# PHX FINANCIAL, INC. X-17A-5 (2026-04-30) — Broker-dealer annual report - Company: PHX FINANCIAL, INC. - Form: X-17A-5 - Filed: 2026-04-30 - Period: 2025-12-31 - Accession: 0001402594-26-000002 - CIK: 1402594 - File #: 8-67653 - Type: Broker-dealer - Material weakness: No - Auditor: Sanville & Company - Auditor location: Huntingdon Valley, PA - Contact: Robert Gilman - Phone: 561-771-0036 - Email: rgilman@mavenstrategic.com - Website: mavenstrategic.com - Signed by: Kevin Chen (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1402594/000140259426000002/phx25public.pdf --- {0}------------------------------------------------ # PBX Financial, Inc. dba Phoenix Financial Services SEC File No. (8-67653) Financial Statement and Supplemental Information Pursuant to Rule 17a-5 of the Securities and Exchange Commission Year Ended December 31, 2025 {1}------------------------------------------------ #### **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington,** D.C. **20549** OMBAPPROVAL 0MB Number: 3235-0123 Expires: Nov. 30, 2026 Estimated average burden hours per response: 12 # **ANNUAL REPORTS FORM X-17A-5 PART** Ill | SEC FILE NUMBER | | |-----------------|--| | 8-67653 | | **FACING PAGE** **Information Required Pursuant to Rules 17a-5, 17a-12, and lSa-7 under the Securities Exchange Act of 1934** | FILING FOR THE PERIOD BEGINNING 01 /01 /25 | AND ENDING 12/31 /25 | | |--------------------------------------------|----------------------|--| | | | | MM/DD/YY MM/DD/YY **A. REGISTRANT IDENTIFICATION** # NAME oF FIRM: PHX Financial Inc. 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.) # 100 Wall Street | | (No. and Street) | | | | |---------------------------------------------------------------------------------------------------|------------------------------------------------------------|-----------------|----------------------------|--| | New York | NY | | 10005 | | | (City) | (State) | | (Zip Code) | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | Robert Gilman | 561-771-0036 | | rgilman@mavenstrategic.com | | | (Name) | (Area Code - Telephone Number) | (Email Address) | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in t his f iling*
Sanville & Company | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | 2617 Huntingdon Pike | Huntingdon Valley PA | | 19006 | | | (Address) | (City) | (Stat e) | (Zip Code) | | | 09/18/2003 | 169 | | | | | | | | | | | | FOR OFFICIAL USE ONLY | | | | \* Claims for exemption from the requirement t hat t he 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 t he basis of the exemption. See 17 CFR 240.17a-S(e)(l)(ii), if applica ble. **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 0MB control number.** {2}------------------------------------------------ #### OATH OR AFFIRMATION | I, Kevin Chen | swear (or affirm) that, to the best of my knowledge and belief, the | |----------------------------------------------------------------|---------------------------------------------------------------------| | financial report pertaining to the firm of PHX Financial, Inc. | as of | 12/31 2~ 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. | Sign | ature:~ | | |--------|---------|--| | Title: | | | | CEO | | | #### **This filing\*\* contains (check all applicable boxes):** - Iii (a) Statement offinancial condition. - Iii (b) Notes to consolidated statement of financial condition. - D (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 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. - □ (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 8 to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable. - □ (I) Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3. - D (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - D (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. - Iii (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 appl icable. - □ (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - Iii (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. - □ (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - □ (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - □ (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-1e or 17 CFR 240.17a-12, as applicable. - □ (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). D (z) other: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_ - - \*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e}{3) or 17 CFR 240.18a-7{d){2), as applicable. {3}------------------------------------------------ #### **Page** | Report oflndependent Registered Public Accounting Firm | | |--------------------------------------------------------|------| | Financial Statement | | | Statement of Financial Condition | 2 | | Notes to the Financial Statement | 3-12 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Stockholder and Those Charged With Governance of PHX Financial, Inc. ### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of PHX Financial, Inc. ( the "Company") as of December 31, 2025, and the related notes (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, 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 audit 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. *Sa11 v1Ue* &: *Co111pa11y* We have served as the Company's auditor since 2016. Huntingdon Valley, Pennsylvania April 29, 2026 {5}------------------------------------------------ #### **PHX Financial, Inc. dba Phoenix Financial Services Statement of Financial Condition December 31, 2025** #### **Assets** | Cash | \$
4,619,179 | |-------------------------------------------------------------------|-----------------| | Receivable from clearing organization | 635,819 | | Deposit with clearing organization | 100,000 | | Securities owned, at market value | 149,847 | | Advances | 1,202,685 | | Other receivables | 340,856 | | Prepaid expenses | 677,829 | | Operating lease right-of-use assets | 418,465 | | Furniture and equipment, net | 277,483 | | Deposits | 124,917 | | Total Assets | \$
8,547,080 | | liabilities and Stockholder's Equity | | | Liabilities | | | Connnissions payable | \$
348,598 | | Accrued expenses and other liabilities | 172,626 | | Operating lease liabilities | 433,692 | | Deferred tax liability | 495,645 | | Income taxes payable | 1,595,105 | | | 3,045,666 | | Total Liabilities | | | Commitments and Contingencies | | | Stockholder's equity | | | Connnon Stock, par value of\$0.001; 10,000,000 shares authorized, | | | 100 shares issued and outstanding | 1 | | Additional paid-in capital | 827,010 | | Retained earnings | 4,674,403 | | Total Stockholder's equity | 5,501,414 | | | | | Total Liabilities and Stockholder's F.quity | \$
8,547,080 | {6}------------------------------------------------ #### **NOTE 1. NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** ### *Nature of the Business* PHX Financial, Inc. dba Phoenix Financial Services (the Company) is a Florida Corporation registered as a broker dealer with the Securities and Exchange Commission (SEC) and a member of the Financial Industry Regulatory Authority, Inc. (FINRA). The Company is a wholly owned subsidiary of Phoenix Financial Consolidated Holdings, LP (Parent). The Company executes principal and agency transactions in listed and over-the-counter securities and engages in investment banking activity. All customer transactions are cleared on a fully disclosed basis through an independent clearing firm. The Company claims exemption from the requirements of SEC Rule 15c3-3 under Section (k)(2)(ii) of the rule, and consequently does not carry securities accounts for customers nor does it perform custodial functions related to their securities. The Company also engages in other private placement activities for which they are considered a "noncovered Firm" as they do not handle customer assets and therefore do not maintain a special account for the exclusive benefit of customers. The Company does not handle cash or securities on behalf of customers. ### *Basis of Presentation* The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. #### *Estimates and Uncertainties* The preparation of financial statements in conformity with generally accepted accounting principles 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 statements and the reported amounts of revenues and expenses during the reporting period. Actual results, as determined at a later date, could differ from those estimates. #### *Deposit with Clearing Agent* The Company, per the terms of its clearing agreement, is required to maintain a restricted security deposit with its clearing broker. Such deposit amounts are refundable to the Company upon termination of the agreement. #### *Income Taxes* The Company is subject to U.S. federal and state income taxes. The Company utilizes an asset and liability approach to account for income taxes. The asset and liability approach requires recognition of deferred tax assets and liabilities for expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities. {7}------------------------------------------------ #### **NOTE 1. NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** #### *Revenue Recognition* All revenues are recorded in accordance with ASC 606, which is recognized when: (i) a contract with a client has been identified, (ii) the performance obligation( s) in the contract have been identified, (iii) the transaction price has been determined, (iv) the transaction price has been allocated to each performance obligation in the contract, and (v) the Company has satisfied the applicable performance obligation over time. The Company's revenues from contracts with customers are recognized when the performance obligations are satisfied at an amount that reflects the consideration expected to be received in exchange for such services. The majority of the Company's performance obligations are satisfied at a point in time and are typically collected from customers by debiting their brokerage account with the Company. The Company believes that the performance obligation is satisfied on the trade date because that is when the underlying financial instrument or purchase is identified, the pricing is agreed upon and the risks and rewards of ownership have been transferred to/from the customer. Commission income is earned by providing trade facilitation, execution, clearance and settlement, custody, and trade administration services to customers. Acting as an agent, commission income is generated by the trade execution from the Company's clients' purchases and sales of securities, either on exchanges or overthe-counter, through the purchases of various investment products such as mutual funds, fixed income, options and commodity transactions. In return for such services, the broker dealer charges a commission. Revenues recognized under commission income consist of one performance obligation which is satisfied on trade date. Trade execution performance obligation is satisfied at a point in time. Corporate finance and placement agent fees are earned from revenue arising from securities offerings in which the Company acts as a selling group member. Revenue is recognized on the trade date (the date on which the Company purchases the securities from the issuer) for the portion the Company is contracted to buy. The Company believes that the trade date is the appropriate point in time to recognize revenue for securities underwriting transactions as there are no significant actions which the Company needs to take subsequent to this date. Insurance based fees are earned from revenue arising from the sale of insurance products in which the Company acts as an agent. Revenue is recognized on the trade date (the date of the contract terms). The Company believes that the trade date is the appropriate point in time to recognize revenue for insurance based transactions as there are no significant actions which the Company needs to take subsequent to this date. {8}------------------------------------------------ #### **NOTE 1. NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** ### *Fair Value of Financial Instruments* The fair values of cash, receivables, accounts payable and accrued expenses and other short-term obligations approximate their carrying values because of the short maturity of these financial instruments. In accordance with FASB ASC 825-10-50, "Disclosure About Fair Value of Financial Instruments," rates available to the Company at the balance sheet date are used to estimate the fair value of existing balance sheet amounts. #### *Limitations* Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial statement. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. #### *Receivable from Clearing Broker* In accordance with ASC 326, the Company's receivables from clearing organizations include amounts receivable from unsettled trades, including amounts related to futures and options on futures contracts executed on behalf of customers, amounts receivable for securities failed to deliver, accrued interest receivables and cash deposits. A portion of the Company's trades and contracts are cleared through a clearing organization and settled daily between the clearing organization and the Company. Because of this daily settlement, the amount of unsettled credit exposures is limited to the amount owed the Company for a very short period of time. The Company continually reviews the credit quality of its counterparties. Based on the Company's evaluation, the Company does not believe that the adoption of ASC 320-20 has or will have a material impact on its financial position and results of operations. ### *Valuation of Investments in Securities and Securities at Fair Value* - *Definition and Hierarchy* In accordance with GAAP, 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 uses various valuation approaches. In accordance with GAAP, a fair value hierarchy for inputs is used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are those 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 assumptions about the inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy is categorized into three levels based on the inputs as follows: {9}------------------------------------------------ #### **NOTE 1. NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** ### *Valuation of Investments in Securities and Securities at Fair Value -Definition and Hierarchy (continued)* *Level I* - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 securities. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment. *Level 2* - Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. *Level 3* - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The availability of valuation techniques and observable inputs can vary from security to security and is affected by a wide variety of factors including, the type of security, whether the security is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Those estimated values do not necessarily represent the amounts that may be ultimately realized due to the occurrence of future circumstances that cannot be reasonably determined. Because of the inherent uncertainty of valuation, those estimated values may be materially higher or lower than the values that would have been used had a ready market for the securities existed. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for securities categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls, is determined based on the lowest level input that is significant to the fair value measurement. Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Company's own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. The Company uses prices and inputs that are current as of the measurement date, including periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many securities. This condition could cause a security to be reclassified to a lower level within the fair value hierarchy. {10}------------------------------------------------ #### **NOTE 1. NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** #### *Securities Owned, at Fair Value* Securities owned consist of the following valued at market. | | Active Markets
for Indentical
Assets (Level 1) | Other
Observable
Inputs (Level 2) | | Significant
Unobservable
Inputs (Level 3) | | Balance as of
December
31,2025 | | |---------------------------------|------------------------------------------------------|-----------------------------------------|--|-------------------------------------------------|--|--------------------------------------|---------| | Assets ( at fair value) | | | | | | | | | Investments in securities | | | | | | | | | Money market | \$
149,847 | \$ | | \$ | | \$ | 149,847 | | Total investments in securities | \$
149,847 | \$ | | \$ • | | \$ | 149,847 | #### *Leases* Effective January 1, 2019, the Company adopted Accounting Standards Codification 842, Leases ("ASC842"). The Company determines if an arrangement contains a lease at inception based on whether or not the Company has the right to control the asset during the control period and other facts and circumstances. The Company evaluates the classification of leases as operating or finance at inception. Leases that meet one or more of the following criteria will be classified as finance leases: - The Company can acquire the leased asset at the end of the lease term for a below-market price. - The ownership of the leased asset is transferred to the Company at the end of the lease period. - The duration of the lease encompasses at least 75% of the useful life of the leased assets. - The present value of the minimum lease payments under the lease represents at least 90% of the fair value of the leased asset. The Company has determined that all leases under which they are the lessee to be operating leases. The Company is the lessee in a lease contract when they obtain the right to control the asset. Operating lease right-of-use ("ROU") assets represent the Company's right to use an underlying asset for the lease term, and lease liabilities represent the Company's obligation to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The Company determines the lease term by assuming the exercise of renewal options that are reasonably certain. As most of the Company's leases do not provide an implicit interest rate, the Company uses the Prime Rate from the Federal Reserve Bank as a guide for financing over the period of the lease based on the information available at the commencement date in determining the present value of future payments. Leases with a lease term of 12 months or less at inception are not recorded on the Company's balance sheets and are expensed on a straight-line basis over the lease term in the Company's statements of operations. {11}------------------------------------------------ #### **NOTE 1. NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** #### *Segment Reporting* On January 1, 2024, the Company adopted ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires all public entities, including those with a single reportable segment, to disclose additional information about a reportable segment's expense. The Company follows Accounting Standard Update 2023-07-Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"), which expands reportable segment information by requiring companies to disclose on an annual and interim basis, significant reportable segment expenses that are regularly reported to the Chief Operating Decision Maker ("CODM") and included within each reported measure of the segment's profit or loss. ASU 2023-07 also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM makes decisions about allocating resources to segments and evaluating performance. The Company has one reportable segment: Brokerage, which generates revenue from customers by charging fees, commissions, and other income for the services it provides to its customers. Such revenue streams are further described earlier in this footnote disclosure under the Revenue Recognition caption. In connection with this, the Company has identified the CEO as the CODM, who uses net income to evaluate the results of the business and how to allocate resources based on net income in managing the operations of the Company. Additionally, the CODM may also use excess net capital, which is not a measure of profit and loss, to make operational decisions while maintaining capital adequacy to meet the Company's regulatory requirements, such as whether to reinvest profits or declare distributions to the stockholder's. The measurement of segment income, expenses, and net income (loss) reviewed by the CODM is reported in the accompanying statement of operations. The measurement of segment assets and liabilities are reported in the accompanying statement of financial condition as total assets and total liabilities. 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. For the year ended December 31,2025, the Company operates in a single segment and the CODM is the Chief Executive Officer. ## **NOTE2. CONCENTRATIONS OF BUSINESS AND CREDIT RISK** In the normal course of business, the Company's customer activities involve the execution, settlement, and financing of various customer securities transactions. These activities may expose the Company to off-balancesheet risk in the event the customer or other broker is unable to fulfill its contracted obligations and the Company has to purchase or sell the financial instrument underlying the contract at a loss. The Company maintains its cash balances in a financial institution which is insured by the Federal Insurance Corporation ("FDIC"). The Company's account balances that are non-interest bearing accounts are subject to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Act"). The Company's interest bearing cash balances may exceed the FDIC coverage of \$250,000. The Company has not experienced any losses in such accounts and believes it is not subject to any significant credit risk on cash. {12}------------------------------------------------ #### **NOTE3. RECEIVABLE FROM/ DUE TO CLEARING AGENT** In March 2017 the Company entered into a clearing agreement with Axos Clearing, LLC. The Company clears all security transactions through its clearing agent, Axos Clearing, LLC. Amounts earned are reconciled monthly and paid in the subsequent month. As a result, the Company considers the amounts due from its clearing agent to be fully collectible, and accordingly, no allowance for doubtful accounts has been established. #### **NOTE4. ADVANCES AND OTHER RECEIVABLES** Included in advances are loans receivable, other amounts due from registered representatives. The loans receivable are amounts advanced to employees as incentives. The unsecured loans are non-interest bearing and generally have a three-year term. The loans are forgiven once the employees have met their length of service obligations. If an employee fails to meet the requirement and is terminated, management evaluates the likelihood of collectability. Once management deems the receivable uncollectable, the balance is written off. As of December 31, 2025, there were no outstanding balances of the loans receivable. Other amounts due from registered representatives are advances made on commissions and chargebacks for regulatory fees and other items. Amounts due from registered representatives as of December 31, 2025 were \$1,351,287. Management has implemented an allowance against broker advances based on length of time outstanding and productivity of the registered representative. As of December 31, 2025, the allowance for broker advances was \$148,602. The balance of other receivables at December 31, 2025 consists of: Broker advances, net of allowance \$ 1,202,685 **\$1,202,685** Other receivables are receivables from advisory fees. Management determines if an allowance for doubtful accounts is necessary by regularly evaluating the counterparty and considering its financial condition, credit history and current economic conditions. As of December 31, 2025 the Company's outstanding receivables balance was \$211,005 and management determined that no allowance for doubtful accounts was necessary as of December 31, 2025. ## **NOTES. INCOME TAXES** The Company accounts for income taxes under FASB ASC 740, "Income Taxes". Under FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. {13}------------------------------------------------ #### **NOTES. INCOME TAXES (CONTINUED)** Under F ASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The tax years 2022 to 2025 remain open to examination by the Internal Revenue Service, the State of New York, the City of New York and the State of Florida. The Company files its tax returns on the cash basis method of accounting. Under the cash basis method, revenues are recognized when received rather than earned, and costs are recognized when cash is disbursed rather than when the obligation is incurred. The Company recognizes deferred income tax assets relating to the tax effect of temporary differences arising as a result of the Company's utilizing the cash basis of accounting for income tax reporting purposes as opposed to the accrual basis of accounting for financial statement purposes. These temporary differences arise primarily from receivables, prepaid expenses and accrued expenses. The deferred tax liability is as follows: | | Amount | |---------------------|-----------------| | December 31, 2024 | \$
(129,851) | | Change in provision | 625,496 | | December 31, 2025 | \$
495,645 | The current and deferred portions of the income tax expense (benefit) included in the statement ofincome are as follows: | | Current | Deferred | | Total | | |---------|---------------|----------|---------|-------|-----------| | Federal | \$
389,995 | \$ | 240,334 | \$ | 630,329 | | State | 387,005 | | 238,491 | | 625,496 | | | \$
777,000 | \$ | 478,825 | \$ | 1,255,825 | #### **NOTE6. FURNITURE AND EQUIPMENT** Furniture and equipment at December 31, 2025 consisted of the following: | Furniture and equipment | 400,189 | |--------------------------------|-----------| | Less: Accumulated depreciation | (122,706) | | | \$277,483 | Based on their estimated useful life, furniture and equipment is calculated over 5 years and 3 years, respectively. {14}------------------------------------------------ #### **NOTE7. STOCK BASED COMPENSATION** In compliance with financial reporting standards of FASB ASC 718- Stock Based Compensation, the Company used the application of Black-Scholes Merton Stock Option Pricing Model to determine stock warrants immediately assigned. The Company's warrant revenue and compensation is based on the volatility factor in the Black-Scholes model of 80% based on average monthly volatility of selected peer companies. The risk-free rated interest rate is used and is approximately 1 % based on U.S. Treasury zero-coupon bond yields of maturities corresponding to the estimated expected term. #### **NOTES. NET CAPITAL REQUIREMENTS** The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule 15c3-1 which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. At December 31, 2025 the Company had net capital of \$2,874,647 which was \$2,699,500 in excess of its required net capital. The Company's net capital ratio was 9.0 to 1. ### **NOTE9. RELATED PARTY TRANSACTIONS** The Company occupies office space on a month-to-month basis through leased premises of the Parent. #### **NOTE 10. COMMITMENTS** & **CONTINGENCIES** During the normal course of operations, the Company, from time to time, may be involved in lawsuits, arbitration, claims, and other legal or regulatory proceedings. The Company does not believe that these matters will have a material adverse effect on the Company's financial position, results of operations, or cash flows. The Company generally engages outside legal counsel to rigorously defend any such lawsuits, arbitrations, claims and other legal or regulatory proceedings. At the present time legal counsel cannot predict the outcome of any proceedings. During 2018, the Company entered into a sublease agreement for office space in Hauppauge, New York which expired in February 2023. The lease was renewed expiring April 2028. During 2025, the Company entered into a lease agreement for office space in Red Bank, New Jersey which expires in May 2028. For the year ended December 31, 2025, the Company has operating lease right-of-use assets and operating lease liabilities amounted to \$418,465 and \$433,692, respectively in the accompanying statement of financial condition. During 2021, the Company entered into a short-term lease of office space in Fort Lauderdale, Florida on a month-to-month basis. The Company has a security deposit of \$100,000 included in other assets within the accompanying statement of financial condition. {15}------------------------------------------------ #### **NOTE 11. SUBSEQUENT EVENTS** The Company has evaluated subsequent events for potential recognition or disclosure in the financial statements through the date these financial statements were issued. Management has determined there were no items requiring disclosure. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.