# JOE JOLLY & CO., INC. X-17A-5/A (2025-11-18) — Broker-dealer annual report - Company: JOE JOLLY & CO., INC. - Form: X-17A-5/A - Filed: 2025-11-18 - Period: 2025-08-31 - Accession: 0000053834-25-000007 - CIK: 53834 - File #: 8-18805 - Type: Broker-dealer - Material weakness: No - Auditor: Cropper Accountancy Corp. - Auditor location: Walnut Creek, CA - Contact: Janice Clem - Phone: 2052522105 - Email: jjco@jjollyco.com - Website: jjollyco.com - Signed by: Joseph D. Jolly, Jr. (President) Original filing: https://www.sec.gov/Archives/edgar/data/53834/000005383425000007/25pubauditjjolly.pdf --- {0}------------------------------------------------ # **Joe Jolly & Co., Inc. Financial Statements and Supplementary Information August 31, 2025** **This report is filed as a PUBLIC DOCUMENT in accordance with Rule 17A-5(e)(3) under the Securities Exchange Act of 1934 to be posted on www.sec.gov** {1}------------------------------------------------ ### TABLE OF CONTENTS | Report of Independent Registered Public Accounting Firm | 1 | |---------------------------------------------------------|------| | Notes to Financial Statements | 2 | | Supplemental Information | 3-10 | {2}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 | ANNUAL REPORTS | |----------------| | FORM X-17A-5 | | PART III | sec file number 8-18805 FACING PAGE Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 | FILING FOR THE PERIOD BEGINNING 09/01/2024 | | | AND ENDING 08/31/2025 | | | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|------|--------------------------------------------|--|--| | | MM/DD/YY
A. REGISTRANT IDENTIFICATION | | MM/DD/YY | | | | | | | | | | | NAME OF FIRM: __ JOE_JOLLY_& CO., INC. | | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
O Security-based swap dealer
Broker-dealer
Check here if respondent is also an OTC derivatives dealer | | | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | | 420 No 20th St., Suite 2350 | | | | | | | | (No. and Street) | | | | | | Birmingham, AL
35203 | | | | | | | (City) | (State) | | (Zip Code) | | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | Joe Jolly, Jr. | 205-252-2105 | | jjco@jjollyco.com | | | | (Name) | (Area Code - Telephone Number) | | (Email Address) | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | | | CROPPER ACCOUNTANCY CORP. | | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | | 2700 Ygnacio Valley Road, Ste 270, Walnut Creek, CA | | | 94598 | | | | (Address) | (City) | | (State)
(Zip Code) | | | | 03/04/2009 | | 3381 | | | | | (Date of Registration with PCAOB)(if applicable) | | | (PCAOB Registration Number, if applicable) | | | | | FOR OFFICIAL USE ONLY | | | | | | Claims for exemption from the requirement that the appual reports of an independent public | | | | | | accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-5{e)(1)(ii), if applicable. Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. {3}------------------------------------------------ #### OATH OR AFFIRMATION I, \_\_ Jo, Jo, Jo, J r . \_ J r . financial report pertaining to the firm of \_ Joe Jol l y & Co., , Inc. August 31 partner, officer, director, or equivalent person, as the case may proprietary interest in any account classified solely as that of a customer. Signature: President JANICE L CLEM My Commission Expires tary Public August 12, 2027 This filing \*\* contains (check all applicable boxes): 2 (a) Statement of financial condition. 2 (b) Notes to consolidated statement of financial condition. Q (c) Statement of income (loss) or, if there is other comprehensive income in the period(s) presented, a statement of comprehensive income (as defined in § 210.1-02 of Regulation S-X). [d) Statement of cash flows. [e) Statement of changes in stockholders' or partners' or sole proprietor's equity. [1) Statement of changes in liabilities subordinated to claims of creditors. [ {g} Notes to consolidated financial statements. [] {h} Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. [i] Computation of tangible net worth under 17 CFR 240.18a-2. [] [[] Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. [] {{} Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable. [1] Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3. [ (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. 口 (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable. 0 (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital on tangible net worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-1, or 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences exist. [p] Summary of financial data for subsidiaries not consolidated in the statement of financial condition. | (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. [] {r} Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. [ ]s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. (t) Independent public accountant's report based on an examination of the statement of financial condition. D (u) Independent public accountant's report based on an examination of the financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. □ (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. [w] Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. [] {{} Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-1e or 17 CFR 240.17a-12, as applicable. [] {y) Report describing any material inadequacies found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). [ (z) Other: \*\* To request confidential treatment of chis filing, see 17 CFR 240.170-5(e)(3) or 17 CFR 240.180-7(d)(2), as applicable. {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) ### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders of Joe Jolly & Company, Inc. ### Opinion on the Financial Statement We have audited the accompanying statement of financial condition of Joe Jolly & Company, Inc. as of August 31, 2025, and the related notes (collectively referred to as the "financial statement"). In our opinion, except for the effects of the effects of the adjustments, if any, as might have been determined to be necessary had we been able to examine evidence regarding the values of investments at year end, the financial statement presents fairly, in all material respects, the financial position of Joe Jolly & Company, Inc. as of August 31, 2025 in conformity with accounting principles generally accepted in the United States of America. We were unable to obtain sufficient and appropriate audit evidence of level 3 municipal bonds (\$1,789,585) at August 31, 2025, which is included in the securities owned balance on the Statement of Financial Condition. We were not able to satisfy ourselves as to the carrying value of the investments or in its gains and losses by other auditing procedures. ### Basis for Opinion This financial statement is the responsibility of Joe Jolly & Company, Inc.'s management. Our responsibility is to express an opinion on Joe Jolly & Company, Inc.'s financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to Joe Jolly & Company, Inc. in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion. CROPPER ACCOUNTANCY CORPORATION We have served as Joe Jolly & Company, Inc.'s auditor since 2024. Walnut Creek, California November 14, 2025 {5}------------------------------------------------ ### AUGUST 31, 2025 STATEMENT OF FINANCIAL CONDITION | Assets | | |--------------------------------------------|-----------------| | Cash and cash equivalents | \$ 1,988,368 | | Receivables | | | Employee advances | 676,500 | | Interest | 25,993 | | Note and advance receivable - stockholder | 1,565,000 | | Securities owned | 3,253,478 | | Property and equipment, net | 6,031 | | Prepaid corporate taxes | 22,175 | | Deferred tax asset | 128,029 | | Other assets | 257,487 | | | | | Total Assets | \$ 7,923,061 | | Liabilities and Stockholders' Equity | | | Liabilities | | | Accounts payable | 1,215 | | Accrued expenses and other liabilities | 40,994 | | | 42,209 | | Commitments and contingencies (Note 4) | | | Stockholders' Equity | | | Common stock, \$100 par value; | | | 250 shares authorized, 100 shares | | | issued and outstanding | 10,000 | | Retained earnings | 7,870,852 | | | 7,880,852 | | | | | Total Liabilities and Stockholders' Equity | \$
7,923,061 | {6}------------------------------------------------ ### NOTES TO FINANCIAL STATEMENTS #### NOTE 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES #### Nature of Business Joe Jolly & Company, Inc. (Company) is a broker-dealer registered with the Securities and Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority (FINRA). While the Company is approved to conduct all types of municipal securities business, during the review period, revenue was limited to dividends, interest, and net fair value adjustments for securities owned. The Company's broker-dealer operations do not carry security accounts for customers or perform custodial functions relating to customer securities. The Company clears all transactions through another brokerdealer. The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (GAAP) and to general practice within the brokerage industry. #### Basis of Accounting The Company reports the results of its operations and its financial condition using the accrual basis of accounting. #### Use of Estimates The preparation of financial statements in conformity with GAAP 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. Accordingly, actual results could differ from these estimates. #### Revenue Recognition Policy and Securities Owned The Company follows the guidance in *Accounting Standards Codification (ASC) Topic 940, "Financial Services—Brokers and Dealers"*, which requires disclosure of the Company's revenue recognition policies and the related accounting standards applied to each significant source of revenue. Revenue is recognized in accordance with the nature of each revenue stream and the applicable accounting guidance. Revenue derived from contracts with customers (e.g., commissions or advisory fees) is accounted for under *ASC Topic 606, "Revenue from Contracts with Customers."* Other sources of revenue such as interest, dividends, and proprietary trading gains/losses arise from financial instruments and are accounted for under *ASC Topics 825 and 320*, as they are outside the scope of ASC 606. During the review period, the Company earns revenue from the following three sources: dividends and interest earned and securities owned net gains or losses. Dividend income is recognized on the ex-dividend date, which is the date the Company becomes entitled to receive the dividend. This treatment is consistent with ASC 320. Dividend income is typically earned from equity securities held by the Company and reflects distributions declared by the issuer. These income streams do not arise from contracts with customers and are therefore excluded from the scope of ASC 606, *Revenue from Contracts with Customers*. Interest income is earned on cash balances, reverse repurchase agreements, and interest-bearing securities held by the Company. It is recognized on an accrual basis using the effective interest method in accordance with ASC 310, *Receivables*, and ASC 320, *Investments – Debt and Equity Securities*. Interest income is accrued daily and is based on the stated interest rate of the instrument, adjusted for any amortization of premiums or accretion of discounts over the life of the security. {7}------------------------------------------------ ### NOTES TO FINANCIAL STATEMENTS ### NOTE 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Securities transactions and related gains, losses, and expenses are recorded on a trade date basis by the Company. Amounts receivable and payable for securities transactions that have not reached their settlement date are recorded on the statement of financial condition. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. The Company engages in proprietary trading activities involving fixed income securities. Securities owned are recorded at fair value, with changes in fair value recognized in earnings in accordance with ASC 940, *Financial Services – Brokers and Dealers*, and ASC 820, *Fair Value Measurement*. Realized gains and losses on securities owned are recognized upon sale or disposition of the securities and are calculated as the difference between the proceeds received and the cost basis of the securities sold. Cost basis is determined using the specific identification method, unless otherwise disclosed. Unrealized gains and losses represent changes in the fair value of securities still held at the reporting date and are also recognized in earnings. Fair value is determined using quoted market prices when available or other valuation techniques when observable inputs are not readily available. Both realized and unrealized gains and losses are included in net fair value adjustments of securities owned in the Statement of Operations. These activities are not within the scope of ASC 606, *Revenue from Contracts with Customers*, as they do not arise from customer contracts but rather from the Company's own investment and trading strategies. #### Cash and Cash Equivalents For purposes of reporting cash flows, the Company considers all liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of August 31, 2025, there were cash equivalents of \$1,988,368. #### Property and Equipment, Net Property and equipment are stated at cost less accumulated depreciation. Maintenance and repairs are charged to expense as incurred, and renewals and betterments are capitalized and depreciated over the estimated useful lives of the related assets. Gains and losses on disposals are credited or charged to operations. Depreciation is computed principally using the straight-line method designed to amortize costs over the following estimated useful lives: | | Useful Lives | | |------------------------|--------------|--| | | (in years) | | | Furniture and fixtures | 3 to 10 | | | Automotive | 5 | | | Leasehold improvements | 39 to 40 | | {8}------------------------------------------------ ### NOTES TO FINANCIAL STATEMENTS ### NOTE 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Property and equipment, net of accumulated depreciation, consist of the following as of August 31, 2025: | Furniture, fixtures & leasehold improvements | \$
73,014 | |----------------------------------------------|--------------| | Automotive | 120,618 | | Less: Accumulated depreciation | (189,355) | | | \$
6,031 | Depreciation expense amounted to \$1,772 for the year ended August 31, 2025. ### Restricted Cash The Company is required to maintain \$250,000 on deposit under the Clearing and Trading Agreement with the clearing broker, which is reported in other assets on the statement of financial condition at August 31, 2025. #### Receivables Receivables are reported at net realizable value. Due to the types of receivables reported by the Company, Management has determined that no allowance for doubtful accounts was considered necessary at August 31, 2025. ### Risks and Uncertainties Marketable securities and other investments are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the value of investment securities will occur in the near term and that such changes could materially affect the Company's financial position. #### Income Taxes Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences, net operating losses, and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The guidance on uncertainty in income taxes addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under this guidance, the Company may recognize the tax benefit from an uncertain tax position only if it is morelikely-than-not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement. {9}------------------------------------------------ ### NOTES TO FINANCIAL STATEMENTS ### NOTE 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The guidance on accounting for uncertainty in income taxes also addresses derecognition, classification, interest and penalties on income taxes, and accounting in interim periods. Management evaluated the Company's tax positions and concluded that the Company had taken no uncertain tax positions that require adjustment to the financial statements to comply with the provisions of this guidance as of August 31, 2025. With few exceptions, the Company is not subject to examination by federal and state tax authorities for years prior to fiscal year 2022. #### Advertising Costs The Company expenses all advertising costs during the period in which they are incurred. Advertising expense amounted to zero for the year ended August 31, 2025 and is included in other operating expenses on the statement of operations. #### Subsequent Events Subsequent events have been evaluated for potential recognition and disclosure through the date of the independent auditor's report which represents the date the financial statements were issued. Management did not find any material event needing recognition or disclosure. #### NOTE 2. UNINSURED CASH BALANCES The Company maintains its cash balances at high credit quality financial institutions. At various times throughout the year ended August 31, 2025, the Company had cash on deposit with financial institutions in excess of federal depository insurance limits. The Company has not experienced and does not anticipate any credit losses on these deposits. At August 31, 2025, the Company's cash balance at financial institutions exceeded the federally insured limit of \$250,000 by \$823. ### NOTE 3. FAIR VALUE MEASUREMENTS Under the FASB's authoritative guidance on fair value measurements, 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. In determining fair value, the Company uses various methods including market, income and cost approaches. Based on these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the valuation techniques the Company is required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories: {10}------------------------------------------------ ### NOTES TO FINANCIAL STATEMENTS #### NOTE 3. FAIR VALUE MEASUREMENTS (continued) - x Level 1 Quoted prices for identical assets and liabilities traded in active exchange markets, such as the New York Stock Exchange. - x Level 2 Observable inputs other than Level 1 including quoted prices for similar assets or liabilities, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data. Level 2 also includes derivative contracts whose value is determined using a pricing model with observable market inputs or can be derived principally from or corroborated by observable market data. - x Level 3 Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation: also includes observable inputs for nonbinding single dealer quotes not corroborated by observable market data. The Company has various processes and controls in place to ensure that fair value is reasonably estimated. A model validation policy governs the use and control of valuation models used to estimate fair value. This policy requires review and approval of models, and periodic re-assessments of models to ensure that they are continuing to perform as designed. Where market information is not available to support internal valuations, independent reviews of the valuations are performed and any material exposures are escalated through a management review process. While the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. During the year ended August 31, 2025, there were no changes to the Company's valuation techniques that had, or are expected to have, a material impact on its financial position or results of operations. The following is a description of the valuation methodologies used for instruments measured at fair value: *Cash equivalents:* The fair value of cash equivalents approximates carrying value reported in the statement of financial condition due to the short maturities of these financial instruments. *Exchange traded funds:* Valued at the daily closing price reported by the fund. *Preferred stock:* Valued at the closing price of identical preferred stock reported on the active market in which the individual stocks are traded. *U.S. Treasury bonds:* Valued at the closing price of identical or similar municipal bonds reported on the active market in which the individual securities are traded. *State and municipal bond obligations:* Valued at the closing price of identical or similar municipal bonds reported on the active market in which the individual securities are traded. The following table sets forth by level, within the fair value hierarchy, the Company's financial assets measured at fair value on a recurring basis as of August 31, 2025: {11}------------------------------------------------ ## NOTES TO FINANCIAL STATEMENTS | | Total | Level 1 | Level 2 | Level 3 | |----------------------------|---------------|---------------|------------|--------------| | Cash equivalents | \$
112,481 | \$
112,481 | \$
- | \$
- | | Corporate fixed income | 13,278 | 13,278 | - | - | | Preferred stocks | 684,825 | 684,825 | - | - | | Money Market | 1,875,886 | 1,875,886 | - | - | | State and municipal bonds | | | | | | obligations | 2,555,376 | - | 765,791 | 1,789,585 | | Total assets at fair value | \$ 5,241,846 | \$ 2,686,470 | \$ 765,791 | \$ 1,789,585 | The Company recognizes transfers into and out of levels at the end of the reporting period. There were no transfers between levels for the year ended August 31, 2025. ### NOTE 4. COMMITMENTS AND CONTINGENCIES The Company leases office facilities on a month to month basis. Rental expense for the year ended August 31, 2025 amounted to \$80,391. Some contracts that the Company enters in the normal course of business include indemnification provisions that obligate the Company to make payments to the counterparty or others if certain events occur. These contingencies generally relate to changes in the value of underlying assets, liabilities, or equity securities or upon the occurrence of events, such as an adverse litigation judgment or an adverse interpretation of the tax law. The indemnification clauses are often standard contractual terms and were entered into in the normal course of business based on an assessment that the risk of loss would be remote. Since there are no stated or notional amounts included in the indemnification clauses and the contingencies triggering the obligation to indemnify have not occurred and are not expected to occur, the Company is not able to estimate the maximum potential amount of future payments under these indemnification clauses. There are no amounts reflected on the statement of financial condition as of August 31, 2025 related to these indemnification clauses. As a result of extensive regulation of broker-dealers, the Company is subject to regular reviews and inspections by regulatory authorities and self-regulatory organizations. The reviews can result in the imposition of sanctions for regulatory violations, ranging from non-monetary censure to fines and, in serious cases, temporary or permanent suspension from conducting business. In addition, regulatory agencies and self-regulatory organizations institute investigations from time to time into industry practices, which can also result in the imposition of sanctions. See Note 7 for additional information regarding regulatory capital requirements applicable to the Company. ### NOTE 5. RELATED PARTY TRANSACTIONS The Company has a note receivable from a stockholder, secured by certain property owned by the respective stockholder, which states that the stockholder agrees to pay the Company a principal sum of \$990,000 with interest on the unpaid balance. Accrued interest will be due and payable on August 31 of each year at a rate of 3.00 percent, with the entire principal and interest balance due and payable in full on August 31, 2028. {12}------------------------------------------------ ### NOTES TO FINANCIAL STATEMENTS #### NOTE 5. RELATED PARTY TRANSACTIONS (continued) The due date was extended three years in the Company's minutes dated August 28, 2025. The balance of the note receivable as of August 31, 2025 is \$990,000. Interest income of \$29,700 was received from the stockholder during the year ended August 31, 2025. As of August 31,2025, the Company also has advances of \$575,000 due from the sole stockholder and \$676,500 from one other employee. The note and advance receivable – stockholder, on the statement of financial condition, is comprised of D \$990,000 note receivable and the \$575,000 advance. #### NOTE 6. INCOME TAXES Net deferred tax assets and liabilities consist of the following components as of August 31, 2025: | Deferred tax assets: | | |----------------------------------------------------------------------|-------------------| | NOL carryover
Property and equipment | 117,668
13,215 | | Total gross deferred tax assets | 130,883 | | Deferred tax liabilities | | | Market value adjustment for securities owned-
held for investment | (2,854) | | Total gross deferred tax liabilities | (2,854) | | Net deferred tax asset | \$ 128,029 | The provision for income taxes is as follows for the year ended August 31, 2025: | Current:
Federal
State | \$
-
- | |------------------------------|--------------| | Deferred:
Federal | 78,500 | | State | 25,846 | | Total income tax benefit | \$ 104,346 | The Company's effective income tax rate for the year ended August 31, 2025 differs from the amount computed using income before income taxes and applying the U.S. federal statutory income tax rate to such amount. The difference between the provision for income taxes and the amount computed by applying the maximum statutory rates to income, before the provision/(benefit) for income taxes, is principally the effect of tax brackets, tax-exempt income, state taxes, and non-deductible expenses. The Company had a net operating loss carryforward of \$459,552 as of August 31, 2025. If unused, the net operating loss carryforward will expire beginning in 2038. The Company recognized no uncertain tax positions for the year ended August 31, 2025. {13}------------------------------------------------ ### NOTES TO FINANCIAL STATEMENTS ### NOTE 7. REGULATORY REQUIREMENTS As a registered broker-dealer, the Company is subject to the SEC's uniform net capital rule. The Company is prohibited from engaging in any securities transactions when its "net capital" is less than the greater of \$100,000 or 6-2/3 percent of its "aggregate indebtedness. At August 31, 2025, the Company had net capital of \$3,493,348, which was \$3,393,348 in excess of the minimum of net capital required. At August 31, 2025, the Company's percentage of aggregate indebtedness to net capital was 1.21. Adherence to the SEC's uniform net capital rule may effectively restrict distributions to stockholders. ### NOTE 8. SINGLE REPORTABLE SEGMENT The Company is engaged in a single line of business as a municipal securities broker-dealer only. The Company has identified its President as the chief operating decision maker ("CODM"), who uses net income to evaluate the results of the business, predominantly in the forecasting process, to manage the Company. Additionally, the CODM uses excess net capital, which is not a measure of profit and loss, to make operational decisions while maintaining capital adequacy, such as whether to reinvest profits or pay dividends. The Company's operations constitute a single operating segment and therefore, a single reportable segment, because the CODM manages the business activities using information of the Company as a whole. The accounting policies used to measure the profit and loss of the segment are the same as those described in the summary of significant accounting policies. All revenue segments and significant expenses for the year ended August 31, 2025 are disclosed on the Statement of Operations. #### NOTE 9. ANNUAL AUDIT REPORT The audited financial statements of the Company for the most recent audit period are available at the principal office of the Company, and will be mailed upon written request pursuant to SEC Rule 17a-5. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.