# MUTUAL SECURITIES, INC. X-17A-5 (2025-09-30) — Broker-dealer annual report - Company: MUTUAL SECURITIES, INC. - Form: X-17A-5 - Filed: 2025-09-30 - Period: 2025-06-30 - Accession: 0000710025-25-000004 - CIK: 710025 - File #: 8-28580 - Type: Broker-dealer - Material weakness: No - Auditor: Farber Hass Hurley LLP - Auditor location: Chatsworth, CA - Contact: Jared Kopp - Phone: 8057646740 - Signed by: Nick Damiani (Chief Administrative Officer) Original filing: https://www.sec.gov/Archives/edgar/data/710025/000071002525000004/fy25aud.pdf --- {0}------------------------------------------------ **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** 0MB APPROVAL OM B Nun1ber: 3 BS-OJ 23 Expire,: **Nov.** 30, 2026 ~stin1<1ted average burtle11 hour~ per r~spo~,e: I'.! # **ANNUAL REPORTS FORM X-17A-5 PART** Ill | SfC rlLE NUM~I k | | |------------------|--| | 8-28580 | | FACING PAGE Information Required Pursuant to Rules 17a·S, 17a-1Z, and 18a-7 under the Securities Exchange Act of 1934 FILING FOR THE PERIOD BEGINNING **07/01/2024** MM/0D/YY ANO ENDING **06/30/2025** MM/DD/VY **A. REGISTRANT IDENTIFICATION** NAME OF FIRM: Mutual Securities, Inc., of California OBA Mutual Securities, Inc. TYPE OF REGISTRANT (check all applicable boxes): 8 Broker-dealer D Security-based swap dealer D Major security-based swap participant C:::: Check here If respondent is also an OTC derivatives dea ler ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use **a** P.O. box no.) # 807-A Camarillo Springs Road | | (No. and Street) | | | |----------------------------------------------|---------------------------------------------------------------------------|-------------------|------------------------------| | Camarillo | California | | 93012 | | (City) | (Stale] | | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | Nick Damiani | (805) 764-67 40 | | nick. damian i@mutual .group | | (Name) | (Area Code - Telephone Nu111ber) | (E111ail Address) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | Farber Hass Hurley LLP | [Name - if Ind ividua l, state last. first, and middle name} | | | | | 9301 Oakdale Ave Suite 230 Chatsworth | CA | 91311 | | (Address) | (City) | (State I | (Zip Code) | | 10/22/2003
l'" | | 223 | | • Claims for exe111 plion f ram the requirement that the an nu al rep 01ts be rnvered by the I eports of an i nde pendent public accountant must be suppo1ted by a st.itement of facts and cu cumstances relied on as the basis of the exemption. See 17 CFR 240.17<1-S(e)(l)(il). if applicable. Persons who are to respond to the collection of Information contained In thi, form are 1101 required to respond unless t!ie form disph•ys a currently valid **0MB** control number. {1}------------------------------------------------ #### **OATH OR AFFJRMATION** | I, Nick Damiani | , swe.:ir (or affirm) that, to the best of my knowledge and belief, the | | |------------------------|--------------------------------------------------------------------------------------------------------------------------------------|-------| | | financial report pertaining to the firm of Mutual Securities, Inc of California OBA Mutual Securities. Inc | as of | | 2~
6/30 | is true ilnd correct. I further swear (or t1ffirm) that neither the com pilny nor any | | | | partner, officer, director. or equivalent person, as the case may be. has any propriet;iry interest in any account classified solely | | | as that of a customer. | | | | | | | | | Signature:~ | | |--|------------------------------|--| | | Title: | | | | Chief Admlnlsllallve Officer | | | | | | #### This **filing0** contains **(check** all **applicable boxes):** - ii (a) Stalernent of financial condition. - '..J (b) Notes to consolidated statement of financial condition. - **!!!!I** (c) Statement of income (loss) or, if there is other comprnhensive income in the period(s) presented, a statement of comprehensive income (as defined in§ 210.1-02 of Regulation **S-X).** - **!i!!!** (d) 5talernent of cash flows. - iii (e} Statement of changP.s in stockholders' or partners' or sole proprietor's eqL1ity. - n (f) Statement of changes in liabilities subordinated to clairns of creditors - **iii** (g) Notes to consolidated financial statements. - iii (h) Computation of net capital under 17 CFR 240.1Sc3-l or 17 CFR 240.18a-1, as applicable - D (i) Computation of tangible net worth under 17 CFR 240.18a 2. - **iii** (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.1Sc3-3. - LJ (k) Computation for determination or security•based swap rPserve requir·ements pursuant to Exhibit (3 to 17 CFR 240.1Sc3 3 or Exhibit A to 17 CFR 240.18a-4, as applicable. - CJ (I) Computation for Determination of PAB Requirements under Exhibit A to§ 240.15c3-3. - **jiiij** (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3•3. - D (n) Information relating to posses,ion or control requirements for securlty"based swap customers under 17 CFR 240.15c3•3(p)(2) or 17 CFR 240.lSa-4, as applicable. - (o) Reconciliations, including appropriate explanations, of the FOCUS Report with corr1putation of net capital or tangible net worth under 17 CFR 240.15c3-l, 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.lBa-4, as applicable, i! material differences exist, 01· a statement that 110 material differences exist. - D (p) Summary of financial data for subsidiaries not consolidated in the statement ot financral condition. - **iii** (q) Oi!th or af!lnnation in accordance with 17 CFR 240\_17a-5, 17 CFR 240.17a-12. or 17 CFR 240.18a-7, as applicable. - 0 (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240,lBa-7, as applicable. - **!i!** (s) Exemption report in accordance with 17 CFR 240.1 la·S or 17 CFR 240, 18a-7, a~ applicable. - 17 (t) Independent public accountant's report based on an examination of the statement of financial condition. - **!i!** (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a-S, 17 CFR 240.18a-7, or 17 CFR 240.l 7il-12, as applicable. - D (v) Independent public accountant's report based or, an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - **ii (w)** Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 cm 240.lBa-7, as applicable. - D (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.1Sc3-le or 17 CFR 240.17a-12, as applic,1ble. - CJ (y) Report describing any rn;iterial Inadequacies round to exist or foL1nd to have existed since the date of the previous audit, or a statement that no material inadequacies exi~t, under 17 CFR 240.17a-12(k). LJ (z) Other:---------------------------------------- - - *""To* rPquest confidential trrotment of certain portions *of* this filing, see 17 CFR 240.17o-5(e)(3) or 17 CFR 240.18a-7(d){2/, as applicable. {2}------------------------------------------------ #### **CALIFORNIA ACKNOWLEDGMENT CIVIL CODE** § **1189** **~lsl!ffl~Jllll~:!JSfJJfflfflm!}:!lllcOO!l~!ffil!r®8.~ 0000000000~0000000000001\$8~ru~~~~** **A** notary public or other officer completing this C£rlificate verifies only t11e identity of lhe imlividual wl10 signed the document to which this certificate is altachecl, and not tile truthfulness, accuracy. or validity al that document. | State of California | |------------------------------------------------------------------------------------------------------------| | County of Untill | | 91
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~ | | Signer is Representing: | | :·2019 N<1t1011al Notary Association {3}------------------------------------------------ # **MUTUAL SECURITIES, INC.** FINANCIAL STATEMENTS JUNE 30, 2025 TOGETHER WITH REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM {4}------------------------------------------------ # **MUTUAL SECURITIES, INC.** # TABLE OF CONTENTS | | Page | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------| | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | | | FINANCIAL STATEMENTS AS OF JUNE 30, 2025
AND FOR THE YEAR THEN ENDED: | | | Statement of financial condition | 1 | | Statement of income | 2 | | Statement of changes in stockholder's equity | 3 | | Statement of cash flows | 4 | | Notes to financial statements | 5 - 12 | | SUPPLEMENTAL SCHEDULES AS OF JUNE 30, 2025: | | | Schedule I - Computation of net capital under Rule 15c3-1
of the Securities and Exchange Commission
Schedule II - Computation for determination of reserve
requirements and information for possession or control | 13 - 14 | | requirements | 15 | | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
(Exemption Report) | 16 | | MUTUAL SECURITIES, INC. EXEMPTION REPORT | 17 | {5}------------------------------------------------ ![](_page_5_Picture_0.jpeg) #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Mutual Securities Inc. #### Opinion on the Financial Statements We have audited the accompanying statement of financial condition of Mutual Securities Inc. as of June 30, 2025, the related statements of income, changes in stockholders' equity, and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Mutual Securities Inc. as of June 30, 2025, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. #### Basis for Opinion These financial statements are the responsibility of Mutual Securities Inc.'s management. Our responsibility is to express an opinion on Mutual Securities Inc.'s financial statements 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 Mutual Securities 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 statements are 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 statements, 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 statements. 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 statements. We believe that our audit provides a reasonable basis for our opinion. #### Supplemental Information The Schedule I, Computation of Net Capital under Rule 15c3-1 of the Securities and Exchange Commission, and Schedule II, Computation For Determination Of Reserve Requirements and Information for Possession or Control Requirements, have been subjected to audit procedures performed in conjunction with the audit of Mutual Securities Inc.'s financial statements. The supplemental information is the responsibility of Mutual Securities Inc.'s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 C.F.R. §240.17a-5. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole. Farber Hass Hurley LLP We have served as Mutual Securities Inc.'s auditor since 2018. Chatsworth, California September 29, 2025 > 9301 Oakdale Avenue, Suite 230 Chatsworth, CA 91311 **P** 818-895-1943 **F** 818-727-7700 **fhhcpas.com** {6}------------------------------------------------ # **MUTUAL SECURITIES, INC. STATEMENT OF FINANCIAL CONDITION JUNE 30, 2025** #### **ASSETS** | Cash and cash equivalents | \$
2,836,155 | |---------------------------------------------------------------|-----------------| | Deposit with clearing organization | 200,000 | | Receivables from brokers or dealers and clearing organization | 3,549,322 | | Furniture, equipment, and leasehold improvements, net | 364 | | Other assets | 69,287 | | TOTAL ASSETS | \$
6,655,128 | # **LIABILITIES AND STOCKHOLDER'S EQUITY** | LIABILITIES: | | |-----------------------------------------------------------------|-----------------| | Accounts payable, accrued expenses, and other liabilities | \$
1,426,786 | | Commissions payable | 3,490,972 | | Income taxes payable - related party | 2,634 | | Total liabilities | 4,920,392 | | COMMITMENTS AND CONTINGENCIES | | | | | | STOCKHOLDER'S EQUITY: | | | Common stock, no par value | | | 100,000 shares authorized, 31,308 shares issued and outstanding | 23,413 | | Additional paid-in capital | 142,726 | Retained earnings 1,568,597 Total stockholder's equity 1,734,736 | TOTAL LIABILITIES AND | | |-----------------------|-----------------| | STOCKHOLDER'S EQUITY | \$
6,655,128 | The accompanying notes to financial statements are an integral part of this statement. {7}------------------------------------------------ # **MUTUAL SECURITIES, INC. STATEMENT OF INCOME FOR THE YEAR ENDED JUNE 30, 2025** ### **REVENUES:** | Commission income | \$
31,166,880 | |-----------------------------------------------|------------------| | Interest income | 158,235 | | Insurance proceeds | 622,113 | | Other income | 763,572 | | | 32,710,800 | | EXPENSES: | | | Compensation and benefits, net | 25,686,574 | | Client adjustments | 774,215 | | Legal and professional fees | 763,109 | | Technology | 600,523 | | Floor brokerage, exchange, and clearance fees | 392,680 | | Insurance | 359,068 | | Regulatory fees | 329,494 | | Occupancy and equipment | 154,583 | | Provision for income taxes | 885,949 | | Other operating expenses | 822,066 | | | 30,768,261 | | NET INCOME | \$
1,942,539 | | | | The accompanying notes to financial statements are an integral part of this statement. {8}------------------------------------------------ #### **MUTUAL SECURITIES, INC. STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY FOR THE YEAR ENDED JUNE 30, 2025** | | Ad
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6 | | The accompanying notes to financial statements are an integral part of this statement. {9}------------------------------------------------ # **MUTUAL SECURITIES, INC. STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2025** # **CASH FLOWS FROM OPERATING ACTIVITIES:** | Net income | \$
1,942,539 | |--------------------------------------------------------------------------------------|-----------------| | Adjustments to reconcile net income to net cash provided by
operating activities: | | | Depreciation | 3,934 | | Increase in receivables from brokers or dealers and clearing organization | (103,427) | | Decrease in other assets | 13,049 | | Increase in accounts payable, accrued expenses, and other liabilities | 824,804 | | Decrease in commissions payable | (145,233) | | Decrease in income taxes payable - related party | (262,393) | | Total adjustments | 330,734 | | Net cash provided by operating activities | 2,273,273 | | CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to stockholder | (1,925,000) | | | | | NET INCREASE IN CASH AND CASH EQUIVALENTS | 348,273 | | CASH AND CASH EQUIVALENTS, beginning of year | 2,487,882 | | CASH AND CASH EQUIVALENTS, end of year | \$
2,836,155 | | SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes, net | \$
824,004 | are an integral part of this statement. The accompanying notes to financial statements {10}------------------------------------------------ # **MUTUAL SECURITIES, INC. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025** # **1. BUSINESS DESCRIPTION** Mutual Securities, Inc., of California d/b/a Mutual Securities, Inc. (the "Company") is a registered broker-dealer in securities under the Securities Exchange Act of 1934, as amended. The Company is registered with the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority and the Securities Investor Protection Corporation. The Company is wholly owned by Mutual Group, Inc. (the "Parent"). The Company offers traditional security broker-dealer products and insurance products to individual, institutional, and corporate clients. The Company's clients are primarily located throughout the United States. The Company executes transactions and introduces them to National Financial Services LLC, (the "Clearing Broker"), a New York Stock Exchange member firm, on a fully disclosed basis. # **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** Basis of accounting - The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). 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 revenue and expenses during the reporting period. Significant estimates include, but are not limited to, the valuation of the provision for incomes taxes and the depreciable lives of furniture, equipment, and leasehold improvements. Accordingly, actual results may differ from those estimates. Cash and cash equivalents - Cash and cash equivalents consists of deposits with banks and highly liquid investments with a maturity of three months or less when purchased which are not held for sale in the ordinary course of business. {11}------------------------------------------------ Receivables from brokers or dealers and clearing organization and allowance for credit losses - The Company extends credit to its Clearing Broker and other companies in the financial services industry in the normal course of business. Management periodically reviews the sufficiency of the allowance for credit losses, taking into consideration its historical losses, existing economic conditions, and reasonable and supportable forecasts of expected credit losses, and makes adjustments to the allowance as it considers necessary. Management has determined that no allowance is necessary at June 30, 2025. Accounts are charged off against the allowance for credit losses when management determines such accounts are uncollectible. The following table summarizes receivables from brokers or dealers and clearing organization at June 30: | | 2025 | 2024 | |-----------------------------------------|--------------|--------------| | Receivables from brokers or dealers and | | | | clearing organization | \$ 3,549,322 | \$ 3,445,895 | # Depreciation - Depreciation is provided using the straight-line method over the estimated useful lives of the related assets, which are as follows: | Furniture and equipment | 5 - 15 years | |-------------------------|-------------------------------------| | Leasehold improvements | Remaining term of the related lease | Furniture, equipment, and leasehold improvements - Furniture, equipment, and leasehold improvements are generally stated at cost. However, the Company reviews long-lived assets to be held and used for possible impairment whenever events or changes in circumstances indicate their carrying amounts may not be recoverable. Recoverability of these assets is measured by comparison of the carrying value of the asset to the sum of the undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the assets are considered to be impaired, an impairment loss is recognized as the amount by which the carrying amount of the asset exceeds the fair value of the asset. Income taxes - Income taxes are provided for the tax effect of transaction reported in the financial statements and consist of taxes currently due. The Company accounts for deferred taxes using the asset and liability approach whereby deferred tax assets and liabilities are determined based on temporary differences between the financial statement and tax basis of assets and liabilities, as measured using the enacted tax rates which are expected to be in effect when these differences reverse. The Company did not have any material deferred tax assets or liabilities at June 30, 2025. {12}------------------------------------------------ The Parent files C-corporation consolidated federal and state income tax returns, including the results of the Company. The Company calculates its income tax provision using the separate return method and settles intercompany income tax balances with the Parent as if it filed separate income tax returns. Accordingly, the Company estimates a provision for income taxes and reports income taxes payable - related party in the accompanying statement of financial condition. Provision for income taxes consists of the following for the year ended June 30, 2025: | Current - | | |-----------|-----------| | Federal | \$621,584 | | State | 264,365 | | | \$885,949 | The Company recognizes and measures uncertain tax positions using a two-step approach. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained upon examination, including resolution of related appeals or litigation processes, if any. In making this assessment, the Company must assume that the taxing authority will examine the income tax position and have full knowledge of all relevant information. The second step is to measure the tax benefit as the largest amount that is more than fifty percent likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating tax positions and tax benefits, which may require periodic adjustments and which may or may not accurately forecast actual outcomes. At June 30, 2025, the Parent's federal and state consolidated income tax returns remain subject to examination by the respective taxing authorities for the 2022 through 2025 tax years. ### Leases - The Company determines if an arrangement is or contains a lease at inception. The Company records right-of-use ("ROU") assets and lease liabilities, which are initially based on the discounted future minimum lease payments over the term of the lease. As the rate implicit in leases is not easily determinable, the incremental borrowing rate is used in determining the present value of lease payments. For leases with an initial term of 12 months or less, no ROU asset or lease liability is recorded on the statement of financial condition and the short-term lease cost for these leases is recorded on a straight-line basis over the lease term. At June 30, 2025, the Company does not have any lease agreements with initial terms exceeding 12 months. ## Recent accounting pronouncement - Effective July 1, 2024, the Company adopted the Financial Accounting Standards Board Accounting Standards Update ("ASU") 2023-07, *Segment Reporting (Topic 280)*. ASU 2023-07 requires additional information and disclosures about the Company's operating segment. See Note 8 for disclosures in accordance with ASU 2023-07. {13}------------------------------------------------ Subsequent events - The Company has evaluated subsequent events through September 29, 2025, the date the accompanying financial statements were available to be issued. There were no subsequent events requiring disclosure during the period then ended. # **3. REVENUE RECOGNITION** Recognition - Revenues are recognized when the promised services are provided to clients in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Commission income - The Company views the selling, distribution and marketing, or any combination thereof, of investment products as a single performance obligation to the product sponsors. The Company is the principal for commission income, as it is responsible for the execution of the clientinvestors' purchases and sales, and maintains relationships with the product sponsors. Registered representatives assist the Company in performing its obligations. The following table presents total commission income disaggregated by major source for the year ended June 30, 2025: | Variable annuities | \$23,966,582 | |---------------------------|--------------| | 12b-1 fees | 5,246,236 | | Brokerage commissions | 1,129,179 | | Direct mutual funds | 692,283 | | Fixed annuities/insurance | 132,600 | | Total commission income | \$31,166,880 | The Company generates two types of commission income: (1) sales-based commission income that is recognized at the time of the transaction on a trade date basis and (2) trailing commission income that is recognized subsequent to the initial transaction over time as earned. Sales-based commission varies by source and is based on a percentage of product source's current market value at the time of the transaction. Trailing commission income is generally based on a percentage of the current market value of clients' investment holdings in trail-eligible assets, and is recognized over the period during which the related ongoing services are performed. As trailing commission income is based on the market value of clients' investment holdings, recognition of this variable consideration is constrained, and thus is not recognized, until the market value is determinable. {14}------------------------------------------------ The following table presents sales-based and trailing commission income disaggregated by major source for the year ended June 30, 2025: | Sales-based | | |---------------------------|--------------| | Variable annuities | \$1,053,978 | | Brokerage commissions | 1,129,179 | | Direct mutual funds | 692,283 | | Fixed annuities/insurance | 109,919 | | Total sales-based income | 2,985,359 | | Trailing | | | Variable annuities | 22,912,604 | | 12b-1 fees | 5,246,236 | | Fixed annuities/insurance | 22,681 | | Total trailing income | 28,181,521 | | Total commission income | \$31,166,880 | #### Interest income - Interest income includes amounts earned under the Company's agreement with its Clearing Broker, primarily consisting of a portion of interest generated from client accounts. The account also includes interest earned on the Company's own cash deposits held with banks and the Clearing Broker. Interest income is recognized when earned and collection is reasonably assured. #### Insurance proceeds - During the year ended June 30, 2025, the Company received insurance proceeds totaling \$622,113 resulting from an insurance claim. # Other income - Other income consists primarily of revenues earned through agreements with the Clearing Broker and third-party providers. Such amounts include account-related fees received in accordance with the custodial agreement for investor client accounts, insurance override payments earned on policies sold by registered representatives, and 12b-1 distribution fees related to core money market fund balances held in client accounts. Such amounts are recognized as income when earned and collection is reasonably assured. ### **4. FURNITURE, EQUIPMENT, AND LEASEHOLD IMPROVEMENTS** Furniture, equipment, and leasehold improvements consist of the following at June 30, 2025: | Furniture and equipment | \$127,715 | |-------------------------------------------------------|-----------| | Leasehold improvements | 61,157 | | | 188,872 | | Less - accumulated depreciation | (188,508) | | Furniture, equipment, and leasehold improvements, net | \$
364 | {15}------------------------------------------------ Depreciation expense totaled \$3,934 for the year ended June 30, 2025. # **5. COMMITMENTS AND CONTINGENCIES** The Company is subject to a clearing agreement with the Clearing Broker to provide clearing, execution, and other services to the Company. At June 30, 2025, the agreement has approximately two years remaining. Either party may terminate the agreement at the end of the renewal term with ninety days' prior written notice. Termination of the agreement for other reasons by the Company will result in a termination fee to be paid by the Company. The Clearing Broker has custody of the Company's cash balances which serve as collateral for any amount due to the Clearing Broker as well as collateral for securities sold short or securities purchased on margin. Interest is paid monthly on these cash deposits at the average overnight repurchase rate. Deposit with clearing organization reported in the accompany statement of financial condition totaled \$200,000 at June 30, 2025. The Company may be subject to various legal proceedings arising in the ordinary course of its business. In the opinion of management based on consultations with counsel, the outcome of any pending proceeding is not likely to have a material effect on the Company's financial statements. # **6. RETIREMENT PLAN** The Company has a retirement plan that offers substantially all employees (who meet certain eligibility requirements) the opportunity to participate in a qualified 401(k) plan (the "Plan"). The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended. Employees are required to have attained the age of 21 and to have completed one year of service in order to be eligible to participate in the Plan. The Plan provides for the Company to make safe harbor matching contributions equal to 100% of participants' elective deferrals up to 4% of eligible compensation. The Company's safe harbor matching contributions totaled \$194,043 for the year ended June 30, 2025. The Plan also provides for discretionary contributions. For the year ended June 30, 2025, the Company elected not to make a discretionary contribution. # **7. CREDIT RISK CONCENTRATIONS** The Company maintained bank balances that, at times, exceeded the federally insured limit as of and during the year ended June 30, 2025. The Company has not experienced losses relating to these deposits and management does not believe that the Company is exposed to any significant credit risk with respect to these amounts. {16}------------------------------------------------ As discussed in Note 1, the Company executes transactions and introduces clients to the Clearing Broker on a fully disclosed basis. The Company's exposure to credit risk associated with nonperformance of its clients in fulfilling their contractual obligations pursuant to securities transactions can be directly impacted by volatile trading markets which may impair the clients' ability to satisfy their obligations to the Company. The Company, through its Clearing Broker, seeks to control these risks by requiring clients to maintain sufficient levels of collateral in compliance with various regulatory and internal guidelines. The Company's Clearing Broker monitors required margin levels daily and, pursuant to such guidelines, requires the clients to deposit additional collateral, or reduce positions, when necessary. The Company's policy is to monitor its market exposure risk. In addition, the Company has a policy of reviewing, as considered necessary, the credit standing of each client with which it conducts business. The Company is engaged in various trading and brokerage activities in which counterparties primarily include broker-dealers, banks, and other financial institutions. In the event counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty or issuer of the instrument. It is the Company's policy to review, as necessary, the credit standing of each counterparty. Commissions earned by the top five registered representatives represented approximately 15% of the Company's total commission income for the year ended June 30, 2025. # **8. SEGMENT REPORTING** The Company is engaged in a single line of business as a broker-dealer, which is comprised of several classes of services including principal and agency transactions. The Company has identified its chief executive officer as the chief operating decision maker ("CODM"). The CODM utilizes net income, as well as excess net capital (see Note 11), which is not a measure of profit and loss, to make operational decisions. The Company's operations constitute a single operating segment and therefore, a single reporting segment, because the CODM manages the business activities using information of the Company as a whole. The accounting policies used to measure profit and loss of the segment are the same as those described in the summary of significant accounting policies. The Company operates in a single reportable segment; therefore, all financial information, including revenues, expenses, and assets, is included in the accompanying financial statements. # **9. RELATED PARTY TRANSACTIONS** The Company has a month-to-month lease agreement with the Parent for office space. Shortterm lease cost totaled \$139,892 for the year ended June 30, 2025 and is reported within occupancy and equipment expense in the accompanying statement of income. At June 30, 2025, the Company owes income taxes to its Parent totaling \$2,634 in the accompanying statement of financial condition. The Company paid income taxes to its Parent totaling \$824,004 for the year ended June 30, 2025. {17}------------------------------------------------ Mutual Advisors, LLC ("Mutual Advisors") is affiliated with the Company through common control as both entities are wholly owned by the Parent. The Company offers brokerage services to certain clients of Mutual Advisors, and either the clients or their investment adviser representatives are charged for such brokerage services. The Company has an agreement with Mutual Advisors under which Mutual Advisors reimburses the Company for compensation and benefits that the Company pays on its behalf. Reimbursements from Mutual Advisors to the Company totaled \$4,344,540 for the year ended June 30, 2025 and are reported within compensation and benefits, net in the accompanying statement of income. At June 30, 2025, the Company had no outstanding amounts due from Mutual Advisors. # **10. RECURRING COMMISSION EXPENSE DEDUCTIONS** The Company charges recurring monthly fees to registered representatives that are included in the commission statements and payments to the registered representatives for technology, administrative, and insurance costs. These recurring registered representative charges are recorded as a reduction to commission expense. These charges totaled approximately \$1,442,409 for the year ended June 30, 2025 and are reported within compensation and benefits, net in the accompanying statement of income. # **11. NET CAPITAL REQUIREMENTS** The Company is subject to the SEC Uniform Net Capital Rule ("SEC Rule 15c3-1") which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1 (and the rule of the "applicable" exchange also provides that equity capital may not be withdrawn or cash distributions paid if the resulting net capital ratio would exceed 10 to 1). At June 30, 2025, the Company had net capital of \$1,421,357 which was \$1,093,331 in excess of its required net capital of \$328,026. The Company's net capital ratio was 3.46 to 1. {18}------------------------------------------------ ### **MUTUAL SECURITIES, INC. COMPUTATION OF NET CAPITAL UNDER RULE 15c3-1 OF THE SECURITIES AND EXCHANGE COMMISSION AS OF JUNE 30, 2025** #### COMPUTATION OF NET CAPITAL | 1. | Total ownership equity from Statement of Financial Condition | | | \$
1,734,736 | |-----|---------------------------------------------------------------|---------------|---------|-----------------| | 2. | Deduct ownership equity not allowable for net capital | | | - | | 3. | Total ownership equity qualified for net capital | | | 1,734,736 | | 4. | Add: | | | | | | A.
Liabilities subordinated to claims of general creditors | | | | | | allowable in computation of net capital | | | - | | | B.
Other (deductions) or allowable credits | | | - | | 5. | Total capital and allowable subordinated liabilities | | | \$
1,734,736 | | 6. | Deductions and/or charges: | | | | | | A.
Total non-allowable assets from Statement of Financial | | | | | | Condition | \$ | 311,532 | | | | B.
Secured demand note deficiency | | - | | | | C.
Commodity futures contracts and spot commodities | | - | | | | D.
Other deductions and/or charges | | - | (311,532) | | 7. | Other additions and/or allowable credits | | | - | | 8. | Net capital before haircuts on securities positions | | | 1,423,204 | | 9. | Haircuts on securities: | | | | | | A.
Contractual securities commitments | | - | | | | B.
Subordinated securities borrowings | | - | | | | C.
Trading and investment securities: | | - | | | | 1.
Exempted securities | | - | | | | 2.
Debt securities | | - | | | | 3.
Options | | - | | | | 4.
Other securities | | 1,847 | | | | D.
Undue concentration | | - | | | | E.
Other | | - | (1,847) | | 10. | Net capital | | | \$
1,421,357 | | | COMPUTATION OF BASIC NET CAPITAL REQUIREMENT | | | | | | | | | | | | 11. Minimum net capital required (6-2/3% of line 19) | | | \$
328,026 | | | 12. Minimum dollar net capital requirement of reporting | | | | | | broker or dealer | | | \$
100,000 | | 13. | Net capital requirement (greater of line 11 or 12) | | | \$
328,026 | | | 14. Excess net capital (line 10 less 13) | | | \$
1,093,331 | | 15. | Net capital less greater of 10% of line 19 or 120% of line 12 | \$
929,318 | | | (Continued on page 14) The accompanying notes to financial statements are an integral part of this schedule. {19}------------------------------------------------ # MUTUAL SECURITIES, INC. COMPUTATION OF NET CAPITAL UNDER RULE 15c3-1 OF THE SECURITIES AND EXCHANGE COMMISSION AS OF JUNE 30, 2025 # COMPUTATION OF AGGREGATE INDEBTEDNESS | 16. | Total A.I. liabilities from Statement of Financial Condition | \$
4,920,392 | |-----|--------------------------------------------------------------|-----------------| | 17. | Add: | | | | A.
Drafts for immediate credit | - | | | B.
Market value of securities borrowed for which no | | | | equivalent value is paid or credited | - | | | C.
Other unrecorded amounts | - | | 18. | Total aggregate indebtedness | \$
4,920,392 | | 19. | Percentage of aggregate indebtedness to net capital | 346.18% | # RECONCILIATION WITH COMPANY'S COMPUTATION (INCLUDED IN PART II OF FORM X-17A-5 AS OF JUNE 30, 2025) | Excess net capital per the Company's FOCUS Report (unaudited) | | 1,438,384 | |---------------------------------------------------------------|----|-----------| | Adjustments made to income and expense accounts which | | | | decrease ownership equity | | (114,860) | | Increase to non-allowable assets | | (222,541) | | Increase to minimum net capital required | | (7,652) | | Excess net capital per this computation | \$ | 1,093,331 | The accompanying notes to financial statements are an integral part of this schedule. {20}------------------------------------------------ # **MUTUAL SECURITIES, INC. COMPUTATION FOR DETERMINATION OF RESERVE REQUIREMENTS AS OF JUNE 30, 2025 AND INFORMATION FOR POSSESSION OR CONTROL REQUIREMENTS** #### **Exemption under SEC Rule 15c3-3 section (k)(2)(ii) has been claimed** The Company is an introducing broker or dealer, clears all transactions with and for clients on a fully disclosed basis with a clearing broker or dealer, and promptly transmits all client funds and securities to the clearing broker or dealer which carries all of the accounts of such clients and maintains and preserves such books and records. > are an integral part of this schedule. The accompanying notes to financial statements {21}------------------------------------------------ ![](_page_21_Picture_0.jpeg) # REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Mutual Securities Inc. We have reviewed management's statements, included in the accompanying Exemption Report, in which (1) Mutual Securities Inc. (the "Company") identified the following provisions of 17 C.F.R. §15c3-3(k) under which the Company claimed an exemption from 17 C.F.R. §240.15c3-3: k(2)(ii) (the "exemption provisions") and (2) The Company stated that the Company met the identified exemption provisions throughout June 30, 2025, the most recent fiscal year except as described in its exemption report. The Company is also filing this Exemption Report because the Company's other business activities contemplated by Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5 are limited to effecting securities transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company. In addition, the Company did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers, other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of Rule 15c2-4 and/or funds received and promptly transmitted for effecting transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company; did not carry accounts of or for customers; and did not carry PAB accounts (as defined in Rule 15c3-3) throughout the most recent fiscal year without exception. The Company's management is responsible for compliance with the exemption provisions and its statements. Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included inquiries and other required procedures to obtain evidence about the Company's compliance with the exemption provisions. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to management's statements referred to above for them to be fairly stated, in all material respects, based on the provisions set forth in paragraph (k)(2)(ii) of Rule 15c3-3 under the Securities Exchange Act of 1934 and the Company's other business activities contemplated by Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5, and related SEC Staff Frequently Asked Questions. Farber Hass Hurley LLP Chatsworth, California September 29, 2025 9301 Oakdale Avenue, Suite 230 Chatsworth, CA 91311 **P** 818-895-1943 **F** 818-727-7700 **fhhcpas.com** {22}------------------------------------------------ ![](_page_22_Picture_0.jpeg) # **Mutual Securities, Inc.'s Exemption Report** Mutual Securities, Inc., of California d/b/a Mutual Securities, Inc. (the "Company") is a registered broker-dealer subject to Rule 17a-5 promulgated by the Securities and Exchange Commission (17 C.F.R. §240.17a-5, "Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R. § 240.17a-5(d)(1) and (4). To the best of its knowledge and belief, the Company states the following: - (1) The Company claimed an exemption from 17 C.F.R. § 240.15c3-3 under the provision of 17 C.F.R. §240.15c3-3 (k)(2)(ii). - (2) The Company met the identified exemption provisions in 17 C.F.R. §240.15c3-3 (k) throughout the most recent fiscal year except as described below: | Check Amount | Received Date | Deposit Date | Note | |--------------|---------------|--------------|---------------------------------| | | | | Not promptly transmitted by the | | \$ 400,000 | 7/1/2024 | 7/5/2024 | Company to the clearing firm | | | | | Not promptly transmitted by the | | \$ 125,000 | 1/15/2025 | 1/21/2025 | Company to the clearing firm | | | | | Not promptly transmitted by the | | \$ 100,000 | 1/15/2025 | 1/21/2025 | Company to the clearing firm | | | | | Not promptly transmitted by the | | \$ 10,598 | 3/12/2025 | 3/19/2025 | Company to the clearing firm | | | | | Not promptly transmitted by the | | \$ 1,528,216 | 10/7/2024 | 10/8/2024 | Company to the clearing firm | | | | | Not promptly transmitted by the | | \$ 1,015,675 | 12/27/2024 | 12/30/2024 | Company to the clearing firm | | | | | Not promptly transmitted by the | | \$ 8,000 | 7/23/2024 | 7/26/2024 | Company to the clearing firm | (3) The Company is also filing this Exemption Report because the Company's other business activities contemplated by Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5 are limited to effecting securities transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company, and the Company (1) did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers, (other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of Rule 15c2-4 and/or funds received and promptly transmitted for effecting transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company); (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts (as defined in Rule 15c3-3) throughout the most recent fiscal year without exception. {23}------------------------------------------------ Mutual Securities, Inc. I, Nick Damiani, swear (or affirm) that, to my best knowledge and belief, this Exemption Report is true and correct. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ By: Nick Damiani Title: Chief Administrative Officer Date: September 29, 2025 Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.