# DANSKE MARKETS INC. X-17A-5 (2025-02-27) — Broker-dealer annual report - Company: DANSKE MARKETS INC. - Form: X-17A-5 - Filed: 2025-02-27 - Period: 2024-12-31 - Accession: 0001142175-25-000003 - CIK: 1142175 - File #: 8-53341 - Type: Broker-dealer - Material weakness: No - Auditor: Citrin Cooperman & Company, LLP - Auditor location: Florham Park, NJ - Contact: Ira Brofsky - Phone: 212 293 0503 - Email: ibr@danskemarkets.com - Website: danskemarkets.com - Signed by: Anders Iversen (President and CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1142175/000114217525000003/danskepublic.pdf --- {0}------------------------------------------------ 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 | |-----------------| | 8-53341 | 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 \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ AND ENDING \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ MM/DD/YY MM/DD/YY A. REGISTRANT IDENTIFICATION NAME OF FIRM: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ TYPE OF REGISTRANT (check all applicable boxes): ☐ Broker-dealer ☐ Security-based swap dealer ☐ Major security-based swap participant ☐ Check here if respondent is also an OTC derivatives dealer ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (No. and Street) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (City) (State) (Zip Code) PERSON TO CONTACT WITH REGARD TO THIS FILING \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (Name) (Area Code – Telephone Number) (Email Address) B. ACCOUNTANT IDENTIFICATION 01/01/24 12/31/24 Danske Markets Inc. 575 Fifth Avenue, 33rd Floor New York NY 10017 Ira Brofsky 212 293 0503 ibr@danskemarkets.com | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | | |--------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|---------|--------------------------------------------|--|--| | Citrin Cooperman & Company, LLP
_____________________________________________________________________________________ | | | | | | | | (Name – if individual, state last, first, and middle name) | | | | | | 180 Park Avenue, Suite 200
_____________________________________________________________________________________ | Florham Park | NJ | 07932 | | | | (Address) | (City) | (State) | (Zip Code) | | | | 11/02/2005
_____________________________________________________________________________________ | | 2468 | | | | | (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 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}------------------------------------------------ | VATT VR AFTINIATIVN | | |-------------------------------------------------------------------------------------------------------------------------------------|-------| | Anders Iversen
swear (or affirm) that, to the best of my knowledge and belief, the financial | | | Danske Markets Inc.
report pertaining to the firm of | as of | | December 31 , 2024___ is true and correct. I further swear (or affirm) that neither the company nor any | | | partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely | | | as that of a customer. | | | | | | Signature:
JENNIFER G OLSSON | | | Notary Public, State of New York | | | No. 01OL6135072
Title:
Qualified in New York County
President and CEO | | | Commission Expires December 14, 200 | | | | | | 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 income in the period(s) presented, a statement of | | | comprehensive income (as defined in § 210.1-02 of Regulation S-X). | | | J (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. | | | 1 {g) Notes to consolidated financial statements. | | | ال {h} Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. | | | L (i) Computation of tangible net worth under 17 CFR 240.18a-2. | | | } Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. | | | | | | 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 apropriate explanations, of the FOCUS Report with computation of net | | | worth under 17 CFR 240,18a-1, or 17 CFR 240,18a-2, as applicable, and the reserve requirements under 17 | | - - - - - - - - - - - {2}------------------------------------------------ Statement of Financial Condition # DANSKE MARKETS INC. (A Wholly-Owned Subsidiary of Danske Bank A/S, Denmark) December 31, 2024 {3}------------------------------------------------ # DANSKE MARKETS INC. (A Wholly-Owned Subsidiary of Danske Bank A/S, Denmark) # TABLE OF CONTENTS | Report of Independent Registered Public Accounting Firm 1 | | |------------------------------------------------------------|--| | Statement of Financial Condition 2 | | | Notes to Financial Statement 3 - 11 | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) # **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Stockholder and Board of Directors Danske Markets Inc. ## **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of Danske Markets Inc. 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 Danske Markets Inc. as of December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. # **Basis for Opinion** This financial statement is the responsibility of Danske Markets Inc.'s management. Our responsibility is to express an opinion on Danske Markets Inc.'s financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to Danske Markets 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 statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion. We have served as Danske Markets Inc.'s auditor since 2013. Florham Park, New Jersey February 26, 2025 {5}------------------------------------------------ # DANSKE MARKETS INC. (A Wholly-Owned Subsidiary of Danske Bank A/S, Denmark) Statement of Financial Condition December 31, 2024 (expressed in U.S. dollars) ### ASSETS | Cash and cash equivalents | \$
744,878 | | |--------------------------------------------------------------------------|------------------|--| | Securities, at fair value | 31,797,597 | | | Right of use assets | 2,811,645 | | | Due from parent | 25,581,774 | | | Prepaid taxes | 144,719 | | | Deferred tax assets | 216,321 | | | Fail to deliver | 7,583 | | | Receivables and other assets | 711,036 | | | Prepaid expenses | 50,206 | | | Total assets | \$
62,065,759 | | | LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES
Lease liabilities | \$
3,104,673 | | | Accrued expenses | 988,246 | | | Due to customers | 7,583 | | | Other liabilities | 8,475 | | | Total liabilities | 4,108,977 | | | COMMITMENTS AND CONTINGENCIES (NOTES 4, 5 AND 7) | | | | STOCKHOLDER'S EQUITY | | | | | | | #### LIABILITIES AND STOCKHOLDER'S EQUITY | Right of use assets | 2,811,645 | | |-----------------------------------------------------------|------------------|--| | Due from parent | 25,581,774 | | | Prepaid taxes | 144,719 | | | Deferred tax assets | 216,321 | | | Fail to deliver | 7,583 | | | Receivables and other assets | 711,036 | | | Prepaid expenses | 50,206 | | | Total assets | \$
62,065,759 | | | LIABILITIES AND STOCKHOLDER'S EQUITY | | | | LIABILITIES | | | | Lease liabilities | \$
3,104,673 | | | Accrued expenses | 988,246 | | | Due to customers | 7,583 | | | Other liabilities | 8,475 | | | Total liabilities | 4,108,977 | | | COMMITMENTS AND CONTINGENCIES (NOTES 4, 5 AND 7) | | | | STOCKHOLDER'S EQUITY | | | | Common stock - \$0.01 par value; 1,000 shares authorized, | | | | 10 shares issued and outstanding | - | | | Additional paid-in capital | 18,000,000 | | | Retained earnings | 39,956,782 | | | Total stockholder's equity | 57,956,782 | | | Total liabilities and stockholder's equity | \$
62,065,759 | | | | | | | | | | | | | | | | | | The accompanying notes are an integral part of this financial statement. {6}------------------------------------------------ ## 1. GENERAL BUSINESS Danske Markets Inc. (the "Company"), a wholly-owned subsidiary of Danske Bank A/S, a Denmark entity (the "Parent"), was incorporated in Delaware on February 12, 2001. The Company is registered as a brokerdealer in securities under the Securities Exchange Act of 1934 (the "Act") and is a member of the Financial Industry Regulatory Authority, Inc. ("FINRA") as a broker-dealer. The Company's primary business activities include acting as agent or riskless principal broker in the purchase and sale of foreign equities and debt securities between U.S. institutional investors and its Parent under Securities and Exchange Commission Rule 15a-6. The Company acts as agent for its Parent in interest rate derivative and foreign exchange transactions with U.S. and non-U.S. customers of its Parent. The Company also participates in securities underwritings and provides merger and acquisition advisory services. The Company does not carry customer accounts and is accordingly exempt from the Act's Rule 15c3-3 (the Customer Protection Rule) pursuant to Provision k(2)(i) of the rule. The Company maintains its office in New York. The books and records are maintained in U.S. dollars. The Company has entered into Service Level Agreements ("SLAs") with its Parent under which the Parent provides various business support services to the Company. Such support services include information technology and back-office services which encompasses settlement of transactions, legal, accounting, audit and human resources (see Note 4). #### 2. SIGNIFICANT ACCOUNTING POLICIES #### Securities Transactions The Company records securities transactions executed for its customers on a settlement-date basis. Transactions denominated in a foreign currency are translated into United States dollars at the prevailing rates of exchange on the date of transaction. #### Fixed Assets Fixed assets are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated economic lives of assets as follows: | | Estimated Life (Years) | | |-----------------------------------|------------------------------------|--| | Computer software and hardware | 3 | | | Telecommunications equipment | 3 | | | Furniture, fixtures and equipment | 3 | | | Leasehold improvements | Shorter of expected useful life or | | | | term of lease | | Expenditures for additions, renewals and betterment of property and equipment above \$15,000 are capitalized. Expenditures for repairs and maintenance are charged to expense as incurred. As assets are retired or sold, the related cost and accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is included in the results of operations. {7}------------------------------------------------ # 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) #### Income Taxes The Company evaluates its uncertain tax positions using the provisions of Financial Accounting Standards Board ("FASB") guidance. The amount recognized is subject to estimate and management judgment with respect to the likely outcome of each uncertain tax position. The amount that is ultimately sustained for an individual uncertain tax position or for all uncertain tax positions in the aggregate could differ from the amount recognized. Deferred income taxes are recognized for the tax consequences of "temporary differences" by applying enacted statutory tax rates applicable to the differences between the tax and financial reporting bases of assets and liabilities, if applicable. The realization of deferred tax assets, if any, is assessed and a valuation allowance established for the portion of the assets for which it is more likely than not that the deferred tax asset will not be realized. #### Cash and Cash Equivalents The Company considers all highly-liquid investments with original maturities of three months or less to be cash equivalents. #### Use of Estimates The preparation of a financial statement in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement. Actual results could differ from those estimates. #### Fails to Deliver/Receive and Receivable/Payable from (to) Customers As an agent and/or riskless principal broker, the Company facilitates its customers' securities transactions on a DVP (delivery vs. payment)/RVP (receive vs. payment) basis only. Securities failed to deliver represent receivables for securities sold by customers that have not been delivered, the settlement date has passed, and the cash owed to customers has not been received. Securities failed to receive represent payables for securities purchased by customers not yet received, the settlement date has passed, and the customers have not paid for such securities. {8}------------------------------------------------ # 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) #### Fair Value Measurement FASB ASC 820, Fair Value Measurement, establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. Under this standard, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The three levels of the fair value hierarchy under FASB ASC 820 are described as follows: Level 1 inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. Level 2 inputs to the valuation methodology include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in inactive markets; inputs other than quoted prices that are observable for the asset or liability; and, inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. ### Financial Instruments – Credit Losses FASB ASC 326, Financial Instruments – Credit Losses, requires a credit loss methodology, Current Expected Credit Losses ("CECL"), which dictates the recognition of credit losses, while also providing transparency about credit risk. The CECL methodology utilizes a lifetime "expected credit loss" measurement objective for the recognition of credit losses for securities and other receivables at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. For financial assets measured at amortized cost (e.g., cash and cash equivalents and receivables from customers), the Company has concluded that there are de minimis expected credit losses based on the nature and contractual life or expected life of the financial assets and immaterial historic and expected losses. {9}------------------------------------------------ # 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) #### Lease Accounting The Company recognizes and measures its leases in accordance with FASB ASC 842, Leases. The Company determines if an arrangement is a lease, or contains a lease, at inception of a contract and when the terms of an existing contract are changed. The Company recognizes a lease liability and a right of use asset at the commencement date of the lease. The lease liability is initially and subsequently recognized based on the present value of its future lease payments. The discount rate is the implicit rate if it is readily determinable or otherwise the Company uses its incremental borrowing rate at the commencement date for all leases. The Company recognizes assets and liabilities for operating and finance leases with terms of more than 12 months. An arrangement is deemed a finance lease if it effectively represents an installment purchase by the Company subject to the criteria outlined in FASB ASC 842. At December 31, 2024, the Company had no finance leases. #### Recently Issued and Effective Accounting Pronouncement Effective January 1, 2024, the Company adopted the provisions of Accounting Standards Update ("ASU") No. 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures ("ASU 2023- 07"). ASU 2023-07 requires incremental line-item disclosures about each reportable segment's expenses as well as profit and losses. The Company has evaluated the guidance and has determined that the Company operates as one operating segment. #### Recently Issued Accounting Pronouncement In December 2023, FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures through changes to the rate reconciliation and income taxes paid information, disaggregated by federal, state, foreign, and individual jurisdictions equal to or greater than five percent. This standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of the new standard on its financial statement and related disclosures. {10}------------------------------------------------ # 3. INCOME TAXES At December 31, 2024, the Company had no federal, state and local net operating loss carryforwards. The Company's deferred tax asset of approximately \$216,000 at December 31, 2024, is related to deferred compensation and rent. At December 31, 2024, the Company had no valuation allowance since management believes that realization of the Company's deferred tax assets is more likely than not based on 2024 earnings history and projected taxable income in 2025. Bonus accrual 147,422 \$ | INCOME TAXES | | |-----------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | The Company's effective tax rate of 23.67% differs from the statutory rate of 21% due primarily to state and
local taxes. The Company files a federal tax return on a standalone basis and combined New York State and
New York City tax returns with its affiliates. The Company has calculated its financial statement taxes on a
standalone basis pursuant to a tax sharing arrangement. At December 31, 2024, the amount due from Parent
relating to New York State and New York City tax was approximately \$70,000. | | history and projected taxable income in 2025. | At December 31, 2024, the Company had no federal, state and local net operating loss carryforwards. The
Company's deferred tax asset of approximately \$216,000 at December 31, 2024, is related to deferred
compensation and rent. At December 31, 2024, the Company had no valuation allowance since management
believes that realization of the Company's deferred tax assets is more likely than not based on 2024 earnings | | Deferred tax assets | | | Bonus accrual | \$
147,422 | | | 729,983 | | Lease liability | | | Total deferred tax assets | 877,405 | | Deferred tax liabilities | | | Right of use asset | (661,084) | | Total deferred tax liability | (661,084) | The Company accounts for income taxes in accordance with FASB ASC 740, Income Taxes, which requires recognition of tax benefits or expenses on the temporary differences between the financial reporting and the tax basis of assets and liabilities. If appropriate, deferred tax assets are adjusted by a valuation allowance, which reflects expectations of the extent to which such assets are more likely than not expected to be realized. In accordance with FASB ASC 740, the Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. A tax position that fails to meet the more likely than not recognition threshold will result in either a reduction of current and deferred tax assets, and/or recording of current or deferred tax liabilities. The Company recognizes accrued interest and penalties, if applicable, related to income taxes as a component of income tax expense. As of December 31, 2024, the Company did not have any uncertain tax positions. As of December 31, 2024, the Company did not have any interest accrued with respect to uncertain tax positions. The Company's federal, state and city income tax returns are closed to examination through 2020. {11}------------------------------------------------ #### 4. RELATED-PARTY TRANSACTIONS The Company entered into an SLA with its Parent and agreed to act as the U.S. "chaperoning" broker-dealer in accordance with Rule 15a-6(a)(3) under the Act, as defined. The SLA shall continue in effect until terminated by one of the parties with a 90-day notification. Under the terms of the SLA, the Company agrees to provide chaperoning services, effect securities transactions, distribute research analysis to U.S. institutional investors and provide general marketing assistance on behalf of its Parent in the U.S. The Parent is obligated to the Company in the amount of \$25,581,774 related to charges that have been incurred with respect to net amounts due for services rendered by the Company. Such amounts are due on demand. # 5. DEFERRED COMPENSATION #### 6. FIXED ASSETS | | | | The Company participates in the Parent's deferred bonus plan whereby certain key employees are entitled to
compensation payable in cash and shares of the Parent. Such compensation can be deferred up to three years
and is subject to certain adjustments, as defined in the agreement. At December 31, 2024, the accrued bonus
amounted to approximately \$627,000, of which approximately \$12,750 will be payable in 2025, \$6,750 will
be payable in 2026, \$4,500 will be payable in 2027 and \$3,000 will be payable in 2028. The payment terms
(deferral period and cash/share payout) of the 2024 bonus of \$600,000 has not been set by the Parent. | | |---------------------------------------------------------------|-----------------------------|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--| | | | | | | | Fixed assets consisted of the following at December 31, 2024: | | | Fixed assets are carried at cost less accumulated depreciation and amortization and are depreciated using the
straight-line method over the estimated economic life of the asset. Expenditures for maintenance and repairs
are recognized as expenses when incurred, while additions and improvements are capitalized. | | | | Tele | | | | | | communications
Equipment | Total | | | | Balance, January 1, 2024
Additions | \$
59,524
- | \$
59,524
- | | | | Disposals | - | - | | | | Balance, December 31, 2024 | 59,524 | 59,524 | | | | Accumulated depreciation | | | | | | and amortization | (59,524) | (59,524) | | | | Fixed assets, net | \$
- | \$
- | | | {12}------------------------------------------------ # DANSKE MARKETS INC. (A Wholly-Owned Subsidiary of Danske Bank A/S, Denmark) Notes to Financial Statement December 31, 2024 (expressed in U.S. dollars) # 7. LEASES The Company leases office space under an operating lease expiring in February 2032. In accordance with the terms of the lease agreement, the Company has received a ten-month rent abatement as well as options to terminate the lease on the fourth anniversary of the Rent Commencement Date and the seventh anniversary of the Rent Commencement Date. Because the Company is not reasonably certain to exercise these termination options, the associated payments under these options are not included in lease payments used to determine lease liability. Lease expense is recognized on a straight-line basis over the lease term. At December 31, 2024, the Company had a right of use asset of \$2,811,645 and a lease liability of \$3,104,673 on the accompanying statement of financial condition. Year ending December 31 Amount 2025 446,376 \$ 2026 446,376 2027 468,518 2028 472,946 2029 472,946 Thereafter 1,024,716 Total minimum lease payments 3,331,878 | Future minimum lease payments under the operating lease recorded on the statement of financial condition at | |-------------------------------------------------------------------------------------------------------------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Remaining lease term: | 7 years and 2 months | |-----------------------|----------------------| | | | {13}------------------------------------------------ ## 8. SEGMENT REPORTING The Company is engaged in a single line of business as a securities broker-dealer, which is comprised of several classes of services, including acting as agent or riskless principal broker in the purchase and sale of foreign equities and debt securities between U.S. institutional investors and its Parent under Securities and Exchange Commission Rule 15a-6, acting as agent for its Parent in interest rate derivative and foreign exchange transactions with U.S. and non-U.S. customers of its Parent, participating in securities underwritings and providing merger and acquisition advisory services. The Company has identified its President and CEO as the chief operating 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 net capital (see Note 10), which is not a measure of profit and 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 of the Company as a whole. The measure of segment assets is reported on the statement of financial condition as total assets. ### 9. FAIR VALUE MEASUREMENTS | | on the statement of financial condition as total assets. | | | as the chief operating 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 net
capital (see Note 10), which is not a measure of profit and 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 of the Company as a whole. The measure of segment assets is reported | |-------------------------|---------------------------------------------------------------|-----------------------------------------------------------------------|---------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | FAIR VALUE MEASUREMENTS | | | | | | | | described in the Company's significant accounting policies in Note 2. | | The Company's assets recorded at fair value have been categorized based upon a fair value hierarchy as | | 31, 2024: | | | | The following table presents information about the Company's assets measured at fair value as of December | | | Quoted Prices in
Active Markets
for Identical
Assets | Significant Other
Observable Inputs | Significant
Unobservable
Inputs | Balance
December 31, | | | (Level 1) | (Level 2) | (Level 3) | 2024 | | Assets | | | | | | US Treasury Bills | \$
31,797,597 | \$
- | \$
- | \$
31,797,597 | | Total at fair value | \$
31,797,597 | \$
- | \$
- | \$
31,797,597 | | | | | | | | | | | | | {14}------------------------------------------------ ### 10. NET CAPITAL As a registered broker-dealer, the Company is subject to the Uniform Net Capital Rule (Rule 15c3-1) of the Securities and Exchange Commission, which requires that the Company maintain minimum net capital. The Company has elected to use the alternative method, which requires that the Company maintain minimum net capital, as defined, equal to the greater of \$250,000 or 2% of customer debit items, as defined. At December 31, 2024, the Company had net capital of \$31,092,621, which exceeded its requirement of \$250,000 by \$30,842,621. #### 11. OFF-BALANCE SHEET RISK AND CONCENTRATION OF CREDIT RISK Credit risk is the amount of accounting loss the Company would incur if a counterparty failed to perform its obligation under contractual terms. All of the clearing and depository operations for the Company are performed by the Parent. The Parent and the Company review, as considered necessary, the credit standing of the counterparties with which the Company conducts business. The Company's exposure to credit risk associated with the nonperformance by the counterparties in fulfilling their obligations pursuant to securities transactions can be directly impacted by volatile securities markets, credit markets and regulatory changes. The Company maintains its cash accounts at two commercial banks. Amounts held in a single account may at times exceed the insurance limit established by the Federal Deposit Insurance Corporation. #### 12. SUBSEQUENT EVENTS The Company has evaluated events that have occurred subsequent to December 31, 2024, and through February 26, 2025. There have been no material subsequent events that occurred during such period that would require disclosure in this report or would be required to be recognized in the statement of financial condition as of December 31, 2024. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.