# AVANTAX INVESTMENT SERVICES, INC. X-17A-5 (2025-03-14) — Broker-dealer annual report - Company: AVANTAX INVESTMENT SERVICES, INC. - Form: X-17A-5 - Filed: 2025-03-14 - Period: 2024-12-31 - Accession: 0000909841-25-000001 - CIK: 719068 - File #: 8-29533 - Type: Broker-dealer - Material weakness: No - Auditor: Deloitte & Touche LLP - Auditor location: Los Angeles, CA - Contact: Rodney Dowell - Phone: 310-341-1853 - Email: rodney.dowell@cetera.com - Website: cetera.com - Signed by: Rodney Dowell (Vice President and Principal Financial Officer) Original filing: https://www.sec.gov/Archives/edgar/data/719068/000090984125000001/aispub.pdf --- {0}------------------------------------------------ AVANTAX INVESTMENT SERVICES, INC. (SEC I.D. No. 8-29533) STATEMENT OF FINANCIAL CONDITION AS OF DECEMBER 31, 2024 AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Filed pursuant to Rule 17a-5(d) under the Securities Exchange Act of 1934 as a Public Document. {1}------------------------------------------------ Public ### 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 III sec file number 8-29533 FACING PAGE Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 AND ENDING\_12/31/2024 filing for the period beginning 01/01/2024 MM/DD/YY MM/DD/YY A. REGISTRANT IDENTIFICATION # NAME OF FIRM: Avantax Investment Services, Inc. TYPE OF REGISTRANT (check all applicable boxes): 匡 Broker-dealer □ Check here if respondent is also an OTC derivatives dealer ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) # 3200 Olympus Blvd. Suite 100 | | | (No. and Street) | | | | | |----------------------------------------------------------------------------------------------------|---------------------------------------------------|------------------------------------------------------------|--------------------------------------------|--------------------------|--|--| | Dallas | | IX | | 75019
(Zip Code) | | | | (City) | | (State) | | | | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | | Rodney Dowell | | (310) 341-1853 | | rodney.dowell@cetera.com | | | | (Name) | (Email Address)
(Area Code - Telephone Number) | | | | | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
Deloitte & Touche LLP | | | | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | | 555 W. 5th Street, Floor 27 Los Angeles | | | CA | 90013 | | | | (Address) | | (City) | (State) | (Zip Code) | | | | October 20, 2003 | | | 34 | | | | | (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 | Rodney Dowell | . swear (or affirm) that, to the best of my knowledge and belief, the | | | | | |-----------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--| | | financial report pertaining to the firm of Avantax Investment Services, Inc. (the "Company")
as of | | | | | | Concessor an an ad
- ABI | PLAND STATUS PROPERTY CONSULTION CONSULTION CONSULTION CONSULTION CONSULTION CONSULTION CONSULTION CONSULTION CONSULTION CONSULTION CONSULTION CONSULTION CONSULTION CONSULTIO | | | | | 2 024 is true and correct. I further swear (or affirm) that neither the company nor any December 31 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. | OFFICIAL STAMP | |-----------------------------------------| | ROBIN C KNOLL | | NOTARY PUBLIC - OREGON | | COMMISSION NO. 1021633 | | MY COMMISSION EXPIRES FEBRUARY 13, 2026 | Signature: Principal Financial Officer Title. Notary Public #### This filing \*\* contains (check all applicable boxes): - (a) Statement of financial condition. - (b) Notes to consolidated statement of financial condition. - [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). - [ (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. - [ {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. - [ ] (i) Computation for determination of customer 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. - (1) 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. - O (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 (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. - [ (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. - [] (u) Independent public accountant's report based on an examination of the 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. - [ {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. - [ {x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-1e or 17 CFR 240.17a-12, as applicable. - O (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 certain portions of this filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18a-7(d)(2), as applicable. {3}------------------------------------------------ # Deloitte. Deloitte & Touche LLP 555 W. 5th Street. Suite 2700 Los Angeles, CA 90013-1010 USA Tel: +1 213 688 0800 Fax: +1 213-688 0100 www.deloitte.com #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholder of Avantax Investment Services, Inc. #### Opinion on the Financial Statement We have audited the accompanying statement of financial condition of Avantax Investment Services, Inc. (the "Company") 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 Company as of December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. #### Basis for Opinion The financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on this 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 of the financial statement provides a reasonable basis for our opinion. Delintle = Touche LLP March 14, 2025 We have served as the Company's auditor since 2024. {4}------------------------------------------------ #### AVANTAX INVESTMENT SERVICES, INC. ## STATEMENT OF FINANCIAL CONDITION AS OF DECEMBER 31,2024 | ASSETS | | | |--------------------------------------------------------------------|------|-------------| | Cash and cash equivalents | ಕ್ಕಾ | 100,900,159 | | Fees and commissions receivable | | 13,079,617 | | Receivable from clearing broker | | 475,087 | | Related party receivables | | 15,985,630 | | Other receivables | | 19,999,641 | | Advisor notes receivable, net of allowance of \$9,138 | | 44,441,317 | | Intangible assets, net of accumulated amortization of \$84,150,501 | | 64,305,205 | | Goodwill | | 148,461,302 | | Other assets | | 913,472 | | Total assets | es | 408,561,430 | | | | | | LIABILITIES AND STOCKHOLDER'S EQUITY | | | | LIABILITIES | | | | Fees and commissions payable | ക്ക | 13,829,342 | | Related party payables | | 49,488,553 | | Deferred revenue | | 3,129,667 | | Deferred income tax liabilities, net | | 15,271,295 | | Accrued expenses and accounts payable | | 503,005 | | Dividends payable | | 4,000,000 | | Other liabilities | | 1,661,015 | | Total liabilities | | 87 882 877 | #### COMMITMENTS AND CONTINGENCIES (NOTE 8) ### STOCKHOLDER'S EQUITY | Common stock, \$0.032 par value. Authorized 900,000 shares; issued and
outstanding 546,000 shares | 17.472 | |------------------------------------------------------------------------------------------------------|--------------| | Additional paid-in capital | 362.749.906 | | Accumulated deficit | (42,088,825) | | Total stockholder's equity | 320,678,553 | | Total liabilities and stockholder's equity | 408.561.430 | The accompanying notes are an integral part of this Statement of Financial Condition. {5}------------------------------------------------ ### AVANTAX INVESMENT SERVICES, INC. NOTES TO STATEMENT OF FINANCIAL CONDITION AS OF DECEMBER 31, 2024 #### NOTE 1 - ORGANIZATION AND DESCRIPTION OF THE COMPANY Avantax Investment Services, Inc. (the "Company") is an introducing securities broker-dealer registered under the Securities Exchange Act of 1934 and a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"). The Company provides brokerage and insurance services to the public nationally through independent financial advisors. A majority of the financial advisors affiliated with the Company hold both securities and advisory licenses and provide investment advisory services through Avantax Advisory Services, Inc ("AAS"), an affiliated registered investment advisor ("RIA"). As a result, all advisory business generated by the Company's advisors is recorded at AAS. The Company is a wholly owned subsidiary of Avantax Wealth Management. Inc. ("AWM"), which is an indirectly owned subsidiary of Avantax, Inc ("Avantax"). Avantax is a wholly owned subsidiary of Aretec Group, Inc. ("Aretec"). Aretec is a wholly owned subsidiary of GC Two Intermediate Holdings, Inc. which is a wholly owned subsidiary of GC Two Holdings, Inc. ("GC Two"). GC Two is a wholly owned subsidiary of GC Three Holdings, LLC ("GC Three"). #### NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES #### Basis of Presentation The Statement of Financial Condition was prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). #### Use of Estimates The preparation of the Statement of Financial Condition in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the Statement of Financial Condition. Accordingly, actual results could differ from those estimates, and these differences could be material #### Cash and Cash Equivalents Cash equivalents include highly liquid investments that are readly convertible to known amounts of cash and that are so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. #### Fees and Commissions Receivable and Payable Fees and commissions receivable includes commissions from mutual funds, variable annuities, insurance product purchases transacted directly with the product sponsors, and mutual fund and annuity trailers. Fees and commissions payable related to these transactions are recorded based on estimated payout ratios for each product as commission revenue is accrued. #### Receivable from Clearing Broker Receivable from clearing broker represents commissions and fees earned and collected by the Company's clearing broker, but not yet remitted to the Company. {6}------------------------------------------------ #### Other Receivables Other receivables primarily consist of accrued receivables from the Company's clearing broker related to fees charged to client accounts, accrued receivables related to cash sweep program, as well as receivables from product sponsors. #### Securities Owned and Securities Sold, Not Yet Purchased Securities owned and securities sold, not yet purchased are recorded on a trade-date basis and are stated at fair value. As of December 31, 2024, the Company had immaterial balances of securities owned and securities sold, not yet purchased, included in Other liabilities, respectively, in the Statement of Financial Condition. See Note 3 - Fair Value Measurements for details. #### Advisor Notes Receivable The Company provides certain financial advisors with loans as part of its recruiting and retention strategy, for key revenue producing advisors. These loans are generally forgivable over a period of up to 15 years provided that the advisor remains licensed with the Company ratably amortizes the principal balance of these forgivable loans over the loan term. If a financial advisor terminates the arrangement prior to the loan maturity date, the balance becomes immediately due, and the loan is reclassified as a payback loan. An allowance for credit losses is recorded upon conversion to payback loan. The Company estimates expected credit losses based on evaluation of several factors related to credit risk, including financial advisors' affiliation status, loan type, and purpose. Additionally, we consider overall macro-economic factors that may impact estimated expected credit losses. The methodologies and assumptions used in estimating credit losses are regularly evaluated to determine if our estimates are appropriate with adjustments made on a quarterly basis. These assumptions and estimates require use of significant management judgement regarding matters that are inherently uncertain. During the year ended December 31, 2024, the Company has not observed material changes in payment terms, collection trends, or other significant factors. #### Goodwill and Other Intangible Assets Goodwill assets are not amortized; however, intangible assets that are deemed to have are amortized over their useful lives, generally ranging from 5 - 20 years. See Note 5 - Goodwill and Other Intangible Assets, for additional information regarding the Company's goodwill and other intangible assets. Goodwill is tested annually on October 1st and between annual tests if certain events occur indicating that the carrying amounts may be impaired. If a qualitative assessment is used and the Company determines that the fair value of a reporting unit is more likely than not less than its carrying amount, a quantitative impairment test will be performed by comparing the fair value of a reporting unit with its carrying amount. No impairment of goodwill was recognized during the year ended December 31, 2024. Long-lived assets, such as intangible assets subject to amortization, are reviewed for impairment when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset group to estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset group exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset or asset group exceeds the estimated fair value of the asset or asset group. There was no impairment of definite-lived intangible assets recognized during the year ended December 31, 2024. {7}------------------------------------------------ #### Other Assets As of December 31, 2024, the Company had \$913,472 in Other assets, which primarily consists of securities owned, prepaid expenses, and deferred charges. #### Deferred Revenue The Company records unearned income when cash payments are received or due in advance of its performance obligation, including amounts which are refundable. #### Recently Issued Accounting Pronouncements In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" to enhance the transparency of income tax disclosures relating to the rate reconciliation, disaggregation of income taxes paid, and certain other disclosures. The ASU should be applied prospectively and is effective for the Company for annual periods beginning after December 15, 2025, with early adoption permitted. The Company is currently evaluating the impact on the related disclosures; however, it does not expect this update to have an impact on its financial condition as the standard is disclosure-related only. In November 2024, FASB issued ASU 2024-03, which requires disaggregated disclosure of income statement expenses for public business entities (PBEs). This ASU is effective for the Company for annual periods beginning after December 15, 2026. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its financial statement, however, it does not expect this update to have an impact on its financial condition as the standard is disclosure-related only. #### Recently Adopted Accounting Pronouncements In November 2023, FASB issued ASU 2023-07. Seament Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which updates reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. This ASU also requires that an entity with a single reportable segment, such as the Company, provide all of the disclosures required as part of the updates and all existing disclosures required by Topic 280. This update is effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company adopted this ASU on January 1, 2024, and the adoption did not have any impact on its financial condition as the standard was disclosure-related only. #### NOTE 3 - FAIR VALUE MEASUREMENTS The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. U.S. GAAP defines three levels of inputs that may be used to measure fair value: Level 1 - Quoted prices in active markets for identical assets and liabilities that the reporting entity 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 and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. Level 3 - Unobservable inputs that reflect the entity's own assumptions about the data inputs that market participants would use in the pricing of the asset or liability and are consequently not based on market activity. {8}------------------------------------------------ The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is the most significant to the fair value measurement in its entirety. A review of the fair value hierarchy classification is conducted on an annual basis. Changes in the type of inputs used in determining fair value may result in a reclassification for certain assets. The Company assumes all transfers occur at the beginning of the reporting period in which they occur. For the year ended December 31, 2024, there were no transfers between Levels 1, 2, and 3. The Company's fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis by product category as of December 31, 2024 is as follows: | | | Level 1 | Level 2 | | Level 3 | | Total | | |------------------------------------------------------------------------|---------|------------|---------|--------|---------|---|-------|------------| | Assets: | | | | | | | | | | Cash equivalents - money market funds | ക | 89,002,149 | ಕಾ | l | ക | l | ക്ക | 89,002,149 | | Securities owned - recorded in Other
assets: | | | | | | | | | | Equity securities | | 33,389 | | | | - | | 33,389 | | Corporate bonds | | - | | 28,088 | | - | | 28,088 | | U.S. government bonds | | 152 | | | | | | 152 | | Total securities owned | | 33,541 | | 28,088 | | | | 61,629 | | Total | સ્ક | 89,035,690 | ക | 28,088 | ക | | ક્તિ | 89,063,778 | | | Level 1 | | Level 2 | | Level 3 | | Total | | | Liabilities: | | | | | | | | | | Securities sold, not yet purchased -
recorded in Other Liabilities: | | | | | | | | | | Mutual funds | ക | 35,419 | S | | S | - | S | 35,419 | | Municipal bonds | | 10,012 | | | | - | | 10,012 | | Total securities sold, not yet purchased | | 45,431 | | | | | | 45,431 | | Total | ક | 45,431 | ಕಾ | | ಕ್ಕಾ | | ಿ | 45,431 | | | | | | | | | | | Cash equivalents include money market mutual fund instruments, which are short term in nature with readily determinable values derived from active markets. mutual funds, publicly traded equity securities with sufficient trading volume, U.S. government bonds, and municipal bonds are fair valued by management using quoted prices for identical instruments in active markets. Accordingly, they are classified within Level 1. Corporate bonds are fair valued by management using third-party pricing services and are classified within Level 2. {9}------------------------------------------------ #### Fair Value of Financial Instruments not Measured at Fair Value The fair value of cash and cash equivalents was estimated to approximate the carrying value and are classified as Level 1 of the fair value hierarchy. The fair value of fees and commissions receivable and payable from clearing broker, related party receivables and payables, other receivables, deferred revenue, and accrued expenses and accounts payable was estimated to approximate the carrying value and are classified as Level 2 of the fair value hierarchy due to their short-term nature. #### NOTE 4 - ADVISOR NOTES RECEIVABLE The following table presents a summary of the activities in financial advisor notes receivable, net of allowance for doubtful amounts for the year ended December 31, 2024: | | Year Ended December 31, 2024 | | | | | |---------------------------------------------------|------------------------------|----------------|-----------------|--|--| | | Forgivable | Payback | Total | | | | Advisor notes receivable, net - beginning balance | 35,518,163
S | 1,948,000
A | ಕ
37,466,163 | | | | Originated/new loans | 14.666.244 | | 14,666,244 | | | | Collections | (40,000) | - | (40,000) | | | | Forgiveness/amortization | (8,659,952) | | (8,659,952) | | | | Transfer from forgivable to payback | (91,333) | 91,333 | | | | | Change in allowance for doubtful amounts | 961,000 | 47,862 | 1,008,862 | | | | Advisor notes receivable, net - ending balance | 42,354,122 | \$ 2,087,195 | 44,441,317 | | | The following table presents a summary of the activities in the allowance for doubtful amounts due from financial advisor notes receivable for the year ended December 31, 2024: | | Year Ended December 31, 2024 | | | | | | | |-----------------------------------------------------------|------------------------------|------------|---|----------|---|-------------|--| | | | Forgivable | | Payback | | Total | | | Advisor notes receivable allowance - beginning
balance | S | 961,000 | S | 57,000 | S | 1.018,000 | | | Provision for doubtful amounts | | (961,000) | | (47,862) | | (1,008,862) | | | Total change | | (961,000) | | (47,862) | | (1,008,862) | | | Advisor notes receivable allowance - ending
balance | ಕಾ | | ಕ | 9,138 | S | 9,138 | | {10}------------------------------------------------ #### NOTE 5 - GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill remained unchanged at \$148,461,302 as of December 31, 2024. The following tables present the components of intangible assets with definite lives subject to amortization at December 31, 2024: | As of December 31, 2024 | Gross
Carrying
Accumulated
Amortization
Amount | | | Net
Carrying
Amount | veiginted
Average
Remaining
Useful Life
(years) | | | |--------------------------------------|------------------------------------------------------------|-------------|----|---------------------------|-------------------------------------------------------------|------------|------| | Financial professional relationships | S | 131,955,706 | ಳು | (75,900,501) | ಳಿ | 56,055,205 | 11.0 | | Sponsor relationships | | 16,500,000 | | (8,250,000) | | 8,250,000 | 9.0 | | Total | S | 148,455,706 | ਵ | (84,150,501) | ಕ | 64.305.205 | | #### NOTE 6 - RELATED PARTY TRANSACTIONS Cetera Financial allocates a portion of its general administrative expenses to the Company based on a direct usage basis. AWM and Avantax Planning Partners, Inc. ("APP"), each allocate expenses to the Company based on total revenues, per an expense sharing agreement. In 2024, the Company allocated expense to its related parties, AAS and Avantax Insurance Agency, LLC ("AIA"), per an expense sharing agreement. Additionally, the Company allocated revenue to AAS and AIA. Because these transactions and agreements are with affiliates, they may not be the same as those recorded if the Company was not a wholly owned subsidiary of AWM and affiliated with the other entities. As of December 31, 2024, the Company had total outstanding payable of \$25,401,080 to Aretec, \$21,868,578 to Cetera Financial, and \$1,196,844 to APP, which were included in Related party payables in the Statement of Financial Condition, the Company had \$1,022,051 of related party payables to other affiliates. The Company had \$14,197,138 of related party receivables with AWM, \$1,570,654 with Avantax, and \$217,838 of related party receivables with other affiliates. Cetera Financial may fund note receivables as part of the recruitment effort to the Company's advisors. Those notes typically require the payback of principal and interest to Cetera Financial over periods of three to five years. The issuance of these notes by Cetera Financial is typically accompanied by the execution of a bonus agreement, between the financial advisor and the Company, providing for the payment based on the passage of time or attainment of certain production targets. Given the credit agreements Aretec has with its lenders, in the event of a default the Company's assets could be used to satisfy Aretec's obligations. #### NOTE 7 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET CREDIT RISK Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company maintains its cash and temporary cash investments in bank deposit and other accounts, the balances of which, at times, may exceed federally insured limits. Exposure to credit risk is reduced by maintaining the Company's banking relationships with high credit quality financial institutions. {11}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``78"+2"8(,[PT7ZTT7`S\+)#?2#,, %31#M5+1#/)#42('+4(.%3[T7aT\7\`Q;D4O#2#&6#1PQ7RSRT74"#1(4+%%3(001#0(4#+)/#64#/)#,,4%)#4 #### bcWWdWXY W - - eW -W fV -W -WWXY W eWgWhW - W 2('+4(.8(,Q;aZ; !"#\$%&'()\*2.(+&,()#?#&'4+%)31%&4"#'1%-+,+%),%3C5.#QZ2P9P%34"#F#251+4+#,G?2"()0#D24%3 Q\_PT7'(1(01('"=HRKH++K3%1(..%4"#141(),(24+%),2.#(1#/%)(35..\*/+,2.%,#/6(,+,8+4"(2.#(1+)061%=#1()/ 4"(4%51%4"#165,+)#,,(24+-+4+#,,"#1#M5+1#&#)4,,'#2+3+#/+)A%%4)%4#`T%34"#FG\$C#.#(,#B%;PT9 `SS`P(/%'4+)0(&#)/&#)4,4%Q`\$;A;C;iRTS;Q`(9ZHIA%%4)%4#`TJK;!"#\$%&'()\*2(11+#,)%25,4%,L (22%5)4,7'1%&'4.\*41(),&+4,25,4%‡)/,()/25,4%,#251+4+#,4%4"#+,,5#1%14"#2.#(1+)061%=#1()/ /%#,)%4%4"#18+,#"%./35)/,%1,#251+4+#,%325,4%,;j#2(5,#4"#\$%&'()\*2.(+&,()#?#&'4+%)74"# \$%&'()\*+,)%41#M5+1#/4%'1#'(1#(/#4#1&+)(4+%)%31#,#1-#1#M5+1#&#)4,3%161%=#1,()//#(.#1,%1 '1%-+/#+)3%1&(4+%)1#.(4+)04%'%,,#,,+%)%12%)41%.1#M5+1#&#)4,3%161%=#1,()//#(.#1,; {12}------------------------------------------------ #### NOTE 11 - INCOME TAXES The tax effect of temporary differences that gave rise to our deferred tax assets and liabilities were as follows: | | Year Ended
December 31, 2024 | | |--------------------------------|---------------------------------|--------------| | Deferred Tax Assets | | | | Deferred revenue | ക്ക | 194.495 | | Forgivable loans | | 620,306 | | Other, net | | 183,418 | | Gross deferred tax assets | | 998,219 | | | | | | Deferred Tax Liabilities | | | | Intangibles | | (16,135,641) | | Other, net | | (133,873) | | Gross deferred tax liabilities | | (16,269,514) | | | | | | Net deferred tax liability | ക | (15,271,295) | A current tax liability of \$25,401,080 to Aretec is included in Related party payables in the Statement of Financial Condition. At December 31, 2024, the Company determined that no valuation allowance was necessary for its deferred tax assets based upon its assessment of whether it is more likely than not that the Company will generate sufficient future taxable income necessary to realize the deferred tax benefits. The primary temporary difference that gives rise to the deferred tax liability relates to intangible assets created from the purchase of the Company in 2015. There was no change to the Company's uncertain tax positions for the calendar year ending December 31, 2024. The total amount of the deferred tax liability for uncertain tax position at December 31, 2024, is \$284,871. As of December 31, 2024, the Company's U.S. federal tax returns for the years 2021-2023 remain open under the normal three-year statute of limitations and are therefore subject to examination. #### NOTE 12 - SEGMENT REPORTING The Company is engaged in a single line of business as a securities broker-dealer. Operating exclusively in the United States, the Company provides brokerage and insurance services through independent financial advisors. Operations constitute a single segment and therefore, a single reportable segment because the chief operating decision makers ("CODM") manage business activities using information of the Company as a whole. The CODM, listed below, use net income, including significant expenses such as commissions, to evaluate the business's performance, predominantly in the forecasting process, management of resources, and to make operational decisions to manage the Company. The Company does not have any customers that individually account for over 10% of revenues. Chief Executive Officer, Cetera Holdings Chief Executive Officer, Cetera Financial Group {13}------------------------------------------------ #### Chief Financial Officer, Cetera Financial Group The Company's financial statements contain all pertinent information, including assets, net income, and significant expenses, utilized by the CODM to manage the Company. The accounting policies used to measure the profit and loss of the same as those described in the summary of significant accounting policies. ## NOTE 13 - SUBSEQUENT EVENTS The Company has evaluated activity through the date the financial statement was issued and concluded that no subsequent events have occurred that would require recognition or disclosure in the financial statement. \* \* \* \* \* \* Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.