National Holdings Corporation, a Delaware corporation organized in 1996, operates
through its wholly-owned subsidiaries which principally provide financial services.
Through our broker-dealer and investment advisory subsidiaries, we (1) offer
full service retail brokerage to high net worth individual and institutional
clients, (2) provide investment banking, merger and acquisition and advisory
services to micro, small and mid-cap high growth companies, (3) engage in trading
securities, including making markets in micro and small-cap NASDAQ and other
exchange listed stocks and (4) provide liquidity in the United States Treasury
marketplace.
Our broker-dealer subsidiaries consist of National Securities Corporation,
a Washington corporation (“National Securities” or “NSC”),
and vFinance Investments, Inc., a Florida corporation (“vFinance Investments”)
(collectively, the “Broker-Dealer Subsidiaries”). As a result of
the merger with Gilman Ciocia, Inc, a Delaware corporation ("Gilman"),
in October 2013, the Company added Prime Capital Services, Inc., a New York
corporation (“Prime”), to its portfolio of Broker Dealer Subsidiaries,
however, in November 2013, National Securities and Prime received approval from
the Financial Industry Regulatory Authority (“FINRA”) allowing for
a mass transfer of Prime’s brokers and customer accounts to National Securities.
This transfer, completed on November 22, 2013, was done to reduce overhead and
consolidate the administrative and regulatory structures of the two entities.
Prime filed a broker-dealer withdrawal in January 2014. The Broker-Dealer Subsidiaries
conduct a national securities brokerage business through their main offices
in New York City, Boca Raton, Florida, and Seattle, Washington. Broker-Dealer
Subsidiaries are introducing brokers and clear all transactions through clearing
organizations, on a fully disclosed basis. The Broker-Dealer Subsidiaries are
registered with the Securities and Exchange Commission ("SEC") and
the Commodities and Futures Trading Commission, are members of FINRA, Securities
Investor Protection Corporation (the "SIPC") and the National Futures
Association ("NFA").
Our brokers operate either as independent contractors or employees. An independent
contractor registered representative who becomes an affiliate of a Broker-Dealer
Subsidiary typically establishes his or her own office and is responsible for
the payment of expenses associated with the operation of such office, including
rent, utilities, furniture, computer and other equipment, market data, software
and general office supplies. As a result, the independent contractor registered
representative is entitled to retain a higher percentage of the commissions
generated by his or her sales than a registered representative employee at a
traditional employee-based brokerage firm. This arrangement allows us to operate
with a reduced amount of fixed costs and lowers the risk of operational losses
for lower production registered representative. A registered representative
employee is provided with office space, technology, regulatory support and administrative
support in exchange for a lower retention percentage of his production.
The Company’s wholly-owned subsidiary, National Asset Management, Inc.,
a Washington corporation ("NAM"), is a federally-registered investment
advisors providing asset management advisory services to high net worth clients
for a fee based upon a percentage of assets managed. In connection with the
Gilman merger, we acquired Asset and Financial Planning LTD, a New York corporation
("AFP"). All registered investment advisors and customer accounts
of AFP were moved into NAM in May 2014 and AFP has ceased all operations.
Our wholly-owned subsidiaries, National Insurance Corporation, a Washington
corporation (“National Insurance”), and Prime Financial Services,
a Delaware corporation (“Prime Financial”), which was acquired in
the Gilman merger, provide fixed insurance products to their clients, including
life insurance, disability insurance, long-term care insurance and fixed annuities.
Our wholly-owned subsidiary, Gilman, provides tax preparation services to individuals,
predominantly in the middle and upper income tax brackets and accounting services
to small and midsize companies.
The Company’s wholly-owned subsidiary, GC Capital Corporation, a Washington
corporation ("GC"), was acquired in the Gilman merger and provides
licensed mortgage brokerage services in New York and Florida.
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