# MODERN CAPITAL SECURITIES INC. X-17A-5 (2026-05-07) — Broker-dealer annual report - Company: MODERN CAPITAL SECURITIES INC. - Form: X-17A-5 - Filed: 2026-05-07 - Period: 2025-12-31 - Accession: 0001282492-26-000006 - CIK: 1282492 - File #: 8-66403 - Type: Broker-dealer - Material weakness: No - Auditor: LMHS, P.C - Auditor location: Norwell, MA - Contact: Cassandra Woodward - Phone: 6616310103 - Signed by: Cassandra Woodward (CFO) Original filing: https://www.sec.gov/Archives/edgar/data/1282492/000128249226000006/mcs2025audit.pdf --- {0}------------------------------------------------ # **MODERN CAPITAL SECURITIES, INC.** **Financial Statements and Supplemental Schedules Required by the U.S. Securities and Exchange Commission** **Including Independent Registered Auditor's Report Thereon** **For the Year-Ended December 31, 2025** {1}------------------------------------------------ # **MODERN CAPITAL SECURITIES INC. FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2025** #### **TABLE OF CONTENTS** | Report of Independent Registered Public Accounting Firm | 1 | |---------------------------------------------------------------------------------------------------------------------------|-----| | Financial Statements | | | Statement of Financial Condition Statement of | 2 | | Earnings | 3 | | Statement of Changes in 6WRFNKROGHU
V Equity | 4 | | Statement of Cash Flows | 5 | | Notes to Financial Statements | 6 - | | Supplemental Information | | | Schedule I - Computation and Reconciliation of Net Capital Under Rule 15c3-1
of the Securities and Exchange Commission | 1 | | Managements Report on Exemption | 1 | | Schedule II - Computation of Aggregate Indebtedness Under Rule 17a-5
of the Securities and Exchange Commission | 1 | | Schedule III - Information Relating to the Possession or Control
Requirements Under SEC Rule 15c3-3 | 1 | Report of Independent Registered Public Accounting Firm 1 {2}------------------------------------------------ #### MODERN CAPITAL SECURITIES, INC. STATEMENT OF FINANCIAL CONDITION AS OF DECEMBER 31, 2025 #### **ASSETS** #### **Assets** | Cash | \$
76,764 | |--------------------------------------|---------------| | Deposits with clearing organizations | 50,000 | | Account Receivable | 251,958 | | Receivable from affiliates | 382,099 | | | | | TOTAL ASSETS | \$
760,821 | #### **LIABILITIES AND MEMBER'S EQUITY** #### **Liabilities** | Commissions payable
Accounts Payable
Payable to affiliates
Other liabilities | \$
177593
11,934
31,609
6,787 | |---------------------------------------------------------------------------------------|-------------------------------------------| | TOTAL LIABLITIES | \$
227,923 | | Member's Equity | | | Member's Equity | 532,898 | | TOTAL LIABILITES AND MEMBER'S EQUITY \$ | 760,821 | {3}------------------------------------------------ #### MODERN CAPITAL SECURITIES, INC. STATEMENT OF EARNINGS FOR THE YEAR END DECEMBER 31, 2025 | Revenues:
Commissions
Revenue from Investment Company Shares
Revenue from Sales of Insurance Based Products
Revenue from Registered Representatives
Other Revenue | \$
641,000
707102
1,044,829
175,150
139,889 | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------| | Total Revenues | \$2,707,970 | | | | | Expenses:
Commission | \$2,098750 | | Professional fees | 116,606 | | Computer and Software | 70,443 | | Wages and Benefits | 81,344 | | Regulatory expenses | 61,520 | | Occupancy | 13,195 | | Insurance | 18,852 | | Clearing Expenses | 50,288 | | Travel and Entertainment | 23,440 | | Other | 39,601 | | Total Expenses | \$2,574,039 | | Net Earnings | \$ 133,931 | {4}------------------------------------------------ #### MODERN CAPITAL SECURITIES, INC STATEMENT OF CHANGES IN MEMBER'S EQUITY FOR THE YEAR END DECEMBER 31, 2025 | Balance, December 31,2024 | \$398,967 | |---------------------------|-----------| | Net Earings | 133,931 | | Balance December 31,2025 | \$532,898 | {5}------------------------------------------------ # **MODERN CAPITAL SECURITIES, INC. STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2025** | Cash flows from operating activities | | |----------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------| | Net Earnings | 133,931 | | Adjustments to reconcile net earnings to net cash
provided by operating activities: | | | Decrease (Increase) in operating assets: | | | Accounts receivable
Receivable from affiliates | (124,723)
(32,353) | | (Decrease) Increase in operating liabilities:
Accounts payable
Payable to affiliates
Commissions Payable
Other Liabilities | 1,472
(33,010)
118,336
6,787 | | Total Adjustments | (63,491) | | Net cash provided by operating activities | 70,440 | | Net increase in cash and cash equivalents | 70,440 | | Cash and cash equivalents at beginning of year | 56,324 | | Cash and cash equivalents at end of year | \$
126,764 | | Cash paid for interest | \$ | | Cash paid for taxes | \$ | {6}------------------------------------------------ #### **MODERN CAPITAL SECURITIES, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2025** ## **NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:** #### Nature of Operations n " Modern Capital Securities, I ., (the "Company is a broker-dealer registered with the SEC and the Financial Industry Regulatory Authority (FINRA). The Company is a California Corporation founded on January 22, 2004, with offices located in North Carolina. #### Basis of Accounting: The financial statements of the Company have been prepared on an accrual basis of accounting and accordingly reflect all significant receivables, payables, and other liabilities. #### Cash and Cash Equivalents For purposes of Cash and Cash Equivalents, the Company considers money market funds with a weighted average maturity of three months or less to be cash equivalents. The Company maintains its cash deposit in accounts which at times, may exceed uninsured limits. The Company has not experienced any losses in such accounts. #### Income Taxes Federal income taxes are not payable by the S Corporation or provided for in this financial statement. The S Corporation shareholders are taxed individually on their share of the S Corporation's earnings. State income taxes are immaterial to the Company's financial statement. #### Uncertain Tax Positions Management has determined that the Company does not have any uncertain tax positions and associated unrecognized benefits or liabilities that materially impact the financial statements or related disclosures. Since tax matters are subject to some degree of uncertainty, there can be no assurance that the Company's tax returns will not be challenged by the taxing authorities and that the Company or its members will not be subject to additional tax, penalties, and interest as a result of such a challenge. Generally, the Company's tax returns remain open for three years for federal income tax examination. #### Cash Flows For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. {7}------------------------------------------------ #### **MODERN CAPITAL SECURITIES, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2025** #### **NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):** #### Estimates Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenue and expenses. Actual results could differ from those estimates. #### Revenue from contracts with customers The Company records revenues under the provisions of ASC 606, using a five-step revenue model to recognize revenue from contracts with customers. The five steps used in this process are: 1) identify the contract, 2) identify the performance obligations in the contract, 3) determine the transaction price, 4) allocate the price to the performance obligations, and 5) recognize the revenue. Under this standard, recognition of revenue occurs when a customer obtains control of promised services or goods in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount of timing of and cash flows from customer contracts. #### Brokerage Commissions The Company buys and sells securities on behalf of its customers. Each time a customer enters into a buy or sell transaction, the Company charges a commission. Commissions and related clearing expenses are recorded on the trade date (the date that the Company fills the trade order by finding and contracting with counterparty and confirms the trade with customer). The Company believes that the performance obligation is satisfied on the trade date because that is when the underlying financial instrument or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership have been transferred to/from the customer. ### Insurance Commissions The Company earns commission revenue through the sale and servicing of insurance policies. Initial policy commissions are recognized at a point in time upon the effective date of the related insurance policy, which is when the Company has satisfied its performance obligation and the commission amount becomes determinable. The Company also earns renewal and trailing commissions related to policy renewals. Renewal and trailing commissions are recognized over time during the related policy coverage period as the Company provides ongoing customer service and support obligations. Revenue from contracts with customers is recognized in an amount that reflects the consideration the Company expects to receive in exchange for providing services to customers. #### **MODERN CAPITAL SECURITIES, INC.** {8}------------------------------------------------ #### **NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2025** ### **NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):** #### Investment Share Commissions Revenue is generated through commissions and transaction fees earned on the sale or purchase of investment shares (e.g., mutual funds, ETFs, equities) on behalf of retail customers. These fees are recognized at the point in time when the transaction is executed. #### Other Revenue The Company earns other revenue from a variety of ancillary and support activities that are not directly tied to its primary operations. These revenue streams contribute to overall business performance and include the following: Interest income earned on customer credit balances maintained in brokerage or custodial accounts. Revenue is recognized on an accrual basis over the period the balances are maintained. Interest charged to customers on margin or debit balances in their accounts. This income is recognized on an accrual basis as earned. Fees charged to customers for mailing trade confirmations, statements, and other accountrelated communications. Revenue is recognized at the point in time when the service is rendered. Income earned from registered representatives for administrative, compliance, or platform access fees related to their association with the Company; typically recognized over the term of the arrangement. ## **Accounts Receivable** Management considers all amounts recorded as accounts receivable to be fully collectible; accordingly, no allowances for credit losses is required. All amounts are due from various entities and financial institutions. ## **NOTE 2 - FAIR VALUE MEASUREMENTS** FASB ASC 820 defines fair value, establishes a framework for measuring fair value, and establishes a fair value hierarchy which prioritized the inputs to valuation techniques. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. Valuation techniques that are consistent with the market, income or cost approach, as specified by FASB ASC 820 are used to measure fair value. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: {9}------------------------------------------------ # **MODERN CAPITAL SECURITIES, INC NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2025** ## **NOTE 2 - FAIR VALUE MEASUREMENTS (Continued)** Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities the Company has the ability to access. Level 2 inputs are inputs (other than quoted prices included within Level 1) that are observable for the asset or liability, either directly or indirectly. Level 3 are unobservable inputs for the asset or liability and rely on management's own assumptions about the assumptions that market participants would use in pricing the asset or liability. (The unobservable inputs should be developed based on the best information available in the circumstances and may include the Company's own data. # **NOTE 3 – FINANCIAL INSTRUMENTS WITH OFF BALANCE SHEET RISK** In the normal course of business the Company purchases and sells securities as both principal and/or agent. If another party to the transaction fails to perform as agreed (for example failure to deliver a security or failure to pay for a security) the Company may incur a loss if the market value of the security is different from the contract amount of the transaction. The risk of default depends on the creditworthiness of the counterparty or issuer of the instrument. It is the Company's policy to review, as necessary, the credit standing of each counterparty. ## **NOTE 4 – NET CAPITAL REQUIREMENTS** As a registered broker-dealer, the Company is subject to the requirements of Rule l5c-3-1 under the Securities Exchange Act of 1934. At December 31, 2025, the Company's net capital of \$51,141 was \$35,946 in excess of the minimum requirement of \$15,195. ## **NOTE 5 – CONCENTRATIONS OF CREDIT RISK** The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. Management believes the Company is not exposed to any significant credit risk related to cash. {10}------------------------------------------------ # **MODERN CAPITAL SECURITIES, INC NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2025** ## **NOTE 6 – CONTINGENT LIABILITIES** On December 31, 2025, there were no asserted ligations, claims or assessments against the Company. In the opinion of management, the ultimate liabilities, if any, resulting from any unasserted claims will not materially affect the financial position of the Company. # **NOTE 7 - RISKS AND UNCERTAINTIES** In the normal course of business, the Company is subject to various claims and litigation arising from normal business operations. Litigation is subject to many uncertainties, the outcome of individual litigated matters is not predictable with assurance, and it is reasonably possible that some legal actions or claims could be decided unfavorable to the Company. Although the amount of ultimate liabilities with respect to such matters cannot be ascertained, management is of the belief that any resulting liability should not materially affect the financial position of the Company. ## **NOTE 8- RELATED PARTY** From time to time, the Company advances funds and receives funds from various related parties to fund operating activities. These amounts are non-interest bearing and short term in nature. #### **NOTE 9- 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. The Company has identified its President 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 4), 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 distributions. 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 accounting policies used to measure the profit and loss of the segment are the same as those described in the summary of significant accounting policies. #### **NOTE 10- LEASE** Starting January of 2024, the Company leases office premises under a month-to-month agreement. The Company has elected not to recognize the right-of-use asset and lease liability as the term is 12 month or less and does not include an option to purchase that the Company is reasonably certain to exercise. Rent expense under the previous agreement for the year ended December 31, 2025 was approximately \$0. ## **NOTE 11- DATE OF MANAGEMENT'S REVIEW** Management has evaluated subsequent events through May 07, 2 0 2 6 **,** the date on which the financial statements were available to be issued {11}------------------------------------------------ #### SCHEDULE I MODERN CAPITAL SECURITIES, INC. COMPUTATION AND RECONCILATION OF NET CAPITAL UNDER RULE 15c3-1 OF THE SECURITIES AND EXCHANGE COMMISSION FOR THE YEAR END DECEMBER 31, 2025 Computation of basic net capital requirements: | Total member's equity | \$532,898 | |-----------------------------------------------------------------|-----------| | Deductions and/or charges | | | Non-allowable assets | 481,757 | | Net capital before haircuts and securities positions | 51,141 | | Haircuts | - | | Net capital | 51,141 | | Minimum net capital requirements: | | | 6 2/3% of total aggregated indebtedness (227,923) | 15,195 | | Minimum net capital requirement for broker/dealer | 5,000 | | Net Capital requirement (greater of the above two requirements) | 15,195 | | Net capital in excess of minimum | \$35,946 | Subsequent to year-end, the Company filed an amended Part II of Form X-17A-5 as of December 31, 2025, reflecting revisions to the net capital computation. {12}------------------------------------------------ #### **Modern Capital Securities, Inc. Exemption Report** Modern Capital 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 and dealers"). This Exemption Report was prepared as required by 17 C.F.R. § 240.17a-5(d)(l) and (4). To the best of its knowledge and belief, the Company states the following: - (1) The Company claimed exemption from 17 C.F.R. § 240.15c3-3 under the following provisions of 17 C.F.R. §240.15c3-3 (k)(2)(ii) - (2) The Company met the identified exemption provisions in 17 C.F.R. §240.15c3-3 throughout the most recent fiscal year without exception. - (3) The Company is also filing this Exempt ion Report because the Company's other business activities contemplated by Footnote 74 of the SEC Release No. 34 - 70073 adopting amendments to 17 C.F.R. § 240.17a-5 are limited to*:* effecting securities transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company; and The Company (1) did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers, (other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of Rule 15c2-4 and/or funds received and promptly transmitted for effecting transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company); (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts (as defined in Rule 15c3-3) throughout the fiscal year ending December 31, 2025 without exception. The statement above was made to the best knowledge and belief of the undersigned. Modern Capital Securities, Inc p , By: : Cassandra Woodward Title: CFO Date: May 7, 2026 {13}------------------------------------------------ #### **MODERN CAPITAL SECURITIES, INC.** ## **SCHEDULE** II **COMPUTATION FOR DETERMINATION OF THE RESERVE REQUIREMENTS UNDER THE SECURITIES AND EXCHANGE COMMISSION RULE 15c3-3 December 31, 2025** The· Company is not required to file the above schedules as it is exempt from Securities and Exchange Commission Rule 15c3-3 under paragraph (k)(2)(ii) of the rule and does not hold customers' monies or securities. The Company is also filing this Exemption Report relying on Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5. #### **SCHEDULE** III **INFORMATION RELATING TO THE POSSESSION OR CONTROL REQUIREMENTS UNDER THE SECURITIES AND EXCHANGE COMMISSION RULE 15c3-3 December 31, 2025** The Company is not required to file the above schedules as it is exempt from Securities and Exchange Commission Rule 15c3-3 under paragraph (k)(2)(ii) of the rule and does not hold customers' monies or securities. The Company is also filing this Exemption Report relying on Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5. {14}------------------------------------------------ Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.