# CAIS CAPITAL LLC X-17A-5/A (2025-03-17) — Broker-dealer annual report - Company: CAIS CAPITAL LLC - Form: X-17A-5/A - Filed: 2025-03-17 - Period: 2024-12-31 - Accession: 0001495902-25-000002 - CIK: 1495902 - File #: 8-68646 - Type: Broker-dealer - Material weakness: No - Auditor: Ernst & Young LLP - Auditor location: New York, NY - Contact: Janice Parise - Phone: 212 751-4422 - Email: finance@caisgroup.com - Website: caisgroup.com - Signed by: Timothy Shannon (President) Original filing: https://www.sec.gov/Archives/edgar/data/1495902/000149590225000002/caiscapitalpublicv2.pdf --- {0}------------------------------------------------ # CAIS Capital, LLC Statement of Financial Condition December 31, 2024 {1}------------------------------------------------ ### UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OMB APPROVAL OMB Number: 3235-0123 Expires: Nov. 30, 2026 Estimated average burden hours per response: 12 # ANNUAL REPORTS FORM X-17A-5 PART III | SEC FILE NUMBER | |-----------------| | 8-68646 | | Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 | FACING PAGE | | | | |-------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|----|-----------------|--------------------------------------------| | FILING FOR THE PERIOD BEGINNING 0170172024 | | | 12/31/2024 | | | | MM/DD/YY | | | MM/DD/YY | | | A. REGISTRANT IDENTIFICATION | | | | | NAME OF FIRM: CAIS Capital, LLC | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
l Broker-dealer
□ Check here if respondent is also an OTC derivatives dealer | _ Security-based swap dealer | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | 527 Madison Ave., Fl 2 | | | | | | | (No. and Street) | | | | | New York | NY | | 10022 | | | (City) | (State) | | | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | Timothy Shannon | 917-589-8463 | | | finance@caisgroup.com | | (Name) | (Area Code - Telephone Number) | | (Email Address) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
Ernst & Young LLP | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | One Manhattan West | New York | | NY | 10001 | | (Address) | (City) | | (State) | (Zip Code) | | 10/20/2003 | | 42 | | | | (Date of Registration with PCAOB)(if applicable) | | | | (PCAOB Registration Number, if applicable) | | * Claims for exemption from the requirement that the annual reports of an independent public | FOR OFFICIAL USE ONLY | | | | 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. {2}------------------------------------------------ #### OATH OR AFFIRMATION I, Timothy Shannon | | | swear (or affirm) that, to the best of my knowledge and beliet, the | | | |-------|--------------------------------------------------------------|---------------------------------------------------------------------|--|-------| | | financial report pertaining to the firm of CAIS Capital, LLC | | | | | 12/31 | | | | 20 nr | 2 02 or equivalent person, as the see and correct. I further swear (or affirm) that neither the company nor any partner, officer, director, or equivalent person, as the carrer. Trurner swear (or any and one on one as that of a customer. ![](_page_2_Figure_4.jpeg) | Signature: | Timothy Shannon | | |------------|-----------------|--| | Title: | | | | President | | | # This filing\*\* contains (check all applicable boxes): - = (a) Statement of financial condition. - = (b) Notes to consolidated statement of financial condition. - □ (c) Statement of income (loss) or, if there is other comprehensive in the period(s) presented, a statement of comprehensive income (as defined in § 210.1-02 of Regulation S-X). - (d) Statement of cash flows. - □ (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - □ (f) Statement of changes in liabilities subordinated to claims of creditors. - □ (g) Notes to consolidated financial statements. - □ (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. - □ (i) Computation of tangible net worth under 17 CFR 240.18a-2. - □ (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 cup re - O (k) Computation of catermination of each it requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. Exhibit A to 17 CFR 240.18a-4. as aprilishle 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. □ (n) Information relating to possession or control requirements for c - □ (n) Information relating to control requirements for usioners under I / CFR 240.5c3-3. 240.15c3-3(p)(2) or 17 CFR 240 18a-4, as applicable 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable. - 口 (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 240.1 worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-2, or 17 CFR 240.188-2, as applicable, and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.18 - 27.1 - 17 - 17 - 17 - CH 240.18a-2, as applicable, and the reserve requirements underences underences underences underences - □ (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-5, 17 CFR 240.17a-12. □ (r) Compliance report in accordance with 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as aplica - □ (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.17a-5, or 17 CFR 240.18a-7, as applicable. - □ (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - (t) Independent public accountant's report based on an examination of the statement of financial condition. - C (u) Independent public accountant's report based on an examination of the financial condition. CFR 240.17a-5, 17 CFR 240.18a-7 or 17 CER 200.77-12, as examination of the 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 annlicable 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 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, 1 as applicable. as applicable. - □ (γ) 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). - L (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 1 {3}------------------------------------------------ ## Page(s) | Report of Independent Registered Public Accounting Firm | | | | |---------------------------------------------------------|--|--|--| | Financial Statements | | | | | Statement of Financial Condition | | | | | Notes to the Statement of Financial Condition | | | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) - - - -- !-""#- \$%-&'(''-)%- \*%+-,--\*--.../01.2- 3%45-6-77-889-9...-%:;<=- - #### >?@ABC-AD-EFG?@?FG?FC->?HIJC?B?G-KLMNIO-POOALFCIFH-QIBR- -ST-UVW-XWYZW[-\]^-X\]\\_WYW]U-T`abcda\efU\ghiia- #### j@IFIAF-AF-Ck?-QIFlFOIlNmClC?R?FC- - nW-V\oW-\p^fUW^-UVW-\qqTYe\]rf]\_sU\UWYW]U-T`-`f]\]qf\gqT]^fUfT]-T`abcda\efU\ghiiatUVW- aTYe\]ru-\s-T`vWqWYZW[wxhyzy{-\]^-UVW-[Wg\UW^-]TUWstUVW-|`f]\]qf\gsU\UWYW]U}u~c]-Tp[- Tef]fT]h-UVW-`f]\]qf\gsU\UWYW]Ue[WsW]Us-`\f[grhf]-\gg-Y\UW[f\g-[WseWqUsh-UVW-`f]\]qf\geTsfUfT]-T`- UVWaTYe\]r-\UvWqWYZW[wxhyzy{hf]qT]`T[YfUrfUV-~d~-\_W]W[\ggr-\qqWeUW^-\qqTp]Uf]\_- e[f]qfegWs~- #### lJIJ-DABj@IFIAF- -SVfs-`f]\]qf\gsU\UWYW]Ufs-UVW-[WseT]sfZfgfUr-T`-UVWaTYe\]rs-Y\]\\_WYW]U~p[-[WseT]sfZfgfUrfs- UT-We[Wss-\]-Tef]fT]-T]-UVWaTYe\]rs-`f]\]qf\gsU\UWYW]U-Z\sW^-T]-Tp[-\p^fU~nW-\[W-\epZgfq- \qqTp]Uf]\_-`f[Y-[W\_fsUW[W^fUV-UVWpZgfqaTYe\]rbqqTp]Uf]\_oW[sf\_VU-T\[^t]fUW^dU\UWsu- tabu-\]^-\[W-[Wpf[W^-UT-ZWf]^WeW]^W]UfUV-[WseWqU-UT-UVWaTYe\]rf]-\qqT[^\]qWfUV-UVW- ~d~-`W^W[\gsWqp[fUfWsg\s-\]^-UVW-\eegfq\ZgW-[pgWs-\]^-[W\_pg\UfT]s-T`-UVWdWqp[fUfWs-\]^qV\]\_W- aTYYfssfT]-\]^-UVWab~- nWqT]^pqUW^-Tp[-\p^fUf]-\qqT[^\]qWfUV-UVWsU\]^\[^s-T`-UVWab~-SVTsWsU\]^\[^s-[Wpf[W- UV\U-Weg\]-\]^eW[`T[Y-UVW-\p^fU-UT-TZU\f]-[W\sT]\ZgW-\ssp[\]qW-\ZTpU-VWUVW[-UVW-`f]\]qf\g- sU\UWYW]Ufs-`[WW-T`-Y\UW[f\g-YfssU\UWYW]Uh-VWUVW[-^pW-UT-W[[T[-T[-`[\p^~p[-\p^fUf]qgp^W^- eW[`T[Yf]\_e[TqW^p[Ws-UT-\ssWss-UVW-[fss-T`-Y\UW[f\g-YfssU\UWYW]U-T`-UVW-`f]\]qf\gsU\UWYW]Uh- VWUVW[-^pW-UT-W[[T[-T[-`[\p^h-\]^eW[`T[Yf]\_e[TqW^p[Ws-UV\U-[WseT]^-UT-UVTsW-[fss~dpqV- e[TqW^p[Wsf]qgp^W^-W\Yf]f]\_h-T]-\-UWsU-Z\sfsh-Wof^W]qW-[W\_\[^f]\_-UVW-\YTp]Us-\]^-^fsqgTsp[Wsf]- UVW-`f]\]qf\gsU\UWYW]U~p[-\p^fU-\gsTf]qgp^W^-Wo\gp\Uf]\_-UVW-\qqTp]Uf]\_e[f]qfegWspsW^-\]^- sf\_]f`fq\]U-WsUfY\UWs-Y\^W-Zr-Y\]\\_WYW]Uh-\s-Wgg-\s-Wo\gp\Uf]\_-UVW-ToW[\gge[WsW]U\UfT]-T`-UVW- `f]\]qf\gsU\UWYW]U~nW-ZWgfWoW-UV\U-Tp[-\p^fUe[Tof^Ws-\-[W\sT]\ZgW-Z\sfs-`T[-Tp[-Tef]fT]~- nW-V\oWsW[oW^-\s-UVWaTYe\]rs-\p^fUT[sf]qWyzyx~- W-T[h-- WZ[p\[ryhyzy- - - {5}------------------------------------------------ # CAIS Capital, LLC Statement of Financial Condition December 31, 2024 | Assets | | | |---------------------------------------------|-------|------------| | Cash and cash equivalents | ಕ್ಕಿ | 16.611.392 | | Restricted cash | | 150.000 | | Accounts receivable | | 23,333,418 | | Prepaid expenses | | 122.033 | | Total Assets | ಕಿ | 40,216,843 | | | | | | Liabilities and Member's Equity | | | | Due to affiliate - net | ಕ್ಕಿ | 5.163.329 | | Deferred revenue | | 7.652 | | Accounts payable and other accrued expenses | | 353,917 | | Total Liabilities | | 5,524,898 | | Member's Equity | | 34,691,945 | | Total Liabilities and Member's Equity | સ્ત્ર | 40,216,843 | The accompanying notes are an integral part of the Statement of Financial Condition. {6}------------------------------------------------ #### 1. Organization CAIS Capital, LLC or the "Company" is a limited liability company established in the state of Delaware on July 27, 2009. The Company is registered as a securities broker-dealer with the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"). The Company is engaged in a single line of business as a securities broker-dealer, with revenue generated from different classes of services, including placement fees, underwriting revenue, and a platform distribution fee. The Company is wholly owned by Capital Integration Systems, LLC ("CAIS LLC"), an affiliated entity established in the state of Delaware. The Company's headquarters is located in New York, NY and its clients are primarily located throughout the United States. ### 2. Summary of Significant Accounting Policies #### Basis of Presentation The Company's statement of financial condition has been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). #### Accounts Receivable Accounts receivable are stated on the Statement of Financial Condition at their net realizable value, which represents the account balance, less an allowance for balances not collectable, partially or fully, if any. As of December 31, 2024, \$21,459,999 of the accounts receivable balance is considered current and collectible within 12 months, and \$1,873,419 is considered noncurrent and collectible beyond 12 months. The Company uses current expected credit loss ("CECL") methodology in accordance with US GAAP to estimate expected credit losses over the entire life of the financial asset for accounts receivable. The allowance for credit losses is based on the Company's expectation of the collectability of financial instruments, including accounts receivable, utilizing the CECL framework. 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's expectation is that the credit risk associated with accounts receivable is not significant until they are 90 days past due based on the contractual arrangement and expectation of collection in accordance with industry standards. In addition, in certain cases management may determine that collection will not be realized, in which case either a direct charge-off is recorded or the allowance previously established is relieved. Management did not believe an allowance was necessary as of December 31, 2024. #### Prepaid Expenses Prepaid expenses are future expenses of the Company that are paid in advance and have not yet been incurred as of December 31, 2024. As these expenses are incurred, prepaid expenses are amortized to expense in accordance with the terms of the related agreement or invoice. {7}------------------------------------------------ ### 2. Summary of Significant Accounting Policies (continued) #### Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers ("ASC 606"). ASC 606 requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The quidance requires an entity to follow a five step model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. The timing of revenue recognition may differ from the timing of payment. The Company records a receivable when revenue is recognized prior to payment and the Company has an unconditional right to payment. The balance of accounts receivable included in the Statement of Financial Condition is generally comprised of receivables for Placement Fee revenue and Underwriting revenue. The Company records deferred revenue when it receives fees from clients that have not yet been earned. Deferred revenue recorded on the Statement of Financial Condition at December 31, 2024 is expected to be recognized within twelve months of the respective contract dates. The primary sources of revenue for the Company are as follows: #### Placement fees Placement fees may include revenue earned from providing introducer services, when the Company acts as a placement agent by assisting in the offer and sale of interests in a third party investment fund, and/or providing continuing investor related services to managers of private investment vehicles, which are the Company's performance obligations. The Company records placement fees over the time the services for the transactions are completed under the terms of each contract, which occurs at the time an investor is accepted into a third-party investment fund or on a monthly basis for ongoing services. Variable amounts are recognized to the extent it is probable that a significant reversal will not occur once the uncertainty is resolved. For variable amounts the uncertainty is dependent on various factors, commonly the value of the private investment vehicles' assets under management, which is highly susceptible to factors outside the Company's influence. The Company does not believe that it can overcome this constraint until these factors are known, which is generally on a quarterly basis. #### Underwriting revenue Underwriting revenue generally arises from securities offerings in which the Company provides introducer services to issuers of securities and the broker-dealer or registered investment advisor who represents the purchaser of the offering. Underwriting revenue can also arise from the Company participating in a private placement directly for an entity. Generally, the Company believes its performance obligation is satisfied when the investor, through its broker-dealer or registered investment advisor, purchases the security. {8}------------------------------------------------ ### 2. The Company records underwriting revenue at a point in time on the trade date when the performance obligation is satisfied. The Company believes that the performance obligation is satisfied on the trade date because that is when the underlying financial instrument or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership have been transferred. #### Platform distribution fee Platform distribution fee is earned from an agreement with CAIS LLC where the Company provides introducer services for investors to purchase interests in private investment by CAIS LLC, which is also the Company's performance obligation. The transaction price is a fee that is calculated as a fixed percentage of certain fees payable to CAIS LLC from the investment vehicles and is recognized as revenue when the performance obligation is satisfied, which is over time. Variable amounts are recognized to the extent it is probable that a significant revenue reversal will not occur once the uncertainty is resolved. For variable amounts the uncertainty is dependent on various factors, commonly the value of the private investment vehicles' assets under management, which is highly susceptible to factors outside the Company's influence. The Company does not believe that it can overcome this constraint until these factors are known, which is qenerally on a monthly basis. #### Interest Interest income is recorded on an accrual basis. Most of the interest income is earned from the money market accounts with Bank of America where the Company's excess cash is invested. At December 31, 2024, interest income receivable of \$59,205 is included within accounts receivable on the Statement of Financial Condition. #### Fair value measurements ASC 820 "Fair Value Measurements" applies to the Company's non-financial assets and liabilities and for the financial assets and liabilities measured at fair value on a nonrecurring basis. This standard provides a framework for measuring fair value in generally accepted accounting principles, expands disclosures about fair value measurements, and establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The fair value of the Company's assets and liabilities, which qualify as financial instruments under existing accounting guidance of financial instruments, approximates the carrying amounts presented in the Statement of Financial Condition due to their short-term nature. #### Income Taxes The Company is considered a disregarded entity for federal and state income tax purposes and is included in the income tax returns filed by CAIS LLC is a limited liability company and is treated as a partnership for income tax purposes. The Company follows the reporting requirements of ASU-2019-12, Income Taxes, and therefore CAIS LLC is not required to allocate tax expense to the Company. No provision has been made for federal and state income taxes since these taxes are the personal responsibility of the members of CAIS LLC. {9}------------------------------------------------ ### 2. Summary of Significant Accounting Policies (continued) The Company recognizes the effect of tax positions only when they are more likely than not to be sustained under audit by taxing authorities. At December 31, 2024, the Company did not have any unrecognized tax benefits or liabilities. The Company operated in the United States and in state and local jurisdictions, and the previous three years remain subject to examination by tax authorities. There are presently no ongoing income tax examinations. ### Use of Estimates The preparation of financial statements in conformity with US GAAP 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 amount of revenue and expenses during the reporting period. Actual results could differ from these estimates. ### Recently Adopted Accounting Standards In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update No. 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 seqment's expenses in interim and annual periods, among other requirements. The Company adopted ASU 2023-07 as of January 1, 2024. The Company is engaged in a single line of business as a securities broker-dealer, which is comprised of several classes of services, including private placement of securities and underwriting. The Company has identified the President of CAIS LLC as the chief operating decision maker ("CODM"), who uses net income to evaluate the results of the business, predominantly in the forecasting process, to manage the Company. Additionally, the CODM uses excess net capital, which is not a measure of profit and loss, to make operational decisions while maintaining capital adequacy. The Company's operations constitute a single operating segment and therefore, a single reportable segment, because the CODM manages the business activities using information of the Company as a whole. The accounting policies used to measure the profit and loss of the segment are the same as those described in the summary of significant accounting policies. ### 3. Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents consists of cash at banks and clearing brokers, money market funds and short-term highly liquid investments used for cash management purposes with maturities of three months or less at the date of acquisition. Restricted cash consists of a clearing deposit held at RBC which is subject to contractual restrictions and may not be utilized for any other purposes. At times, cash, cash equivalent, and restricted cash balances may exceed federally insured limits. Cash in U.S. banks is insured by the Federal Deposit Insurance Corporation ("FDIC"). The FDIC maximum insurable limit on cash deposits is \$250,000. Cash and cash equivalents in excess of the insurable limit was \$16,311,767 as of December 31, 2024. The Company reduces its exposure to credit risk by depositing its cash with high credit-quality financial institutions. Investments in money market funds are categorized as Level I investments within the fair value hierarchy (detailed in Note 2) as they are valued based on quoted prices in active markets. {10}------------------------------------------------ #### 3. Cash, Cash Equivalents, and Restricted Cash (continued) The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Statement of Financial Condition that sum to the same such amounts shown in the Consolidated Statement of Cash Flows: | Cash | ಕಿ | 1,566,718 | |----------------------------------------------------------|----|------------| | Cash equivalents | | 15,044,674 | | Restricted cash | | 150.000 | | Total cash, cash equivalents, and restricted cash \$ | | 16,761,392 | #### 4. Guarantees ASC Topic 460, "Guarantees" requires the disclosure of representations and warranties which the Company enters into which may provide general indemnifications to others. The Company in its normal course of business may enter into other legal contracts that contain a variety of these representations and warranties that provide general indemnifications. The Company's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. However, based on its experience, the Company expects the risk of loss to be remote. #### 5. Related Party The Company entered into a distribution agreement with CAIS LLC, whereby it receives a fee equal to 5% of certain fees payable to CAIS LLC from its affiliated private investment vehicles that it sponsors. During the year ended December 31, 2024, the fees received by the Company from CAIS LLC were \$892,325, of which \$65,818 remains receivable as of December 31, 2024 and is included in "Due to affiliate - net" in the Statement of Financial Condition. The Company also entered into a management services agreement with CAIS LLC, whereby CAIS LLC provides administrative services, office space, and other services related to the development and operation of the Company's business. The Company's share of the expenses related to such services is calculated monthly based on the methodology described in the management services agreement and is paid periodically via intercompany transfer to CAIS LLC, net of any amounts that CAIS LLC owes the Company. During the year ended December 31, 2024, the Company incurred \$43,348,022 of expenses under the management services agreement. At December 31, 2024, the due to affiliate balance was \$9,762,229 and the due from affiliate balance was \$4,598,900 and is disclosed in the Statement of Financial Condition as "Due to affiliate - net" as \$5,163,329 and is due on demand without interest, and was settled in the normal course of business during 2025. {11}------------------------------------------------ #### 6. Business Risks The Company is subject to market and operational risks associated with the services it provides. The Company identifies, measures, and monitors risk through various control mechanisms and established formal risk management policies and procedures that are reviewed on an ongoing basis. #### Market Risk Market risk is the risk of potential adverse changes to the onqoing agreements or contracts because of changes in market conditions. The Company mitigates its exposure to market risk by performing due diligence on the funds made available through its platform. Periods of market volatility could occur in response to events outside of the Company's control which could adversely affect the operating results of the Company. #### Operational Risk Operational risk is the risk of loss resulting from inadequate or failed processes, personnel or systems, or from external events. CAIS LLC has established an Operational Risk Management Committee ("ORMC"), which is a forum for senior management to discuss risks, assessments, risk events, risk mitigation, control enhancements and other noteworthy topics that impact the Company and its affiliated entities. The ORMC has the responsibility for the oversight and maintenance of the Company's Operational Risk Management Framework, which sets the basis for the comprehensive and proactive identification, assessment, management, monitoring, and reporting of operational risks for CAIS LLC and the Company. The Company seeks to mitigate operational risk through adherence to policies and procedures and maintenance of systems for the Company's operations. #### 7. Regulatory Requirements For the year ended December 31, 2024, the Company did not have custody of any client assets. The Company does not carry securities accounts for customers or perform custodial services. The Company claimed an exemption from 17 C.F.R. § 240.15c3-3 under provision 17 C.F.R. §240.15c3-3 (k)(2)(ii) and relied on Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5. There were no subordinated borrowings for the year ended December 31, 2024. The Company is subject to the SEC Uniform Net Capital Rule (SEC Rule15c3-1), 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 (and the rule of the "applicable" exchange also provides that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to 1). Under SEC Rule 15c3-1, the Company is required to maintain minimum net capital equal to the greater of \$100,000 or 6.667% of aggregate indebtedness. At December 31, 2024, the Company had net capital of \$10,796,390, which was \$10,428,063 in excess of its required net capital of \$368,327. The ratio of aggregate indebtedness to net capital was 0.51 to 1 at December 31, 2024. #### 8. Subsequent Events The Company has performed an evaluation of events that have occurred subsequent to December 31, 2024, and through February 28, 2025, the date of the filing of this report. There have been no material subsequent events that occurred during such period that would require disclosure in this report or would be required to be recognized in the statement of financial condition as of December 31, 2024. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.