# CHELSEA MORGAN SECURITIES, INC. X-17A-5 (2026-03-10) — Broker-dealer annual report - Company: CHELSEA MORGAN SECURITIES, INC. - Form: X-17A-5 - Filed: 2026-03-10 - Period: 2025-12-31 - Accession: 0001090102-26-000003 - CIK: 1090102 - File #: 8-51916 - Type: Broker-dealer - Material weakness: No - Auditor: WWC, P.C. Certified Public Accountants - Auditor location: San Matteo, CA - Contact: John Pisapia - Phone: 7189678400 - Email: jpisapia@chfs.com - Website: chfs.com - Signed by: John Pisapia (President) Original filing: https://www.sec.gov/Archives/edgar/data/1090102/000109010226000003/chelse2025audit.pdf --- {0}------------------------------------------------ ## 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: Nov. 30, 2026 Estimated average burden hours per response: 12 ## SEC FILE NUMBER 8-51916 FACING PAGE Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 01/01/2025 FILING FOR THE PERIOD BEGINNING MM/DD/YY MM/DD/YY 12/31/2025 A. REGISTRANT IDENTIFICATION NAME OF FIRM: CHELSEA MORGAN SECURITIES, INC. TYPE OF REGISTRANT (check all applicable boxes): Broker-dealer Security-based swap dealer Check here if respondent is also an OTC derivatives dealer Major security-based swap participant AND ENDING ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) # 242 MAIN STREET | | (No. and Street) | | | | | |--------------|------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--| | | NY | | 10307 | | | | | (State) | | (Zip Code) | | | | | | | | | | | JOHN PISAPIA | | | JPISAPIA@CHFS.COM | | | | | | (Email Address) | | | | | | | | | | | | | | | | | | | | | | | | | | | SAN MATEO | CA | 94403 | | | | | (City) | (State) | (Zip Code) | | | | | | | | | | | | | | (PCAOB Registration Number, if applicable) | | | | | | | | | | | | 2010 PIONEER COURT
(Date of Registration with PCAOB)(if applicable) | PERSON TO CONTACT WITH REGARD TO THIS FILING
718-967-8400
(Area Code - Telephone Number)
FOR OFFICIAL USE ONLY | B. ACCOUNTANT IDENTIFICATION
INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
WWC, P.C. CERTIFIED PUBLIC ACCOUNTANTS
(Name - if individual, state last, first, and middle name)
1171 | | | \*Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-5(e)(1)(ii), if applicable. Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. {1}------------------------------------------------ #### OATH OR AFFIRMATION | 1, | JOHN PISAPIA
swear (or affirm) that, to the best of my knowledge and belief, the | | | | | |----------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--| | | , as of
financial report pertaining to the firm of CHELSEA MORGAN SECURITIES, INC.
DECEMBER 31
, 2 025, 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. | | | | | | | Deerdre Sttenhaus Anlide
Signature: | | | | | | | DIERDRE STEINHAUS AINBINDER
Notary Public, State of New York
No. 01A14899711
Title: | | | | | | | Qualified in Nassau County
PRESIDENT
Commission Expires July 6, 20 27 | | | | | | | | | | | | | | 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 income 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 conselidated 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. | | | | | | | (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. | | | | | | | (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR | | | | | | | 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable. | | | | | | | (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net | | | | | | | worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-1, or 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17
CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences
exist. | | | | | | | (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. | | | | | | 미 | | | | | | | | (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 report or financial statements under 17 | | | | | | | CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable.
17 | | | | | | | (v) Independent public accountant's report based on an examination of certain statements in the compliance report under
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. | | | | | | 미 | (y) Report describing any material inadequacies found to exist or found to have existed since the date of the previous audit, or | | | | | | | a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k).
(z) Other: | | | | | \*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18a-7(d)(2), as applicable. {2}------------------------------------------------ Financial Statements and Supplemental Schedules December 31, 2025 (With Independent Auditors' Report Thereon and Supplemental Schedules) These financial statements and schedules should be deemed confidential pursuant to subparagraph (e)(3) of Rule 17a-5 of the Securities and Exchange Commission. {3}------------------------------------------------ ## December 31, 2025 ## Table of Contents | | PAGE | |--------------------------------------------------------------------------------------------------------|-------| | INDEPENDENT AUDITOR'S REPORT | 1 | | STATEMENT OF FINANCIAL CONDITION | 2 | | STATEMENT OF INCOME | 3 | | STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY | 4 | | STATEMENT OF CASH FLOWS | 5 | | NOTES TO FINANCIAL STATEMENTS | 6-10 | | SUPPLEMENTAL INFORMATION PURSUANT TO RULE 17a-5
OF THE SECURITIES EXCHANGE ACT OF 1934: | 11 | | SCHEDULE I - COMPUTATION OF NET CAPITAL UNDER RULE
15c3-1 OF THE SECURITIES AND EXCHANGE COMMISSION | 12 | | SCHEDULE II - INFORMATION RELATING TO RESERVE REQUIREMENTS
FOR BROKER/DEALERS | 13 | | SCHEDULE III - INFORMATION RELATING TO POSSESSION OR
CONTROL REQUIREMENTS PURSUANT TO RULE 15c3-3 | 13 | | EXEMPTION REPORT | 14 | | INDEPENDENT AUDITORS' REPORT ON EXEMPTION REPORT | 15-16 | | INDEPENDENT AUDITORS' SUPPLEMENTARY REPORT ON
SIPC ASSESSMENT RECONCILIATION | 17-19 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) ## REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholder of Chelsea Morgan Securities Inc. (dba Chelsea Financial Services) 242 Main Street, Staten Island, NY 10307 ### Opinion on the Financial Statements We have audited the accompanying statement of financial condition of Chelsea Morgan Securities Inc. (dba Chelsea Financial Services) (the "Company") as of December 31, 2025, the related statements of income, changes in stockholder's equity, and cash flows for the year then ended, and the related notes and schedules (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, 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 the Company's management. Our responsibility is to express an opinion on the Company'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 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 statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. 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. ## Auditor's Report on Supplemental Information The Schedule I-Computation of Net Capital Under Rule 15c3-1, Schedule II -Computation for Determination of Reserve Requirements under Rule 15c3-3, and Schedule III - Information Relating to Possession or Control Requirements under SEC Rule 15c3-3 have been subjected to audit procedures performed in conjunction with the audit of the Company's financial statements. The supplemental information is the responsibility of the Company'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 in conformity with 17 C.F.R. §240.17a- 5. In our opinion, Schedule I-Computation of Net Capital Under Rule 15c3-1, Schedule II Computation for Determination of Reserve Requirements under Rule 15c3-3, and Schedule III - Information Relating to Possession or Control Requirements under SEC Rule 15c3-3 are fairly stated, in all material respects, in relation to the financial statements as a whole. WWC, P.C. WWC, P.C. РСАОВ ID. No. 1171 We have served as the Company's auditor since 2017. San Mateо, CA March 2, 2026 {5}------------------------------------------------ #### STATEMENT OF FINANCIAL CONDITION #### As of December 31, 2025 #### ASSETS | Cash | \$
419,674 | |-----------------------------------------------------------------|---------------| | Commissions receivable | 320,687 | | Clearing deposit at broker | 26,436 | | Prepaid expenses | 117,396 | | Rent deposit | 1,100 | | Intangible assets, net of accumulated amortization | 17,400 | | Furniture, equipment and leasehold improvements at cost, net of | | | accumulated depreciation, and right of use assets, net | 8,758 | | TOTAL ASSETS | \$ 911,451 | | LIABILITIES AND STOCKHOLDER'S EQUITY | | | Accounts payable and accrued expenses | \$
559,656 | | Note payable | 41,500 | | TOTAL LIABILITIES | 601,156 | | Commitments and contingent liabilities | | | Stockholder's equity | | | Common stock, par value \$0.01, 1,000 shares authorized, | | | issued and outstanding | 10 | | Paid-in capital | 136,990 | | Retained earnings | 173,295 | | Total stockholder's equity | 310,295 | | TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY | \$ 911,451 | {6}------------------------------------------------ #### STATEMENT OF INCOME For the Year Ended December 31, 2025 | Revenues: | | | |-------------------------------|-----------------|-----| | Commission | \$
7,358,026 | | | Rebates | 304,310 | | | Interest income | 222,408 | | | Other income | | 792 | | Total Revenue | 7,885,536 | | | Expenses: | | | | Commission expense | 4,916,490 | | | Payroll and employee benefits | 1,659,475 | | | Travel and entertainment | 128,102 | | | Occupancy | 161,083 | | | Clearing fees | 138,892 | | | Communications and technology | 128,986 | | | Insurance | 34,905 | | | Professional fees | 121,974 | | | Regulatory fees | 88,573 | | | Maintenance and repairs | 4,225 | | | Office supplies and expenses | 22,065 | | | Depreciation | 2,912 | | | Amortization | | 600 | | Interest | 347 | | | Other | 63,319 | | | Total Expenses | 7,471,948 | | | Operating Income | 413,588 | | | State and local taxes | 20,275 | | | Net Income | \$
393,313 | | {7}------------------------------------------------ ## STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY ## For the Year Ended December 31, 2025 | | Common Stock | | Additional | | | | | | | |----------------------------------|--------------|--|------------------------|--|--------------------|----|-----------------------|--|-----------| | | Shares | | Amount | | Paid-in
Capital | | Retained
Earnings | | Totals | | Balances at
January 1, 2025 | 1,000 \$ | | 10 \$ | | 136,990 | ಕೆ | 87,667 \$ | | 224,667 | | Distribution to
shareholder | | | | | | | (307,685) | | (307,685) | | Net income | | | | | | | 393,313 | | 393,313 | | Balances at
December 31, 2025 | | | 1,000 \$ \$ 2010 \$ \$ | | | | 136,990 \$ 173,295 \$ | | 310,295 | {8}------------------------------------------------ ## STATEMENT OF CASH FLOWS For the Year Ended December 31, 2025 ## CASH FLOWS FROM OPERATING ACTIVITIES: | Net income | સ્ત્ર | 393,313 | |------------------------------------------------------------------------------------|--------|--------------| | Adjustments to reconcile net income to net cash provided by operating activities | | | | Depreciation | | 2,912 | | Amortization
Gain on disposal of copier | | 600
(548) | | Increase in commissions receivable | | (107,434) | | Increase in clearing deposit at broker | | (166) | | Increase in prepaid expenses | | (62,834) | | Decrease in arbitration receivable | | 7,338 | | Increase in accounts payable and accrued expenses | | 59,827 | | Increase in note payable | | 41,500 | | NET CASH PROVIDED BY OPERATING ACTIVITIES | | 334,508 | | CASH FLOWS FROM INVESTING ACTIVITIES: | | | | Purchase of fixed assets | | (9,892) | | Purchase of client list | | (18,000) | | NET CASH USED IN INVESTING ACTIVITIES | | (27,892) | | CASH FLOWS FROM FINANCING ACTIVITIES: | | | | Payment of finance lease | | (1,519) | | Capital distributions | | (307,685) | | NET CASH USED IN FINANCING ACTIVITIES | | (309,204) | | NET DECREASE IN CASH | | (2,588) | | CASH - Beginning of the year | | 422,262 | | CASH - End of the year | સ્ત્ર | 419,674 | | SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for: | | | | Interest | ર્સ્ડે | 347 | | Taxes | ക്ക | 17,275 | {9}------------------------------------------------ #### NOTES TO FINANCIAL STATEMENTS December 31, 2025 #### NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS #### Organization Chelsea Morgan Securities, Inc. D/B/A Chelsea Financial Services (the "Company"), a New York S Corporation formed in 1999, is registered as a broker-dealer with the Securities and is a member of the Financial Industry Regulatory Authority. The Company's principal address is 242 Main Street, Staten Island, NY 10307. #### Nature of Business The Company earns commission income by introducing as a broker transactions and accounts of customers to another broker-dealer who carries such accounts on a fully disclosed basis, and by participating in private placements. #### NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES #### Basis of Presentation The accompanying financial statements are prepared in accordance with generally accounting principles in the United States ("GAAP"). #### Cash All short-term investments with an original maturity of three months or less are considered to be cash equivalents. #### Depreciation The cost of furniture and equipment is depreciated over the related assets of 5 to 7 years on a straight-line basis. The cost of leasehold improvements is depreciated useful lives of the related assets or the term of the related lease, whichever is shorter. #### Concentration of Credit Risk The Company is engaged in various trading and brokerage activities in which counterparties primarily include broker-dealers, banks, and other financial institutions. In the event counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the instrument. It is the Company's policy to review, as necessary, the credit standing of each counterparty. #### Use of Estimates The preparation of financial statements in conformity with generally accepted accounting primiples requires the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported and expenses during the reporting period. Actual results could differ from those estimates. A significant estimate included in the financial statements relates to the useful life of the acquired customer list recognized as an intangible asset. Management applied judgment in estimating that the customer list will provide economic benefits over a 15-year period, considering factors such as customer retentions, historical experience, and industry considerations. The customer list is amortized on a systematic basis over the estimated useful life, and changes in these assumptions could materially affect amortization expense in future periods. #### Revenue Recognition In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Reverse from Contracts with Customers ("Revenue Recognition Stand"), which outlines a single comprehensive model for entities to use in {10}------------------------------------------------ ## NOTES TO FINANCIAL STATEMENTS ### December 31, 2025 ## NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued accounting for revenue arising from contracts with customers. The revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the entity expects to be entitled in exchange for those goods or services. The ASU defines the promised good or service as the performance obligation under the contract. In accordance with the Revenue Recognition Standard, the Company has identified the specific performance obligation (promised services) associated with the contract with the customer and has determined when that specific performance obligation has been satisfied, which may be at a point in time or over time depending on how the performance obligation is defined. The contracts with customers also contains the transaction price, which consideration and/or consideration that may vary (variable consideration) and is defined as the amount of consideration an entitled to when or as the performance obligation is satisfied. The Revenue Recognition Standard further clarified the guidance related to reporting revenue gross as principal versus net as an agent. The Company acts as an agent in the revenue-generating transactions with its customers. #### Commission Commission income represents fees and is recognized when the company on the security to be transacted and the amount of commission to be charged, the service has been rendered, at which point there are no outstanding performance obligations due to the customer, and the Company is assured that its commission fee will be received. Brokerage are derived from executing transactions for clients on exchanges and over-the-counter markets, sales of mutual funds, providing brokerage services and other such activities. Transactions in securities, including the related commission revenues and expenses, are recorded on a trade-date basis as securities transactions occur. #### Private placement fees Private placement revenue represents placement fees earned in connection with the offering and sale of securities issued by thirdparty issuers. The Company acts as a placement agent and earns a commission based on a fixed percentage of the capital raised, as specified in the applicable selling or placements. Revenue is recognized when the underlying transaction is completed, the offering has closed, and the Company has no further performance obligations, and collection is reasonably assured. #### Leases The Company determines if a lease at inception. Operating and leases are recognized as its own right-of-use ("ROU") asset category in the Company's property and the corresponding lease obligations are recognized to operating lease liability. Finance leases are also included as equipment and the corresponding lease obligations are also recognized in accrued expenses in the Company's statement of financial condition. ROU assets represent the right to use an underlying asset for the lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease do not provide an implicit rate, the Company generally uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments may include options to extend or terminate the lease when it is reasonably certain that Company will exercise that option. Lease payments is recognized on a straight-line basis over the lease term. For lease agreements that are one year or length, the Company exercises the exemption under ASC 842 which for the Company is the lease of its primary business. The annual lease expense did vary materially from the prior year. {11}------------------------------------------------ #### NOTES TO FINANCIAL STATEMENTS #### December 31, 2025 #### NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued #### Adoption of new accounting standards The FASB issued (ASU) 2023-07, "Segment Reporting" (Topic 280) which increased disclosure requirements regarding a public entity's reporting segments effective for fiscal years beginning after December 15, 2023. ASU 2023-07 required incremental line-item disclosures about each reportable segment's expenses as well as profit and losses. The Company has evaluated there under and has determined that the Company operates as one reporting segment. For further discussion refer to Footnote 10, Reportable Segments. #### Recent Accounting Pronouncements #### Financial Instruments - Credit Losses In November 2019, the FASB issued ASU 2019-11, which is an update to ASU Update No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments which is stated in the amendments in this update clarify or address stakeholders' specific issues about certain aspects of the amendments in Update 2016-13 as described in the following. The amendments clarify that the allowance for credit deteriorated (PCD) assets should include in the allowance for credit losses expected recoveries of amounts previously written off and expected to be written off by the entity and should not exceed the aggregate of amortized cost basis previously written off and expected to be written off by an entity. In addition, the amendments clarify that when a discounted cash flow method is used to estimate expected credit loses, expected recoveries should not include any amounts that result in an acceleration of the noneredit discount. An entity may include increases in expected cash flows after acquisition. The amendments provide transition entities an accounting policy election to adjust the effective interest rate on existing troubled debt restructurings. (TDRs) using prepayment assumptions on the date of adoption of Topic 326 rather than the prepayment assumptions in effect immediately before the restructuring. The amendments in this update extend the for accrued interest receivable balances to additional relevant disclosures involving amortized cost basis. The amendments clarify that an entity should assess whether it reasonably expects the borrower will be able to continually replenish collateral securing the financial asset to apply the practical expedient. The amendments also clarify that an entity applying the practical expedient should estimate expected credit losses for any difference between the amortized cost basis that is greater than the fine collateral securing the financial asset (that is, the unsecured portion of the amortized cost basis). An entity may determine that the expectation of nonpayment for the amortized cost basis equal to the fair value of the collateral securing the financial asset is zero. The amendment to Subtopic 805- 20, Business Combinations- Identifiable Assets and Liabilities, and any Noncontrolling the guidance by removing the cross-reference to Subtopic 310-30 in paragraph 805-20-50-1 and replacing it with a cross reference to the guidance on PCD assets in Subtopic 326-20. In November 2019, the FASB issued ASU No. 2019-10, to update the effective date of ASU No. 2016-02 for private companies, not-for-profit organizations and certain smaller reporting companies applying for credit losses, and hedging standard. #### Accounting for Income Taxes In December 2019, the FASB issued a new standard to simplify accounting for income taxes. The guidance eliminates certain exceptions related to the approach for intra-period tax allocation income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences related to changes in ownership of equity method investments and foreign subsidiaries. The guidance also simplifies aspects of accounting for franchise taxes and enates. and clarifies the accounting for transactions that result in a step-up on the tax basis of goodwill. Management has decemined that the adoption of this new pronouncement will not have a material impact on the Company's financial statements. {12}------------------------------------------------ ### NOTES TO FINANCIAL STATEMENTS December 31, 2025 ## NOTE 3 - INCOME TAXES The Company has elected "S Corporation" status with the Internal Revenue Service and state taxing authorities. The stockholder includes the "S Corporation" income or loss in his individual tax return, and accordingly, no federal or state or benefits are provided for in the financial statements during the period of "S Corporation" status. ## NOTE 4-NET CAPITAL REOUIREMENTS The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule ("SEC rule 15c3-1"), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, shall not exceed 15 to 1 and equity capital may not be withdends paid if the resulting net capital ratio would exceed 10 to 1. On December 31, 2025, the Company had net capital of \$165,641, which was \$125,564 in excess of its required net capital of \$40,077. The Company's ratio of aggregate indebtedness to net capital was 3.63 to 1. #### NOTE 5-CUSTOMER LIST AND AMORTIZATION During 2025, the Company acquired a Customer List of approximately four hundred (400) clients for \$18,000, from an unrelated third party. To maintain good customer relations, the brokers that served the client list purchased. The customer list is being amortized over a 15-year useful life because the Company's policy is to focus on Long Term Customer Engagement, which allows it to maximize revenue and reduce acquisition costs. The Company evaluated the Customer List for impairment at 12/3/2025 and determined there is no impairment as the customers acquired generated commissions and gross profit more the list value. Amortization expense for the year ended December 31, 2025, was \$600. #### NOTE 6-RELATED PARTY TRANSACTIONS The Company leases office space annually from a company owned by its President. The lease has been renewed for 2026. The Company paid rent of \$101,000 to the related party in 2025. The Company also leases back-up office space approximately 12 miles from New York City, under its Business Continuity Plan, from its President, in the event of significant business disruption in the New York City area. This one-year lease is effective January 1, 2026, and is renewable by the annual rent for the lease will be \$60,000 for 2026. #### NOTE 7-FIXED ASSETS Fixed asset expenditures are recorded at cost. Furniture and equipment are depreciated on a straight-line method over the estimated useful lives of the assets ranging from 5-7 years. Depreciation expense for the year ended December 31, 2025 was \$2,912. The following summarizes the fixed assets at December 31, 2025: | Computers and equipment | ea | 37,098 | |--------------------------------|-------|--------| | Furniture and fixtures | | 2,905 | | | | 40,003 | | Less: accumulated depreciation | | 31,245 | | | સ્ત્ર | 8,758 | {13}------------------------------------------------ #### NOTES TO FINANCIAL STATEMENTS December 31, 2025 #### NOTE 8-OFF BALANCE SHEET RISK The Company has one single clearing house. In the clearing house becomes insolvent, the Company's business may be adversely affected. Pursuant to a Clearing Agreement, the Company introduces all of its sole clearing broker on a fully disclosed basis. Therefore, all of the customers' money balances and long and short security positions are carried on the books of the clearing broker. Under certain conditions as defined in the clearance agreement, the Company has agreed to indemnify the clearing broker for losses, if any, which the clearing broker may sustain from carrying securities transactions introduced by the Company. In accordance with industry practice and regulatory requirements, the Company and the clearing broker monitor collateral on the securities transactions introduced by the Company. In accordance with the clearing agreement, the Company is required to the amount of \$25,000 that remains in the clearing broker as long as the agreement is in force. As of December 31, 2025, the deposit amount was \$26,436. #### NOTE 9-COMMITMENTS AND CONTINGENCIES #### Leases In November 2025, the Company entered into a lease agreement for office space with two related parties for the year. These leases commence on January 1, 2026, the Company entered into a lease agreement for office space in Wichita, Kansas, on a month-to-month basis. The Company also rents space at a storage facility. Related party rental expense for the year ended December 31, 2025, was \$101,000. #### Legal Proceeding As of the balance sheet date, the Company is not subject to any material legal or regulatory proceedings. Management is not aware of any pending or threatened matters that would require accrual or disclosure in the accompanying financial statements. #### NOTE 10 - PENSION PLAN The Company has a 401(k)-pension plan at ADP. Employees are eligible to enroll after they have been with the Company for one year. The employees' contributions are immediately vested. The Company makes matching contributions up to 6% which are vested over a three-year period. Matching contributions for the year ended December 31, 2025, were \$39,902. #### NOTE 11-REPORTABLE SEGMENTS The Company is engaged in a single line of business as a securities broker dealer. The Company has identified its owner and President as the Chief Operation Decision Maker ("CODM"), who uses net income to evaluate the results of the business, predominantly in the forecasting process, to manage the Company. Additionally, the CODM uses excess capital (See Note 4) which is not a measure of profit or loss, to make operational decisions while maintaining capital adequacy, such as whether to reinvest profits or pay dividends. The Company's operations constitute a single operating segment and therefore, a single reportable segment, because the CODM manages the business activities using information on the Company as a whole. The accounting policies used to measure profit and loss of the segment are the same as those described in the summary of significant policies. #### NOTE 12 - SUBSEQUENT EVENTS The Company has evaluated events and transactions occurring subsequent of financial condition date of December 31, 2025, for items that should potentially be recognized or those financial statements. The evaluation was conducted through March 2, 2026, the date the financial statements were available to be issued. The Company did not identify any subsequent events that require adjustment to or disclosure in the accompanying financial statements. {14}------------------------------------------------ # SUPPLEMENTAL INFORMATION PURSUANT TO RULE 17a-5 OF THE SECURITIES EXCHANGE ACT OF 1934 {15}------------------------------------------------ ## SCHEDULE I COMPUTATION OF NET CAPITAL UNDER RULE 15c3-1 OF THE SECURITIES AND EXCHANGE COMMISSION As of December 31, 2025 | NET CAPITAL: | | | | |----------------------------------------------------------------|---------|--------|---------| | Stockholder's equity | | S | 310,295 | | Less non-allowable assets and deductions: | | | | | Intangible assets at cost, net | 17,400 | | | | Furniture, equipment and leasehold improvements at cost, net | 8,758 | | | | Prepaid expenses | 117,396 | | | | Rent deposit | 1,100 | | | | | | | 144,654 | | | | | | | NET CAPITAL | | ਦਿੱਤਾ | 165,641 | | | | | | | Minimum Net Capital Required (6.67% of aggregate indebtedness) | | સ્ત્ર | 40,077 | | Minimum Net Capital Dollar Requirement | | ક્ષ્ટ | 5,000 | | Minimum Net Capital Required | | સ્ત્ર | 40,077 | | Excess Net Capital (\$165,641 - \$40,077) | | સ્ત્રે | 125,564 | | | | | | | AGGREGATE INDEBTEDNESS, total liabilities | | S | 601,156 | | PERCENTAGE OF AGGREGATE INDEBTEDNESS TO | 601,156 | | | | NET CAPITAL | 165,641 | | 363% | | | | | | ## RECONCILIATION OF FIRST FOCUS IIA TO FINAL PRE-AUDIT FOCUS IIA | NET CAPITAL COMPUTED ON FIRST FILED FOCUS IIA, December 31, 2025 | ಳ | 164,800 | |------------------------------------------------------------------|---|----------| | AMENDMENTS | | | | Increase in Equity | | 59,487 | | (Decrease) in Non-Allowable Assets | | (58,646) | | NET CAPITAL COMPUTED IN FINAL FILED FOCUS IIA | | 165,641 | | RECONCILED DIFFERENCE | | | {16}------------------------------------------------ ## SCHEDULE II COMPUTATION FOR DETERMINATION OF RESERVE REQUIREMENTS FOR BROKER/DEALERS ## AND ## SCHEDULE III INFORMATION RELATING TO POSSESSION OR CONTROL REQUIREMENTS UNDER RULE 15c3-3 For the year ended December 31, 2025 The Company claims an exemption from the provisions of Rule 15c3-3 under paragraph (K) (I) (ii). Accordingly, the "Computation for Determination of Reserve Requirements" and "Information Relating to the Possession or Control Requirements" under such rule have not been prepared. {17}------------------------------------------------ ## CHELSEA MORGAN SECURITIES, INC. 242 MAIN STREET STATEN ISLAND, NEW YORK 10307 SEC Rule 15c3-3(k) Exemption Report For year ended December 31, 2025 Chelsea Morgan Securities, Inc. ("the Company") is a registered broker-dealer subject to Rule 17a-5 promulgated by the Securities and Exchange Commission (17 C.F.R. §240.17a-5, "Reports to be made by certain brokers or dealers"). This Exemption Report was prepared as required by 17 C.F.R. §240.17a-5(d)(1) and (4). To the best of its knowledge and belief, the Company states the following: - 1. The Company claimed an exemption from 17 C.F.R. §240.15c3-3 under the provisions of subsection (k)(2)(ii). - 2. The Company met the requirements of this exemption throughout the most recent fiscal year without exception. Chelsea Morgan Securities, Inc. I, John Pisapia, swear that, to my best knowledge and belief, that this Exemption Report is true and correct. John Pisapia, President March 2, 2026 Date {18}------------------------------------------------ ## REPORT ON BROKER DEALER EXEMPTION For the year ended December 31, 2025 {19}------------------------------------------------ WWC, P.C. CERTIFIED PUBLIC ACCOUNTANTS ## REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholder of Chelsea Morgan Securities, Inc. (dba Chelsea Financial Services) 242 Main Street, Staten Island NY 10307 We have reviewed management's statements, included in the accompanying SEC Rule 15c3-3(k) Exemption Report, for the year ending December 31, 2025, in which (1) Chelsea Morgan Securities, Inc. (dba Chelsea Financial Services) (the "Company") identified the following provisions of 17 C.F.R. §15c3-3(k) under which The Company claimed an exemption from 17 C.F.R. §240.15c3-3; under paragraph (k)(2)(i) and (2) the Company stated that Chelsea Morgan Securities, Inc. (dba Chelsea Financial Services) met the identified exemption provisions throughout the most recent fiscal year without exception. The Company'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 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 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 the Securities Exchange Act of 1934. WWC,P.C WWC, P.C. Certified Public Accountants PCAOB ID No. 1171 We have served as the Company's auditor since 2017. San Mateo, CA March 2, 2026 > 2010 PIONEER COURT. SAN MATEO. CA 94403 TEL.: (650) 638-0808 FAX .: (650) 638-0878 E-MAIL: INFO@WWCCPA.COM WEBSITE: WWW.WWCCPA.COM {20}------------------------------------------------ ## REPORT ON SIPC ASSESSMENT RECONCILIATION ## For the year ended December 31, 2025 {21}------------------------------------------------ ![](_page_21_Picture_0.jpeg) ## REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON APPLYING AGREED-UPON PROCEDURES To the Board of Directors and Stockholder of Chelsea Morgan Securities Inc. (dba Chelsea Financial Services) 242 Main Street, Staten Island, NY 10307 We have performed the procedures included in Rule 17a-5(e)(4) under the Securities Exchange Act of 1934 and in the Securities Investor Protection Corporation (SIPC) Series 600 Rules, which are enumerated below and were agreed to by Chelsea Morgan Securities Inc. (dba Chelsea Financial Services) (the "Company") and the SIPC, solely to assist you and SIPC in evaluating the Compliance with the applicable instructions of the General Assessment Reconciliation (Form SIPC-7) for the year ended December 31, 2025. The Company's management is responsible for its Form SIPC-7 and for its compliance with the applicable instructions on Form SIPC-7. Management of the Company has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of assisting you and SIPC in evaluating the Company's complicable instructions on Form SIPC-7 for the year ended December 31, 2025. 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 pot address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible the procedures performed are appropriate for their purpose. The sufficiency of these procedures is solely the of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the been requested or for any other purpose. The procedures we performed, and our associated findings are as follows: - Compared the listed assessment payments in Form SIPC-7 with respective cash disbursement records entries, notifferences. 1.) - Compared the Total Revenue amounts reported on the Annual Audited Report Form X-17A-5 Part III for the year ended December 31, 2025, 2.) with the Total Revenue amount reported in Form SIPC-7 for the year ended December 31, 2025, noting no differences. - Compared any adjustments reported in Form SIPC-7 with supporting schedules and working papers, noting no differences. 3.) - Recalculated the arthmetical accuracy of the calculations reflected in the related schedules and working papers 4. ) supporting the adjustments, noting no differences; and - 5.) computed, noting no differences. We were engaged by the Company to perform this agreed-upon procedures engagement in accordance with attestation standards established by the AICPA and in accordance with 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 expession of an opinion or conclusion, respectively, on the Company's Form for its compliance with the applicable instructions on Form SIPC-7 for the year ended December 31, 2025. 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 SPC and is not intended to be and should not be used by anyone offer than these specified parties. WWC,P.C. WWC, P.C. Certified Public Accountants PCAOB ID No. 1171 We have served as the Company's auditor since 2017. San Mateo, CA March 2, 2026 > 2010 PIONEER COURT, SAN MATEO, CA 94403 TEL.: (650) 638-0808 FAX.: (650) 638-0878 E-MAIL: INFO@WWCCPA.COM WEBSITE: WWW.WWCCPA.COM {22}------------------------------------------------ ## SCHEDULE OF ASSESSMENT AND PAYMENTS TO THE SECURITIES INVESTOR PROTECTION CORPORATION ## FOR THE YEAR ENDED DECEMBER 31, 2025 | Total revenue (FOCUS Line 12/Part IIA Line 9) | S | 7,885,536 | |-----------------------------------------------------------------------|-------|-----------| | Deductions | | | | Commissions, floor brokerage and clearance paid to other SIPC members | | | | in connections with securities transactions | | 138,892 | | Revenues from the distribution of shares of a registered open end | | | | investment company and from the sale of insurance | | 4,908,214 | | | | | | Total deductions | | 5,047,106 | | SIPC net operating revenues | S | 2,838,430 | | SIPC general assessment at .0015 | સ્ત્ર | 4,258 | | Less: payments | | 2,072 | | | | | | Assessment balance due | ಲ್ಲಾ | 2,186 | Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.