# MADISON AVENUE SECURITIES, LLC X-17A-5 (2026-03-06) — Broker-dealer annual report - Company: MADISON AVENUE SECURITIES, LLC - Form: X-17A-5 - Filed: 2026-03-06 - Period: 2025-12-31 - Accession: 0000841271-26-000004 - CIK: 841271 - File #: 8-40426 - Type: Broker-dealer - Material weakness: No - Auditor: Tait Weller - Auditor location: Philadelphia, PA - Contact: Sandra Woods - Phone: 8582071303 - Signed by: Martin McNees (President) Original filing: https://www.sec.gov/Archives/edgar/data/841271/000084127126000004/2025Public1.pdf --- {0}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OMB APPROVAL OMB Number: 3235-0123 Expires: Nov. 30, 2026 Estimated average burden hours per response: 12 # **ANNUAL REPORTS FORM X-17A-5 PART Ill** | SEC FILE NUMBER | | |-----------------|--| | 8-40426 | | 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 /2025 | | | AND ENDING 12/31/2025 | | | | MM/DD/YY | | | MM/DD/YY | | | A. REGISTRANT IDENTIFICATION | | | | | NAME oF FIRM: Madison Avenue Securities, LLC | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
0 Broker-dealer
0 Security-based swap dealer
0 Check here if respondent is also an OTC derivatives dealer | | | 0 Major security-based swap participant | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | 13500 Evening Creek Dr N Ste 555 | | | | | | | (No. and Street) | | | | | San Diego | | CA | | 92128 | | (City) | | (State) | | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | Sandra Woods | 858 207 1303 | | | swoods@mas-bd. com | | (Name) | (Area Code-Telephone Number) | | (Email Address) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
Tait Weller | | | | | | | (Name- if individual, state last, first, and middle name) | | | | | 50 South 16th Street Ste 2900 Philadelphia | | | PA | 19102-2529 | | (Address) | (City) | | (State) | (Zip Code) | | 10/16/2003 | | | 445 | | | T" of''''''""""
with PCAOB)Iif 'PPii"bl•l | | | | (PCAOB "'~.ttotioo N"mb", if •pplk•bl•ll | | * Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public | FOR OFFICIAL USE ONLY | | | | accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-5(e)(1)(ii), if applicable. Persons who are to respond to the collection of Information contained In this form are not required to respond unless the form displays a currently valid OMB control number. {1}------------------------------------------------ ### **OATH** OR AFFIRMATION | 1, Martin McNees | swear (or affirm) that, to the best of my knowledge and belief, the | |---------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------| | financial report pertaining to the firm of Madison Avenue Securities, LLC | as of | | December 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. | | | Signature:
Martin McNees | Digltally signed by Martin McNees
Date: 2026.03 02 12:33:52 -08'00' | | |-----------------------------|------------------------------------------------------------------------|--| | Title:
President | | | ### This filing\*\* contains (check all applicable boxes): - ~ (a) Statement of financial condition. - D (b) Notes to consolidated statement of financial condition. - D (c) Statement of income (loss) or, if there is other comprehensive income in the period(s) presented, a statement of comprehensive income (as defined in§ 210.1-02 of Regulation S-X). - D {d) Statement of cash flows. - D (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - D {f) Statement of changes in liabilities subordinated to claims of creditors. - D (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. - D (I) Computation for Determination of PAB Requirements under Exhibit A to§ 240.15c3-3. - D (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. - D (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 financial data for subsidiaries not consolidated in the statement of financial condition. - ~ (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. - D (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - D (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - D (t) Independent public accountant's report based on an examination of the statement of financial condition. - l!i!i (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. - D (w) Independent public accountant's report based on a review ofthe 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 applicable. - D (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 AND INDEPENDENT AUDITORJS REPORT* ### DECEMBER 31, 2025 AND 2024 PUBLIC {3}------------------------------------------------ ### *TABLE OF CONTENTS* | | Page | |--------------------------------------|------| | INDEPENDENT AUDITOR'S REPORT | 1 | | FINANCIAL STATEMENTS | | | Statements of Financial CotJditiotJ, | | | December 31, 2025 And 2024 | 2 | | Notes To Financial Statements | 3-10 | {4}------------------------------------------------ taitweller.com ### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Members of Madison Avenue Securities, LLC San Diego, California #### Opinion on the Financial Statements We have audited the accompanying statements of financial condition of Madison Avenue Securities, LLC as of December 31, 2025 and 2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the fmancial position of Madison Avenue Securities, LLC as of December 31, 2025 and 2024 in conformity with accounting principles generally accepted in d1e United States of America. #### Basis for Opinion These fmancial statements are the responsibility of Madison Avenue Securities, LLC's management. Our responsibility is to express an opinion on Madison Avenue Securities, LLC's fmancial statements based on our audits. \\fe are a public accounting firm registered wid1 the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to Madison Avenue Securities, LLC in accordance wid1 d1e U.S. federal securities laws and d1e applicable mles and regulations of the Securities and Exchange Commission and d1e PCAOB. \\fe have setved as Madison Avenue Securities LLC's auditor since 2021. \\fe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whed1er d1e f111ancial statements are free of material misstatement, whed1er due to error or fraud . Our audits included performing procedures to assess d1e risks of material misstatement of the f111ancial statements, \vhether due to error or fraud, and performing procedures d1at respond to d10se risks. Such procedures included examining, on a test basis, evidence regarding d1e amounts and disclosures in the fmancial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. \\fe believe d1at our audits provide a reasonable basis for our opinion. TAIT WELLER & BAiffiR, LLP Philadelphia, Pennsylvania March 2, 2026 {5}------------------------------------------------ ### *STATEMENTS OF FINANCIAL CONDITION* ### **December 31, 2025 and 2024** | ASSETS | | | |--------------------------------------------|--------------|-------------| | CURRENT ASSETS | | | | Cash and cash equivalents | \$ 5,741,118 | \$5,319,168 | | Commissions receivable | 1,310,773 | 866,225 | | Registered representative receivables, net | 295,261 | 589,496 | | Prepaid expenses | 294,516 | 109,809 | | Related party receivable | 4 715 | 19 323 | | Total current assets | 7,934,913 | 6,904,021 | | Property and equipment, net | 2,253 | 12,627 | | Deposits with clearing organization | 250,000 | 250,000 | | Other deposits | 36 277 | 36 277 | | Total Assets | \$7 234 213 | \$7 202 925 | ### **LIABILITIES AND MEMBERS' EQUITY** #### **CURRENT LIABILITIES** | Accounts payable | \$ 279,934 | \$
97,850 | |---------------------------------------|------------|--------------| | Accrued liabilities | 204,078 | 205,000 | | Commissions payable | 1,998,777 | 1,827,599 | | Employment liabilities | 514,523 | 547,754 | | Related party payable | 64,388 | 54,963 | | Other current liabilities | 232 877 | 161 836 | | Total Liabilities | 3 294 577 | 2.895,002 | | MEMBERS' EQUITY | | | | Members' equity | 4 640 336 | 4.307.923 | | Total members' equity | 4.640,336 | 4 307 923 | | Total liabilities and members' equity | | \$7.202 925 | {6}------------------------------------------------ ### *NOTES TO FINANCIAL STATEMENTS* ### **For The Years Ended December 31, 2025 and 2024** ### **(1) ORGANIZATION AND NATURE OF BUSINESS** Madison A venue Securities, LLC ("Company"), a Delaware Limited Liability Company, is dually registered as a Broker Dealer and a Registered Investment Advisor Firm. The Company is a member of the Financial Industry Regulatory Authority, Inc. ("FINRA") and Securities Investor Protection Corporation ("SIPC"). The Company will continue as a limited liability company ("LLC") until the managing member decides the advantages of the limited liability company structure no longer exist. The Company provides securities investment services as an introducing broker-dealer. The Company maintains a fully disclosed clearing relationship with Pershing, LLC. The Company is registered with the Securities and Exchange Commission under the Investments Advisers Act of 1940 to provide investment advisory services. ### (2) **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** ### *USE OF ESTIMATES* The preparation of flnancial 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, related disclosures at the date of the fmancial statements, and the amounts of revenues and expenses reported during the reporting period. Actual results could differ from those estimates. ### *CASH AND CASH EQUIVALENTS* The Company considers all cash accounts, which are not subject to withdrawal restrictions or penalties, certificates of deposit and money market funds purchased with an original maturity of three months or less to be cash equivalents. ### *PROPERTY AND EQUIPMENT* Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, which range from three to seven years, or tl1e life of the lease if dependent on the lease term. The Company expenses general repairs and maintenance costs that do not extend the life of any existing asset, as incurred. ### *REVENUE RECOGNITION* In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU No. 2014-09, Revenue from Contracts wid1 Customers ("ASC 606"). This ASU implements a common revenue standard that clarifles the principles for recognizing revenue. The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of control for promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for d1ose goods or services. To achieve d1at core principle, an entity is required to identify the contract(s) with a customer, identify the performance obligations in tl1e contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when (or as) the entity satisfles a performance obligation. ASC 606 furtl1er requires d1at companies {7}------------------------------------------------ ### *NOTES TO FINANCIAL STATEMENTS- (CotJtitwed)* #### **For The Years Ended December 31, 2025 and 2024** disclose sufficient information to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. (See Note 4 for further information.) ### *CREDIT LOSSES ON FINANCIAL INSTRUMENTS* The Company accounts for estimated credit losses on fmancial assets measured at amortized cost basis in accordance with Financial Accounting Standards Board ("FASB"), Accounting Standard Codification ("ASC") Topic 326 that requires management's measurement of the current expected credit loss ("CECL") to be based on a broader range of reasonable and supportable information for lifetime credit loss estimates including historical experience, current conditions, and supportable forecasts. A broker-dealer's estimate of expected credit losses should consider the expected risk of credit loss even if that risk is remote, regardless of the method applied to estimate credit losses. A broker-dealer, however, is not required to measure expected credit losses on a financial asset (or group of fmancial assets) in which historical credit loss information adjusted for current conditions and reasonable and supportable. ### *RECEIVABLES AND CREDIT POLICIES* Commissions receivable are uncollateralized clearing broker obligations due under normal trade terms requiring payments wid1in 30 days. The Company generally collects receivables within 30 days and does not charge interest on commissions receivable d1at are over 30 days old. Receivables consist of commissions and fees earned on the sale of mutual funds and retirement products and from amounts billed to the Company's registered reps for insurance premiums and od1er fees the Company pay on their behalf. Commissions receivable, net of trading costs are stated at the amount expected to be collected. Payments of commissions receivable are allocated to d1e specific transactions identified on d1e clearing broker statement, carrier statements or, if unspecified, are applied to the earliest unpaid amounts. The amount of commissions receivable is reduced by a valuation allowance that reflects management's best estimate of the amounts d1at will not be collected. Management individually reviews all commissions receivable balances d1at exceed 30 days from the invoice date and based on an assessment of current creditworthiness, current conditions and reasonable supportable forecasts, writes off d1e portion, if any, of the balance that will not be collected. Additionally, management estimates an allowance for d1e aggregate remaining commissions receivable based on historical collectability. In d1e opinion of management, at December 31, 2025, and 2024, all commissions were considered collectible and no allowance was deemed necessary. {8}------------------------------------------------ ### *NOTES TO FINANCIAL STATEMENTS- (Continued)* ### For The Years Ended December 31, 2025 and 2024 ### *PROPERTY AND EQUIPMENT* Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, which range from three to seven years, or the life of the lease if dependent on the lease term. The Company expenses general repairs and maintenance costs that do not extend the life of any existing asset, as incurred. ### *FINANCIAL INSTRUMENTS* The Company does not hold financial instruments for trading purposes as part of its business operations. Certain of the Company's fmancial instruments, including cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other liabilities are carried out at cost, which approximates their fair value because of the short-term maturity of d1ese financial instruments. ### *CONCENTRATION OF CREDIT RISK* The Company engages in various trading and brokerage act1v1t1es in which counterparties primarily include product issuers, clearing organizations, banks and other fmancial 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 d1e counterparty or issuer of the instrument. It is the Company's policy to review, as necessary, the credit standing of each counterparty. For the year ended December 31, 2025, commission, and fee revenue from three types of investments, Mutual Funds, Investment Advisory and Variable Annuities, accounted for approximately 72% of total revenues. For d1e year ended December 31, 2024, commission, and fee revenue from three types of investment, Mutual Funds, Investment Advisory and Variable Annuities, accounted for approximately 71% of total revenues. As of December 31, 2025, and 2024, no registered representative accounted for more than 10% of gross revenues. The Company maintains its bank accounts at four fmancial institutions. Funds are insured up to \$250,000 by the Federal Deposit Insurance Corporation ("FDIC"). As of December 31,2025, the Company had accounts with uninsured cash balances of approximately \$5,090,000. The Company has not experienced any losses in such accounts and management believes it places cash on deposit with financially stable institutions. The Company maintained clearing accounts at a fmancial institution located in New Jersey. The Securities Investors Protection Corporation ("SIPC") insures customers for up to \$250,000 in cash losses and up to \$500,000 in total at these institutions. At December 31, 2025, the Company had no uninsured cash balances at this institution. {9}------------------------------------------------ ### *NOTES TO FINANCIAL STATEMENTS- (Continued)* ### **Fot· The Years Ended December 31, 2025 and 2024** ### *INCOME TAXES* As a Delaware limited liability company doing business in California, the Company is not liable for federal income taxes. However, the Company is subject to an \$800 California minimum state franchise tax and a fnced fee based on revenues. The Company is subject to franchise taxes required in any of the various states in which it operates. For the years ended December 31, 2025, and 2024, franchise tax fees incurred based on revenues were \$59,617 and \$27,020, respectively. The total state tax included in the provision for income taxes for the years ended December 31, 2025, and 2024 was \$0 and \$0, respectively. Members of the LLC are personally liable for individual federal and state income taxes on the Company's taxable income. ### *SUBSEQUENT EVENTS* In January 2026, the Company entered into a note payable agreement relating to flnanced insurance premiums. The terms of the agreement require monthly installments of \$59,878 which include interest at a rate of 7.45%. The balances are due in November 2026. At December 31, 2025, the Company had two open complaints that were settled subsequent to year end. The related liabilities were accrued as of December 31, 2025, and amounted to approximately \$100,000. The Company's management assessed and determined tl1at the Company has sufflcient insurance coverage for the legal matters for the year ended December 31, 2025. In the opinion of the Company's management, based on current available information, review with outside legal counsel and insurance coverage, the ultimate resolution of these matters will not have a material adverse in1pact on the Company's financial position or results of operations. Management has evaluated subsequent events, as deflned by F ASB ASC 855, Subsequent Events, through the date tl1at the flnancial statements were available to be issued on February 27, 2026. ### **(3) BROKER DEALER- SINGLE REPORTING SEGMENT** The Company is engaged in a single line of business as a broker-dealer which is comprised prin1arily of agency transactions and investment advisory services. The Company has identifled its President as ilie chief operating decision maker ("CODM"), who uses net income to evaluate the results of the business, predominantly in tl1e forecasting process, to manage the Company. Additionally, CODM uses excess net capital (see Schedule I), which is not a measure of proflt and loss, to make operational decisions wlllie maintaining capital adequacy, such as whetl1er to reinvest profits or pay distributions and manage the company. The Company's operations constitute a single operating segment and therefore, a single reportable segment, because CODM manages the business activities using information of ilie Company as a whole. The accounting policies used to measure the proflt and loss of tl1e segment are the same as those described in the summary of signiflcant accounting policies. Refer to the Statements of Operations for tl1e segment's revenues and signiflcant segment expenses. {10}------------------------------------------------ ### *NOTES TO FINANCIAL STATEMENTS- (Cot1titwed)* #### **For The Years Ended December 31,2025 and 2024** #### **(4) PROPERTY AND EQUIPMENT** Property and equipment consist of the following at December 31: | | 2025 | 2024 | |-------------------------------------------------|----------|-----------| | Equipment | 2,693 | 2,693 | | Computer equipment | 28,430 | 28,430 | | | 31,123 | 31,123 | | Less: accumulated depreciation and amortization | (28,870) | (18,496) | | Property and equipment, net | \$ 2 253 | \$ 12 627 | | | | | Depreciation expense for each of the years ended December 31, 2025, and 2024 was \$10,3 7 4. #### **(5) REVENUE FROM CONTRACTS WITH CUSTOMERS** Revenue from contracts with customers includes commissions, marketing and distribution fees and asset management fees. The recognition and measurement of revenue is based on the assessment of individual contract terms. Significant judgment is required to determine whether performance obligations are satisfied at a point in time or over time, how to allocate transaction prices where multiple performance obligations are identified; when to recognize revenue based on the appropriate measure of the Company's progress under the contract; whether revenue should be presented gross or net of certain costs; and whether constraints on variable consideration should be applied to uncertain future events. #### Investment Advisory Fees The Company provides investment advisory services daily. The Company believes the performance obligation for providing advisory services is satisfied over time because the customer is receiving and consuming the benefits as they are provided by the Company. Fee arrangements are based on a percentage applied to the customer's assets under management. Fees are received monthly and are recognized as revenue at that time as they relate specifically to the services provided in that period, which are distinct from the setvices provided in other periods. {11}------------------------------------------------ ### *NOTES TO FINANCIAL STATEMENTS- (Cot1tinued)* #### **For The Years Ended December 31,2025 And 2024** ### Distribution Fees (12b-1 fees) from Mutual Funds and Retirement Products (Investment Company Shares) The Company enters into arrangements with managed accounts or other pooled investment vehicles (funds) to distribute shares to investors. The Company believes that its performance obligation is the sale of securities to investors and as such this is fulfilled on the trade date. Any fixed amounts are recognized on the trade date and variable amounts are recognized to the extent it is probable that a significant revenue reversal will not occur once the uncertainty is resolved. For variable amounts, as the uncertainty is dependent on the value of the shares at future points in time as well as the length of time d1e investor remains in d1e fund, both of which are highly susceptible to factors outside the Company's influence, d1e Company does not believe that it can overcome this constraint until d1e market value of the fund and d1e investor activities are known, which are usually monthly or quarterly. Distribution fees recognized in the current period are primarily related to performance obligations d1at have been satisfied in prior periods. #### Costs to Obtain or Fulfill a Contract with a Customer The Company incurs costs to obtain revenue contracts with its customers, such as sales commissions paid to independent registered representatives for obtaining new contracts wid1 clients. These costs do not meet the criteria for capitalization under ASC 606. The Company has recorded as a liability certain estimated costs incurred but not paid associated with providing services where the performance obligation has been met. As of December 31, 2025 and 2024, d1e amount of the liability for costs incurred but not paid was \$1,602,7 44 and \$1,327,085. During the years 2025 and 2024, the Company recognized commissions expense of \$44,53 7,922 and \$36,325,502, respectively, direcdy related to obtaining revenue from contracts. #### Accrual of Revenue from Contracts with Customers Revenue from contracts is accrued in circumstances where the Company believes the performance obligation has been met. The Company estimates revenue based on historical data and has recorded as an asset estimated revenue earned but not paid. As of December 31, 2025, and 2024 the amount of the asset for revenue earned but not paid was \$1,310,773 and \$866,225, respectively. #### Other Revenue Other revenue principally consists of wholesaling, overrides and product support fees that the Company is entided to upon the sale of certain products based on their selling agreements. The Company believes that its performance obligation for these fees is d1e sale of securities to investors, which is fulfilled on the trade date. The remaining portion of other revenue includes fees charged to representatives and other activity, where the performance obligation is satisfied at the time of invoicing. {12}------------------------------------------------ ### *NOTES TO FINANCIAL STATEMENTS- (Cor1tinued)* ### For The Years Ended December 31,2025 And 2024 ### (6) EMPLOYMENT LIABILITIES Employment liabilities on December 31, 2025, and 2024, consist of unpaid and accrued compensation, payroll taxes and paid time off totaling \$514,523 and \$547,754, respectively. ### (7) EMPLOYEE BENEFIT PLAN On January 1, 2005, Asset Marketing Systems Insurance Services, LLC ("AMS"), a former parent and affiliated company, instituted a 401 (k) plan (the "Plan") in which AMS and the Company's employees may participate if they are 18 years or older and after they have been employed one full month with a minimum one hour of actual service performed. An employee may contribute up to the maximum allowed by Internal Revenue Service ("IRS") regulations. The Company, a participating employer in the Plan, matches employees' contributions. The matching contributions expensed in 2025 and 2024 were \$68,291 and \$56,915, respectively. ### (8) NET CAPITAL REQUIREMENT The Company is subject to Rule 15c3-1(a)(2)(iv) of the Securities Exchange Act of 1934, as amended, which requires that the ratio of aggregate indebtedness to net capital, as defined, not exceed 15 to 1, and d1at d1e Company maintain mininmm net capital of \$50,000 or 6-2/3% of aggregated indebtedness, \$219,638 and \$193,000 on December 31, 2025 and 2024, respectively, whichever is higher. On December 31, 2025, and 2024, the Company had net capital of \$3,767,634 and \$3,388,832, respectively, which was \$3,547,996 and \$3,195,832 in excess, respectively, of its required mininmm net capital and the ratios of aggregate indebtedness to net capital were 0.87 to 1 and 0.85 to 1, respectively. ### (9) COMMITMENTS AND CONTINGENCIES ### *LEGAL AND REGULATORY MATTERS* The Company is involved in legal proceedings including arbitration claims and other claims which were initiated by regulators, customers or clients involving the purchase or sale of investment securities. As of the date that the financial statements were available to be issued, management is not able to estimate d1e possible loss or range of loss in excess of its current insured limits that may be incurred as a result of these ongoing matters. For d1e years ended December 31, 2025, and 2024, d1e Company incurred \$935,206 and \$1,037,848, respectively, in legal expenses, settlements and awards. {13}------------------------------------------------ ### *NOTES TO FINANCIAL STATEMENTS- (Co11ti11ued)* ### **For The Years Ended December 31,2025 And 2024** ### **(10) RELATED PARTY TRANSACTIONS** In 2025 and 2024, distributions of \$1,500,000 were made to the members. The Company shared expenses wid1 affiliated companies' "Affiliates". The Affiliates paid expenses under the expense sharing agreement in d1e amount of \$648,974 and \$604,745 or the years ended December 31, 2025 and 2024, respectively. The Company incurred expenses under the expense sharing agreement of \$664,585 and \$606,605 for the years ended December 31, 2025, and 2024, respectively. As of December 31, 2025, and 2024, the payable balances to Affiliates were \$64,388 and \$54,963, respectively. The Affiliates paid the Company \$120,105 and \$46,956 for d1e years ended December 31, 2025, and 2024, respectively. As of December 31, 2025, and 2024, d1e receivable balances from the Affiliates were \$4,715 and \$19,323, respectively. Additionally, the company leases its office space from an affiliate on annual basis. Lease expense amounted to \$176,497 and \$171,357 for the years ending December 31, 2025, and December 31, 2024, respectively. The Company has a selling agreement wid1 an Affiliate under which d1e Affiliate compensates d1e Company in relation to such non-variable life insurance and fL'I:ed/fL'I:ed indexed annuity sales. During the years ending December 31, 2025, and 2024, the Company generated approximately \$200,000 and \$1,200,000, respectively, which is included in other revenue on the statement of operations. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.