# GUZMAN & COMPANY X-17A-5/A (2025-04-02) — Broker-dealer annual report - Company: GUZMAN & COMPANY - Form: X-17A-5/A - Filed: 2025-04-02 - Period: 2024-12-31 - Accession: 0000822756-25-000004 - CIK: 822756 - File #: 8-38646 - Type: Broker-dealer - Material weakness: No - Auditor: BDO USA, P.C - Auditor location: MIAMI, FL - Contact: ltoribio@guzman.com - Phone: 305-416-5358 - Email: ltoribio@guzman.com - Website: guzman.com - Signed by: Alexis G. Miller (CFO) Original filing: https://www.sec.gov/Archives/edgar/data/822756/000082275625000004/Public.pdf --- {0}------------------------------------------------ | UNITED STATES | 0MB APPROVAL | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------| | SECURITIES AND EXCHANGE COMMISSION | 0MB Number: 3235-0123
Expires: Nov. 30, 2026 | | Washington, D.C. 20549 | Estimated average burden
hours per response: 12 | | ANNUAL REPORTS | SEC FILE NUMBER | | FORM X-17A-5 | 8-38646 | | PART Ill | | | | | | 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 01/01/2024 | AND ENDING 12/31/2024 | | MM/DD/VY | MM/DD/VY | | A. REGISTRANT IDENTIFICATION | | | NAME oF FIRM: Guzman & Company | | | TYPE OF REGISTRANT (check all applicable boxes):
[!] Broker-dealer
□ Security-based swap dealer
□ Check here if respondent is also an OTC derivatives dealer | □ Major security-based swap participant | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | 101 Aragon Avenue | | | (No. and Street) | | | Coral Gables
Florida | 33134 | | (City)
(State) | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | (305) 37 4 3600
Alexis G. Miller | agmilfer@guzman.com | | (Name}
(Area Code-Telephone Number} | (Email Address) | | B. ACCOUNTANT IDENTIFICATION | | | | | | | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
BOO USA, P.C | | | (Name - if individual, state last, first, and middle name} | | | 100 SE 2nd St. Suite 1700
Miami | 33131
FL | | {Address)
(City} | (State)
(Zip Code} | | 10/08/2003
243 | | | (rte of Registration with PCAOB)(lf applicable) FOR OFFICIAL USE ONLY | | | | I
(PCAOB Registration Number, If applicable) | 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 0MB control number. {1}------------------------------------------------ #### **OATH OR AFFIRMATION** I, Alexis G. Miller swear (or affirm) that, to the best of my knowledge and belief, the financial report pertaining to the firm of Guzman & Company 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_3.jpeg) Signature~ **r..;;;i;;?,** Title: Chief Financial Officer & FINOP. #### **This filing\*\* contains (check all applicable boxes):** - **iil** (a) Statement of financial condition. - **iil** (b) Notes to consolidated statement of financial condition . - □ (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 5-X). - □ (d) Statement of cash flows. - D (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - □ (f) Statement of changes in liabilities subordinated to claims of creditors. - □ (g) Notes to consolidated financial statements. - D (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. - D (i) Computation of tangible net worth under 17 CFR 240.18a-2. - D (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - D (k) 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. - □ (I) Computation for Determination of PAS Requirements under Exh ibit A to§ 240.15c3-3. - □ (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - D (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. - □ (o) Reconciliations, 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 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences exist. - D (p) Summary of financia l data for subsidiaries not consolidated in the stat ement of financial condition. - **iil** (q) Oat h 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 report or financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. - D (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. - 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-le or 17 CFR 240.17a-12, as applicable. - □ {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). D (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. {2}------------------------------------------------ FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2024 {3}------------------------------------------------ # **CONTENTS:** | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | | |---------------------------------------------------------|-----| | FINANCIAL STATEMENTS: | | | Statement of Financial Condition | 2 | | Notes to Financial Statements | 3-8 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) Fax: 305-374-1135 www.bdo. com 100 SE 2nd St., Suite 1700 Miami, FL 33131 # **Report of Independent Registered Public Accounting Firm** Stockholders of Guzman & Company Coral Gables, Florida # **Opinion on Financial Statement** We have audited the accompanying statement of financial condition of Guzman & Company (the "Broker-Dealer") as of December 31, 2024, and the related notes (collectively referred to as the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Broker-Dealer at December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. # **Basis for Opinion** This financial statement is the responsibility of the Broker-Dealer's management. Our responsibility is to express an opinion on the Broker-Dealer'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 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. # BDO USA~ P.G. We have served as the Broker-Dealer's auditor since 2021. Miami, Florida March 31, 2025 BDO USA, P .C. , a Virginia professional corporation , is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. {5}------------------------------------------------ # STATEMENT OF FINANCIAL CONDITION DECEMBER 31 , **2024** | ASSETS | | |----------------------------------------------------------------|-----------------| | Cash and cash equivalents | 1,488,,328 | | Cash segregated under regulatory requiren ents Note· ) | 56 531 | | Deposits with clearing or,ganizations | 5,00,00.0 | | Receivable from clearing organizations (Note 5) | 1,842,851 | | Other receivables | 324,656 | | Due, from related parties ,(Note 3) | 77 01
10 | | Securities owned, at fair value Note· 6) | oo,.15a, | | Prepaid ex penses and deposits | gq 618' | | Fumit.me, equipment and leasehold ,improvements, net (Nate 10) | 21 ,965, | | Right of use asset - Operating (Note 11 ) | 95.,6.22 | | Right of use asset - Finance (Note 11 ) | 5,320 | | TOTAL ASSETS | 4,910,659 | | | | | UABILm ES AND STOCKHOLDERS' EQUITY | | | Accounts payable and accrued ex penses | 536 095 | | Lease obligation - Operating Note 11 ) | '96,710 | | Lease obligation - Finance Note 11 ) | 5,950 | | | 638,755 | | | | | SUBORDINA TEO BORROWING (NOTE 9) | 3,000,000 | | TOTAL Ll~BILITIES | \$
3,638,755 | | | | | COMMITMENTS AND CONTINGENCIES (NOTE 12) | | | | | | STOCKHOLDERS' EQUITY | | | Common stock, par value \$1.00 per share; 7,500 shares | \$
2,000 | | authorized; 2,000 shares issued and outstanding | | | Additional paid-in ca pita I | 1,150,645 | | Retained earnings | 119,259 | | | 1,271 ,904 | | TOTAL LIABJUllES AND STOCKHOLDERS' EQUITY | \$ | | | 4,910.659 | The accompanying notes are an integral part of these financial statements. {6}------------------------------------------------ NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2024 # **1. ORGANIZATION** Guzman & Company (the "Company") is a Florida S Corporation registered with the U.S. Securities and Exchange Commission ("SEC") as a broker-dealer and is a member of the Financial Industry Regulatory Authority ("FINRA") The Company is engaged in a single line of business as a securities broker-dealer, which is comprised of several classes of services, including agency transactions, principal transactions, investment banking, and rebates and execution fees. #### **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** #### **Basis of Presentation** The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. #### **Use of Estimates** The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities on December 31, 2024, and revenues and expenses during the year then ended. The actual outcome of the estimates could differ from the estimates made in the preparation of the financial statements. #### **Fair Value of Financial Instruments** Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 6. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular instruments. Changes in assumptions or in market conditions could significantly affect the estimates. #### **Financial Instruments Not Measured at Fair Value** Some of the Company's financial instruments are not measured at fair market value on a recurring basis but are recorded at amounts that approximate fair value due to their liquid short-term nature. #### **Cash and Cash Equivalents** Cash consists of deposits with banks and all highly liquid investments, with maturities of three months or less, that are not segregated and deposited for regulatory purposes. #### **Current Expected Credit Losses (CECL)** The Company records receivables, net of any allowance for expected credit losses, when relevant revenue recognition criteria has been achieved and payment is conditioned on the passage of time. The Company maintains an allowance for expected credit losses to provide coverage for estimated losses from its customer receivables. The Company determines the adequacy of the allowance by estimating the probability of loss based on the Company's analysis of historical credit loss experience of its customers receivables and by taking into consideration current market conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. The Company has determined that long-term forecasted information is not relevant to its customer receivables, which are primarily short-term. The Company updates its average credit loss rates annually and maintains an annual allowance review process to consider current factors that would require an adjustment to the credit loss allowance. In addition, the Company periodically performs a qualitative assessment to monitor risks associated with current and forecasted conditions that may require an adjustment to the expected credit loss rates. Expected credit losses for newly recognized financial assets and changes to expected credit losses during the period are recognized in the statement of operations. {7}------------------------------------------------ NOTES TO FINANCIAL STATEMENTS DECEMBER **31, 2024** # **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** ## **Furniture, Equipment and Leasehold Improvements, net** Furniture, equipment, and leasehold improvements are stated at cost less accumulated depreciation and amortization. Depreciation of these assets is computed over their estimated useful lives, 3 to 5 years, using the straight-line method. Leasehold improvements are amortized using the straight-line method over either the economic useful life of the improvement or the lease term, whichever is shorter. Expenditures that increase the value or productive capacity of assets are capitalized. When furniture and equipment are retired, sold, or otherwise disposed of, the asset's carrying amount and related accumulated depreciation are removed from the accounts and any gain or loss is included in the statement of operations. #### **Leases** The Company accounts for its leases in accordance with Accounting Standards Codification 842, Leases. The Company is a lessee in several noncancellable operating leases for office space. The Company determines if an arrangement is a lease, or contains a lease, at inception of a contract and when the terms of an existing contract are changed. The Company recognizes a lease liability and a right of use (ROU) asset at the commencement date of the lease. - Lease liabilities. A lease liability is measured based on the present value of its future lease payments. Variable payments are included in the future lease payments when those variable payments depend on an index or a rate and are measured using the index or rate at the commencement date. Lease payments, including variable payments based on an index rate, are remeasured when any of the following occur: (1) the lease is modified (and the modification is not accounted for as a separate contract), (2) certain contingencies related to variable lease payments are resolved, or (3) there is a reassessment of any of the following: the lease term, purchase options or amounts that are probable of being owed under a residual value guarantee. The discount rate is the implicit rate if it is readily determinable; otherwise, the Company uses its incremental borrowing rate. The implicit rates of the Company's leases are not readily determinable; accordingly, the Company uses its incremental borrowing rate based on the information available at the commencement date for each lease. The Company's incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms and in a similar economic environment. The Company determines its incremental borrowing rates by starting with the interest rates on its recent borrowings and other observable market rates and adjusting those rates to reflect differences in the amount of collateral and the payment terms of the leases. - ROU assets. A lessee's ROU asset is measured at the commencement date at the amount of the initiallymeasured lease liability plus any lease payments made to the lessor before or at the commencement date, minus any lease incentives received; plus any initial direct costs. Unless impaired, the ROU asset is subsequently measured throughout the lease term at the amount of the lease liability (that is, present value of the remaining lease payments), plus unamortized initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Lease cost for lease payments is recognized on a straight-line basis over the lease term. - Accounting policy election for short-term leases. The Company has elected, for all underlying classes of assets, to not recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less at lease commencement, and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. The Company recognizes lease cost associated with its short-term leases on a straight-line basis over the lease term. #### **3. RELATED PARTY TRANSACTIONS** Aragon Galiano Holdings LLC provides office space to the Company for a monthly property management fee. The Company has approximately \$600 receivable from Aragon Galiano Holdings LLC. {8}------------------------------------------------ # NOTES TO FINANCIAL STATEMENTS DECEMBER 31, **2024** # **3. RELATED PARTY TRANSACTIONS (CONTINUED)** The Company entered into an expense sharing agreement with Guzman Energy LLC ("Energy") in August 2015. Energy is related to the Company by virtue of common ownership. The Company agreed to provide for certain employee compensation, benefits, and other administrative services in exchange for a monthly fee to be paid by Energy to the Company. The agreement remains in effect for one year with the option to renew in successive oneyear periods. The agreement can also be cancelled by either party with a 5-day notice of cancellation. As of December 31, 2024, the Company had approximately \$2,400 due from Energy. As of December 31, 2024, the Company has a subordinated loan agreement with its majority stockholder which totals \$3,000,000, bears interest at 5% per year, and matures on December 30, 2029. (Note 9) The Company has approximately \$74,000 receivable from an employee at December 31, 2024, which is due on demand and non-interest bearing. # **4. CASH SEGREGATED UNDER REGULATORY REQUIREMENTS** The Company claimed an exemption from 17 C.F.R. §240.15c3-3 under the following provisions of 17 C.F.R. §240.15c3-3(k)(2)(i): Who carries no margin accounts, promptly transmits all customer funds and delivers all securities received in connection with its activities as a broker or dealer, does not otherwise hold funds or securities for, or owe money or securities to, customers and effectuates all financial transactions between the broker or dealer and its customers through one or more bank accounts, each to be designated as "Special Account for the Exclusive Benefit of Customers of Guzman & Company". Cash of \$56,531 has been segregated in a special reserve bank account for the benefit of customers under Rule 15c3-3 of the Securities Exchange Act of 1934. For the year ended December 31, 2024, the Company did not have any customers or transactions subject to exemption 17 C.F.R §240.15c3-3(k)(2)(i), which would have required the Company to segregate cash into a special reserve bank account for the benefit of customers under Rule 15c3-3 of the Securities Exchange Act of 1934. ### **5. RECEIVABLE FROM CLEARING ORGANIZATIONS** Receivables from clearing organizations on December 31, 2024, were \$1,842,851. The Company clears its proprietary and customer transactions on a fully disclosed basis through BofA Securities. Pursuant to a clearing agreement, the Company is required to maintain a certain minimum capital with the clearing organization, in the form of either cash or securities. The level is agreed upon from time to time based on the nature of the Company's clearing activities. As of December 31, 2024, the aggregate required minimum collateral deposit under the clearing agreement was \$500,000. The Company complies with clearing broker-dealer requirements for obtaining collateral from customers. ## **6. FAIR VALUE MEASUREMENTS** ## **Fair Value Measurements** ASC 820, Fair Value Measurement, establishes a framework for measuring fair value, and establishes a fair value hierarchy which prioritizes the inputs to valuation techniques. 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. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Valuation techniques that are consistent with the market, income or cost approach, as specified by ASC 820, are used to measure fair value. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: - Level 1 Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. - Level 2 Inputs (other than quoted prices included within Level 1) that are observable for the asset or liability, either directly or indirectly. {9}------------------------------------------------ # NOTES TO FINANCIAL STATEMENTS DECEMBER 31 , 2024 # **6. FAIR VALUE MEASUREMENTS (CONTINUED)** • Level 3 Unobservable inputs for the asset or liability and rely on management's own assumptions about the assumptions that market participants would use in pricing the asset or liability. # **Determination of Fair Value** The Company maintains policies and procedures to value its financial instruments using the highest level and most relevant data available. In addition, management reviews valuations, including independent price validation, for certain instruments. The following describes the valuation methodologies the Company uses to measure different financial instruments at fair value, including an indication of the level in the fair value hierarchy in which each instrument is generally classified. For many financial instruments, fair value is based on independent sources such as quoted market prices or dealer price quotations. To the extent certain financial instruments trade infrequently or are not marketable, they may not have readily determinable fair values. In these instances, the Company estimates fair value using various pricing models and available information that management deems most relevant. Among the factors considered by the Company in determining the fair value of financial instruments are discounted anticipated cash flows , the cost, terms and liquidity of the instrument, the financial condition, operating results and credit ratings of the issuer or underlying company, the quoted market price of publicly traded securities with similar quality and yield, and other factors generally pertinent to the valuation of financial instruments. **Corporate stocks.** Corporate stocks and options are valued based on quoted market prices. Corporate stocks that trade in active markets are classified within Level 1. **Government agency bonds.** Government agency bonds are valued based on quoted market prices. Government bonds that trade in active markets are classified within Level 2. # **Items Measured at Fair Value on a Recurring Basis** The following table presents the Company's financial instruments that are measured at fair value on a recurring basis as of December 31, 2024, for each fair value hierarchy level. | | December 31, 2024 | | | | | | | | |-------------------------|-------------------|---------|--------|---------|--------|--|-------|----------| | | Level1 | | Level2 | | Level3 | | Total | | | ASSETS | | | | | | | | | | Securities o ned: | | | | | | | | | | Corporate stocks | | 204,156 | 5 | | | | | 204,·156 | | Gov;emment agency bonds | | | | 196,602 | | | | 196,602 | | Total | | 204,156 | | 196,602 | s | | | 400,758 | The Company does not have any financial assets or liabilities that are measured at fair value on a non-recurring basis as of December 31 , 2024. #### **7. FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK AND CONCENTRATIONS OF CREDIT RISK** The Company enters into various transactions involving off-balance sheet financial instruments. These financial instruments include securities purchased and sold on a when-issued basis (when-issued securities). These financial instruments are used to meet the needs of customers, conduct trading activities, and manage market risks and are, therefore, subject to varying degrees of market and credit risk. {10}------------------------------------------------ # NOTES TO FINANCIAL STATEMENTS DECEMBER 31 , 2024 # **7. FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK AND CONCENTRATIONS OF CREDIT RISK (CONTINUED)** The Company's customer securities activities are provided to a diverse group of governmental, institutional, corporate, and individual investors. In the normal course of business, the Company's customer activities involve the execution, settlement, and financing of various customer securities transactions. These activities may expose the Company to off-balance-sheet risk in the event the customer or other broker is unable to fulfill its contracted obligations and the Company has to purchase or sell the financial instrument underlying the contract at a loss. 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. ## **8. NET CAPITAL REQUIREMENT** The Company's business is subject to significant regulation by various governmental agencies and self-regulatory organizations. Such regulation includes, among other things, periodic examinations by these regulatory bodies to determine whether the Company is conducting and reporting its operations in accordance with the applicable requirements of these organizations. As a registered broker dealer, the Company is subject to the SE C's net capital rule (Rule 15c3-1 ), which requires that the Company maintain a minimum net capital, as defined. The Company, as a registered broker-dealer in securities, is subject to the SEC's Net Capital Rule (Rule 15c3-1 ), which requires that the Company maintain "Net Capital" equal to the greater of \$250,000 or 6 2/3% of "Aggregate Indebtedness", as defined, and requires that the ratio of aggregate indebtedness to net capital shall not exceed 15 to 1. On December 31 , 2024, the Company's "Net Capital" was \$3,925,571 , which was \$3,675,571 in excess of the "Required Net Capital" of \$250,000. On December 31 , 2024, the Company's ratio of aggregate indebtedness to net capital was 0.14 to 1. # **9. SUBORDINATED BORROWING** As of December 31 , 2024, the Company has a subordinated loan agreement with its majority stockholder which totals \$3,000,000, bears interest at 5% per year, and matures on December 30, 2029. The loan agreement renews automatically at the maturity date for an additional one-year term. The subordinated borrowings are covered by agreements approved by FINRA and are thus allowable in computing net capital under the SEC's uniform net capital rule. To the extent that such borrowings are required for the Company's continued compliance with minimum net capital requirements , they may not be repaid (Note 8). The fair value of subordinated borrowings is approximately \$2,287,000 and is classified as a level 3 financial instrument within the fair value hierarchy. # **10. FURNITURE, EQUIPMENT, AND LEASEHOLD IMPROVEMENTS, NET** Furniture, equipment and leasehold improvements, net, are summarized as follows: | Furniture and Equipment | \$ 387,548 | |-------------------------------------------------|-------------------| | Leasehold Jmprovements | 216,187 | | | 603,735 | | | | | less accumulated depreciati.on and amortization | (581 ,770) | | | \$
.21
,965 | {11}------------------------------------------------ # NOTES TO FINANCIAL STATEMENTS DECEMBER **31 , 2024** # **11 . LEASES** # **Operating Lease** The Company subleases office space through an operating lease that expires in 2026. Operating lease assets and obligations as of December 31 , 2024 are as follows: | Right of use asset - Operating | \$
95,622 | | |--------------------------------|--------------|--| | Lease obligation - Operati11g | \$
96,710 | | Estimated future minimum operating lease payments, exclusive of taxes and other charges are as follows: | For the years ending December 31 , | | | |-----------------------------------------|----------|------------------| | 2025
2026 | \$
\$ | 85,832
14,305 | | Total future minimum lease payments | \$ | 100,137 | | Less: amount representing interest | \$ | (4,515) | | Present value of minimum lease payments | \$ | 95,622 | Information associated with the measurement of the remaining operating lease obligations as of December 31, 2024 is as follows: Weighted-average remaining lease term in years 1.17 Weighted-average discount rate 1.61 % # **12. COMMITMENTS AND CONTINGENCIES** # **Litigation** Certain claims, lawsuits and complaints arising in the ordinary course of business may have been filed or are pending against the Company. In the opinion of management, all such matters are adequately covered by insurance, or if not so covered, are without merit or are of such kind, or involve such amounts, as would not have a significant effect on the financial position or results of operations of the Company, if disposed of unfavorably. # **13. SUBSEQUENT EVENTS** The Company has evaluated subsequent events through March 31 , 2025, which is the date the financial statements were available to be issued. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.