# VALMARK SECURITIES, INC. X-17A-5 (2023-02-27) — Broker-dealer annual report - Company: VALMARK SECURITIES, INC. - Form: X-17A-5 - Filed: 2023-02-27 - Period: 2022-12-31 - Accession: 0000896132-23-000001 - CIK: 896132 - File #: 8-45463 - Type: Broker-dealer - Material weakness: No - Auditor: MSL, P.A. - Auditor location: ORLANDO, FL - Contact: ELIZABETH E. KOZENKO - Phone: 330-576-1234 - Email: ekozenko@valmarkfg.com - Website: valmarkfg.com - Signed by: ELIZABETH E. KOZENKO (SECRETARY, CFO) Original filing: https://www.sec.gov/Archives/edgar/data/896132/000089613223000001/2022AuditedFinancialsVSI.pdf --- {0}------------------------------------------------ ![](_page_0_Picture_0.jpeg) Independent Auditors Report – Financial Statements and Supplemental Information Reconciliation (Form SIPC-7) – Schedule of General Assessment Report on Applying Agreed-Upon Procedures of Broker Dealer Report on Review of Statement of Exemption ### Year Ended December 31, 2022 #### WWW.VALMARKFG.COM {1}------------------------------------------------ #### UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ANNUAL REPORTS FORM X-17A-5 PART III | OMB APPROVAL | |---------------------------| | OMB Number: 3235-0123 | | Expires: Oct. 31, 2023 | | Estimated average burden | | hours per response:
12 | SEC FILE NUMBER 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 01/01/22 | | AND ENDING 12/31/22 | | | |------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|---------------------|------------------------|--------------------------------------------| | | MM/DD/YY | | | MM/DD/YY | | | A. REGISTRANT IDENTIFICATION | | | | | NAME OF FIRM: VALMARK SECURITIES, INC. | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
XI Broker-dealer
Check here if respondent is also an OTC derivatives dealer | _ Security-based swap dealer | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | 130 SPRINGSIDE DR., SUITE 110 | | | | | | | (No. and Street) | | | | | AKRON | OH | | | 44333 | | (City) | (State) | | | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | ELIZABETH E. KOZENKO | (330) 576-1234 x3452 | | EKozenko@ValmarkFG.com | | | (Name) | (Area Code - Telephone Number) | | (Email Address) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
MSL, P.A. | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | 255 S. ORANGE AVE., SUITE 600 | ORLANDO | | FL | 32801 | | (Address) | (City) | | (State) | (Zip Code) | | 09/24/2003 | | 569 | | | | (Date of Registration with PCAOB)(if applicable) | | | | (PCAOB Registration Number, if applicable) | | | FOR OFFICIAL USE ONLY | | | | | * Claims for exemption from the requirement that the annual reports of an independent public | | | | | accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-5(e)(1)(ii), if applicable. Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. {2}------------------------------------------------ #### OATH OR AFFIRMATION I, ELIZABETH E. KOZENKO , swear (or affirm) that, to the best of my knowledge and belief, the financial report pertaining to the firm of VALMARK SECURITIES, INC. . as of DECEMBER 31 \_\_ 2022\_\_\_\_ 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_2_Picture_3.jpeg) Signature: Title: SECRETARY, CFO Notary Public #### This filing\*\* contains (check all applicable boxes): - 区 (a) Statement of financial condition. - | (b) Notes to consolidated statement of financial condition. - 区 (c) Statement of income (loss) or, if there is other comprehensive in the period(s) presented, a statement of comprehensive income (as defined in § 210.1-02 of Regulation S-X). - [x] (d) Statement of cash flows. - [e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - | (f) Statement of changes in liabilities subordinated to claims of creditors. - 区 (g) Notes to consolidated financial statements. - 🇿 (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. - [ (i) Computation of tangible net worth under 17 CFR 240.18a-2. - □ (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - □ (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 PAB Requirements under Exhibit A to § 240.15c3-3. - [ (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - | (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. - l (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. - | (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. - [ (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - 18 (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. - 区 (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. - □ (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. - 区 (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - | {} Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.17a-12, as applicable. - □ (y) Report describing any material inadequacies found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). - □ (z) Other: - \*\* To request confidential treatment of chis filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18c-7(d)(2), as applicable. {3}------------------------------------------------ #### FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION Year Ended December 31, 2022 {4}------------------------------------------------ #### C O N T E N T S \_\_\_\_\_\_\_ | | Page
Number | | |----------------------------------------------------------------------------------------------------|----------------|--| | REPORT
OFINDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM | 1 | | | FINANCIAL
STATEMENTS | | | | Statement
of
Financial
Condition | 3 | | | Statement
of
Operations | 4 | | | Statement
of
Changes
in
Shareholder's
Equity | 5 | | | Statement
of
Cash
Flows | 6 | | | Notes
to
Financial
Statements | 7 | | | SUPPLEMENTAL
INFORMATION | | | | Schedule
I
–
Computation
of
Net
Capital(Under
17
C.F.R.
§
240.17a-5) | 16 | | {5}------------------------------------------------ ![](_page_5_Picture_0.jpeg) #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors of Valmark Securities, Inc. Akron, Ohio #### Opinion on the Financial Statements We have audited the accompanying statement of financial condition of Valmark Securities, Inc. as of December 31, 2022, and the related statements of operations, changes in shareholder's equity, and cash flows for the year then ended, and the related notes to the financial statements (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of Valmark Securities, Inc. as of December 31, 2022, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. #### Basis for Opinion These financial statements are the responsibility of Valmark Securities, Inc.'s management. Our responsibility is to express an opinion on Valmark Securities, Inc.'s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to Valmark Securities, Inc. in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. {6}------------------------------------------------ To the Board of Directors of Valmark Securities, Inc. #### Auditor's Report on Supplemental Information The information contained in the accompanying supplemental information on Schedule I -Computation of Net Capital (under 17 C.F.R. §240.17a-5) has been subjected to audit procedures performed in conjunction with the audit of Valmark Securities, Inc.'s financial statements. The supplemental information is the responsibility of Valmark Securities, Inc.'s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented conformity with 17 C.F.R. §240.17a-5. In our opinion, the supplemental information on Schedule I - Computation of Net Capital (under 17 C.F.R. §240.17a-5) is fairly stated, in all material respects, in relation to the financial statements as a whole. MSIL. P. Certified Public Accountants We have served as Valmark Securities, Inc.'s auditors since 2009. Orlando, Florida February 27, 2023 {7}------------------------------------------------ #### STATEMENT OF FINANCIAL CONDITION #### December 31, 2022 | VALMARK | SECURITIES,
INC. | | | |------------------------------------------------------------------------------------------|--------------------------------------------------------|---------------------------|--| | STATEMENT | OF
FINANCIAL
CONDITION | | | | December
31,
2022 | | | | | ASSETS | | | | | Cash
and
cash
equivalents
Deposits
at
clearing
brokers | | \$
1,248,364
99,929 | | | Commissions
receivable | | 4,521,649 | | | Due
from
affiliates | | 963,193 | | | Other
receivables
Customer
list,
net | | 93,844
117,937 | | | Investments
in
affiliates | | 246,209 | | | | TOTAL
ASSETS | \$ 7,291,125 | | | LIABILITIES | | | | | Commissions
payable | | \$
4,032,487 | | | Due
to
affiliates
Other | | 426,727
151,346 | | | | TOTAL
LIABILITIES | 4,610,560 | | | COMMITMENTS
AND
CONTINGENCIES | | | | | SHAREHOLDER'S
EQUITY
Common
stock
-
\$1
par
value;
750
shares | | | | | authorized;
100
shares
issued
and
outstanding | | 100 | | | Paid-in
capital
Retained
earnings | | 47,424
2,633,041 | | | | TOTAL
SHAREHOLDER'S
EQUITY | 2,680,565 | | | | TOTAL
LIABILITIES
AND
SHAREHOLDER'S
EQUITY | \$ 7,291,125 | | | | | | | {8}------------------------------------------------ #### STATEMENT OF OPERATIONS #### Year Ended December 31, 2022 | VALMARK
SECURITIES,
INC. | | | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------|--| | STATEMENT
OF
OPERATIONS | | | | Year
Ended
December
31,
2022 | | | | REVENUES
Commissions
from
the
sale
of
insurance-based
products,
investment
company
shares,
and
other
Trail
commissions
Other | \$ 50,966,823
26,815,537
1,827,386 | | | TOTAL
REVENUES | 79,609,746 | | | COMMISSIONS
AND
OTHER
CLEARING
BROKER
EXPENSES | 65,519,454 | | | | 14,090,292 | | | OPERATING
EXPENSES | 11,663,882 | | | INCOME
BEFORE
INCOME
TAX
EXPENSE | 2,426,410 | | | INCOME
TAX
EXPENSE | 509,546 | | | NET
INCOME | \$
1,916,864 | | {9}------------------------------------------------ #### STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY #### Year Ended December 31, 2022 | STATEMENT | | | SECURITIES,
INC. | | | |---------------------------|------------------|-----------------|---------------------|----------------------|-----------------| | | OF
CHANGES | IN | SHAREHOLDER'S | EQUITY | | | | Year
Ended | December | 31,
2022 | | | | | | | | | | | | Common
Shares | Stock
Amount | Paid-in
Capital | Retained
Earnings | Total | | | | | | | | | BEGINNING
BALANCE
- | | \$ 100 | \$ 47,424 | \$ 2,216,177 | \$ 2,263,701 | | JANUARY
1,
2022 | 100 | | | | | | DIVIDENDS | - | - | - | (1,500,000) | (1,500,000) | | NET
INCOME | - | - | - | 1,916,864 | 1,916,864 | {10}------------------------------------------------ #### STATEMENT OF CASH FLOWS #### Year Ended December 31, 2022 | VALMARK
SECURITIES,
INC. | | | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------|--| | STATEMENT
OF
CASH
FLOWS | | | | Year
Ended
December
31,
2022 | | | | | | | | CASH
FLOWS
FROM
OPERATING
ACTIVITIES
Net
income
Adjustments
to
reconcile
net
income
to
net
cash
provided
by
operating
activities | \$
1,916,864 | | | Amortization
Share
of
loss
from
affiliates | 20,813
675 | | | Changes
in
operating
assets
and
liabilities:
Deposits
at
clearing
brokers
Commissions
receivable
Other
receivables
and
prepaid
expenses
Commissions
payable
Other
liabilities
Due
from/to
affiliates,
net | 20,088
869,924
11,489
(463,154)
(44,580)
(453,177) | | | NET
CASH
PROVIDED
BY
OPERATING
ACTIVITIES | 1,878,942 | | | CASH
FLOWS
FROM
INVESTING
ACTIVITIES
Investment
in
joint
venture
Distribution
received
from
joint
venture | (250,000)
5,666 | | | NET
CASH
USED
BY
INVESTING
ACTIVITIES | (244,334) | | | CASH
FLOWS
FROM
FINANCING
ACTIVITIES
Payment
of
dividends
on
common
stock | (1,500,000) | | | NET
INCREASE
IN
CASH
AND
CASH
EQUIVALENTS | 134,608 | | | CASH
AND
CASH
EQUIVALENTS
-BEGINNING
OF
YEAR | 1,113,756 | | | CASH
AND
CASH
EQUIVALENTS
-END
OF
YEAR | \$ 1,248,364 | | {11}------------------------------------------------ #### NOTES TO FINANCIAL STATEMENTS #### Year Ended December 31, 2022 #### A. BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies of Valmark Securities, Inc. (the "Company") is presented to assist in understanding the Company's financial statements. The financial statements and notes are representations of the Company's management, who is responsible for their integrity and objectivity. #### Business Description The Company is a wholly owned subsidiary, via a pass-through entity (Valmark Investments, LLC), of Executive Insurance Agency, Inc. ("EIA"), which is a wholly owned subsidiary of Valmark Financial Group, LLC ("VFG"). The Company derives commission income by representing insurance carriers and their representatives who sell variable insurance and annuity contracts, settlement of fixed and variable life insurance contracts to third parties, and by introducing customers to a stock and mutual fund brokerage firm that clears trading transactions. Customers remit funds directly to the insurance carriers and clearing broker, and no funds or securities are held by the Company. The Company is registered as a broker-dealer with the United States Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority ("FINRA") and the Securities Investor Protection Corporation ("SIPC"). The Company provides these services to independent financial advisors, enabling them to provide investors with the services described above. #### Use of Estimates Management uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenue and expenses. Significant estimates by management include, among others, the allocation of operating expenses from VFG and thedetermination ofthe amounts to accrue with respect to certain legal contingencies, the ultimate outcome of which cannot be determined until such litigation has concluded.Actual results could vary from the estimates that were used. #### Cash and Cash Equivalents The Company considers financial instruments with original maturities of less than 90 days to be cash equivalents. {12}------------------------------------------------ #### A. BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) #### Commissions Receivable and Credit Policies Commissions receivable are uncollateralized obligations due under normal trade terms, requiring payment within 30 days from the trade date. The Company generally collects receivables within 30 days and does not charge interest on commissions receivable with invoice dates over 30 days old.Collections of commissions receivable are allocated to the specific invoices identified on the customer's remittance advice or, if unspecified, are applied to the oldest, unpaid invoices. Management individually reviews all commissions receivable balances that exceed 90 days from the invoice date and, based on an assessmentof current creditworthiness, estimates the portion, if any,of the balance that will not be collected. Additionally, management estimates an allowance for the aggregate remaining commissions receivable based on historical collectibility and determines amounts of any uncollectible receivables to be charged off. In the opinion of management, on December 31, 2022, all commissions receivable were considered collectible, and no allowance was necessary. #### Fair Value of Financial Instruments The Company uses the following methods and assumptions to estimate the fair value of each class of financial instruments: Cash and cash equivalents - The carrying amounts reported in the statement of financial condition for cash equivalents approximate their fair value because of the short maturity of these instruments. Commissions receivable, other receivables and due from affiliates - The carrying amounts of these receivables approximate fair value due to their short-term nature and historical collectibility. Commissions payable and due to affiliates - The carrying amounts of these payables approximate fair value due to the short-term nature of these obligations. #### Equity Method Investments The Company accounts for its investments in joint ventures for which it holds a noncontrolling interest, but can exercise influence, under the equity method of accounting. Under this method, the investment is initially recorded at cost and adjusted thereafter for the Company's share of the affiliate's net income or loss and other changes in the affiliate's equity. Additionally, the Company records its share of earnings or losses in theconsolidated statement of operations (see Note F). #### Customer List The Company amortizes acquired customer lists on a straight-line basis over their estimated remaining useful lives, which theCompany has determined to be 8 years. The customer list is evaluated annually for impairment. There were no impairment losses recorded during the year ended December31, 2022. {13}------------------------------------------------ #### Revenue Recognition Revenues are recognized when control of the promised services is transferred to customers, in an amount that reflects the consideration the Company expects to beentitled to in exchange for those services. Revenues are analyzed to determine whether the Company is the principal (i.e., reports revenues on a gross basis) or agent (i.e., reports revenues on a net basis) in the contract. Principal or agent designations depend primarily on the control an entity has over the product or service before control is transferred to a customer. The indicators of which party exercises control include primary responsibility over performance obligations, inventory risk before the good or service is transferred and discretion in establishing the price (see Note C). #### Income Taxes The Company does not file separate income tax returns; rather, its activity is included in consolidated tax returns filed by EIA.The Company accrues an income tax provision based on its ratable share of consolidated income taxes or benefit, as if the Company and EIA filed on a separate-return basis, and theamount of current tax or benefit calculated is recorded as due to/from affiliates and either remitted to or received from EIA.The Company utilizes the asset and liability method of accounting for income taxes.Under this method, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is provided against the future benefit of deferred tax assets if itcannot be determined that it is more likely than not that the future tax benefits associated with thedeferred tax asset will be realized.The Company's tax provision consists of its current tax provision, plus any change during theyear in deferred tax assets and liabilities (see Note D). made to a taxing authority and the amount can reasonably be estimated. As of In theevent that an uncertain tax position exists in which theCompany could incur income taxes, the Company would evaluate whether there is a probability that the uncertain tax position taken would be sustained upon examination by thetaxing authorities.Allowances for uncertain tax positions would then be recorded if the Company determined it is probable that a position would not be sustained upon examination or if a payment would have to be December 31, 2022, the Company does not believe it has any uncertain tax positions that would result in the Company having a liability to the taxing authorities. As of December 31, 2022, with few exceptions,the consolidated income tax returns filed by EIA are no longer subject to income tax examinations by U.S. federal taxing authorities forany year before 2019. #### Subsequent Events Management has evaluated subsequent events for recognition and disclosure through February 27, 2023, the date the financial statements were available to be issued. {14}------------------------------------------------ #### B. CONCENTRATIONS OF CREDIT RISK AND SIGNIFICANT CUSTOMERS The Company is engaged in various trading and brokerage activities in which counterparties primarily include broker-dealers and other financial institutions.In theevent 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. commission income for the year ended December 31, 2022. The Company's largest The Company's two largest product vendors accounted for approximately 17% and 17% of individual accounts receivable balances at December 31, 2022 were from three insurance carriers and represented 25%, 23%, and 11%, of year-end commissions receivable, respectively. At times during the year, the Company's cash balance exceeded amounts insured by the Federal Deposit Insurance Corporation ("FDIC").The Company has not experienced any loss in such accounts and believes that it is not exposed to any significant credit risk related to its cash balances. #### C. REVENUES #### Significant Judgments The Company derives revenue from contracts with customers by representing insurance carriers and their representatives who sell variable insurance and annuity contracts, settlement of fixed and variable life insurance contracts to third parties, and by introducing customers to stock and mutual fund brokerage firms who clear trading transactions. The Company also receives trail commissions for the ongoing servicing of variable annuity, variable life, and certain mutual fund transactions. Recognition and measurement of revenue is based on the assessment of individual contract terms using portfolio approach practical expedient. Management has determined in all cases that performance obligations are satisfied at a point in time. #### Commission Revenue Brokerage commissions. The Company introduces customers to a clearing broker-dealer to execute buys and sells of securities. Each time a customer enters into a buy orsell transaction, the Company receives a commission. Commissions and related clearing expenses are recorded on the trade date (the date that the clearing broker-dealer fills the trade order by finding and contracting with a counterparty and confirms the trade with the customer). The Company considers the performance obligation satisfied on the trade date when the underlying financial instrument or purchaser is identified, the pricing is agreed upon, and therisks and rewards of ownership have been transferred to or from the customer. Variable annuity and insurance contracts. The Company acts as an agent forcertain insurance carriers to enter into variable life insurance contracts or variable annuity contracts. Commissions are recorded on thedate the contract is signed by thecustomer. The Company considers the performance obligation satisfied on the date of the customer's signature. At this time, the contract is final, in force, and theownership of the policy has been transferred to the customer. For insurance renewal commissions that are premium-based, variable consideration is deemed to be insignificant due to probable reversals, and accordingly revenue is recorded at the time of renewal. {15}------------------------------------------------ #### C. REVENUES (Continued) Trail commissions. The Company earns trail commissions (commissions that are paid over time, such as 12(b)-1 fees) that are recurring in nature and areearned based on the market value of investment holdings in customer accounts eligible to pay trails. Trail commissions are primarily earned on mutual funds and variable annuity contracts. As trailing commission revenue is based on the market value of clients' investment holdings, the consideration is variable, and an estimate of the variable consideration is constrained due to thedependence on unpredictable market impacts and client accountvalues. The constraint is removed once the account value can be determined.Accordingly, trail commissions are recorded on the date the insurance company or fund company generates the commission. The Company considers the performance obligation satisfied on this date due to the fact that these commissions are paid at the end of the performance obligation period (typically thelast day of a quarter or month). The following table presents sales-based (brokerage, variable annuity, and insurance contracts) and trail commissions revenue disaggregated by investment product category for the year ended December 31, 2022: | Sales-based | | |---------------------------------|--------------| | Life
insurance | \$34,148,399 | | Annuities | 10,193,111 | | Mutual
funds | 3,919,165 | | Life
settlements | 2,510,686 | | Stocks
&
bonds | 195,462 | | Total
sales-based
revenue | 50,966,823 | | Trail-based | | | Annuities | 17,401,945 | | Mutual
funds | 5,681,058 | | Life
insurance | 3,732,534 | | Total
trail-based
revenue | 26,815,537 | | Total
commission
revenue | \$77,782,360 | #### Commission revenue Other revenue which was approximately \$1,827,0000 for the year ended December 31, 2022, includes affiliation, licensing, software, and other fees charged to independent representatives, and is recorded as services are provided. Other revenue also includes interest income, which is recorded when received. #### D. INCOME TAXES The Company's income tax provision for the year ended December 31, 2022 is entirely related to federal income taxes. The Company is subject to theOhio Commercial Activities Tax ("CAT"), which was immaterial for 2022. For the year ended December31, 2022, the Company's total tax provision of approximately \$510,000 consisted solely of the current tax expense resulting from the taxable income generated during the year ended December31, 2022.There were no significant differences between the financial reporting and the tax basis of assets and liabilities. The income tax liability is recorded in Due to Affiliates at December 31, 2022. {16}------------------------------------------------ #### E. RELATED-PARTY RELATIONSHIPS AND TRANSACTIONS The Company sharesoffice, administrative and occupancy expenses with VFG and three affiliated entities.Substantially all of the Company's operating expenses are allocated by VFG for the year ended December 31, 2022. The allocation is pursuant to the expensesharing agreement between theCompany and VFG.Management periodically reviews and modifies the expense allocation when eventsand circumstances warrant such modification. Allocations are primarily based on estimated employee time expended on each entity. VFG rents office space from a company related through common ownership. Total rent expense related to this lease recorded by the Company after allocation from VFG was approximately \$298,000 for the year ended December 31, 2022. VFG has entered into an agreement to provide administrative services to Morehead Insurance Services, LLC ("Morehead"), a joint venture partially owned by the Company (see Note F), such as payroll, IT support, and benefit plan administration. For the year ended December 31, 2022, total administrative expenses recorded on Morehead under this agreement was \$50,000. At December 31, 2022 Morehead's balance sheet included a Due to Affiliates amount of \$8,333 related to this agreement. therefore, is a related party. This related party accounted for approximately 5% of At December 31, 2022, Due to Affiliates included amounts due to related companies for commissions received by theCompany on behalf of the related companies.In theopinion of management, such amounts are expected to be repaid prior to December31, 2023. At December 31, 2022, Due from Affiliates included amounts due from related companies for commissions received by related companies or commissions paid by the Company on behalf of the related companies.In theopinion of management, such amounts are expected to be received prior to December31, 2023. One of the Company's customers is an affiliate of an indirect owner of the Company and, commission income for the year ended December 31, 2022, and approximately 6% of the commissions receivable balance at December 31, 2022. #### F. JOINT VENTURES On April 19, 2006, the Company entered into an operating agreement with an unrelated entity to form PMIA II, LLC ("PMIA2"), which qualifies as a variable-interest entity.The Company owns 51% of PMIA2.PMIA2 was formed as a jointopportunity to market and provide insurance products. Even though the Company owns 51% of the entity, the Company is credited or charged with only 30% of the net profits or netlosses.Therefore, it was determined that the Company is not the primary beneficiary and does not consolidate the entity into its financial statements.The Company accounts forthe joint venture under the equity method of accounting.As of December 31, 2022, total assets and liabilities of PMIA2 were minimal, and there was minimal activity in thestatement of operations forthe year ended December 31, 2022. {17}------------------------------------------------ #### F. JOINT VENTURES (Continued) On September 12, 2022 theCompany entered into an operating agreement with an unrelated individual to form Morehead, which qualifies as a variable-interest entity. Morehead was formed as a joint opportunity to market and provide insurance products. Even though the company owns 50% of the entity, the Company is credited or charged with only 10% of the net profits or net losses. Therefore, it was determined that the Company is not the primary beneficiary and does not consolidate the entity into its financial statements. The Company accounts forthe joint venture under the equity method ofaccounting due to theexertion of significant influence. The maximum exposure to loss due to involvement with this VIE is equal to the carrying value of the investment.This was determined by management's understanding of the nature of the business, the fact that there are no guarantees that the Company is responsible for on behalf of Morehead, and the understanding of Morehead's operating agreement. Initially, per the terms of the Morehead operating agreement, 100 Class V units were issued and 100 Class S units were issued. As of December 31, 2022, 100 Class V units were held by the Company for its initial capital contribution of \$250,000, and 100 Class S units were held by the unrelated individual. At December 31, 2022, the Company's investment in Morehead was approximately \$244,000 with no differences existing between the amount reported on the Company's balance sheet and the proportionate assets and liabilities of Morehead. There was minimal activity in the statementof operations for the year ended December 31, 2022. The following table presents the investments in affiliates and related earnings or losses from affiliates as of and for the year ended December 31, 2022: | terms
of
the
Morehead
operating
agreement,
units
were
issued.
As
of
December
31,
for
its
initial
capital
contribution
of
unrelated
individual.
At
December
31,
approximately
\$244,000
with
no
differences
Company's
balance
sheet
and
the
was
minimal
activity
in
the
statementof | 2022,
\$250,000,
2022, | 100
Class
100
Class
and
100
the
Company's
existing
proportionate
assets
operations | V
units
were
issued
V
units
were
held
Class
S
units
were
investment
in
between
the
amount
and
liabilities
of
for
the
year
ended | | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------|---------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--| | | | | | | | | | December
31,
2022 | | | | Equity
in
net
assets
of
affiliates | | | | | | Morehead | \$ | 243,659 | | | | PMIA2 | |
2,550 | | | | Equity
in
net
assets
of
affiliates | \$ | 246,209 | | | | | Year | Ended
December
31,
2022 | | | | Share
of
earnings
(losses)
of
affiliates | | | | | | Morehead | | \$
(6,341) | | | | PMIA2 | |
5,666 | | | | Share
of
earnings
(losses)
of
affiliates | | \$
(675) | | | | | | | | | {18}------------------------------------------------ #### G. CONTINGENCIES #### Legal and Regulatory Matters The Company, from time to time, is subject to routine litigation and arbitration generally related to regulatory inquiries and customer complaints in the normal course of business. Although there can be no assurance as to the ultimate disposition of routine litigation, management believes, based upon information available at this time, that the ultimate outcome of these matters will not have a material adverse effect on the operations and financial condition of the Company. The Company is a registered broker-dealer and, as such, is subject to thecontinual scrutiny of entities who regulate the broker-dealer industry, including FINRA, the SEC, and various securities commissions of the states and jurisdictions in which the Company operates.As part of the regulatory process, the Company is subject to routine examinations, the purpose of which is to determine the Company's compliance with rules and regulations promulgated by theexamining regulatory authority.In theevent of noncompliance, the Company may be subject to disciplinary action, including fines. Management is not aware of any asserted violations that could result in significant exposure to the Company. brokers to the extent of the net loss on the unsettled trade. On December 31, 2022, #### Clearing Firms Included in the Company's clearing agreements with its clearing brokers is an indemnification clause.This clause relates to instances where the Company's customers fail to settle securities transactions.In theevent this occurs, the Company has indemnified the clearing management of the Company had not been notified by the clearing brokers, nor were they otherwise aware, of any potential losses relating to this indemnification. #### COVID-19 Pandemic To date, the Company has not experienced any significant direct negative impact of COVID-19 pandemic to its business. However, the pandemic continues to impact economic conditions, and could potentially have a negative impact the Company's financial position, results of operations, and cash flows in thefuture.Management is actively monitoring this situation, however, given the daily evolution of the pandemic and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 pandemic on our future financial condition, results of operations, or cash flows. accounts and does not accept customer funds or securities. Instead, it has entered into a #### H. NET CAPITAL PROVISIONS OF RULE 15c3-1 The Company is a "Fully Disclosed Broker-Dealer."The Company does not carry customer "clearing agreement" with its clearing brokers and has fully disclosed all of its customer accounts to these brokers. Pursuant to the net capital provisions of Rule 15c3-1 of the Securities Exchange Act of 1934, the Company is required to maintain a minimum net capital balance, as defined, under such provisions. {19}------------------------------------------------ #### H. NET CAPITAL PROVISIONS OF RULE 15C3-1 (Continued) The Company's minimum capital requirement is the greater of \$50,000, or 6 2/3%, of aggregate indebtedness, as defined, under SEC Rule 15c3-1(a)(1).Net capital may fluctuate on a daily basis.On December 31, 2022, the Company had net capital of \$1,070,826, as computed by this Rule, which was \$763,455 in excess of its required net capital of \$307,371. In addition to the minimum net capital provisions, Rule 15c3-1 requires that the Company maintain a ratio of aggregate indebtedness, as defined, to net capital, of notmore than 15 to 1.On December 31, 2022, the ratio was 4.31 to 1. #### I. CUSTOMER LIST The Company, in conjunction with its parent company, signed an agreement with an unrelated third party to acquire the rights to an income stream that was previously shared under a revenue sharing agreement. The Company's allocable portion of consideration to acquire such rights is comprised entirely ofcash payments totaling \$166,500. Customer list 166,500 \$ Accumulated amortization (48,563) Net book value 117,937 \$ Amortization expense 20,813 \$ The estimated amortization expense over each of the next five years is \$20,813. As of and for the year ended December 31, 2022, customer listand related amortization was as follows: | Customer list | S | 166,500 | |--------------------------|---|----------| | Accumulated amortization | | (48,563) | | Net book value | | 117,937 | | | | | | Amortization expense | S | 20,813 | {20}------------------------------------------------ SUPPLEMENTAL INFORMATION {21}------------------------------------------------ #### (Under Under 17 C.F.R. § 240.17a-5) SCHEDULE I - COMPUTATION OF NET CAPITAL #### December 31, 2022 | VALMARK
SECURITIES, | INC. | |---------------------------------------------------------------------------------------------------------------------------|-----------------| | SCHEDULE
I
-
COMPUTATION
OF
(Under
Under
17
C.F.R.
§
240.17a-5) | NET
CAPITAL | | December
31,
2022 | | | Net
capital | | | Total
shareholder's
equity
from
statement
of
financial
condition
Deductions
and/or
changes: | \$
2,680,565 | | Nonallowable
assets:
Commissions
receivable
and
other
receivables |
1,145,637 | | Other |
99,956 | | Customer
list,
net |
117,937 | | Investments
in
affiliates |
246,209 | | | 1,609,739 | | Net
capital | \$
1,070,826 | | Aggregate
indebtedness | \$
4,610,560 | | Computation
of
basic
net
capital
requirement
of
6
2/3%
of
aggregate | | | indebtedness | \$
307,371 | | Minimum
required
net
capital | \$
50,000 | | Net
capital
requirement | \$
307,371 | | Excess
net
capital | \$
763,455 | | Ratio
of
aggregate
indebtedness
to
net
capital | 4.31 | {22}------------------------------------------------ # VALMARK SECURITIES, INC. REPORT ON APPLYING AGREED-UPON PROCEDURES Year Ended December 31, 2022 {23}------------------------------------------------ ### CONTENTS Page Number #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON APPLYING AGREED-UPON PROCEDURES 1-2 #### SCHEDULE I Schedule of General Assessment Reconciliation (Form SIPC-7) {24}------------------------------------------------ ![](_page_24_Picture_0.jpeg) #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON APPLYING AGREED-UPON PROCEDURES To the Board of Directors of Valmark Securities, Inc. Akron, Ohio We have performed the procedures included in Rule 17a-5 e)(4) under the Securities Exchange Act of 1934 and the Securities Investor Protection Corporation ("SIPC") Series 600 Rules, which are enumerated below on the accompanying General Assessment ("Form SPIC-7") for the year ended December 31, 2022. Management of Valmark Securities, Inc. (the "Company") is responsible for its Form SIPC-7 and for its compliance with the applicable instructions on Form SPIC-7. Management of the Company has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of assisting the Company and SIPC in evaluating the Company's compliance with the applicable instructions on Form SIPC-7 for the year ended December 31, 2022. Additionally, SIPC has agreed to and acknowledged that the procedures performed are appropriate for their intended purpose. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meets of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures we performed and our findings are as follows: - 1. Compared the listed assessment payments in Form SIPC-7 with respective cash disbursement records entries, noting no differences; - 2. Compared the Total Revenue amounts reported on the Annual Audited Report Form X-17A-Part III for the year ended December 31, 2022, with the Total Revenue amounts reported in Form SIPC-7 for the year ended December 31, 2022, noting no differences; - 3. Compared any adjustments reported in Form SIPC-7 with supporting schedules and working papers, noting no differences; and - 4. Recalculated the arithmetical accuracy of the calculations reflected in Form SIPC-7 and in the related schedules and working papers supporting the adjustments, noting no differences. - 5. Compared the amount of any overpayment applied to the current assessment with the Form SIPC 7 on which it was originally computed noting no differences. {25}------------------------------------------------ To the Board of Directors of Valmark Securities, Inc. We were engaged by the Company to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the AICPA and in accordance with the standards of the Public Company Accounting Oversight Board (United States). We were not engaged to, and did not conduct an examination or a review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the Company's Form SIPC-7 and for its compliance with the applicable instructions on Form SIPC-7 for the year ended December 31, 2022. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement. This report is intended solely for the information and use of the Company and the SIPC and is not intended to be, and should not be, used by anyone other than those specified parties. Sh. 2 Certified Public Accountants Orlando, Florida February 27, 2023 {26}------------------------------------------------ | SIPC-7 | | |----------------|--| | (36-REV 12/18) | | #### SECURITIES INVESTOR PROTECTION CORPORATION Mail Code: 8967 P.O. Box 7247 Philadelphia, PA 19170-0001 (36-REV 12/18) ### General Assessment Reconciliation ## For the fiscal year ended 12/31/2022 (Read carefully the instructions in your Working Copy before completing this Form) #### TO BE FILED BY ALL SIPC MEMBERS WITH FISCAL YEAR ENDINGS 1. Name of Member, address, Designated Examining Authority, 1934 Act registration no. and morth in which fiscal year ends for purposes of the audit requirement of SEC Rule 17a-5: | | 45483 FINRA DEC
VALMARK SECURITIES, INC.
130 SPRINGSIDE DR. STE 110
AKRON, OH 44333-2486 | Note: If any of the information shown on the
mailing label requires correction, please e-mail
any corrections to form@sipc.org and so
indicate on the form filed.
Name and telephone number of person to
contact respecting this form.
ELIZABETH KOZENKO 330-576-1234 | | |--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--| | | 2. A. General Assessment (item 2e from page 2) | 4,398 | | | | B. Less payment made with SIPC-6 filed (exclude interest)
7/25/2022 | 1,873 | | | | Date Paid | | | | | C. Less prior overpayment applied | | | | | 2,525
D. Assessment balance due or (overpayment) | | | | | E. Interest computed on late payment (see instruction E) for | | | | | 2,525
F. Total assessment balance and interest due (or overpayment carried forward) | | | | | G. PAYMENT: √ the box
Check mailed to P.O. Box Funds Wired
ACH
Total (must be same as F above) | | | | | ക്ക
H. Overpayment carried forward | | | | | 3. Subsidiaries (S) and predecessors (P) included in this form (give name and 1934 Act registration number);
The SIPC member submitting this form and the | | | | | person by whom it is executed represent thereby
that all information contained herein is true, correct
and complete. | VALMARK SECURITIES. INC.
(Name of Corporation, Partnership or other organization)
under Mozenes | | | | Dated the 6th day of February
CFO | (Authorized Signature) | | | | This form and the assessment payment is due 60 days after the end of the Working Copy of this form
for a period of not less than 6 years, the latest 2 years in an easily accessible place. | (Title) | | | | Dates: | | | | | Reviewed
Received
Postmarked | | | | | Calculations_
Documentation_ | Forward Copy _ | | | IPC REVIEWER | Exceptions: | | | | S | Disposition of exceptions: | | | {27}------------------------------------------------ #### DETERMINATION OF "SIPC NET OPERATING REVENUES" AND GENERAL ASSESSMENT Amounts for the fiscal period beginning 01/01/2022 and ending 12/31/2022 | Item No.
2a. Total revenue (FOCUS Line 12/Part IIA Line 9, Code 4030) | | Eliminate cents
\$80,598,830 | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------|---------------------------------| | 2b, Additions:
(1) Total revenues from the securities business of subsidiaries (except foreign subsidiaries) and
predecessors not included above. | | | | (2) Net loss from principal transactions in securities in trading accounts. | | | | (3) Net loss from principal transactions in commodities in trading accounts. | | | | (4) Interest and dividend expense deducted in determining item 2a. | | | | (5) Net loss from management of or participation in the underwriting or distribution of securities. | | | | (6) Expenses other than advertising, printing, registration fees and legal fees deducted in determining net
profit from management of or participation in underwriting or distribution of securities. | | | | (7) Net loss from securities in investment accounts. | | | | Total additions | | | | 2c. Deductions:
(1) Revenues from the distribution of shares of a registered open end investment company or unit
investment trust, from the sale of variable annuities, from the business of insurance, from investment
advisory services rendered to registered investment companies or insurance company separate
accounts, and from transactions in security futures products.
(2) Revenues from commodity transactions.
(3) Commissions, floor brokerage and clearance paid to other SIPC members in connection with
securities transactions.
(4) Reimbursements for postage in connection with proxy solicitation,
(5) Net gain from securities in investment accounts.
(6) 100% of commissions and markups earned from transactions in (i) certificates of deposit and
(ii) Treasury bills, bankers acceptances or commercial paper that mature nine months or less
from issuance date.
(7) Direct expenses of printing advertising and legal fees incurred in connection with other revenue
related to the securities business (revenue defined by Section 16(9)(L) of the Act),
(8) Other revenue not related either directly or indirectly to the securities business.
(See Instruction C): | | 77,586,898 | | | | | | | | 79,815 | | | | | | | | | | | | | | | | | | | | | | (Deductions in excess of \$100,000 require documentation) | | | | (9) (i) Total interest and dividend expense (FOCUS Line 22/PART IIA Line 13,
Code 4075 plus line 2b(4) above) but not in excess
of total interest and dividend income. | S | | | (ii) 40% of margin interest earned on customers securities
accounts (40% of FOCUS line 5, Code 3960). | S | | | Enter the greater of line (i) or (ii) | | | | Total deductions | | 77,666,713 | | 2d. SIPC Net Operating Revenues | | 2,932,117 | | 2e. General Assessment @ .0015 | 4,398 | | | | | (to page 1, line 2 A.) | {28}------------------------------------------------ ### REPORT ON REVIEW OF STATEMENT OF EXEMPTION OF BROKER DEALER Year Ended December 31, 2022 {29}------------------------------------------------ ### CONTENTS Page Number 1 #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON REVIEW OF STATEMENT OF EXEMPTION OF BROKER DEALER SCHEDULE I Broker Dealer Statement of Exemption to the Customer Protection Rule under SEC Rule 15c3-3 {30}------------------------------------------------ ![](_page_30_Picture_0.jpeg) #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON REVIEW OF STATEMENT OF EXEMPTION OF BROKER DEALER To the Board of Directors of Valmark Securities, Inc. Akron, Ohio We have reviewed management's statements, included in the accompanying Statement of Exemption to the Customer Protection Rule Under SEC Rule 15c3-3, in which (1) Valmark Securities, Inc. identified the following provisions of 17 C.F.R. §15c3-3(k) under which Valmark Securities, Inc. claimed an exemption from 17 C.F.R. §240.15c3-3: 15c3-3(k)(2)(ii), (the "exemption provisions") and (2) Valmark Securities, Inc. stated that Valmark Securities, Inc. met the identified exemption provisions throughout the most recent fiscal year, except as described in its exemption report. Valmark Securities, Inc.'s management is responsible for compliance with the exemption provisions and its statements. Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included inquiries and other required procedures to obtain evidence about Valmark Securities, Inc.'s compliance with the exemption provisions. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to management's statements referred to above for them to be fairly stated, in all material respects, based on the provisions set forth in paragraph (k)(2)(ii) of Rule 15c3-3 under the Securities Exchange Act of 1934. MSb, P.4. Certified Public Accountants Orlando, Florida February 27, 2023 {31}------------------------------------------------ ![](_page_31_Picture_0.jpeg) #### Broker Dealer Statement of Exemption to the Customer Protection Rule Under SEC Rule 15c3-3 Valmark Securities, Inc. claims exemption from SEC Rule 15c3-3 under the provisions of SEC Rule 15c3-3(k)(2)(ii). Valmark Securities, Inc., an introducing broker-dealer, clears all brokerage transactions with and for customers through Pershing, LLC (clearing broker-dealer). Valmark Securities, Inc. promptly transmits all customer funds and securities to Pershing, LLC, which carries all of the accounts of such customers and maintains and preserves such books and records pertaining thereto pursuant to the requirements of §§ 240.17a-3 and 240.17a-4. After testing the population of transactions, Valmark Securities, Inc. concludes that they have met the requirements under SEC Rule 15c3-3(k)(2)(ii) including limited relief under Regulatory Notice 15-23 with the following exceptions for the year beginning January 1, 2022 and ending December 31, 2022: - Three transactions were forwarded to the carrier after six business days. These transactions were researched and found to be a result of mail delays. The checks were sent to the home office for processing and did not immediately arrive. Checks were promptly forwarded to the respective carriers within one business day after receipt in the home office. - Three transactions were forwarded to the carrier between six and fifteen business days. These transactions were researched and found to be the result of a lag between when the registered representative received the checks and when they were forwarded to the carrier or home office. Registered reps were instructed to promptly forward all customer funds in the future. Elizabeth E. Kozenko Chief Financial Officer Secretary, Valmark Securities, Inc. #### WWW.VALMARKFG.COM Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.