Siebert Financial and Kakao Pay Mutually Agree to Terminate Stock Purchase Agreement

Siebert Financial Corp. (NASDAQ: SIEB) (“Siebert”) and Kakaopay Corporation (KOSPI: 377300) (“Kakao Pay”) today announced that they have entered into a mutual agreement to terminate the previously announced Second Tranche Stock Purchase Agreement that they entered into on April 27, 2023 (the “SPA”).

The parties have terminated the SPA after reaching a compromise regarding their disagreement over, among other things, the occurrence of a “Purchaser Material Adverse Effect” in the SPA, and the ability of the closing conditions in the SPA to be satisfied.

Under the terms of the parties’ agreement, Kakao Pay will continue to own the 8,075,607 shares of Siebert common stock that it purchased from Siebert in May 2023, and retain its right under a separate stockholders’ agreement to designate one director to Siebert’s board of directors, subject to certain conditions. Other contractual consent rights that Kakao Pay would have otherwise retained once the parties failed to consummate the stock issuance contemplated by the SPA have been modified to provide Siebert’s management with additional flexibility to grow the company. Siebert will make a payment to Kakao Pay as a settlement fee, payable in installments beginning on March 29, 2024. Neither party will pay any other fees, or have any other liabilities, to the other party related to the SPA.

“After careful consideration we believe the decision to terminate the stock purchase agreement is in the long-term interest of Siebert and our stockholders. This resolution places Siebert in the best position to execute on the exciting opportunities before it, while removing any uncertainty that might have otherwise been present had this compromise not been reached,” said John J. Gebbia, Chairman and CEO of Siebert. “We are pleased that Kakao Pay continues to show confidence in Siebert’s current management as demonstrated by its desire to remain a significant stockholder of Siebert. We look forward to working with Kakao Pay as we continue to grow our business for the benefit of all stockholders.”

“We are glad that we were able to quickly come to agreement on mutually-agreed upon terms that recognize the time and resources Kakao Pay has invested in Siebert,” said Won-Keun Shin, the CEO of Kakao Pay. “We welcome the opportunity to continue our strategic investment in Siebert and look forward to working collaboratively with Siebert to help grow its business.”