# KERSHNER SECURITIES, LLC X-17A-5 (2025-02-28) — Broker-dealer annual report - Company: KERSHNER SECURITIES, LLC - Form: X-17A-5 - Filed: 2025-02-28 - Period: 2024-12-31 - Accession: 0001438071-25-000001 - CIK: 1438071 - File #: 8-67922 - Type: Broker-dealer - Material weakness: No - Auditor: Bauer & Company - Auditor location: Austin, TX - Contact: Jon Sanderson - Phone: 5124398140 - Email: rson@kershnertrading.com - Website: kershnertrading.com - Signed by: Jon B. Sanderson (Chief Financial Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1438071/000143807125000001/audit2024_1.pdf --- {0}------------------------------------------------ **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** > **ANNUAL REPORTS FORM X-17A-S PART** Ill 0MB APPROVAL 0MB Number: 3235-0123 Expires: Nov 30, 2026 Estimated average burden hours per response: I~ ',[[Fill NJII/[;: ~ 8-67922 **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 **O 1/01/2024** MM/DD/VY AND ENDING **12/31/2024** MM/DD/VY **A. REGISTRANT IDENTIFICATION** NAME OF FIRM: Kershner Securities, LLC --------------------------------- TYPE OF REGISTRANT (check all applicable boxes): ~ Broker-dealer D Security-based swap dealer D 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.) 1825-B Kramer Lane, Suite 200 (No. and Street) Austin Texas 78758 (City) (State) (Zip Code) PERSON TO CONTACT WITH REGARD TO THIS FILING Jon B. Sanderson 512-439-8140 jsande rson@kershnertrading.com (Name] (Area Code - Telephone Number) (Email Address) **B. ACCOUNTANT IDENTIFICATION** INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing• Bauer & Company, LLC (Name - if individual, state last, first, and middle name) P.O. Box 27887 Austin Texas 78755 (Address) (City) (State) (Zip Code) 11/20/14 6072 r• of **Regi>Uaboa with PCAOB)(il** applicable) **FOR OFFICIAL USE ONLY** (PCAOR RegiFINANCIAL STATEMENTS | | |-----------------------------------------------------------------------------------------------------------------------------------|----| | Statement of Financial Condition | 2 | | Statement of Operations | 3 | | Statement of Changes in Member's Equity | 4 | | Statement of Cash Flows | 5 | | Notes to Financial Statements | 6 | | SUPPLEMENTAL SCHEDULES | | | I.
Computation of Net Capital and Aggregate Indebtedness
Pursuant to Rule 15c3-1 | 12 | | II.
Computation for Determination of Reserve Requirements
Pursuant to Rule 15c3-3 | 13 | | III.
Information Relating to the Possession or Control Requirements
Pursuant to Rule 15c3-3 | 13 | | INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S REVIEW | | | REPORT REGARDING THE EXEMPTIVE PROVISIONS OF RULE 15c3-3 | 14 | | Kershner Securities, LLC Exemption Report | 15 | | INDEPENDENT ACCOUNTANTS' REPORT ON APPLYING AGREED
UPON PROCEDURES RELATED TO AN ENTITY'S SIPC ASSESSMENT | | | RECONCILIATION | 16 | | Schedule of Assessment Payments on Form SIPC-7 as required under
Rule 17a-5(e)(4)(i) of the Securities and Exchange Commission | 18 | | | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To Those Charged with Governance and Member of Kershner Securities, LLC #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of Kershner Securities, LLC a Wholly Owned Subsidiary of Kershner Trading Group, LLC as of December 31, 2024, the related statements of operations, changes in member's equity, and cash flows for the year then ended, 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 Kershner Securities, LLC as of December 31, 2024, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** These financial statements are the responsibility of Kershner Securities, LLC's management. Our responsibility is to express an opinion on Kershner Securities, LLC'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 Kershner Securities, LLC 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. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. #### **Auditor's Report on Supplemental Information** The Computation of Net Capital and Aggregate Indebtedness Pursuant to Rule 15c3-1 of the Securities and Exchange Commission (Schedule I), the Computation for Determination of Reserve Requirements Under Rule 15c3-3 of the Securities and Exchange Commission (Schedule II) and the Information Relating to the Possession or Control Requirements Under Rule 15c3-3 of the Securities and Exchange Commission (Schedule III) (the "Supplemental Information") has been subjected to audit procedures performed in conjunction with the audit of Kershner Securities, LLC's financial statements. The supplemental information is the responsibility of Kershner Securities, LLC's management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 C.F.R. §240.17a-5. In our opinion, the Supplemental Information is fairly stated, in all material respects, in relation to the financial statements as a whole. **BAUER & COMPANY, LLC** Bauer & Company, LLC We have served as Kershner Securities, LLC's auditor since 2018. Austin, Texas February 26, 2025 Bauer & Company, LLC P.O. Box 27887 Austin, TX 78755 Tel 512.731.3518 / www.bauerandcompany.com {5}------------------------------------------------ #### **KERSHNER SECURITIES, LLC (A Wholly Owned Subsidiary of Kershner Trading Group, LLC)** Statement of Financial Condition December 31, 2024 #### **Assets** | Cash and cash equivalents
Receivable from clearing organization
Referral fees receivable
Receivables from related entities | \$
11,600
66,988
333,678
20,446 | |-------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------| | Total assets | \$
432,712 | | Liabilities and member's equity | | | Accounts payable | \$
16,972 | | Other accrued expenses | 7,898 | | Payable to related entities | 26,481 | | Total liabilities | 51,351 | | Member's equity | 381,361 | | Total liabilities and member's equity | \$
432,712 | {6}------------------------------------------------ ### **KERSHNER SECURITIES, LLC (A Wholly Owned Subsidiary of Kershner Trading Group, LLC)** Statement of Operations December 31, 2024 | Revenue | | |--------------------------------------------------------|-----------------| | Referral fees | \$
3,276,484 | | Related party service fee income | 168,312 | | Total revenue | 3,444,796 | | Expenses | | | Related party labor allocation | 288,532 | | Commissions and clearing fees | 312,336 | | Related party communications and technology allocation | 14,303 | | Related party occupancy allocation | 27,191 | | Regulatory fees and expenses | 20,161 | | Related party other expenses | 1,103 | | Other expenses | 80,366 | | Total expenses | 743,992 | | Other income | 531,000 | | Income before income tax expense | 3,231,804 | | Franchise taxes | 11,588 | | Net income | \$
3,220,216 | {7}------------------------------------------------ #### **KERSHNER SECURITIES, LLC (A Wholly Owned Subsidiary of Kershner Trading Group, LLC)** Statement of Changes in Member's Equity December 31, 2024 | Balance at December 31, 2023 | \$
1,688,145 | |------------------------------|-----------------| | Capital distributions | (4,527,000) | | Net income | 3,220,216 | | Balance at December 31, 2024 | \$
381,361 | {8}------------------------------------------------ #### **KERSHNER SECURITIES, LLC (A Wholly Owned Subsidiary of Kershner Trading Group, LLC)** Statement of Cash Flows December 31, 2024 | Cash flows from operating activities: | | |-----------------------------------------------------------------------|-----------------| | Net income | \$
3,220,216 | | Adjustments to reconcile net income to net cash provided by operating | | | activities: | | | Changes in operating assets and liabilities: | | | Receivable from clearing organization | 1,204,752 | | Receivable from related entities | 251,164 | | Other receivables | (196,610) | | Accounts payable | (2,977) | | Other accrued expenses | (30,192) | | Payable to related entities | 354 | | Net cash provided by operating activities | 4,446,707 | | Cash flows from financing activities: | | | Capital distributions | (4,527,000) | | Net cash used in financing activities | (4,527,000) | | Net change in cash and cash equivalents | (80,293) | | Cash and cash equivalents at beginning of year | 91,893 | | Cash and cash equivalents at end of year | \$
11,600 | | Supplemental disclosures of cash flow information: | | | Cash paid during the year for: | | | Interest | \$
- | | Franchise taxes | \$
12,391 | {9}------------------------------------------------ #### **Note 1 - Nature of Business** Kershner Securities, LLC (the "Company"), was organized as a Delaware Limited Liability Company on February 22, 2008. The Company is a broker-dealer in securities registered with the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"). The Company's sole member is Kershner Trading Group, LLC, ("KTG", the "Parent", or the "Member"). The Company operates under the provisions of Paragraph k(2)(ii) of Rule 15c3-3 of the SEC, and accordingly is exempt from the remaining provisions of that Rule. The Company does not hold customer funds or securities, but as an introducing broker or dealer, will clear all transactions on behalf of customers on a fully disclosed basis through a clearing broker-dealer, Goldman Sachs Execution & Clearing, L.P ("Goldman"). There were no revenues from this source for the year ended December 31, 2024. In November 2023, the Company entered into a Referral and Commission Sharing Agreement ("RCSA") with T3 Trading Group, LLC ("T3TG") to refer certain of its related party clients for execution services relating to the purchase and sale of exchange listed equity securities and options contracts. Under this T3TG agreement, the Company will be paid a portion of the commissions and other related transactional income for transactions executed by T3TG. In April 2024, the Company entered into a Services Agreement ("SA") with Fifth Lane Capital, LP ("FLC") to collect service fees on transactions based on shares traded. The Company does not hold customer funds or securities, but as an introducing broker or dealer, will clear all transactions on behalf of customers on a fully disclosed basis through a clearing broker-dealer, Velocity Clearing, LLC. #### **Note 2 - Significant Accounting Policies** #### Basis of Accounting These financial statements are presented on the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America. Revenues are recognized in the period earned and expenses when incurred. #### Use of Estimates The preparation of financial statements 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 statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company's critical accounting estimates affecting the financial statements include the allocation of income and expenses with affiliated entities. #### Cash Equivalents For purposes of reporting cash flows, the Company has defined cash equivalents as highly liquid investments with original maturities of less than ninety days that are not held for sale in the ordinary course of business. {10}------------------------------------------------ #### Receivable from Clearing Organization For the trading activity business the Company introduces to Goldman on behalf of its customer the transactions are cleared on a fully disclosed basis through its clearing broker-dealer, Goldman Sachs Execution & Clearing, L.P. At December 31, 2024, the amount receivable from Goldman totaled \$66,988 consisting of fees and commissions earned and collected on securities transactions for the Company. #### Referral Fee Receivable The Company has a RCSA with T3TG on referred business of a related party. At December 31, 2024, the amount of the referral fee receivable from T3TG totaled \$333,678 earned on securities transactions. As of February 2025, the amount has been collected in full. #### Receivables from Related Entities The Company entered into a Services Agreement with Fifth Lane Capital, LP. At December 31, 2024, the amount of the receivable from FLC total \$20,446 consisting of service fees on securities transactions. #### Revenue Revenue includes related party brokerage commissions, referral fees from referred customers and related party services fees. Purchases and sales of securities, and commission revenue and expense, are recorded on a trade date basis. Revenue also includes referral fees and dividends. Referral fees are recorded as earned and dividends are recorded on the ex-dividend date. #### *Related Party Brokerage Commissions* The Company serves as an introducing broker-dealer and will charge a commission for the purchases and sales transactions of its related party customer. Related party commissions and clearing expenses are recorded on the trade date (the date that the trade order is filled with a counterparty and confirmed with the related party customer.) The Company believes that the performance obligation is satisfied on the trade date because that is when the underlying financial instrument and/or purchaser are identified, the pricing is agreed upon and the risks and rewards of ownership have been transferred to/from the customer. There were no revenues from this source for the year ended December 31, 2024. #### *Referral Fees* The Company serves a source of referrals to T3TG and receives a referral fee for the purchases and sales transactions of its referred customer. Referral fees are recorded when earned based on when the Company's performance obligations under the RCSA are deemed to have been met.. The Company believes that the performance obligations are satisfied when T3TG accepts the referral and on the trade date of the underlying financial transaction executed by the referred customer, when the risks and rewards of ownership have transferred to/from the customer. The Company earned revenue from referrals in the amount of \$3,276,484 for the year ended December 31, 2024. {11}------------------------------------------------ #### *Related Party Service Fees* The Company serves as a source of trading related services and support for FLC and receives a service fee based on the number of shares transacted. Service fees are recorded when earned based on when the Company's performance obligations under the Service Agreement are deemed to have been met. The Company believes that the performance obligation is satisfied on the trade date of the underlying financial transaction and/or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership have transferred to/from the customer. The Company earned revenue from service fees in the amount of \$168,312 for the year ended December 31, 2024. #### Financial Instruments and Credit Risk Financial instruments that potentially subject the Company to credit risk include cash and cash equivalents and receivables from the clearing organization. Receivables from the clearing organization represent cash deposited and commissions receivable from the organization, \$500,000 of which are insured from theft by the Securities Investor Protection Corporation. #### Advertising Costs Advertising costs are expensed as incurred. There were no advertising expenses for the year ended December 31, 2024. #### Income Taxes The Company will be taxed at the member level rather than at the corporate level for federal income tax purposes. The Company is liable for a pro rata allocation of the Texas margin tax, which is filed with the Parent. The Company has recorded \$11,588 of Texas margin tax expense for the year ended December 31, 2024. In the ordinary course of business, there are many transactions for which the ultimate tax outcome is uncertain. The Company regularly assesses uncertain tax positions in each of the tax jurisdictions in which it has operations and accounts for the related financial statement implications. Unrecognized tax benefits are reported using the two-step approach under which tax effects of a positions are recognized only if it is "more-likelythan-not" to be sustained and the amount of the tax benefit recognized is equal to the largest tax benefit that is greater than fifty percent likely of being realized upon ultimate settlement of the tax position. Determining the appropriate level of unrecognized tax benefits requires the Company to exercise judgment regarding the uncertain application of tax law. The amount of unrecognized tax benefits is adjusted when information becomes available or when an event occurs indicating a change is appropriate. The company includes interest and penalties related to its uncertain tax positions as part of income tax expense, if any. There are no uncertain tax positions as of December 31, 2024. #### Fair Value of Financial Instruments The carrying amount of cash and cash equivalents, receivable from clearing organization, accounts payable and accrued expenses approximated fair market value at December 31, 2024 due to their relatively short maturities and prevailing market terms. #### Recent Accounting Pronouncements Accounting standards that have been issued or proposed by the Financial Accounting Standards Board ("FASB") or other standards-setting bodies are not expected to have a material impact on the Company's financial position, results of operations or cash flows. {12}------------------------------------------------ The Company follows Accounting Standards 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 provided to the Chief Operating Decision Maker ("CODM") and included within each reported measure of a segment's profit or lass. 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 conducts its business activities and reports financial results as a single reportable brokerage services segment. The CODM makes decisions about allocating resources and assessing performance in a manner consistent with the way the Company operates its business and presents their financial results. The nature of business and accounting policies of the brokerage services segment are the same as described in the description of business and summary of significant accounting policies notes. The CODM is the Company's FINOP. #### **Note 3 - Member's Equity** The Company has one class of membership interest and the sole member of the Company is Kershner Trading Group, LLC. The Member makes capital contributions to the Company as it may determine from time to time. No interest accrues on such contributions and the Member does not have the right to withdraw, or be repaid on its contributions, except as provided in the LLC Agreement. Capital account withdrawals and distributions are made in accordance with the LLC Agreement. Capital distributions to its Member can be made under a capital distribution policy approved by the Member. #### **Note 4 - Net Capital Requirements** Pursuant to the net capital provisions of Rule 15c3-1 of the Securities and Exchange Act of 1934, the Company is required to maintain a minimum net capital, as defined under such provisions. Net capital and the related net capital ratio may fluctuate daily. At December 31, 2024, the Company had net capital of \$347,915 and net capital requirements of \$100,000. The Company's ratio of aggregate indebtedness to net capital was 0.1476 to 1. The Securities and Exchange Commission permits a ratio of no greater than 15 to 1. #### **Note 5 - Related Party Transactions** The Company has an Intercompany Administrative Services Agreement ("Agreement") with its Parent. The Agreement provides for the pro rata sharing of office space, office equipment and the expenses of certain administrative and other personnel and ancillary services. The parties have agreed to share the fees and costs allocated to the Company. The Parent invoices the Company for those expenses monthly. The {13}------------------------------------------------ Company incurred \$193,581 of expense under this agreement for the year ended December 31, 2024, of which \$14,202 was payable at December 31, 2024. The Company entered into a Technology Services Agreement ("Technology Agreement") to outsource all of its technology needs to Kershner Technology and Innovation, LLC, which is wholly owned by the Parent. The Technology Agreement provides for a monthly fixed fee of \$1,000. Additionally, the Technology Agreement calls for technology support and a pro rata sharing of administrative and other personnel based on a predetermined percentage of personnel cost. The Company incurred \$48,552 of expense under this agreement for the year ended December 31, 2024, of which \$4,046 was payable at December 31, 2024. The Company has an Intercompany Administrative Services Agreement ("Agreement") with Kershner Equities, LLC ("Equities"). The Agreement provides for the pro rata sharing of expenses if applicable and other personnel and ancillary services. The parties have agreed to share the fees and costs allocated to the Company. Equities invoices the Company for those expenses monthly. The Company incurred \$88,996 of expense under this agreement for the year ended December 31, 2024, of which \$8,233 was payable at December 31, 2024. The Company has agreements to provide electronic trading services to Kershner Trading Americas, LLC and Kershner Trading Americas II, LLC (collectively "Americas"), both are wholly owned by the Parent. At December 31, 2024 there were no transactions related to the agreement. Related party other income is discussed above in Note 2 – Significant Accounting Policies. #### **Note 6 - Commitment and Contingencies** Included in the Company's clearing agreement with its clearing broker-dealer is an indemnification clause. This clause relates to instances where the Company's customers fail to settle security transactions. In the event this occurs, the Company will indemnify the clearing broker-dealer to the extent of the net loss on any unsettled trades. At December 31, 2024, management of the Company had not been notified by the clearing brokerdealer, nor were they otherwise aware, of any potential losses relating to this indemnification. #### *Litigation* The Company from time to time may be involved in litigation relating to claims arising out of its normal course of business. Management believes that there are no claims or actions pending or threatened against the Company, the ultimate disposition of which would have a material impact on the Company's financial position, results of operations or cash flows. #### *Risk Management* The Company maintains various forms of insurance that Company's management believes are adequate to reduce the exposure to these risks to an acceptable level. {14}------------------------------------------------ #### **Note 7 – Other Income** In May 2024 , the Company received an exchange fee credit in the amount of \$531,000. The credit was for fees erroneously charged by the clearing broker dealer in the years 2020 – 2024 for sponsored access in which the Company terminated this service in 2020. The Company recorded the credit as other income on the Statement of Operations in accordance with ASC 450-30, Gain Contingencies. #### **Note 8 – Subsequent Events** The Company has evaluated subsequent events through February 26, 2025, the date the consolidated financial statements were available to be issued. Subsequent to the year end, the Company made a distribution to the Parent totaling \$175,000. #### **Note 9 – Significant Customers** In 2024, two customers made up over 10% of the Company's total revenue. T3TG contributed 95% of the revenue, while FLC accounted for 5%. By December 31, 2024, T3TG represented 79% of all receivables, with FLC making up 5% {15}------------------------------------------------ ## **KERSHNER SECURITIES, LLC** **(A Wholly Owned Subsidiary of Kershner Trading Group, LLC)** Computation of Net Capital and Aggregate Indebtedness Pursuant to Rule 15c3-1 As of December 31, 2024 #### **SCHEDULE I** | Net capital: | | |--------------------------------------------------------------------------------------------|---------------| | Total member's equity | \$
381,361 | | Less: | | | Receivable from related entities | 20,446 | | Net capital before haircuts on securities positions | 360,915 | | Other deductions | 13,000 | | Net capital | \$
347,915 | | Aggregate indebtedness: | | | Total liabilities | \$
51,351 | | Total aggregate indebtedness | \$
51,351 | | Minimum net capital requirement (greater of 6 2/3% of aggregate indebtedness or \$100,000) | \$
100,000 | | Net capital in excess of minimum requirement | \$
247,915 | | Ratio: Aggregate indebtedness to net capital | 0.1476 to 1 | | | | The above computation does not differ from the Computation of Net Capital under Rule 15c3-1 as of December 31, 2024 as recorded by Kershner Securities, LLC on Form X-17A-5, as amended and filed on February 26, 2025. Accordingly, no reconciliation is deemed necessary. {16}------------------------------------------------ #### **KERSHNER SECURITIES, LLC (A Wholly Owned Subsidiary of Kershner Trading Group, LLC) Schedule II and Schedule III** December 31, 2024 #### **Schedule II** #### **Computation for Determination of Reserve Requirements Under Rule 15c3-3 of the Securities and Exchange Commission** The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934 pursuant to paragraph (k)(2)(ii) of the Rule and does not claim an exemption from Rule 15c3-3 in reliance upon Footnote 74 of SEC Release No. 34-70073 dated July 30, 2003, and as discussed in Question 8 on the related FAQ released by SEC staff.. The Company does not hold funds or securities for or owe money or securities to customers. #### **Schedule III** #### **Information Relating to the Possession or Control Requirements Under Rule 15c3-3 of the Securities and Exchange Commission** The Company is exempt from provisions of Rule 15c3-3 under the Securities Exchange Act of 1934 pursuant to paragraph (k)(2)(ii) of the Rule and does not claim an exemption from Rule 15c3-3 in reliance upon Footnote 74 of SEC Release No. 34-70073 dated July 30, 2003, and as discussed in Question 8 on the related FAQ released by SEC staff.. The Company did not maintain possession or control of any customer funds or securities. {17}------------------------------------------------ ![](_page_17_Picture_0.jpeg) #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To Those Charged with Governance and Member of Kershner Securities, LLC We have reviewed management's statements, included in the accompanying Rule 15c3-3 Exemption Report pursuant to SEC Rule 17a-5, in which (1) Kershner Securities, LLC a Wholly Owned Subsidiary of Kershner Trading Group, LLC identified the following provision of 17 C.F.R. §15c3-3(k) under which Kershner Securities, LLC claimed an exemption from 17 C.F.R. §240.15c3-3: (k)(2)(ii) (the "exemption provision") and (2) Kershner Securities, LLC stated that Kershner Securities, LLC met the identified exemption provision throughout the most recent fiscal year of December 31, 2024 without exception. The Company is also filing this Exemption 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 direct mutual fund business in accordance with the requirements of paragraphs (a) or (b)(2) of Rule 15c2-4. In addition, the Company 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 did not carry accounts of or for customers; and did not carry PAB accounts (as defined in Rule 15c3-3) throughout the most recent fiscal year without exception. Kershner Securities, LLC's management is responsible for compliance with the exemption provision and its statements and Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. §240.17a-5. Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included inquiries and other required procedures to obtain evidence about Kershner Securities, LLC's compliance with the exemption provision. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to management's statements referred to above for them to be fairly stated, in all material respects, based on the provisions set forth in paragraphs (k)(2)(ii) of Rule 15c3-3 under the Securities Exchange Act of 1934 and 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, and related SEC Staff Frequently Asked Questions. **BAUER & COMPANY, LLC** Bauer & Company, LLC Austin, Texas February 26, 2025 {18}------------------------------------------------ ![](_page_18_Picture_0.jpeg) ## Kershner Securities, LLC's Exemption Report Kershner Securities, LLC (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 ·'Repmis to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R. §240.17a-5(d)( 1) and (4). To the best of its knowledge and belief the Company states the following: - ( l) The Company claimed an exemption from 17 C.F.R. ~240.15c3-3 (k)(2)(ii). - (2) The Company met the identified exemption provisions in 17 C.F.R. ~240. l 5c3-3(k) throughout the most recent fiscal year without exception. - ( 3) The Company is also filing this Exemption 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 direct mutual fund business in accordance with the requirements of para6rraph (a) or (b)(2) of Rule l 5c2-4. The Company (I) does 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 para6rraph (a) or (b)(2) of Rule I 5c2-4; (2) does not call)' accounts of or for customers~ and ( 3) does not cany P AB accounts (as defined in Rule 15c3-3) throughout the most recent fiscal year. Kershner Securities, LLC L Jon 8. Sanderson, affinn that, to the best of my knowledge and belief, this Exemptien port is trne and COITect. By: 1ief Financial Officer February 26, 2025 {19}------------------------------------------------ ![](_page_19_Picture_0.jpeg) #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON APPLYING AGREED-UPON PROCEDURES To Those Charged with Governance and Member of Kershner Securities, LLC We have performed the procedures included in Rule 17a-5(e)(4) under the Securities Exchange Act of 1934 and in the Securities Investor Protection Corporation (SIPC) Series 600 Rules, which are enumerated below on the accompanying General Assessment Reconciliation (Form SIPC-7) for the year ended December 31, 2024. Management of Kershner Securities, LLC, a Wholly Owned Subsidiary of Kershner Trading Group, LLC (the "Company") is responsible for its Form SIPC-7 and for its compliance with the applicable instructions on Form SIPC-7. Management of the Company has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of assisting you and SIPC in evaluating the Company's compliance with the applicable instructions on Form SIPC-7 for the year ended December 31, 2024. Additionally, SIPC has agreed to and acknowledged that the procedures performed are appropriate for their intended purpose. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures we performed, and our findings are as follows: - 1) Compared the listed assessment payments in Form SIPC-7 with respective cash disbursement records entries, noting no differences; - 2) Compared the Total Revenue amounts reported on the Annual Audited Report Form X-17A-5 Part III for the year ended December 31, 2024 with the Total Revenue amount reported in Form SIPC-7 for the year ended December 31, 2024, noting the following difference: total revenues per the Form SIPC-7 were \$3,425,266 and total revenues per the audited financial statements were \$3,444,796, a difference of (\$19,530). - 3) Compared any adjustments reported in Form SIPC-7 with supporting schedules and working papers, noting no differences; - 4) Recalculated the arithmetical accuracy of the calculations reflected in Form SIPC-7 and in the related schedules and working papers supporting the adjustments, noting following differences: no differences; - 5) Compared the amount of any overpayment applied to the current assessment with the Form SIPC-7 on which it was originally computed, noting no differences. We were engaged by the Company to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the AICPA and in accordance with the standards of the Public Company Accounting Oversight Board (United States). We were not engaged to and did not conduct an examination or a review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the Company's Form SIPC-7 and for its compliance with the applicable instructions on Form SIPC-7 for the year ended December 31, 2024. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. {20}------------------------------------------------ ![](_page_20_Picture_0.jpeg) We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement. This report is intended solely for the information and use of the Company and SIPC and is not intended to be and should not be used by anyone other than these specified parties. **BAUER & COMPANY, LLC** Bauer & Company, LLC Austin, Texas February 26, 2025 {21}------------------------------------------------ #### **GENERAL ASSESSMENT FORM** For the fiscal year ended \_\_\_\_\_\_\_\_\_\_ 12/31/2024 | | Determination of "SIPC NET Operating Revenues" and General Assessment for:
MEMBER NAME
SEC No.
KERSHNER SECURITIES LLC
8-67922 | | |---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------| | | 1/1/2024
12/31/2024
For the fiscal period beginning ______________ and ending ____________ | | | | | | | 1 | Total Revenue (FOCUS Report – Statement of Income (Loss) – Code 4030) | \$ 3,425,266.00
__________________ | | 2 | Additions: | | | | a Total
revenues
from
the
securities
business
of
subsidiaries
(except
foreign
subsidiaries)
and
predecessors
not
included
above.
__________________ | | | | b Net
loss
from
principal
transactions
in
securities
in
trading
accounts.
__________________ | | | | c Net
loss
from
principal
transactions
in
commodities
in
trading
accounts.
__________________ | | | | d Interest
and
dividend
expense
deducted
in
determining
item
1.
__________________ | | | | e Net
loss
from
management
of
or
participation
in
the
underwriting
or
distribution
of
securities.
__________________ | | | | f Expenses
other
than
advertising,
printing,
registration
fees
and
legal
fees
deducted in determining net profit management of or participation in
__________________
underwriting or distribution of securities. | | | | __________________
g Net loss from securities in investment accounts. | | | | h Add lines 2a through 2g. This is your total additions. | \$ 0.00
__________________ | | 3 | Add lines 1 and 2h | \$ 3,425,266.00
__________________ | | 4 | Deductions: | | | | a Revenues from the distribution of shares of a registered open end investment
company or unit investment trust, from the sale of variable annuities, from the
business of insurance, from investment advisory services rendered to
registered investment companies or insurance company separate accounts
__________________
and from transactions in security futures products. | | | | b Revenues from commodity transactions.
__________________ | | | | c Commissions, floor brokerage and clearance paid to other SIPC members
in connection with securities transactions.
__________________ | | | | d Reimbursements for postage in connection with proxy solicitations.
__________________ | | | | e Net gain from securities in investment accounts.
__________________ | | | | f 100% commissions and markups earned from transactions in (I) certificates
of deposit and (ii) Treasury bills, bankers acceptances or commercial paper
__________________
that mature nine months or less from issuance date. | | | | g Direct expenses of printing, advertising, and legal fees incurred in connection
with other revenue related to the securities business (revenue defined by
__________________
Section 16(9)(L) of the Act). | | | | h Other revenue not related either directly or indirectly to the securities business.
__________________
Deductions in excess of \$100,000 require documentation | | | 5 | a Total interest and dividend expense (FOCUS Report - Statement
of Income (Loss) -
Code 4075 plus line 2d above) but
\$ 18,824.00
not
in excess of total interest and dividend income
__________________ | | | | b 40% of margin interest earned on customers securities accounts
(40% of FOCUS Report - Statement of Income (Loss)
-
Code 3960)
__________________ | | | | \$ 18,824.00
c Enter the greater of line 5a or 5b
__________________ | | | 6 | Add lines 4a through 4h and 5c. This is your total
deductions. | \$ 18,824.00
__________________ | {22}------------------------------------------------ | SIPC-7
37 REV 0722 | | | SECURITIES INVESTOR PROTECTION CORPORATION | | SIPC-7
37 REV 0722 | |-----------------------|----------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------|----------------------------------------------------|-----------------------------------|---------------------------------------| | | | | GENERAL ASSESSMENT FORM | | | | | | | 12/31/2024
For the fiscal year ended __________ | | | | 7 | Subtract line 6 from line 3. This is your SIPC Net Operating Revenues. | | | | \$ 3,406,442.00
__________________ | | 8 | Multiply line 7 by .0015. This is your General Assessment.
Current overpayment/credit balance, if any | | | | \$ 5,109.00
__________________ | | 9 | | | | | \$ 0.00
__________________ | | 10 | | 2024
General assessment from last filed
_____
SIPC-6 or 6A | | \$ 2,205.00
__________________ | | | | | 2024
11 a Overpayment(s) applied on all _____ SIPC-6 and 6A(s) | \$ 0.00
__________________ | | | | | b Any other overpayments applied | | \$ 0.00
__________________ | | | | | | 2024
c All payments applied for _____ SIPC-6 and 6A(s) | \$ 2,205.00
__________________ | | | | | d Add lines 11a through 11c | | | \$ 2,205.00
__________________ | | | 12 | LESSER of line 10 or 11d. | | | | \$ 2,205.00
__________________ | | | 13 a Amount from line 8 | | | \$ 5,109.00
__________________ | | | | b Amount from line 9 | | | \$ 0.00
__________________ | | | | c Amount from line 12 | | | \$ 2,205.00
__________________ | | | | d Subtract lines 13b and 13c from 13a. This is your assessment balance due. | \$ 2,904.00
__________________ | | | | | 14 | 0
Interest (see instructions) for ______ days late at 20% per annum
__________________ | | | | | | 15 | Amount you owe SIPC. Add lines 13d and 14. | | \$ 2,904.00 | | | | 16 | | Overpayment/credit carried forward (if applicable) | | | \$ 0.00
__________________ | | | | | | | | | | SEC No.
Designated Examining Authority | | FYE | Month | | | 8-67922 | | DEA: FINRA | 2024 | Dec | | | | MEMBER NAME | KERSHNER SECURITIES LLC | | | | | | MAILING ADDRESS | 1825-B KRAMER LANE STE 200 | | | | | | | AUSTIN, TX 78758-4281 | | | | Subsidiaries (S) and predecessors (P) included in the form (give name and SEC number) UNITED STATES By checking this box, you certify that you have the authority of the SIPC member to sign this form; that all information in this form is true and complete; and that on behalf of the SIPC member, you are authorized, and do hereby consent, to the storage and handling by SIPC of the data in accordance with SIPC's Privacy Policy ✔ □ | KERSHNER SECURITIES LLC
______________________________________________________ | Jon B. Sanderson
_______________________________ | |-----------------------------------------------------------------------------------|-------------------------------------------------------------------| | (Name of SIPC Member) | (Authorized Signatory) | | 2/25/2025
______________________________________________________ | jsanderson@kershnertrading.com
_______________________________ | | (Date) | (e-mail address) | | | | Completion of the "Authorized Signatory" line will be deemed a signature. *This form and the assessment payment are due 60 days after the end of the fiscal year.* Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.