# AXOS CLEARING LLC X-17A-5 (2025-09-26) — Broker-dealer annual report

- Company: AXOS CLEARING LLC
- Form: X-17A-5
- Filed: 2025-09-26
- Period: 2025-06-30
- Accession: 0001146205-25-000006
- CIK: 1146205
- File #: 8-53595
- Type: Broker-dealer
- Material weakness: Yes
- Auditor: BDO USA, P.C.
- Auditor location: San Diego, CA
- Contact: Howard Green
- Phone: 4023842055
- Website: bdo.com
- Signed by: Howard Green (CFO)

Original filing: https://www.sec.gov/Archives/edgar/data/1146205/000114620525000006/public.pdf

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# Axos Clearing LLC

Statement of Financial Condition as of June 30, 2025 and Report of Independent Registered Public Accounting Firm

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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 |  |
|--|-----------------|--|

### 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 07/01/24 MM/DD/YY MM/DD/YY A. REGISTRANT IDENTIFICATION NAME OF FIRM: AXOS Clearing LLC TYPE OF REGISTRANT (check all applicable boxes): 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.) 15950 West Dodge Road, Ste. 300 (No. and Street) Omaha NE 68118 (State) (Zip Code) (City) PERSON TO CONTACT WITH REGARD TO THIS FILING Howard Green 402-384-2055 howard.green@axosclearing com (Name) (Area Code - Telephone Number) (Email Address) B. ACCOUNTANT IDENTIFICATION INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing\* BDO USA, P.C.

|                                                  |                       | (Name - if individual, state last, first, and middle name) |                                            |  |  |
|--------------------------------------------------|-----------------------|------------------------------------------------------------|--------------------------------------------|--|--|
| 3570 Carmel Mountain Road, Suite 400   San Diego |                       | CA                                                         | 92130                                      |  |  |
| (Address)                                        | (City)                | (State)                                                    | (Zip Code)                                 |  |  |
| 10/08/2003                                       |                       | 243                                                        |                                            |  |  |
| (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.

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### OATH OR AFFIRMATION

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| Howard Green financial report pertaining to the firm of Axos Clearing LLC as of

6/30 , 2 025 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.

GENERAL NOTARY - State of Nebraska TINA R. BRATETIC My Comm. Exp. November 30, 2025

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 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.
- [ {|) 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 capible net worth under 17 CFR 240.15c3-1, 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-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 240.17a-12, as applicable.
- | (y) Report describing any material inadequacies found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k).
- □ (z) Other:
- \*\* To request confidential treatment of chis filing, see 17 CFR 240.17a-5(e){3} or 17 CFR 240.180-7(d){2}, as applicable.

Title ·

Chief Financial Officer

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![](_page_3_Picture_0.jpeg)

Tel: 858-404-9200 Fax: 858-404-9201 **www.bdo.com** 

### **Report of Independent Registered Public Accounting Firm**

Board of Managers Axos Securities, LLC Omaha, Nebraska

### *Opinion on Financial Statement*

We have audited the accompanying statement of financial condition of Axos Clearing, LLC (the Broker-Dealer) as of June 30, 2025, 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 Broker-Dealer at June 30, 2025, in conformity with accounting principles generally accepted in the United States of America.

### *Basis for Opinion*

This financial statement is the responsibility of the Broker-Dealer's management. Our responsibility is to express an opinion on the Broker-Dealer'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 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 provides a reasonable basis for our opinion.

We have served as the Broker-Dealer's auditor since 2019. San Diego, California September 26, 2025

BDO USA, P.C., a Virginia professional corporation, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.

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| 0B70=320B74@D8E0;4=CB                                                     | <br><br> |
| 0B7B46A460C438=2><?;80=24F8C75434A0;0=3>C74AA46D;0C8>=B                   | <br>     |
| 4?>B8CBF8C72;40A8=6>A60=8I0C8>=B                                          | <br>     |
| (42DA8C84B>F=430C508AE0;D4                                                | <br>     |
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| '4248E01;45A><2DBC><4AB=4C                                                | <br>     |
| '4248E01;45A><A468BC4A438=E4BC<4=C03E8B>AB'                               | <br>     |
| (42DA8C84B1>AA>F43                                                        | <br>     |
| %A>?4ACH0=34@D8?<4=C=4C                                                   | <br>     |
| >>3F8;;0=38=C0=681;40BB4CB=4C                                             | <br>     |
| 454AA43C0G0BB4C=4C                                                        | <br>     |
| \$C74A0BB4CB                                                              |          |
| )>C0;0BB4CB                                                               | <br><br> |
| &% \$K%#'&+                                                               |          |
| %0H01;4C>2DBC><4AB                                                        |          |
| (42DA8C84B;>0=43                                                          |          |
| %0H01;4C>1A>:4AB340;4AB0=32;40A8=6>A60=8I0C8>=B                           |          |
| 22>D=CB?0H01;40=3022AD43;8018;8C84B                                       |          |
| )>C0;;8018;8C84B                                                          |          |
| ><<8C<4=C0=3>=C8=64=284B#>C4                                              |          |
| "4<14ANB4@D8CH                                                            |          |
| )>C0;;8018;8C84B0=3<4<14ANB4@D8CH                                         | <br><br> |

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{7}------------------------------------------------

Income Taxes -Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred income tax assets and liabilities are determined using the asset and liability method. Under this method, the net deferred tax asset or liability is determined based on the temporary differences between the book and tax bases of the various assets and liabilities on the Statement of Financial Condition and gives current recognition to changes in tax rates and laws. The Company records a valuation allowance when management believes it is more likely than not that deferred tax assets will not be realized. The U.S. Federal jurisdiction, New York, and California are the major tax jurisdictions where the Company files income tax returns. The Company, which is a C corporation, for tax purposes, is subject to U.S. Federal and State examinations by tax authorities. An income tax position will be recognized as a benefit only if it is more likely than not that it will be sustaination by the Internal Revenue Service, based upon its technical merits. Once that status is met, the amount recorded will be the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company has analyzed the positions for all open tax years and the positions to be taken for the tax year ended June 30, 2025,in its major jurisdictions, and has analyzed whether there are uncertain tax positions ("UTP") that require financial statement recognition. Based on this review, the Company has reserved for a UTP in non-filing states for the year ended June 30, 2025. However, the Company's conclusions regarding this policy may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analyses of and aws, regulations and interpretations thereof. Furthermore, upon audit by a taxing authority, the Company may be liable for additional taxes. The open tax years under potential examination vary by jurisdiction.

Goodwill and Intangibles Assets - Goodwill represents the excess of an acquisition over the fair value of the net assets acquired. Intangible assets represent purchased assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights. Intangible assets that have finite lives, such as customer relationship intangibles, are amortized over their estimated useful lives.

The Company performs annual impairment tests of its goodwill as of March 31. The Company performed a qualitative assessment and determined it was not more likely than not that the fair value of the reporting unit was less than its carrying amount

At June 30, 2025, goodwill of \$60.0 million was included within Goodwill and intangible assets, net on the Statement of Financial Condition. As of June 30, 2025, the Company concluded that goodwill was not impaired.

The Company reviews intangibles for imparment annually and whenever events or circumstances indicate that the carrying value of such assets may not be recoverable. If there are indicators that the asset group is not recoverable then an impairment loss shall be recognized if the carrying amount of an intangible asset is not recoverable and its carrying anount exceeds its fair value. Intangible assets (other than goodwill) are amortization expense on the Statement of Income, using straight-line methods over their respective estimated useful lives. As of June 30, 2025, there was no impairment recorded.

The Company's intangible assets as of June 30, 2025 are summarized as follows:

(Dollars in Thousands)

| Intangible assets:             |        |        |
|--------------------------------|--------|--------|
| Customer relationships         | સ્ત્રે | 35,770 |
| Acquired technology            |        | 10,990 |
| Trade name                     |        | 290    |
| Non-Solicitation rights        |        | 130    |
| Total intangible assets gross  | S      | 47,180 |
| Accumulated amortization:      |        |        |
| Customer relationships         | સ્ત્રે | 13,938 |
| Acquired technology            |        | 6,018  |
| Trade name                     |        | 290    |
| Non-Solicitation rights        |        | 130    |
| Total accumulated amortization |        | 20,376 |
| Net carrying amount            | ਉ      | 26,804 |

{8}------------------------------------------------

Segment Reporting - During the year ended June 30, 2025, the Company adopted Accounting Standards Update ("ASU") 2023-07, which expanded business segment disclosure requrements, as outlined herein. The Company is engaged in a single line of business as a broker-dealer, which is comprised of services, including clearing, stock lending, margin lending, and custody services. The Company identified the Parent's Chief Executive Officer, who also serves on the Axos Securities, LLC Board of Managers, as the Chief Operating Decision Maker ("CODM"). The Company's CODM assesses performance and allocates resources based on net income. Additionally, the CODM uses excess net capital (see Note 8), 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 of the Company as a whole. Segment assets are the same as those reported in the Company's Statement of Financial Condition.

Accounting Standards Issued But Not Yet Adopted - In December 2023, the FASB issued ASU 2023-09 which requires further granularity on the disclosure of income taxes, including:

- · Certain prescribed line items in the income tax rate reconciliation presented both in dollar and percentage terms;
- · Income taxes paid, income before income taxes disaggregated by federal, state and foreign taxes; and
- · Further disaggregation of income taxes paid by any individual jurisdiction equal to or exceeding five percent of total income taxes paid.

This standard is effective for fiscal years beginning after December 15, 2024. The Company does not expect any significant impact on its financial condition or results of operations upon adoption.

### CASH AND CASH EQUIVALENTS AND CASH SEGREGATED IN COMPLIANCE WITH FEDERAL AND 3. OTHER REGULATIONS

The following table provides a reconciliation of Cash and cash equivalents and Cash segregated in compliance with federal and other regulations reported within the Statement of Financial Condition as of June 30, 2025:

### (Dollars in Thousands)

| Cash and cash equivalents                                                                            | 22,741  |
|------------------------------------------------------------------------------------------------------|---------|
| Cash segregated in compliance with federal and other regulations                                     | 146.835 |
| Total Cash and cash equivalents and Cash segregated in compliance with federal and other regulations | 169.576 |

Cash segregated in compliance with federal and other regulations on the Statement of Financial Condition represents cash segregated or set aside to satisfy requirements under Rule 15c3-3 of the Exchange Act. This cash is held within special reserve bank accounts for the benefit of customers.

{9}------------------------------------------------

### 4. RECEIVABLE FROM AND PAY ABLE TO BROKERS, DEALERS, AND CLEARING ORGANIZATIONS

Receivable from and payable to brokers, and clearing organizations are comprised of the following as of June 30, 2025:

| (Dollurs in Thousunus)       |   |        |
|------------------------------|---|--------|
| Receivable, net:             |   |        |
| Brokers and dealers          | ಕ | 6,237  |
| Securities failed to deliver |   | 3,756  |
| Clearing organizations       |   | 1,614  |
| Total receivable, net        |   | 11,607 |
| Payable:                     |   |        |
| Brokers and dealers          | S | 14,344 |
| Securities failed to receive |   | 3,317  |
| Clearing organizations       |   | 2,971  |
| Total payable                |   | 20,632 |

Receivables related to securities are collateralized by the underlying securities held at the Company prior to settlement.

The total amount of broker-dealer allowance for credit losses recorded as of June 30, 2025, is \$17.8 million. The allowance for credit losses recorded is primarily due to a single receivable of \$14.6 million, which was provisioned for in 2019.

#### 5. BENEFIT PLANS

The Parent, Axos Financial, Inc., offered a 401(k) plan as of June 30, 2025. Substantially all of the Company's employees are able to participate in the plan. Employees may contribute up to 100% of their compensation subject to certain limits based on federal tax laws. The Company provided an employer matching contribution to the 401(k) plan based on an employee's designated deferral of their eligible compensation.

### 6. FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date.

In determining fair value, the Company establishes a fair value hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most obeet when available. Observable inputs are that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company's assumption about the inputs market participants would use in pricing the asset or the best information available in the circumstances. The hierarchy is categorized into three levels based on the inputs as follows:

Level 1 - Quoted prices in active markets for identical assets or liabilities in active markets that the ability to access as of the measurement date.

Level 2 - Observable inputs other than Level 1 prices such as quoted prices for fiabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets.

Level 3 -Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing nodels such as discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

Level 3 investments consist of Depository Trust Clearing Corporation ("DTC") stock. DTCC members are required to own a certain amount of DTCC stock based on clearing levels and certain other factors. DTCC stock is valued based on information provided by the DTCC, classified as a restricted security.

{10}------------------------------------------------

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{11}------------------------------------------------

### 8. REGULATORY REQUIREMENTS

The Company is subject to the SEC Uniform Net Capital (Rule 15c3-1 of the Exchange Act). Under this rule, the Company has elected to operate under the alternate method and is required to maintain mimimum net capital of \$1.5 million or 2% of aggregate debit balances arising from client transactions, as defined. On June 30, 2025, the Company had net capital of \$87.0 million which was \$81.8 million in excess of the requirement of \$5.2 million. The Company's percentage of net capital to aggregate debit items was 34%. Under the alternate method, the Company may not repay subordinated debt, pay cash distributions, or make any unsecured advances or loans to its parent or employees if such in net capital of less than 5% of aggregate debit balances or less than 120% of its minimum dollar requirement.

The Company, as a clearing broker, is subject to SEC Customer Protection Rule (Rule 15c3-3 of the Exchange Act) which requires segregation of funds in a special reserve account for the exclusive benefit of customers ("Customer Reserve") and proprietary accounts of brokers ("PAB Reserve"). As of June 30, 2025, the Company calculated a Customer Reserve deposit requirement of \$121.9 million and maintained a deposit of \$111.5 million. On July 1, 2025, the Company made a deposit of \$26 million. As of June 30, 2025, the Company calculated a PAB Reserve deposit requirement of \$19.7 million and maintained a deposit of \$35.4 million.

### 9. OFFSETTING OF SECURITIES FINANCING AGREEMENTS

The Company enters into securities borrowed and securities loaned transactions. The Company executes to facilitate customer match-book activity, to cover short positions, and for customer securities lending. The Company manages credit exposure from certain transactions by entering into master securities lending agreements. The relevant allow for the efficient closeout of transactions, and set-off of collateral against the net amount owed by the counterparty following a default. Default events generally include, among other things, failure to pay, insolvency of a counterparty.

The following table presents information about the offsetting of these instruments and related collateral amounts as of June 30, 2025.

### (Dollars in Thousands)

|                     | Gross Assets /<br>Liabilities | Amounts Offset | Net Balance<br>Sheet Amount | Amounts Not - -<br>Offset | Net Assets /<br>Liabilities |
|---------------------|-------------------------------|----------------|-----------------------------|---------------------------|-----------------------------|
| Assets:             |                               |                |                             |                           |                             |
| Securities borrowed |                               |                |                             | 139,396 \$ \$             |                             |
| Liabilities:        |                               |                |                             |                           |                             |
| Securities loaned   | 139.426 \$                    |                | 139,426 \$                  | 139,426 \$                |                             |

The securities loaned transactions represent equities with and open maturity classification.

### 10. RECEIVABLE FROM AND PAYABLE TO CUSTOMERS

Accounts receivable from and payable to customers include amounts due on cash and margin transactions. Securities owned by customers are held as collateral for receivables are receivables are recorded net of an allowance for credit losses of \$260 thousand. The amounts are as follows as of June 30, 2025:

|  |  | (Dollars in Thousands) |
|--|--|------------------------|
|--|--|------------------------|

| Receivable from customers - net | 234.876 |
|---------------------------------|---------|
| Payable to customers            | 329.973 |

### 11. PAYABLE TO BANKS AND PARENT

The Company has a \$1.50 million uncommitted secured line of credit from a third party bank available for borrowing as needed. As of June 30, 2025, no borrowings were outstanding. This credit facility bears interest at a rate based on the Federal Funds rate and any borrowings are due upon demand. As of June 30, 2025, the rate was 5.75%. The credit facility has no expiration date. The Company was in compliance with all applicable covenants at June 30, 2025.

{12}------------------------------------------------

The Company has a \$110 million committed unsecured line of credit from a third party bank available for limited purpose borrowing. As of June 30, 2025, no borrowings were outstanding. This credit facility expires in October 2025. The committed credit facility contains financial and other covenants. The Company was in complicable covenants at June 30, 2025. As of June 30, 2025, the rate was 7.0%.

The Company has a \$100 million uncommitted unsecured line of credit available from the Parent. As of June 30, 2025, no borrowings were outstanding. This credity bears interest at a rate based on the Federal Funds rate and is due upon demand. As of June 30, 2025, the rate was 7.0%. This credit facility has no expiration date. The Compliance with all covenants at June 30, 2025.

#### 12. INCOME TAXES

The components of the net deferred tax asset as of June 30, 2025 are presented in the following table.

| (Dollars in Thousands)           |    |        |
|----------------------------------|----|--------|
| Deferred tax assets:             |    |        |
| Intangible assets                | ನಾ | 6,588  |
| Allowance for credit losses      |    | 4,713  |
| Accrued compensation             |    | 512    |
| Stock-based compensation expense |    | 456    |
| Other                            |    | 204    |
| Total deferred tax asset         |    | 12,473 |
| Deferred tax liabilities:        |    |        |
| Depreciation and amortization    |    | 760    |
| Other                            |    | 20     |
| Total deferred tax liability     |    | 780    |
| Net deferred tax asset           |    | 11,693 |
|                                  |    |        |

The Company is included in the consolidated tax return of the Parent and its subsidiaries. The provision for income taxes is calculated by using a "separate return" method, it is assumed to file a separate return with the tax authority, thereby reporting taxable income or loss and paying the applicable tax to or receiving the appropriate refund from ultimate Parent. The current tax provision is the tax payable or refundable based on a hypothetical, current-year separate return. The Company provides deferred taxes on temporary differences and on any carryforwards that could be claimed on our hypothetical return and assesses the need for a valuation allowance on the basis of the projected separate return results.

The reconciliation of the gross beginning and ending amount of uncertain tax positions are as follows:

| (Dollars in Thousands)                                    | June 30, 2025 |  |
|-----------------------------------------------------------|---------------|--|
| Balance-beginning of period                               | 113           |  |
| Additions-current year tax positions                      | 31            |  |
| Reductions-prior year tax positions                       | (36)          |  |
| Total liability for uncertain tax positions-end of period | 108           |  |

As of June 30, 2025, uncertain tax benefits totaled \$108 thousand that, if recognized, would favorably impact the effective tax rate. The Company does not anticipate resolution of any unrecognized tax benefits within the next 12 months. The Company accounts for interest and penalties related to income tax liabilities as a component of income tax expense.

### 13. COMMITMENTS AND CONTINGENCIES

The Company may be subject to lawsuits, arbitration, claims, and other legal proceedings in connection with its business. A substantial adverse judgment or other uniavorable resolution of these matters could have a material adverse effect on the Company's Statement of Financial Condition. Management is of the Company has adequate legal defenses with respect to the legal proceedings to which it is a defendant or respondent and the outcome of these pendings is not likely to have a material adverse effect on the Statement of Financial Condition of the Company.

{13}------------------------------------------------

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