# THINKEQUITY LLC X-17A-5 (2024-02-26) — Broker-dealer annual report

- Company: THINKEQUITY LLC
- Form: X-17A-5
- Filed: 2024-02-26
- Period: 2023-12-31
- Accession: 0000822489-24-000001
- CIK: 822489
- File #: 8-38622
- Type: Broker-dealer
- Material weakness: No
- Auditor: Grassi Advisors & Accountants
- Auditor location: New York, NY
- Contact: Alan Krim
- Phone: 5165261586
- Email: radams@think-equity.com
- Website: think-equity.com
- Signed by: William Baquet (President)

Original filing: https://www.sec.gov/Archives/edgar/data/822489/000082248924000001/thinkpublic2023.pdf

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

OMB APPROVAL OMB Number: 3235-0123 Expires: Oct. 31, 2023 Estimated average burden hours per respon se: 12

# **ANNUAL REPORTS FORM X-17A-5 PART Ill**

| SEC FILE NUMBER |  |
|-----------------|--|
| 8-38622         |  |

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 01/01/2022                                                                                          |                                                           |     | AND ENDING 12/31/2022 |                                             |
|-------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------|-----|-----------------------|---------------------------------------------|
|                                                                                                                                     | MM/DD/YY                                                  |     |                       | MM/DD/YY                                    |
|                                                                                                                                     | A. REGISTRANT IDENTIFICATION                              |     |                       |                                             |
| NAME OF FIRM: THINKEQUITY LLC                                                                                                       |                                                           |     |                       |                                             |
| TYPE OF REGISTRANT (check all applicable boxes):<br>0 Broker-dealer<br>0 Check here if respondent is also an OTC derivatives dealer | 0 Security-based swap dealer                              |     |                       | 0 Major security-based swap participant     |
| ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.)                                                                 |                                                           |     |                       |                                             |
| 17 STATE STREET, 41ST FLOOR                                                                                                         |                                                           |     |                       |                                             |
|                                                                                                                                     | (No. and Street)                                          |     |                       |                                             |
| NEW YORK                                                                                                                            | NY                                                        |     |                       | 10004                                       |
| (City)                                                                                                                              | (State)                                                   |     |                       | (Zip Code)                                  |
| PERSON TO CONTACT WITH REGARD TO THIS FILING                                                                                        |                                                           |     |                       |                                             |
| RICHARD ADAMS                                                                                                                       | (646) 467-5487                                            |     |                       | radams@think-equity.com                     |
| (Name)                                                                                                                              | (Area Code- Telephone Number)                             |     | (Email Address)       |                                             |
|                                                                                                                                     | B. ACCOUNTANT IDENTIFICATION                              |     |                       |                                             |
| INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*                                                           |                                                           |     |                       |                                             |
| Grassi Advisors & Accountants                                                                                                       |                                                           |     |                       |                                             |
|                                                                                                                                     | (Name- if individual, state last, first, and middle name) |     |                       |                                             |
| 750 Third Avenue                                                                                                                    | New York                                                  |     | NY                    | 10017                                       |
| (Address)                                                                                                                           | (City)                                                    |     | (State)               | (Zip Code)                                  |
| OCTOBER 22, 2003                                                                                                                    |                                                           | 606 |                       |                                             |
| rte of<br>Regi<tcotioo with PCAOB)(if opplicoble:                                                                                   |                                                           |     |                       | {PCAOB Regi<tcotioo Nombec, if opplicoble)l |
|                                                                                                                                     | FOR OFFICIAL USE ONLY                                     |     |                       |                                             |

\* Claims for exemption from the requirement that the annual reports be covered by the 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)(l)(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.

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#### OATH OR AFFIRMATION

| I, WilHam Baquet                                                                                                                    | , swear (or affirm) that, to the best of my knowledge and belief, the                |  |       |
|-------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------|--|-------|
| financial report pertaining to the firm of THINKEOUITY LLC                                                                          |                                                                                      |  | as of |
| 12/31                                                                                                                               | 2~ is true and correct. I further swear (or affirm) that neither the company nor any |  |       |
| partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely |                                                                                      |  |       |
| as that of a customer.                                                                                                              |                                                                                      |  |       |
|                                                                                                                                     |                                                                                      |  |       |

![](_page_1_Picture_2.jpeg)

No ary Publi

### This filing\*\* contains (check all applicable boxes):

- !iiii! (a) Statement of financial condition.
- ~ (b) Notes to consolidated statement of financial condition.
- 0 (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).
- 0 (d) Statement of cash flows.
- 0 (e) Statement of changes in stockholders' or partners' or sole proprietor's equity.
- 0 (f) Statement of changes in liabilities subordinated to claims of creditors.
- 0 (g) Notes to consolidated financial statements.
- 0 (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable.
- 0 (i) Computation of tangible net worth under 17 CFR 240.18a-2.
- 0 (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3.
- 0 (k) Computation for determination of secu rity-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or Exhibit A to i7 CFR z4o i8a 4, as applicable.
- 0 (I) Computation for Determination of PAB Requirements under Exhibit A to§ 240.15c3-3.
- 0 (m) Information relating to possession or control requirements for cu stomers under 17 CFR 240.15c3-3.
- 0 (n) Information relat ing 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) Reconcil iations, including appropriate explanations, of the FOCUS Report with computation of net capital or 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 240.1Sc3-3 or 17 CFR 240.18a-4, as applicable, if material. differences exist, or a statement that no material differences exist.
- 0 (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condit ion.
- !!! (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.
- 0 (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- 0 (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- 0 (t) Independent public accountant's report based on an examination of the statement of financial condition.
- 0 (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable.
- 0 (v) Independent public accountant's report based on an examination of certa in statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- 0 (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.
- D (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-1e or 17 CFR 240.17a-12, as appl icable.
- 0 (y) Report describing any material inadequacies found to exist or 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). <sup>0</sup>(z) Other: \_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_

\*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18a-7(d)(2}, as applicable.

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# STATEMENT OF FINANCIAL CONDIDON AND REPORT OF INDEPENDENT REPORT OF INDEPENDENT REGISTER PUBLIC ACCOUNTING FIRM

### FOR THE YEAR ENDED DECEMBER31, 2022

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# FOR THE YEAR ENDED DECEMBER31, 2022

# TABLE OF CONTENTS

Page No(s). Report of Inde-pendent Registered Public Accounting Firm Financial Statement: Statement of Financial Condition 2 Notes to Fi nanc ial Statement 3- 9

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![](_page_4_Picture_0.jpeg)

# REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Managing Member of ThinkEquity LLC

# Opinion on the Financial Statement

We have audited the accompanying statement of financial condition of ThinkEquity LLC (the "Company") as of December 31, 2022, and the related notes (collectively referred to as the "financial statement"). In our opinion, the statement of financial condition presents fairly, in all material respects, the financial position of ThinkEquity LLC as of December 31, 2022 in conformity with accounting principles generally accepted in the United States of America.

### Basis for Opinion

This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company'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 the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the U.S. Securities and Exchange Commission ("SEC") 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 financial statement presentation. We believe that our audit provides a reasonable basis for our opinion .

~cf. ~l!.fAs; P.C.

GRASSl & CO., CPAs, P.C.

We have served as ThinkEquity LLC's auditors since 2020.

New York, New York February 28, 2023

750 THiF~~D AVENUE, 2HfH FtOOR, NEV./ YORK, NY ~001 <sup>7</sup> P: 212.661.6166 ·F. 212.7'oc: .G748 • GRASSICPAS.COM NEV/ YCR!< NEVV JERSEY ! I-..1ASSACHUSETTS FLORID;\

**MOORE** 

AN INDEPENDENT F:RM i<SSOC!f,TE.D 'tv!TH MOORE GLOBAL t'ET':VORK LII·J!I ''E D

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## **STATEMENT OF FINANCIAL CONDITION**

## **AS OF DECEMBER 31, 2022**

## **ASSETS**

| Assets                               |                  |
|--------------------------------------|------------------|
| Cash and cash equivalents            | \$<br>27,893,105 |
| Deposits with clearing organizations | 13,769,940       |
| Due from broker dealers              | 376,361          |
| Forgivable loans                     | 344,722          |
| Right-of-use asset                   | 8,743,061        |
| Prepaid expenses                     | 175,216          |
| Security deposits                    | 524,909          |

### **Total assets**

# \$ **51,827,314**

| LIABILITIES AND MEMBER'S EQUITY                                           |                 |               |
|---------------------------------------------------------------------------|-----------------|---------------|
| Liabilities                                                               |                 |               |
| Accounts payable and accrued expenses                                     | \$<br>1,651,449 |               |
| Securities not yet owned                                                  | 280,500         |               |
| Deferred revenue                                                          | 1,524,817       |               |
| Commissions payable                                                       | 1,351,104       |               |
| Operating lease liability                                                 | 9,224,659       |               |
| Total liabilities                                                         |                 | \$ 14,032,529 |
| Commitments and contingencies                                             |                 |               |
| Member's equity                                                           |                 | 37,794,785    |
| Total liabilities and member's equity                                     |                 | \$ 51,827,314 |
| The accompanying notes are an integral part of these financial statements |                 |               |

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### **NOTES TO FINANCIAL STATEMENTS**

## **FOR THE YEAR ENDED DECEMBER31, 2022**

#### **Note 1 - Organization and Nature of Business**

ThinkEquity LLC (the "Company") J(mnerly known as Fordham Financial Management, Inc . is a broker-deale r registered with the United States Securities and Exchange Commission (the "SEC" ) and is a member ofthc Financial Industry Regulatory Aut hority ("FINRA") and the Securities Investor Protection Corporation ("S!PC"). I::ftcctive A ugust !6. 2021, Fordham Financial Management, Inc. converted tl·om a Colorado corpo ration into a Delaware: limited liability company changing its name. to ThinkEq uity LLC. The Company is a wholly-owned subsidiary of Fordham Holdings. Inc. (the "Pa rent"). "fhe Company is engaged in a single line of business as a securities brokerdealer, \\·hich comprise:< :<everal cb,;ses of serv ices, including private pl accmc:nts and investment banking.

The Company operates unde r the provisions of Paragraph (k)(2)( ii) of Rule l5c3 -3 of the Securities Exchange Act of 19.34 and, accordingly, is ex empt from the remaining provisions of that rule. Essentially, the requirements of Pa ragraph (k)(2)( ii l provide tbat the Company clear all transactions on beha lf of custome rs on a fully disclosed basis with a clea ring broker all(! promptly transrn it all customer fund;; and securities to clearing broker dealer. The clearing broker-dealer carries all the accounts of customers and maintains ali related books and records as are customarily kept by a clearing broker-dealer.

#### **Note 2 - Summary of Significant Accounting Policies**

#### **Basis of presentation**

·rhe Company follows accounting standards established by the Financial Accounting Standards Board (the '"FASB'') to e nsure c'onsistent reporting of llnanc:ial condition, rc:sults of operations, and cash flows. Reference,; to accounting principles gene rally accepted in the United States of America (""U.S. GAA P"') in th ese notes arc: to the FASB Accounti ng Standards Codification, sometimes referred to as the "Cod ification" or "'ASC."

#### **Use of estimates**

T he preparation of financial statements in conformity with U.S. GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabili ties and disclosure of contingent asset~ and liabilities at rhe date of the fin;Jncia i statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ Jh.>m those estimates.

#### **Cash and cash equivalents**

For the purpose of the statement of cash Jlows, the Company considers highly liquid investments with an original maturity of three months or less to be cash equivalents.

#### **Property and equipment**

Prnperty and equipment are stated at cost. Depreciation *is* provided using a straight line approach using estimated useful lives of five to seve n years. Maj or additions and improvements are capitalized, and repairs and maintenance are charged to operations as incurred. All properly and equipment was fully depreciated as of December 3 1, 2018, and there were no purchase;; durin g the year ended December 31, 202::!.

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### **NOTES TO FINANCIAL STATEMENTS**

### **FOR THE YEAR ENDED DECEMBER31, 2022**

# **Note 2- Summary of Significant Accounting Policies (Continued)**

#### **Revenue recognition**

'I'he Compa ny follows the prov isions of FASR ASC Topic 606, *Revenue from Contracts with Customers* (''ASC To pic 606"). 'I'he revenue recognition guidance requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the conside ration to wh ich the entity expects to be entitled in e.\changc of those goods or service.

The guidance requires an entity to follow a five -step model to ( 1) identitY the eontract(s) wirh a customer. (2) identify the performance obligations in the contract, (3) deterrnine the transaction price. (4) allocate the transaction price to the performance obligations in the contract and (Si recognize revenue when (or as) the .:ntity satisfies a perf(Jrmanc.: obligation. ln determining the transaction price, an entity may include variable consideration on.ly lll the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated \-vith the vill'iablc consideration is resolved. The revenue recognition guidance docs not apply to revenue associated with financial instruments. interest income and expense, and leasing and insurance contracts. The lbllowing is a description of the principal activities !!·om which the Company gene rates its revenue.

T'hc Company provides corporate 1inancc and commissions transaction related services to its customers. ·rhe benefits of the Company 's se rvices are generally transferred to the c-ustomers at a po int in time upon executin g a trans;1ction. The timing of the Company's rcvc.nue recognition may differ from the tim ing of payment by its customers. The Company records a receivable when revenue is recognized prior to payment and the Company has an unconditional right to pilyment. Alternatively, when payment precedes the provision of the related serv ices, the Company records deferred revenue, which represents a contract liability until the performance obligations are satisfied . ·rhere were no contract assets or contract liabilities at the beginning and end of the year.

#### **Corpo.-ate finance income**

Corporate finance income is earned from providing private placement, underwriting and advisory services. The benefits of the Company's services are generally h·ansferred to the Company's customers over time, since the customers simultaneously rece ive and consume the. beneGts as the Cornpany performs the sei'vice . T'!-i0 · Company 's contracts are usually cance llable by e ither party at any time and the considerations typically include expense advances nnd success fees. F::xpcnse advances arc generally collected near the beginning l'f each deal as deferred revenue and recogn ized into revenue as expenses related to the deals are incurred. However, suc ce s~ fees arc variable and subject to constraints, and are typically not recogn ized until the transaction completion elate- due to the unGertainty associated with those eve nts. As of December 3 !, *2022.* expense advances included in the ac.cornpanying: statement of financial condition as deferred revenue totaled \$1 .524.817.

T'hc Company 1nay rcc.::ive stock warrams as part of agreed-upon compensation for services. ln accordance with ASC Topic 606. these warrants are valued at fair value at the initiation of the contract. if determinable. Otherwise. the warrants arc valued based on the typical charge f\1r the se rvice provided. At the c.ompletion of the contract the warrant fair values arc recognized into revenue as corporate finance income .... warrants and as compensnrion expense, a:; these warrants arc allocated at closing to certain employees. The Company utilizes valuation techniques to deicrmi ne the fi1ir value of the warrants at the date of grant utilizing market data to convert future amounts to a single amount based on cmrent market expecta tions about the future amounts (lattice models). For the year c~nde <sup>d</sup>December 31 , 2022. the Company recorded revenue and compensation expense fl·om receipt and issuance of these warrants totaling \$420.749.

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### **NOTES TO FINANCIAL STATEMENTS**

# **FOR THE YEAR ENDED DECEMBER31, 2022**

# **Note 2- Summary of Significant Accounting Policies (Continued)**

#### **Commission Income**

Securities transactions and the recognition of related income and expenses are recorded on a trade date basis. Commissions and related clearing charges nrc also recorded on a trade-date basis as securities transactions occur.

#### **Income taxes**

As a limited liability company, the Company has e lected to be treated as a partnership under the provisions of the Inte rnal Revenue Code (" IRC"). Under those provisions, the Company is not required to pay fe deral or state income taxes on its taxable income. In stead, the members are li able for individual federal and state income taxes on their respective share of the Company 's taxabl e income.

U.S . GAAP requires the evaluati on of tax positions taken or expected to be taken in the course of preparing the Company's tax returns to determine whether the tax positions are more-likely than-not to be susta ined upon examination by the applicable tax authority, based on the technical merits o f the tax position. Management believes any such positions wo uld be immate rial to the overall fin ancia l stateme nts.

# **Note 3- Receivable from Clearing Broker/Securities Held at Broker**

The Company conducts business and clears its proprietary and customer tran sactions through one clearing broker on a fully disclosed basis. The Company earns commissio ns as an introducing broker for the transactions of its customers. The clearing and depository operations for the Company's customer accounts are perfo rmed by its clearing broker pursuant to a clearance agreement.

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### **NOTES TO FINANCIAL STATEMENTS**

### **FOR THE YEAR ENDED DECEMBER31, 2022**

# **Note 4- Commitments and Contingencies**

#### **Lease commitments**

As of January I, 202 1, the Company adopted the accounting standard, FASB ASC Topic 842, *Leases* ("ASC 842"). ASC 842 requires all lessees to recognize a right-of-use asset for the underlying leased asset and a lease liability for the corresponding lease li ability for all lease agreements with a term greater than 12 months, initially measured at the present va lue of the lease payments. In accordance with ASC 842, the modified retrospecti ve method was applied to all lease agreements in effect at January I, 2021. Under th e modified retrospective method, the cumul ative effect of applying the standard is recognized at the date of initial application.

Right-of-use assets and the corresponding lease liabilities are recogni zed at the lease commencement date based on the present va lue of lease payments over the life of the lease term. In determining the present value of lease payments, the Company uses the rate implicit in the lease if it is readily determinable, a borrowing rate based on similar debt, or a risk-free rate for a period comparab le to the lease term to discount the lease payments to present value. The Company has elected to use the risk-free rate by class of underly ing asset as a practical ex pedient. However, if any of the Company 's leases contain an implic it interest rate, that rate is used to determine the present va lue of those lease payments. The Company considers the lease term to be the noncance llab le period that it has the ri ght to use the underlying asset, including all periods covered by an option to (I) extend the lease, if the Company is reasonably certain to exercise the option, (2) termin ate the lease if the Company is reaso nably certain not to exercise that option, and (3) extend or not to terminate the lease, in which exercise of the option is controlled by the lessor.

In accordance with Topic 842, the Company, at the inception of the contract, evaluates if an arrangement is or co ntains a lease and thus recogni zes a right-of-use asset and the corresponding lease liability. The Company's right-of-use assets and lease liabilities relate to the renta l of office space. The Company recognizes right-of-use assets and lease li abilities for leases with te rms of greater than 12 months.

Leases are classified either finance or operating leases. For operating leases, the lease liability is initi ally and subseq uently measured at the present va lue of the future payments at the lease commencement date. For fin ance leases, the lease li ab ility is initially measured in the same man ner. The classification between operating and finance leases determines whether lease expe nses are recogn ized based on an effecti ve interest method or on a straight-line basis, respectively, over the term of the lease. Lease payments included in the measurement of the lease liab ility comprise a fixed pay ment owed over the lease term.

The right-of-use assets asset is initially measured at cost, which comprises the initial amo unt of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any incentives rece ived. right-of-use assets under finance leases are amortized on a straight-line basis over the lease term. right-of-use rightof- use assets for operating and fin ance leases are periodically reduced by impairment losses.

The Company monitors for events or changes that can require a reassessment of its leases. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the co rrespo nding right-ofuse asset unless do ing so would reduce the carrying amount of the right-of-use asset to an amount less than ze ro.

Operating lease right-of-use assets are presented as operating lease right-of-use assets on the statement of financial condition. The Company has no finance leases and no re lated party leases.

The Company's right-of-use assets and lease liabilities primarily relate to its noncance lable operating lease obligatio ns for the rental of office space. Generally, leases covering office space include renewal options and are su bject to rent esca lation s based on in creased operating costs and rea l estate taxes. Lease components in the Company's leases are accounted for following the guid ance in ASC 842 for the capitalization of long-term leases. At December 31 , 2022, the lease liability is eq ua l to the present va lue of the remaining lea se payments, disco unted using the risk-free rate.

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### **NOTES TO FINANCIAL STATEMENTS**

#### **FOR THE YEAR ENDED DECEMBER31, 2022**

# **Note 4- Commitments and Contingencies (Continued)**

Lease activity for the year ended December 31 , 2022 was as follows:

| Lease cost:                                 |                      |
|---------------------------------------------|----------------------|
| Operating lease cost<br>Variable lease cost | \$ 500,693<br>78,125 |
| Total lease cost                            | \$5788 18            |
| Other information:                          |                      |
| Cash paid for amounts in the measurement    |                      |
| of lease li ab ilities:                     |                      |
| Operating cash Oows from operating leases   | \$ 283,483           |
| Weig hted ave rage remaining lease term:    |                      |
| Operating leases                            | 10 Years             |
| Weighted average discount rate :            |                      |
| Operati ng leases                           | 2%                   |

Future minimum lease payments and reconciliation to the statement of financial condition at December 3 1, 2022 are as follows:

| Years ending December 31 ,                                            | Operating<br>Leases                                                          |
|-----------------------------------------------------------------------|------------------------------------------------------------------------------|
| 2023<br>2024<br>2025<br>2026<br>2027<br>Thereafter                    | \$ 370,29.)<br>888,348<br>1,043,000<br>I ,043,000<br>I ,080,250<br>5,680.625 |
| Total future minimum undisco unted least payments                     | \$10,105,516                                                                 |
| Less: amount representing interest<br>Total operating lease liability | \$9,224 659                                                                  |

7

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#### **NOTES TO FINANCIAL STATEMENTS**

#### **FOR THE YEAR ENDED DECEMBER31, 2022**

# **Note 4- Commitments and Contingencies (Continued)**

In the ordinary course of business, the Company may been named as a defendant in legal and regulatory proceedings, as well as exams, investigations, and similar reviews by governmental and se lf-regul atory agencies. These legal and regulatory proceeding co uld give rise to pote ntial injunctions, judgments, settlements, fin es and/or penalties. The Company typically includes an indemnification clause with all of their investment banking clients. The Company recognizes a li ability for a contingency in acc rued expenses and other liabilities when it is probabl e that a liability has bee n incurred and the amount of loss can be reaso nably estimated .

As of the date of the financial statements, the Company has not had any matters which have required the Company to determine a loss to be probable and reasonably estimable; accordingly, no such adjustments have been made in the Company's accompanying financial statements. The Company believes that any pending legal action s or regulatory proceed ings and any other exams, investigations or similar reviews will not have a materi al adverse effect on its results of operations, cash fl ows or financial condition

#### **Brokerage activities**

ln the normal course of bu siness, the Company is engaged in various brokerage activities on an agency basis through a c leari ng broke r. ln connection with these activities, a customer's un settled transactions may expose the Company to off-balance sheet risk in the eve nt the customer is unable to fulfill its contractual obligations. S ignifi cant credit expos ure may res ult in the eve nt that the Company's clearing broker is unable to fulfill its contractua l obligation.

# **Note 5- Forgivable Loans**

The Company extend ed credit ("forgivable loans") to new advisors in 2022 in the form of signing bonuses and commission advances. The decision to extend cred it to advisors is generally based on the advisor's ability to generate future commissions. These advances are forgivable over the terms of the advisor agreement prov ided the adv isor rema in s licensed through the Company for a period oftime. At December 31 , 2022, \$344,722 of extended credit is forgivable.

8

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### **NOTES TO FINANCIAL STATEMENTS**

### **FOR THE YEAR ENDED DECEMBER31, 2022**

# **Note 6- Net Capital Requirements**

The Company is subj ect to the SEC Uniform Rule (SEC Rule 15c3-1 ), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebted ness to net capital, both as defi ned, shall not exceed 15 to 1 (and the rule of the "applicable" exchange also prov ides that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio wou ld exceed 10 to l ). At December 3 1, 2022, the Company had net cap ital of \$37, 134,767, which was \$36,832,941 in excess of its req uired net capital of\$301 ,826. The Company's aggregate indebted ness to net capital ratio was 0. 1218 to I at December 31, 2022.

Ce rtai n advances, dividend payments and other equity withdrawals are restricted by the provisions of the rules of the Securities and Exchange Commission.

Under the arrangements with the clearing broker-dealer, the Company is required to maintain certain minimum levels of cap ital and comply with other financi a l ratio requirements.

# **Note 7- Concentrations and Credit Risks**

The Company clears its securities transactions through a major financi al service firm. These activities may ex pose the Company to off-balance-sheet risk in the event that the institution is unable to fulfill its obligation and the Company has to purchase or se ll the securiti es at a loss.

The Company maintains its cash balances in various commercial banks which, at times, can exceed the Federal Deposit Insurance Corporation ("FDIC" ) limit of \$250,000 per depositor. At December 3 1, 2022, the Company's cash balances held at the com mercial banks exceeded the FDIC limit. The Company has not experi enced any losses in such accounts, and these acco unts currently exceed the FDIC limit by \$26,889,840.

Financial instruments that potentially subject the Company to concentrations of credit risk consist principal ly of the c learing organi zatio ns receivable. The Company has cas h on deposit with a clearing organization. The amount of cred it risk associated with the deposits with clearing organi zation is approx imate ly \$13,069,940 and is reflected in the stateme nt of financi al co ndition.

#### **Note 8- Subsequent Events**

The Company has eva luated subsequent events through February 28, 2023, the date the fin ancial statements we re ava il ab le to be issued. During this period, there were no material subsequent event requiring disclosure.


Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.