |            |  
|                                                                                                                |  |               |            |      |   |             |   |   |            |  
|Cash flows from investing activities:                                                                           |  |               |            |      |   |             |   |   |            |  
|Purchase of leasehold improvements and equipment                                                                |  |               | (65,053    | )    |   | (381,046    | ) |   | (1,175,059 | )
|                                                                                                                |  |               |            |      |   |             |   |   |            |  
|                                                                                                                |  |               |            |      |   |             |   |   |            |  
|Cash flows from financing activities:                                                                           |  |               |            |      |   |             |   |   |            |  
|Distributions to members                                                                                        |  |               | (2,417,244 | )    |   | (6,824,179  | ) |   | (3,140,888 | )
|Subordinated borrowings                                                                                         |  |               | 6,000,000  |      |   | 10,000,000  |   |   |            |  
|Subordinated repayments                                                                                         |  |               |            |      |   | (10,000,000 | ) |   |            |  
|                                                                                                                |  |               |            |      |   |             |   |   |            |  
|                                                                                                                |  |               |            |      |   |             |   |   |            |  
|Net cash provided by (used in) financing activities                                                             |  |               | 3,582,756  |      |   | (6,824,179  | ) |   | (3,140,888 | )
|                                                                                                                |  |               |            |      |   |             |   |   |            |  
|                                                                                                                |  |               |            |      |   |             |   |   |            |  
|Net increase (decrease) in cash and cash equivalents                                                            |  |               | 8,021,374  |      |   | (8,336,902  | ) |   | 14,067,105 |  
|Cash and cash equivalents
 - beginning of year                                                                  |  |               | 19,859,779 |      |   | 28,196,681  |   |   | 14,129,576 |  
|                                                                                                                |  |               |            |      |   |             |   |   |            |  
|                                                                                                                |  |               |            |      |   |             |   |   |            |  
|Cash and cash equivalents - end of year                                                                         |  | $             | 27,881,153 |      | $ | 19,859,779  |   | $ | 28,196,681 |  
|                                                                                                                |  |               |            |      |   |             |   |   |            |  
|                                                                                                                |  |               |            |      |   |             |   |   |            |  
|Supplemental disclosures of cash flow information:                                                              |  |               |            |      |   |             |   |   |            |  
|Taxes paid                                                                                                      |  | $             | 154,726    |      | $ | 404,483     |   | $ | 231,230    |  
|Interest paid                                                                                                   |  | $             | 48,000     |      | $ | 73,000      |   | $ | 48,000     |  
|                                                                                                                |  |               |            |      |   |             |   |   |            |  
|Non-cash investing activity:                                                                                    |  |               |            |      |   |             |   |   |            |  
|Receivable from landlord for reimbursement of leasehold improvements
 and corresponding deferred rent liability |  |               |            |      |   |             |   | $ | 491,441    |  

See notes to financial statementsF-20

---



SIEBERT, BRANDFORD, SHANK & CO., L.L.C.

Notes to
Financial Statements
December 31, 2011, 2010 and 2009

Note A - Organization
and Summary of Significant Accounting Policies

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|[1] | Organization:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Siebert,
 Brandford, Shank & Co., L.L.C. (SBS or the Company) engages in the
 business of tax-exempt underwriting and related trading activities. The
 Company qualifies as a Minority and Women Owned Business Enterprise in
 certain municipalities.                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|[2] | Investment banking:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Investment banking
 revenues include gains and fees, net of syndicate expenses, arising primarily
 from municipal bond offerings in which the Company acts as an underwriter or
 agent. Investment banking management fees are recorded on the offering date,
 sales concessions on the settlement date, and underwriting fees at the time
 the underwriting is completed and the income is reasonably determinable.                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|[3] | Cash equivalents:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Cash equivalents represent short-term, highly liquid investments
which are readily convertible to cash and have maturities of three
months or less at time of purchase. Cash equivalents, which are valued at
fair value, consist of money market funds which amounted
to $27,881,153 and $19,845,425 at December 31, 2011 and 2010, respectively.                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|[4] | Investments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Security transactions are
 recorded on a trade-date basis. Securities owned are valued at fair value.
 The resulting realized and unrealized gains and losses are reflected as
 trading profits.                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Dividends are recorded on
 the ex-dividend date, and interest income is recognized on an accrual basis.                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|[5] | Fair
 value:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Authoritative accounting
 guidance defines fair value, establishes a framework for measuring fair value
 and establishes a fair value hierarchy. Fair value is the price that would be
 received to sell an asset or paid to transfer a liability in an orderly
 transaction between market participants at the measurement date. Fair value
 measurements are not adjusted for transaction costs. The fair value hierarchy
 prioritizes inputs to valuation techniques used to measure fair value into
 three levels:

| |  |         |                                                                                                                                                                                                       
| |  | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Level 1 | Unadjusted quoted prices
 in active markets for identical assets or liabilities.                                                                                                                      
| |  |         |                                                                                                                                                                                                       
| |  | Level 2 | Inputs other than quoted
 market prices that are observable, either directly or indirectly, and
 reasonably available.                                                                                
| |  |         |                                                                                                                                                                                                       
| |  | Level 3 | Unobservable inputs
 reflect the assumptions that the managing members develop based on available
 information about the assumptions market participants would use in valuing
 the asset or liability.

F-21

---



SIEBERT, BRANDFORD, SHANK & CO., L.L.C.

Notes to
Financial Statements
December 31, 2011, 2010 and 2009

Note A - Organization
and Summary of Significant Accounting Policies (CONTINUED)

| |                                                                                                                    |  | 
| | ------------------------------------------------------------------------------------------------------------------ |  | 
| | The classification of
 financial instruments valued at fair value as of December 31, 2011 and
 2010 is as follows:

|                 |  |                   |            |         |   |            |  |   |            | 
|---------------- |  | ----------------- | ---------- | ------- | - | ---------- |  | - | ---------- | 
|                 |  | December 31, 2011 |           
|                 |  |                   |           
|                 |  | Level 1           |            | Level 2 |   | Total      | 
|                 |  |                   |            |         |   |            | 
|                
|Cash equivalents |  | $                 | 27,881,153 |         |   |            |  | $ | 27,881,153 | 
|                 |  |                   |            |         |   |            |  |   |            | 
|                 |  | December 31, 2010 |           
|                 |  |                   |           
|                 |  | Level 1           |            | Level 2 |   | Total      | 
|                 |  |                   |            |         |   |            | 
|                 |  |                   |            |         |   |            |  |   |            | 
|Cash equivalents |  | $                 | 19,845,425 |         |   |            |  | $ | 19,845,425 | 
|Municipal bonds  |  |                   |            |         | $ | 11,816,604 |  | $ | 11,816,604 | 

| |                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------
| | Municipal bonds are valued
 based on prices obtained from pricing sources, which derive values from
 observable inputs.

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|[6] | Furniture,
 equipment and leasehold improvements, net:                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Furniture, equipment and
 leasehold improvements are stated at cost, net of accumulated depreciation
 and amortization. Depreciation is calculated using the straight-line method
 over the estimated useful lives of the assets, generally five years.
 Leasehold improvements are amortized over the period of the lease.                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|[7] | Use of estimates:                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The preparation of
 financial statements in conformity with accounting principles generally
 accepted in the United States of America requires management to make
 estimates and assumptions that affect the reported amounts of assets and
 liabilities and disclosure of contingent assets and liabilities at the date
 of the financial statements and the reported amounts of revenues and expenses
 during the reporting period. Actual results could differ from those
 estimates.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|[8] | Income
 taxes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Company is not subject
 to federal income taxes. Instead, the members are required to include in
 their income tax returns their respective share of the Companys income. The
 Company is subject to tax in certain state and local jurisdictions. Deferred
 taxes are not significant.                                                                                                                                                                                            

F-22

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SIEBERT, BRANDFORD, SHANK & CO., L.L.C.

Notes to
Financial Statements
December 31, 2011, 2010 and 2009

Note B - Subordinated
Borrowings and Secured Demand Note Receivable

The subordinated debt
consists of the following:

|                                |  |              |           |      |   |           | 
|------------------------------- |  | ------------ | --------- | ---- | - | --------- | 
|                                |  | December 31, |          
|                                |  |              |          
|                                |  | 2011         |           | 2010 |  
|                                |  |              |           |      |  
|                               
|Payable to member (a)           |  | $            | 1,200,000 |      | $ | 1,200,000 | 
|Payable to clearing broker
 (b) |  |              | 6,000,000 |      |   |           | 
|                                |  |              |           |      |   |           | 
|                                |  |              |           |      |   |           | 
|                                |  | $            | 7,200,000 |      | $ | 1,200,000 | 
|                                |  |              |           |      |   |           | 

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | Consists of a Secured
 Demand Note Collateral Agreement payable to Muriel Siebert & Co., Inc.
 (Siebert), a member of the Company, in the amount of $1,200,000 bearing 4%
 interest and due August 31, 2013. On November 1, 2010, the Company
 entered into a temporary subordinated loan agreement with Siebert in the
 amount of $10,000,000 bearing interest at 2% and maturing on December 15,
 2010. The note was repaid in December 2010. Interest expense paid to Siebert
 for each of the years ended December 31, 2011, 2010 and 2009 amounted to
 $48,000, $73,000 and $48,000, respectively.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(b) | On December 14, 2011, the
 Company entered into a temporary subordinated loan agreement with National
 Financial Services, its clearing broker, in the amount of $6,000,000, bearing
 interest at the federal funds rate plus 4% (4.04% at December 31, 2011) and
 maturing January 27, 2012. The note was repaid on January 27, 2012. Interest
 expense accrued in 2011 amounted to approximately $11,000.                                                                                                                                                                                              

The subordinated borrowings
are available in computing net capital under the Securities and Exchange
Commissions (SEC) Uniform Net Capital Rule. To the extent that such
borrowing is required for the Companys continued compliance with minimum net
capital requirements, it may not be repaid.

The secured demand note
receivable of $1,200,000 is collateralized by cash equivalents of Siebert of
approximately $1,538,000 at December 31, 2011 and $1,536,000 at
December 31, 2010. Interest earned on the collateral paid by Siebert to
SBS amounted to approximately $2,500, $3,500 and $10,000 in 2011, 2010 and
2009, respectively.

Note C - Furniture,
Equipment and Leasehold Improvements, Net

Furniture, equipment, and leasehold improvements consist of the following:

|                                                |  |              |           |      |   |           | 
|----------------------------------------------- |  | ------------ | --------- | ---- | - | --------- | 
|                                                |  | December 31, |          
|                                                |  |              |          
|                                                |  | 2011         |           | 2010 |  
|                                                |  |              |           |      |  
|                                               
|Equipment                                       |  | $            | 821,463   |      | $ | 788,635   | 
|Furniture and leasehold
 improvements           |  |              | 1,623,513 |      |   | 1,591,288 | 
|                                                |  |              |           |      |   |           | 
|                                                |  |              |           |      |   |           | 
|                                                |  |              | 2,444,976 |      |   | 2,379,923 | 
|Less accumulated
 depreciation and amortization |  |              | 1,217,736 |      |   | 961,575   | 
|                                                |  |              |           |      |   |           | 
|                                                |  |              |           |      |   |           | 
|                                                |  | $            | 1,227,240 |      | $ | 1,418,348 | 
|                                                |  |              |           |      |   |           | 

F-23

---



SIEBERT, BRANDFORD, SHANK & CO., L.L.C.

Notes to
Financial Statements
December 31, 2011, 2010 and 2009

Note D - Net Capital

The Company is subject to
the SECs Uniform Net Capital Rule 15c3-1, which requires the maintenance
of minimum net capital and that the ratio of aggregate indebtedness to net
capital, both as defined, shall not exceed 15 to 1. At December 31, 2011
and 2010, the Company had net capital of $21,353,097 and $16,842,830,
respectively, which was $20,860,291 and $15,721,207, respectively, in excess of
its required net capital and its ratio of aggregate indebtedness to net capital
was 0.35 and 1.00 to 1, respectively. The Company claims exemption from the
reserve requirements under Section 15c-3-3(k)(2)(ii).

Note E - Commitments

The Company rents office
space under long-term operating leases expiring through 2020. These leases call
for base rent plus escalations for property taxes and other operating expenses.
Future minimum base rent under these operating leases as of December 31,
2011 are as follows:

|             |  |        |           | 
|------------ |  | ------ | --------- | 
|Year
 Ending |  | Amount |          
|             |  |        |          
|            
|2012         |  | $      | 908,000   | 
|2013         |  |        | 806,000   | 
|2014         |  |        | 661,000   | 
|2015         |  |        | 564,000   | 
|2016         |  |        | 479,000   | 
|Thereafter   |  |        | 1,497,000 | 
|             |  |        |           | 
|             |  |        |           | 
|             |  | $      | 4,915,000 | 
|             |  |        |           | 

Rent expense including taxes and operating expenses for 2011, 2010 and 2009 amounted
to $1,065,030, $1,020,409 and $757,778, respectively.

During 2010, the Company
purchased leasehold improvements of approximately $129,000 which were
reimbursed by the landlord. The Company recorded such reimbursement as a credit
to deferred rent liability. Such amount, along with approximately $491,000
recorded in 2009 (together an aggregate amount of $620,000), is being
recognized as a reduction of rental expense on a straight-line basis over the
term of the lease.

Rent expense is being
charged to operations on a straight-line basis resulting in a deferred rent
liability which, together with the deferred rent discussed above, amounted to
$686,663 at December 31, 2011 and $741,551 at December 31, 2010.

Note F - Accounts Payable and
Accrued Expenses

Accounts payable and accrued
expenses consist of the following:

|                                              |  |              |           |      |   |            | 
|--------------------------------------------- |  | ------------ | --------- | ---- | - | ---------- | 
|                                              |  | December 31, |          
|                                              |  |              |          
|                                              |  | 2011         |           | 2010 |  
|                                              |  |              |           |      |  
|                                             
|Accounts payable                              |  | $            | 1,488,400 |      | $ | 184,934    | 
|Accrued bonus and other employee compensation |  |              | 5,037,575 |      |   | 15,341,035 | 
|Other accrued expenses                        |  |              | 127,006   |      |   | 463,190    | 
|                                              |  |              |           |      |   |            | 
|                                              |  |              |           |      |   |            | 
|                                              |  | $            | 6,652,981 |      | $ | 15,989,159 | 
|                                              |  |              |           |      |   |            | 

Note G - Other

During each of 2011, 2010 and 2009,
the Company was charged $75,000 by Siebert for general and administrative
services.

F-24

---



SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

SIEBERT
FINANCIAL CORP.

| |       |                                              
| | ----- | ---------------------------------------------
| | By:   | /s/ MURIEL
 F. SIEBERT                       
| |       |                                              
| |       | Muriel F.
 Siebert                           
| |       | Chair, Chief
 Executive Officer and President
| |       |                                              
| |       |                                              
| | Date: | June 12, 2012                                
| |       |                                              

---



EXHIBIT INDEX

|            |                                                                                                                                                                                                                                                                                          |                          |                                                                                                                                                                                                                                                                                                                                               
|----------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |                                                                                                                                                                                                                                                                                          | Description
 Of Document
|            |                                                                                                                                                                                                                                                                                          |                         
|            | 2.1                                                                                                                                                                                                                                                                                      |                          | Plan and Agreement of Merger between J. Michaels, Inc. (JMI) and Muriel Siebert Capital
 Markets Group, Inc. (MSCMG), dated as of April 24, 1996 (Merger Agreement) (incorporated by reference
 to Siebert Financial Corp.s Annual Report on Form 10-K for the fiscal year ended December 31, 1996)                                    
|            |                                                                                                                                                                                                                                                                                          |                          |                                                                                                                                                                                                                                                                                                                                               
|            | 2.2                                                                                                                                                                                                                                                                                      |                          | Amendment No. 1 to Merger Agreement, dated as of June 28, 1996 (incorporated by reference to
 Siebert Financial Corp.s Annual Report on Form 10-K for the fiscal year ended December 31, 1996)                                                                                                                                               
|            |                                                                                                                                                                                                                                                                                          |                          |                                                                                                                                                                                                                                                                                                                                               
|            | 2.3                                                                                                                                                                                                                                                                                      |                          | Amendment No. 2 to Merger Agreement, dated as of September 30, 1996 (incorporated by reference
 to Siebert Financial Corp.s Annual Report on Form 10-K for the fiscal year ended December 31, 1996)                                                                                                                                          
|            |                                                                                                                                                                                                                                                                                          |                          |                                                                                                                                                                                                                                                                                                                                               
|            | 2.4                                                                                                                                                                                                                                                                                      |                          | Amendment No. 3 to Merger Agreement, dated as of November 7, 1996 (incorporated by reference
 to Siebert Financial Corp.s Annual Report on Form 10-K for the fiscal year ended December 31, 1996)                                                                                                                                            
|            |                                                                                                                                                                                                                                                                                          |                          |                                                                                                                                                                                                                                                                                                                                               
|            | 3.1                                                                                                                                                                                                                                                                                      |                          | Certificate of Incorporation of Siebert Financial Corp., formerly known as J. Michaels, Inc.
 originally filed on April 9, 1934, as amended and restated to date (incorporated by reference to Siebert Financial Corp.s
 Annual Report on Form 10-K for the fiscal year ended December 31, 1997)                                             
|            |                                                                                                                                                                                                                                                                                          |                          |                                                                                                                                                                                                                                                                                                                                               
|            | 3.2                                                                                                                                                                                                                                                                                      |                          | By-laws of Siebert Financial Corp. (incorporated by reference to Siebert Financial Corp.s
 Registration Statement on Form S- 1 (File No. 333-49843) filed with the Securities and Exchange Commission on April 10, 1998)                                                                                                                     
|            |                                                                                                                                                                                                                                                                                          |                          |                                                                                                                                                                                                                                                                                                                                               
|            | 10.1**                                                                                                                                                                                                                                                                                   |                          | Siebert Financial Corp. 1998 Restricted Stock Award Plan (incorporated by reference to Siebert
 Financial Corp.s Annual Report on Form 10-K for the fiscal year ended December 31, 1997)                                                                                                                                                     
|            |                                                                                                                                                                                                                                                                                          |                          |                                                                                                                                                                                                                                                                                                                                               
|            | 10.2**                                                                                                                                                                                                                                                                                   |                          | Siebert Financial Corp. 1997 Stock Option Plan (incorporated by reference to Siebert Financial
 Corp.s Annual Report on Form 10-K for the fiscal year ended December 31, 1996)                                                                                                                                                               
|            |                                                                                                                                                                                                                                                                                          |                          |                                                                                                                                                                                                                                                                                                                                               
|            | 10.3                                                                                                                                                                                                                                                                                     |                          | Siebert, Brandford, Shank & Co., LLC Operating Agreement, among Siebert, Brandford, Shank
 & Co., L.L.C., Muriel Siebert & Co., Inc., Napoleon Brandford III and Suzanne F. Shank, dated as of March 10, 1997 (incorporated
 by reference to Siebert Financial Corp.s Annual Report on Form 10-K for the fiscal year ended December 31, 1996)
|            |                                                                                                                                                                                                                                                                                          |                          |                                                                                                                                                                                                                                                                                                                                               
|            | 10.4                                                                                                                                                                                                                                                                                     |                          | Services Agreement, between Siebert, Brandford, Shank & Co., L.L.C. and Muriel Siebert &
 Co., Inc., dated as of March 10, 1997 (incorporated by reference to Siebert Financial Corp.s Annual Report on Form 10-K
 for the fiscal year ended December 31, 1996)                                                                              
|            |                                                                                                                                                                                                                                                                                          |                          |                                                                                                                                                                                                                                                                                                                                               
|            | 10.5                                                                                                                                                                                                                                                                                     |                          | Operating Agreement of SBS Financial Products Company, LLC, dated effective as of April 19, 2005,
 by and among Siebert Financial Corp., Napoleon Brandford III and Suzanne Shank. (incorporated by reference to Siebert Financial
 Corp.s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 17, 2005)     
|            |                                                                                                                                                                                                                                                                                          |                          |                                                                                                                                                                                                                                                                                                                                               
|            | 10.6**                                                                                                                                                                                                                                                                                   |                          | Siebert Financial Corp. 2007 Long-Term Incentive Plan (incorporated by reference to Siebert Financial
 Corp.s Registration Statement on Form S-8 (File No. 333-144680) filed with the Securities and Exchange Commission on July
 18, 2007)                                                                                                  
|            |                                                                                                                                                                                                                                                                                          |                          |                                                                                                                                                                                                                                                                                                                                               
|            | 10.7*                                                                                                                                                                                                                                                                                    |                          | Fully Disclosed Clearing Agreement, by and between National Financial Services LLC and Muriel
 Siebert & Co., Inc. dated May 5, 2010. (incorporated by reference to Siebert Financial Corp.s Quarterly Report on Form
 10-Q filed with the Securities and Exchange Commission on August 16, 2010)                                            
|            |                                                                                                                                                                                                                                                                                          |                          |                                                                                                                                                                                                                                                                                                                                               
|            | 21                                                                                                                                                                                                                                                                                       |                          | Subsidiaries of the registrant (incorporated by reference to Siebert Financial Corp.s Annual
 Report on Form 10-K for the year ended December 31, 2001)                                                                                                                                                                                      
|            |                                                                                                                                                                                                                                                                                          |                          |                                                                                                                                                                                                                                                                                                                                               
|            | 23                                                                                                                                                                                                                                                                                       |                          | Consent of Independent Auditors                                                                                                                                                                                                                                                                                                               
|            |                                                                                                                                                                                                                                                                                          |                          |                                                                                                                                                                                                                                                                                                                                               
|            | 31.1                                                                                                                                                                                                                                                                                     |                          | Certification of Muriel F. Siebert pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a),
 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                   
|            |                                                                                                                                                                                                                                                                                          |                          |                                                                                                                                                                                                                                                                                                                                               
|            | 31.2                                                                                                                                                                                                                                                                                     |                          | Certification of Joseph M. Ramos, Jr. pursuant to Securities Exchange Act Rules 13a-14(a) and
 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley act of 2002.                                                                                                                                                               
|            |                                                                                                                                                                                                                                                                                          |                          |                                                                                                                                                                                                                                                                                                                                               
|            | 32.1                                                                                                                                                                                                                                                                                     |                          | Certification of Muriel F. Siebert of Periodic Financial Report under Section 906 of the Sarbanes-Oxley
 Act of 2002                                                                                                                                                                                                                          
|            |                                                                                                                                                                                                                                                                                          |                          |                                                                                                                                                                                                                                                                                                                                               
|            | 32.2                                                                                                                                                                                                                                                                                     |                          | Certification of Joseph M. Ramos, Jr. of Periodic Financial Report under Section 906 of the Sarbanes-Oxley
 Act of 2002                                                                                                                                                                                                                       
|            |                                                                                                                                                                                                                                                                                          |                          |                                                                                                                                                                                                                                                                                                                                               
|*           | Portions of the indicated document have been afforded confidential treatment and have been filed
 separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the General Rules and Regulations promulgated
 under the Securities Exchange Act of 1934, as amended.
|            |                                                                                                                                                                                                                                                                                          |                          |                                                                                                                                                                                                                                                                                                                                               
|**          | Management contract or compensatory plan or arrangement.                                                                                                                                                                                                                                

---