# TELSEY ADVISORY GROUP LLC X-17A-5 (2023-02-28) — Broker-dealer annual report - Company: TELSEY ADVISORY GROUP LLC - Form: X-17A-5 - Filed: 2023-02-28 - Period: 2022-12-31 - Accession: 0001443209-23-000001 - CIK: 1443209 - File #: 8-67988 - Type: Broker-dealer - Material weakness: No - Auditor: EisnerAmpner LLP - Auditor location: New York, NY - Contact: Jerry Arzu - Phone: 2125844614 - Email: jarzu@telseygroup.com - Website: telseygroup.com - Signed by: JERRY ARZU (COO) Original filing: https://www.sec.gov/Archives/edgar/data/1443209/000144320923000001/2022tagshort1.pdf --- {0}------------------------------------------------ #### UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OMB APPROVAL OMB Number: 3235-0123 Expires: Oct. 31, 2023 Estimated average burden hours per response: 12 SEC FILE NUMBER ### ANNUAL REPORTS FORM X-17A-5 PART III FACING PAGE Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 AND ENDING 12/31/22 filing for the period beginning 01/01/22 MM/DD/YY MM/DD/YY ### A. REGISTRANT IDENTIFICATION # NAME OF FIRM: Telsey Advisory Group TYPE OF REGISTRANT (check all applicable boxes): @ Broker-dealer □ Check here if respondent is also an OTC derivatives dealer ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) ### 555 FIFTH AVENUE, 7TH FLOOR | | (No. and Street) | | | | |----------------------------------------------|---------------------------------------------------------------------------|-----------------------|-----------------|--| | NEW YORK | NY | | 10017 | | | (City) | (State) | (Zip Code) | | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | JERRY ARZU | 212.584.4614 | jarzu@telseygroup.com | | | | (Name) | (Area Code - Telephone Number) | | (Email Address) | | | | | | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | EISNERAMPER LLP | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | 733 Third Avenue | (Name - if individual, state last, first, and middle name)
New York | NY | 10017 | | | (Address) | (City) | (State) | (Zip Code) | | | 9/29/2003 | | 2 2-4 | | | \* Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-5(e){(1)(ii), if applicable. Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. {1}------------------------------------------------ #### OATH OR AFFIRMATION swear (or affirm) that, to the best of my knowledge and belief, the I, JERRY S. ARZU as of financial report pertaining to the firm of TELSEY ADVISORY GROUP , 2 022 \_\_ is true and correct. I further swear (or affirm) that neither the company nor any 12/31 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. ![](_page_1_Figure_4.jpeg) ![](_page_1_Figure_5.jpeg) ### This filing\*\* contains (check all applicable boxes): - (a) Statement of financial condition. - = (b) Notes to consolidated statement of financial condition. - □ {c} Statement of income (loss) or, if there is other comprehensive income in the period(s) presented, a statement of comprehensive income (as defined in § 210.1-02 of Regulation S-X). - □ (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 requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - [] (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable. - [] (I) Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3. - [] (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - 口 (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-2, 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. - | (q) Oath or affirmation in accordance with 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. - □ (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - □ {s} Exemption report in accordance with 17 CFR 240.18a-7, as applicable. - □ (t) Independent public accountant's report based on an examination of the statement of financial condition. - □ (u) Independent public accountant's report based on an examination of the financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. - D (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - | {w} Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - [] {x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.17a-12, as applicable. - [] {y) Report describing any material inadequacies found to 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). - □ (z) Other: - \*\*To request confidential treatment of chis filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.180-7(d)(2), as applicable. {2}------------------------------------------------ STATEMENT OF FINANCIAL CONDITION AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTNG FIRM DECEMBER 31, 2022 {3}------------------------------------------------ ### **CONTENTS** | Report of Independent Registered Public Accounting Firm | | |---------------------------------------------------------|-------| | Financial Statement | | | Statement of Financial Condition | 2 | | Notes to Financial Statement | 3 - 6 | {4}------------------------------------------------ #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Members of Telsey Advisory Group LLC #### *Opinion on the Financial Statement* We have audited the accompanying statement of financial condition of Telsey Advisory Group LLC (the "Company") as of December 31, 2022, and the related notes (collectively referred to as the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of December 31, 2022, in conformity with accounting principles generally accepted in the United States of America. #### *Basis for Opinion* This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion. We have served as the Company's auditor since 2014 EISNERAMPER LLP New York, New York February 27, 2023 > "EisnerAmper" is the brand name under which EisnerAmper LLP and Eisner Advisory Group LLC provide professional services. EisnerAmper LLP and Eisner Advisory Group LLC are independently owned firms that practice in an alternative practice structure in accordance with the AICPA Code of Professional Conduct and applicable law, regulations and professional standards. EisnerAmper LLP is a licensed CPA firm that provides attest services, and Eisner Advisory Group LLC and its subsidiary entities provide tax and business consulting services. Eisner Advisory Group LLC and its subsidiary entities are not licensed CPA firms. {5}------------------------------------------------ #### **STATEMENT OF FINANCIAL CONDITION** **December 31, 2022** | ASSETS | | |-----------------------------------------------------------------------------------------------|----------------------------------------| | Cash | \$
4,590,136 | | Cash segregated in compliance with federal regulations | 13,663 | | Accounts receivable | 763,036 | | Receivable from clearing broker, including clearing deposit of \$256,358 | 633,888 | | Securities pledged under subordinated loan agreement | 3,000,000 | | Property and equipment, net | 35,458 | | Security deposits and other assets | 198,234 | | Due from Parent | 1,341,240 | | | \$
10,575,655 | | LIABILITIES AND MEMBERS' EQUITY | | | Liabilities
Accounts payable and accrued expenses
Deferred revenue
Total liabilities | \$
1,685,137
25,000
1,710,137 | | Liabilities subordinated to claims of general creditors | 3,000,000 | | Members' equity | 5,865,518 | | | \$
10,575,655 | {6}------------------------------------------------ #### **NOTES TO FINANCIAL STATEMENT** #### **1. Nature of business and summary of significant accounting policies** #### *Nature of Business* Telsey Advisory Group LLC (the "Company") is a Limited Liability Company organized under the laws of the state of Delaware on May 28, 2008. The Company's operations consist primarily of generating and distributing financial equity research to institutions, providing investment banking services and institutional trading. The Company is a registered broker-dealer with the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority ("FINRA"). The Company became a registered broker-dealer in March 2009. #### *Basis of Presentation* The financial statement has been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). #### *Concentrations of Credit Risk* The Company maintains cash in bank accounts which, at times, may exceed federally insured limits. The Company is subject to credit risk to the extent any financial institution with which it conducts business is unable to fulfill contractual obligations on its behalf. #### *Accounts Receivable* The Company carries its accounts receivable at cost less an allowance for credit losses. #### *Allowance for Credit Losses* In accordance with ASC Topic 326, Financial Instruments - Credit Losses ("ASC 326"), certain financial assets measured at amortized cost are required to have a current expected credit loss (CECL) methodology to estimate expected credit losses over the entire life of the financial assets as of the reporting date. The allowance for credit losses is based on the Company's expectation of the collectability of financial instruments carried at amortized cost, including fees receivable and receivable from clearing broker utilizing the CECL framework. The Company's expectation is that the credit risk associated with fees receivable and receivable from clearing broker is that any client or financial institution with which it conducts business with is unable to fulfill its contractual obligations. Management monitors the credit risk of clients and currently there is not a foreseeable expectation of an event or change which could result in these receivables being unpaid based on individual facts and circumstances. The Company considers factors such as historical experience, credit quality, age of balances and current and future economic conditions that may affect the Company's expectation of the collectability in determining the allowance for credit losses. The Company has no allowance for credit losses as of December 31, 2022. {7}------------------------------------------------ #### **NOTES TO FINANCIAL STATEMENT** #### *Receivable from Clearing Broker* The Company has a clearing agreement with Mirae Asset Securities (USA), Inc. The Clearing Broker clears the Company's security transactions, and the Company is required to maintain certain deposits with the Clearing Broker. #### *Fair Value of Financial Instruments* At December 31, 2022, the carrying value of the Company's assets and liabilities, which qualify as financial instruments in accordance with US GAAP, such as accounts receivable, due from Parent, and accounts payable and accrued expenses, approximate their fair values due to their short-term nature and are categorized as Level 2 assets and liabilities. #### *Property and Equipment* Property and equipment, net, is stated at cost less accumulated depreciation and amortization. Depreciation and amortization is provided for utilizing the straight-line method over the estimated useful lives of the related assets as follows: | | Estimated | |-------------------------------|------------------------------------------| | Asset | Useful Lives | | Computer and office equipment | 3 years | | Furniture and fixtures | 5 years | | Website development | 3 years | | Leasehold improvements | Shorter of the economic useful life | | | of improvements or the term of the lease | #### *Use of Estimates* The preparation of financial statement in conformity with GAAP requires the Company's management to make estimates and assumptions that affect the amounts disclosed in the financial statement. Actual results could differ from those estimates. #### *Soft Dollar Payables* The Company ensures that all payments made on behalf of customers qualify for the safe harbor of Section 28(e) of the Securities Exchange Act of 1934 and that customers have appropriately disclosed and received approval from investors to pay for services outside of the Section 28(e) safe harbor. #### *Income Taxes* The Company is a limited liability company and is treated as a partnership for federal and state income tax purposes, accordingly, there is no provision for federal and state income taxes as the net income or loss of the Company is included in the income tax returns of the individual members. The Company is subject to New York City Unincorporated Business Tax and has elected the New York State and Illinois entity tax for the year ended December 31, 2022 ("PTET"). The PTET allows pass-through entities to elect to pay New York State and Illinois tax due on the members' share of net income of the Company. {8}------------------------------------------------ #### **NOTES TO FINANCIAL STATEMENT** The Company follows an asset and liability approach to financial accounting and reporting for New York City Unincorporated Business Tax. Deferred income tax assets and liabilities are computed for the difference between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on the enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce the deferred income tax assets to the amount expected to be realized The determination of the Company's provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. Significant judgment is required in assessing the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions. The benefits of uncertain tax positions are recorded in the Company's financial statement only after determining a more-likelythan-not probability that the uncertain tax positions will withstand challenge, if any, from tax authorities. When facts and circumstances change, the Company reassesses these probabilities and records any changes in the financial statement as appropriate. Accrued interest and penalties related to income tax matters are classified as a component of income tax expense. In accordance with GAAP, the Company is required to determine whether a tax position is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit recognized is measured as the largest amount of benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. At December 31, 2022, management has determined that the Company had no uncertain tax positions that would require financial statement recognition. The Company's conclusions regarding this policy may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analyses of and changes to tax laws, regulations and interpretations thereof. The Company files its income tax returns in the U.S. federal and various state and local jurisdictions. Any potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with U.S. federal, state and local tax laws. The Company's management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. #### **2. Property and equipment** Property and equipment consist of the following as of December 31, 2022: | Computer and office equipment | \$
363,131 | |------------------------------------------------|---------------| | Furniture and fixtures | 33,125 | | Website development | 223,197 | | Leasehold improvements | 147,154 | | | 766,607 | | Less accumulated depreciation and amortization | 731,149 | | | | | | \$
35,458 | {9}------------------------------------------------ #### **NOTES TO FINANCIAL STATEMENT** #### **3. Net capital requirement** The Company, as a member of FINRA, is subject to the Securities and Exchange Commission Uniform Net Capital Rule 15c3-1. This Rule requires the maintenance of minimum net capital and that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1 and that equity capital may not be withdrawn or cash dividends paid if the resulting aggregate indebtedness to net capital ratio would exceed 10 to 1. At December 31, 2022, the Company's net capital was approximately \$7,785,000 which was approximately \$7,535,000 in excess of its minimum net capital requirement of \$250,000. #### **4. Related party transactions** Pursuant to an expense sharing agreement, as effectively modified in January 2022, (the "Agreement") with Telsey Holdings LLC (the "Parent"), the Company recognizes certain expenses based on the terms and conditions per the Agreement. The amount due from Parent was approximately \$1,341,000 at December 31, 2022. #### **5. Employee benefit plan** The Company maintains a retirement plan (the "Plan"), pursuant to Section 401(k) of the Internal Revenue Code, for eligible participants to make voluntary contributions of a portion of their annual compensation, on a deferred basis, subject to limitations provided by the Internal Revenue Code. #### **6. Liabilities subordinated to claims of general creditors** The subordinated loan agreement is with related party and is available in computing net capital under the SEC's uniform net capital rule. The Company had a \$3,000,000 subordinated loan agreement at December 31, 2022, which was in accordance with agreements approved by FINRA. The subordinated loan agreement matured October 31, 2022 and was automatically renewed for another year. The loan bears interest at 6% per annum. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.