18. Commitments, Contingencies, and Other

Legal and Regulatory Matters

In the normal course of business, the Company may be subject to various proceedings and claims arising from its business activities, including lawsuits, arbitration claims and regulatory matters. The Company is also involved in other reviews, investigations and proceedings by governmental and self-regulatory organizations regarding the business, which may result in adverse judgments, settlements, fines, penalties, injunctions and other relief. In many cases, however, it is inherently difficult to determine whether any loss is probable or reasonably possible or to estimate the amount or range of any potential loss, particularly where proceedings may be in relatively early stages. Except as described below, in the Company’s opinion, based on currently available information, the ultimate resolution of current matters is not expected to have a material adverse impact on the Company’s financial position and results of operations as of June 30, 2026. However, resolution of one or more of these matters may have a material effect on the results of operations in any future period, depending upon the ultimate resolution of those matters and depending upon the level of income for such period.

Subsequent to June 30, 2026, the Company settled an arbitration that requires the Company to make a payment of approximately $1.48 million, which is expected to be paid during the third quarter of 2026. As of June 30, 2026, the Company had recorded $1.48 million related to the settlement, which is included in the line item “Accounts payable and accrued liabilities” on the statements of financial condition. The settlement charge of $1.48 million was recognized in line item “Settlement expense” on the statements of operations during the three and six months ended June 30, 2026.

Overnight Financing

As of both June 30, 2026 and December 31, 2025, MSCO had an available line of credit for short term overnight demand borrowing with BMO Harris Bank (“BMO Harris”) of up to $25 million. As of those dates, MSCO had no outstanding loan balance and there were no commitment fees or other restrictions on the line of credit. The Company utilizes customer or firm securities as a pledge for short-term borrowing needs.

There was no interest expense related to this credit line for the three months ended June 30, 2026 and 2025. The interest expense for this credit line was $0 and $1,000 for the six months ended June 30, 2026 and 2025, respectively. The commitment fee associated with the utilization of this credit line was $3,000 for both three months ended June 30, 2026 and 2025. The commitment fee was $6,000 and $5,000 for the six months ended June 30, 2026 and 2025, respectively.

BMO Credit Agreement

On November 22, 2024, MSCO entered into a Credit Agreement (the “BMO Credit Agreement”) with BMO Bank N.A. (“BMO”), a national banking association. The BMO Credit Agreement provides for a revolving credit facility of up to $20,000,000. The Company may use any borrowings under the BMO Credit Agreement to finance NSCC Deposit Requirements (other than an Adequate Assurance Deposit) and withdrawals from a Reserve Account. As part of the agreement, the MSCO entered into a Parent Guaranty agreement with Siebert guaranteeing repayment of any debt issued to MSCO. Effective November 22, 2025, MSCO renewed the BMO Credit Agreement with BMO until November 20, 2026.

Borrowings under the BMO Credit Agreement bears interest on the outstanding daily balance at a rate of interest per annum equal 2.5% plus the greater of: (a) Term SOFR for such day plus 0.11448% and (b) Federal Funds Target Range – Upper Limit and (c) 0.25%. The annual commitment fee is equal to one half of one percent (0.50%) of the average daily unused portion of the commitment of $20,000,000. The BMO Credit Agreement contains customary affirmative covenants and negative covenants and requires MSCO maintain minimum total regulatory capital of $50,000,000, excess net capital of 25,000,000, assets to total regulatory capital ratio of not more than 5.0 to 1.0, and a minimum liquidity ratio of not less than 1.0. The Company was in compliance with the requirements of the BMO credit agreement as of June 30, 2026.

There was no interest expense for the BMO Credit Agreement for the three and six months ended June 30, 2026 or 2025. The Company incurred commitment fees of $25,000 and $35,000 for the three months ended June 30, 2026 and 2025, respectively. The Company incurred commitment fees of $51,000 and $56,000 for the six months ended June 30, 2026 and 2025, respectively.

EWB Credit Agreement

On August 15, 2024, the Company entered into a Loan and Security Agreement (the “EWB Credit Agreement”) with East West Bank (“EWB”), a California banking corporation, dated as of July 29, 2024. The EWB Credit Agreement provides for a revolving credit facility of up to $20,000,000. The maturity date of the EWB Credit Agreement is July 29, 2027. The Company may use any borrowings under the EWB Credit Agreement for acquisitions, stock buybacks, and for general corporate purposes in an amount not to exceed $10,000,000. Obligations under the EWB Credit Agreement are guaranteed by John J. Gebbia, the Company’s Chief Executive Officer, Gloria E. Gebbia, a Director of the Company, and John J. Gebbia and Gloria E. Gebbia, as co-trustees of the John and Gloria Living Trust. The amount outstanding related to the EWB Credit Agreement was $5 million as of both June 30, 2026, and December 31 2025. The interest expense for this credit line was $95,000 and $0 for the three months ended June 30, 2026 and 2025, respectively. The interest expense for this credit line was $190,000 and $0 for the six months ended June 30, 2026 and 2025, respectively.

Borrowings under the EWB Credit Agreement bear interest on the outstanding daily balance at a rate of interest per annum equal to the greater of: (a) the one-month Term Secured Overnight Financing Rate (“Term SOFR”), as administered by CME Group Benchmark Administration plus 3.15% and (b) 7.50%. The origination fee is equal to one half of one percent (0.50%) of the $20,000,000 revolver cap. The EWB Credit Agreement contains customary affirmative covenants and negative covenants and requires the Company to maintain a minimum debt service coverage ratio of not less than 1.35:1.00 and minimum net capital of $43,000,000.

Shelf Registration Statement and At the Market Offering

The Company’s shelf registration statement on Form S-3 and related Sales Agreement were previously disclosed in the 2025 Form 10-K. No shares were sold under the Sales Agreement during the three and six months ended June 30, 2026. As of the filing date of this Report, because the Company’s public float is below $75.0 million, future primary offerings on Form S-3 are subject to the limitations of General Instruction I.B.6 of Form S-3 known as the “baby shelf rules”.

NFS Contract

Effective September 29, 2025, MSCO entered into an amendment to its clearing agreement with NFS that, among other things, extends the term of the arrangement for an additional five-year period commencing on September 26, 2025 and ending October 1, 2030. If the Company chooses to exit this agreement before the end of the contract term, the Company is under the obligation to pay an early termination fee upon occurrence pursuant to the table below:

For the three and six months ended June 30, 2026 and 2025, there has been no expense recognized for any early termination fees. The Company believes that it is unlikely it will have to make material payments related to early termination fees and has not recorded any contingent liability in the financial statements related to this arrangement.

Transaction with Media Platform

On March 4, 2026, the Company entered into a media partnership agreement with a multimedia news platform operator for sponsored programming, branded financial content, and promotional integrations over a term of approximately 50 weeks, commencing March 16, 2026. The total contract value is $1.0 million, payable in a combination of cash and shares of the Company’s common stock, with a portion payable in advance. The agreement is non-cancellable.

The Company recognizes advertising expense as the related services are received. For the three and six months ended June 30, 2026, the Company recognized approximately $225,000 and $300,000 of advertising expense, respectively, which is included in “Advertising and promotion” in the statements of operations. In addition, the Company recorded approximately $76,000 of prepaid advertising for amounts paid in advance, which is included in “Prepaid expenses and other assets” in the statements of financial condition. In June 2026, the Company issued shares of its common stock with an aggregate value of $189,000, which was recorded in “Prepaid Expenses and Other Assets” on the statements of financial condition.

General Contingencies

The Company’s general contingencies are included in Note 20 – Commitments, Contingencies, and Other in the Company’s 2025 Form 10-K. Other than the below, there have been no material updates to the Company’s general contingencies during the three months ended June 30, 2026.

The Company is self-insured with respect to employee health claims. As part of this plan, the Company recognized expenses of $324,000 and $249,000 for the three months ended June 30, 2026 and 2025, respectively. The Company recognized expenses of $740,000 and $634,000 for the six months ended June 30, 2026 and 2025, respectively.

The Company had an accrual of $96,000 and $71,000 as of June 30, 2026 and December 31, 2025, respectively, which represents the estimate of future expense to be recognized for claims incurred during the periods.

The Company believes that its present insurance coverage and reserves are sufficient to cover currently estimated exposures, but there can be no assurance that the Company will not incur liabilities in excess of recorded reserves or in excess of its insurance limits.