# NETREX CAPITAL MARKETS, LLC X-17A-5 (2022-03-31) — Broker-dealer annual report - Company: NETREX CAPITAL MARKETS, LLC - Form: X-17A-5 - Filed: 2022-03-31 - Period: 2021-12-31 - Accession: 0001539379-22-000002 - CIK: 1539379 - File #: 8-69037 - Type: Broker-dealer - Material weakness: No - Auditor: Mayer Hoffman McCann CPAs - Auditor location: New York, NY - Contact: Brent E Hippert - Phone: 4435418400 - Email: bhippert@netrexcapital.com - Website: netrexcapital.com - Signed by: Brent Hippert (CFO) Original filing: https://www.sec.gov/Archives/edgar/data/1539379/000153937922000002/nx_fs2021vb.pdf --- {0}------------------------------------------------ | | UNITED STATES | | | OMB APPROVAL | | | |-------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------|--------------------------------|---------------------|-------------------------------------------------|--|--| | SECURITIES AND EXCHANGE COMMISSION | | | | OMB Number: 3235-0123
Expires: Oct. 31, 2023 | | | | | | Washington, O.C. 20549 | | Estimated average burden | | | | | | | | hours per response: 12 | | | | | | ANNUAL REPORTS | | SEC FILE NUMBER | | | | | FORM X-17A-5 | | | 8-69037 | | | | | | PART Ill | | | | | | | | | | | | | | Information Required Pursuant to Ru Iles 17a-S, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 | | FACING PAGE | | | | | | | | | | __ | | | | FILING FOR THE PERIOD BEGINNING_1_/ | _1_/2_1 | _____ | AND ENDING _1_2_/3_ | 1_/_2_1
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_ | | | | | | MM/DD/YY | | MM/DD/YY | | | | | | A. REGISTRANT IDENTIFICATION | | | | | | NAME o F FIRM: Netrex Capital Markets, LLC | | | | | | | | | | | | | | | | TYPE 0'F REGISTRANT (check all applicable boxes): | | | | | | | | ~ Broker-dealer
0 Check here if respondent Is also an OTC derivatives dealer | 0 Security-based swap dealer | | | 0 Major security-based swap pa1rticipant | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | | | 270 South Service Road, Suite 45 | | | | | | | | | | {No. and Street) | | | | | | Melville | | NY | | 11747 | | | | (Oty) | | (State) | | {Zip Code) | | | | | | | | | | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | | Brent Hippert | 443-541-8400 | | | bhippert@netrexcapital.com | | | | (Name) | | (Area Code - Telephone Number) | | (Email Address) | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | | | | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | | | | Mayer Hoffman McCa nn CPAs | | | | | | | | | {Name - ilf individual, state last, first, and middle name) | | | | | | | 5 Bryant Park | | New York | NY | 10018 | | | | (Address) | (City) | | (State) | (Zip Code) | | | | 10/22/2003 | | | 199 | | | | | rte
of Rog;•tr•fon w;th PCAOB )(If • pplKATHLEEN MCNEAL SHEELER | | partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely | | | | Notary Public | |-------------------------------------| | Balti'nore County | | Maryland | | My Commission Expires Oct. 06, 2021 | CFO Notary Public # This filing .. contains (check a ll applicable boxes): - **ii** (a) Statement of financial condition. - 0 (b) Notes to consolidated statement of financial condition. - **ii** (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). - **ii** ( d) Statement of cash flows. - **ii** (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - 0 (f) Statement of changes in liabilities subordinated to claims of creditors. - **iii** (g) Notes to consolidated financial statements. - **iii** (h) Computation ofnet capital under 17 CFR 240.15c3-1 or17 CFR 240.18a-1, as applicable. - D {i) Computation of tangible net worth under 17 CFR 240.18a-2. - D {j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - D {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. - D (I) Computation for Determination of PAB Requirements under Exhibit A to§ 240.15c3-3. - **li!iil** (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - D {n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable. - **ii** {o) Reconciliations, including appropriate e:xplanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.1Sc3-1, 17 CFR 240.18a-1, or 17 CFR 240.1.8a-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. - 0 (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - **li!iil** (q) Oath or affirmation in accordance with 17 CFR 240.17a·S, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. - D (r) Compliance report in accordance with 17 CFR 240.17a-5or17 CFR 240.18a-7, as applicable. - **iii** (s) Exemption report in accordance with 17 CFR 240.17a-5or17 CFR 240.18a-7, as applicable. - 0 (t) Independent public accountant's report based on an examination of the statement of financial condition. - **iii** (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a-5, 17 CFR 240i.18a-7, or 17 CFR 240.17a-12, as applicable. - 0 {v) Independent public accountant's report based on an examination1 of certain statements in the compliance report under 17 CFR 240.l 7a-5or17 CFR 240.18a-7, as applicable. - **ii** (w) Independent public accountant's report based on a review of the exemption report under 17 C!=R 240.17a-S or 17 CFR 240.18a-7, as applicable. - 0 (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-le or 17 CFR 240.17a-12, as applicable. - 0 {y) Report describing any material inadequacies found to exist or found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k}. D (z) Other:-------------------------------------- - - \*\*To request confidential treatment of certain portions of this filing, see *17 CFR* 240.17a-S(e}(3} or 17 *CFR* 240.18a-7(d)(2), as applicable. {2}------------------------------------------------ Melville, New York FINANCIAL STATEMENTS December 31, 2021 {3}------------------------------------------------ ### TABLE OF CONTENTS | Report of Independent Registered Public Accounting Firm | | |--------------------------------------------------------------------------------------------------------------|-------| | Financial Statements | | | Statement of Financial Condition | 2 | | Statement of Income | 3 | | Statement of Changes in Members' Equity | 4 | | Statement of Cash Flows | 5 | | Notes to Financial Statements | 6 - 8 | | Supplemental Information | | | Schedule I - Computation of Net Capital Under Rule 15c3-1 of The Securities and
Exchange Commission | 9 | | Schedule 11 & 11 1. Management Statement from Exemption 1 Sc3-3 of The Securities
and Exchange Commission | 10 | | | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) # **Mayer Hoffman Mccann CPAs** ### **The New York Practice of Mayer Hoffman Mccann P.C. An Independent CPA Firm** 5 Bryant Park at 1065 Avenue of the Americas • New York, NY 10018 Phone: 212.790.5700 • Fax: 816.897.1387 • www.mhmcpa.com ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Board of Directors and Members of Netrex Capital Markets, LLC ## **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of Netrex Capital Markets, LLC (the "Company") as of December 31, 2021, the related statements of income, changes in members' equity, changes in liabilities subordinated to claims of general creditors, 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 the Company as of December 31, 2021, 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 the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. ![](_page_4_Picture_12.jpeg) {5}------------------------------------------------ ### **Supplemental Information** The computation of net capital, computation for determination of reserve requirements and information relating to the possession or control requirements (together "supplemental information") has been subjected to audit procedures performed in conjunction with the audit of the Company's financial statements. The supplemental information is the responsibility of the Company'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. l 7a-5. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole. We have served as the Company's auditors since 2018. New York, New York March 31, 2022 {6}------------------------------------------------ #### **STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2021** ### **ASSETS** | Cash | \$
3,221 ,526 | |---------------------|------------------| | Accounts Receivable | 185,000 | | Prepaid Expenses | 19,280 | | Total Assets | \$
3,425,806 | ### **LIABILITIES AND MEMBERS' EQUITY** | Accounts payable and accrued expenses (Note 4) | \$
32,637 | |------------------------------------------------|-----------------| | Total Liabilities | 32,637 | | MEMBERS' EQUITY | 3,393,169 | | Total Liabilities and members' equity | \$
3,425,806 | {7}------------------------------------------------ #### **STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31 , 2021** #### **REVENUE** | Advisory fee revenue | \$
8,803,429 | |------------------------------------|-----------------| | Underwriting revenue | 124,506 | | TOTAL RIEVENUE | 8,927,935 | | OPERATING EXPENSES: | | | Compensation and benefits | 3,291 ,705 | | Marketing and T&E | 407,067 | | Advertising | 98,266 | | Service agreement expense (Note 4) | 19,212 | | Regulatory fees | 19,412 | | Professional fees | 34,275 | | other operating expenses | 180,966 | | Total expenses | 4,050,903 | | Income From Operations | 4,877,032 | | Other Income PPP Loan Forgiveness | 182,813 | | NET INCOME | \$
5,059,845 | {8}------------------------------------------------ #### STATEMENT OF CHANGES IN MEMBERS' EQUITY FOR THE YEAR ENDED DECEMBER 31 , 2021 | MEMBERS' EQUITY, DECEMBER 31, 2021 | \$
3,393,169 | |-------------------------------------|----------------------| | Members' distributions | (2,324,570) | | Net income
Member's contribution | 5,059,845
130,000 | | MEMBER'S EQUITY, JANUARY 1, 2021 | \$
527,894 | | | | {9}------------------------------------------------ #### **STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2021** #### **OPERATING ACTIVITIES:** | Net income | \$
5,059,845 | |-------------------------------------------------|-----------------| | Adjustments to reconcile net income to net cash | | | provided by operating activities: | | | PPP Loan Forgiveness | (182,813) | | Accounts receivable | (135,000) | | Accounts payable and accrued expenses | (5,952) | | Prepaid expenses | (14,434) | | Deferred revenue | (50,000) | | Net cash provided by operating activities | 4,671 ,646 | | FINANCING ACTIVITIES | | | PPP Loan | 182,813 | | Member's contribution | 130,000 | | Members' distributions | (2,324,570) | | Net cash used by financing activities | (2,011 ,757) | | NET INCREASE IN CASH | 2,659,889 | | CASH AT BEGINNING OF YEAR | 561,637 | | CASH AT END OF YEAR | \$
3,221,526 | {10}------------------------------------------------ NOTES TO FINANCIAL STATEMENTS #### **NOTE 1 - Nature of Business** Netrex Capital Markets, LLC (the "Company") is a broker-dealer registered with the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). The Company is a Florida corporation formed on March 7, 2011 and is majority owned by Netrex Capital Markets Holdings, LLC (the "Parent"). The Company began operations on October 9, 2012, as Cadena Securities Services, LLC. In September 2018, the Company was acquired by Netrex Capital Markets Holdings, LLC and changed the name to Netrex Capital Markets, LLC. Effective January 1, 2021 the majority owner has a preferred position until having received the full return of its Preferred Capital of \$1,900,000 plus an aggregate amount sufficient to receive a compounded annual return thereon of 4%. The Company principally provides public and private companies advice regarding capital raising. The Company anticipates advising primarily on new debt financings however, it also advises private companies involved in merger and acquisition activity as to which investment banking firms they should engage. The Company does not maintain any customer accounts, handle customer funds, or securities, and is not involved in any trading activities. #### **Note 2 Summary of Significant Accounting Policies** #### Basis of Presentation The Company prepares financial statements in accordance with Generally Accepted Accounting Principles in the United States. #### Cash and Cash Equivalents The Company considers all highly liquid investments, with original maturities of less than ninety days that are not held for sale in the ordinary course of business as cash and cash equivalents. Cash and cash equivalents held at financial institutions, at times, may exceed the amount insured by the Federal Deposit Insurance Corporation #### Revenue Recognition The Company recognizes revenue in accordance with Financial Accounting Standards Board Accounting Standards Codification ("ASC") 606 Revenue from Contracts with Customers. Revenue is measured based on a consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over goods or service to a customer. The Company's revenues within the scope of ASC 606 include fees from investment banking and merger and acquisition advisory services. The Company may provide advisory services/corporate finance activity including mergers a111d acquisitions, reorganizations, tender offers, leveraged buyouts, fundraising activity and the pricing of securities to be issued. The Company's contracts generally have a duration of one year or less. The Company has participated as am underwriter in bond transactions as a co-underwriter with a large investment bank. Revenue is recognized upon closing of the underwriting. The Company's agreements contain nonrefundable retainer fees and I or success fees, which may be fixed or represent a percentage of value that the customer receives if and when the corporate finance activity is completed ("success fees"). In some cases, there is. also an "base service fees" that is calculated on the date that a service is completed based on the details included in the underlying agreement. The retainer fees, base service fee, or other milestone fees reduce any success fee subsequently invoiced and {11}------------------------------------------------ #### NOTES TO FINANCIAL STATEMENTS received upon the completion of the corporate finance activity. The Company evaluates its nonrefundable retainer payments, to determine if the fee relates to the transfer of a good or service, as a distinct performance obligation, in exchange for the retainer. If a promised good or service is not distinct, the Company combines that good or service with other promised goods or services until it identifies a bundle of goods or services that is distinct. In some cases, that would result in the broker-dealer accounting for all the services promised in a contract as a single performance obligation and the retainer revenue is classified as deferred revenue on the Statement of Financial Condition. At December 31, 2021 there was \$0 of deferred revenue, 100% of the \$50,000 of deferred revenue from December 31 2020 was recognized during 2021. All of the Company's revenue for 202·1 is recognized at a point in time. #### Account Receivable and Allowance for Credit Losses Accounts receivable are due when invoiced or within 30 days and allowance for credit losses is provided based upon a periodic analysis of individual account balances. At December 31, 2021 the Company determined that no allowance for credit losses was necessary. #### Income Taxes The Company is an LLC and is disregarded for Federal income tax purposes. Accordingly, no provision for income taxes is provided in the financial statements. The company has paid New York State income tax on behalf of its members through a **PTET** election with New York, which is recorded as distributions for 2021. The Company is required to determine whether a tax position is more likely tthan not to be sustained upon examination by the applicable taxing authority, including resolution of any tax related appeals or litigation processes based on the technical merits of the position. The Company files an income tax return in the U.S. federal jurisdiction and may file income tax returns in various U.S. states. The Company has no uncertain tax positions at December 31, 2021. The Company's tax returns are open for examination for the year 2018 and thereafter. #### Advertising Costs Advertising costs are charged to operations during the period in which they are incurred. #### 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. #### **NOTE** 3 - **Net Capital Requirements** The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (Rule 15c3-1 ), which requires the maintenance of a minimum amount of net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. Rule 15c3-1 also provides that equity capital may not be withdrawn or cash dividends paid if the net capital ratio after such withdrawals {12}------------------------------------------------ NOTES TO FINANCIAL STATEMENTS or payments would exceed 10 to 1. The Company had net capital of \$3, 188,889 and excess capital of \$3,088,889 as of December 31 , 202·1, and a net capital requirement of \$100,000. The Company's net capital ratio as of December 31 , 2021 was .01 to 1 #### **NOTE 4 - Related Party Transactions** The Company is owned by the Members. The Members assume responsibility for all income tax liabilities. During the year ended December 31 , 2021 , pursuant to an agreement between the Company and Netrex LLC, an entity in which the chief executive officer has an ownership interest, the Company recorded an administrative services fee expense of \$19,212 to the affiliate. The administrative fee expense covers the administrative services and office space provided to the Company by the affiliate. This amount is included in Services fees on the Statement of Income. The affiliate also provided payroll services, benefits and paid jointly incurred expenses on behalf of the company for which it was reimbursed. The Company incurred \$464,818 of such costs during the year. Included in accounts payable and accrued expenses is \$32,637 payable to the affiliate. The Company incurred \$316, 940 of fees to an entity affiliated with the Company's chief executive officer for promotional activities. At December 31 , 2021 , there is \$0 due to this entity included in accounts payable and accrued expenses #### **NOTE 5 - Concentration of Credit Risk and Major Customers** During 2021 one customer accounted 10.1% of the Company's revenue. At December 31 , 2021, all of the Company's accounts receivable was due from two customers. #### **NOTE 6 - PPP Loan** The Company received a \$182,813 Paycheck Protection Program loan under the Federal Coronavirus Aid, Relief and Economic Security Act ("CARES Act") during 2021 and the loan was forgiven during 2021 under the terms of the CARES Act. #### **NOTE 7 - Subsequent Events** The company evaluated subsequent events through the date that the financial statements were available to be issued. The Company made member distributions during March of \$2,000,000 after notifying FINRA of the intended distribution as required by SEC regulations. The Company entered into a 36 month lease for its offices from a related party. The payments for 2022 will be approximately \$41 ,346 for 2022 and then \$45, 104 annually through June 2025. The company also paid approximately \$53,000 for lease hold improvements during 2022. {13}------------------------------------------------ #### **Schedule** I - **Computation Of Net Capital Under Rule 15c3-1 Of The Securities And Exchange Commission** **December 31, 2021** | Member's Equity per Statement of Financial Condition | \$
3,393,169 | |-----------------------------------------------------------------|------------------| | Less: Nonallowable assets | 204,280 | | Net capital | \$
3, 188,889 | | Aggregate indebtedness - items included in financial statements | \$
32,637 | | Basic net capital requirement (\$100,000 minimum) | \$
100,000 | | Excess net capital | \$
3,088,889 | | Net Capital less 120% minimum net capital requirement | 3,068,889 | | Percentage of aggregate indebtedness to net capital | 1.0% | There were no differences between the above calculation and the Company's amended calculation of net capital as reflected on the amended unaudited Form X-17a-5 Part llA {14}------------------------------------------------ #### SCHEDULE II #### COMPUTATION FOR DETERMINATION OF THE RESERVE REQUIREMENTS UNDER RULE 15c3-3 of the Securities and Exchange Commission Netrex Capital Markets, LLC is exempt from Rule 15c3-3 under the provision of Rule 15c3-3(k)(2)(i) of the Securities and Exchange Commission #### SCHEDULE Ill #### INFORMATION RELATING TO THE POSSESSION OR CONTROL REQUIREMENTS UNDER RULE 15c3-3 of the Securities and Exchange Commission Netrex Capital Markets, LLC is exempt from Rule 15c3-3 of The Securities and Exchange Commission under the provision of Rule 15c3-3(k)(2)(i). {15}------------------------------------------------ ![](_page_15_Picture_0.jpeg) # **Mayer Hoffman Mccann CPAs** ### **The New York Practice of Mayer Hoffman Mccann P.C. An Independent CPA Firm** 5 Bryant Park at 1065 Avenue of the Americas • New York, NY 10018 Phone: 212.790.5700 • Fax: 816.897.1387 • www.mhmcpa.com ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Board of Directors and Members of Netrex Capital Markets, LLC We have reviewed management's statements, included in the accompanying Exemption Report, in which **(1)** Netrex Capital Markets, LLC (the "Company") identified the following provisions of 17 C.F.R. § 15c3-3(k) under which the Company claimed an exemption from 17 C.F.R. § 240. I 5c3-3: (2)(i) (the "exemption provision") and (2) the Company stated that the Company met the identified exemption provisions throughout the most recent fiscal year ended December 31, 2021 without exception. The Company's management is responsible for compliance with the exemption provisions and its statements. 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 the Company's compliance with the exemption provisions. 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 optmon. Based on our review, we are not aware of any material modifications that should be made to management's statements referredl to above for them to be fairly stated, in all material respects, based on the provisions set forth in paragraph (k)(2)(i) of Rule 15c3-3 under the Securities Exchange Act of 1934. New York, New York March 31 , 2022 ![](_page_15_Picture_11.jpeg) {16}------------------------------------------------ ![](_page_16_Picture_0.jpeg) ## **Exemption Report** Netrex Capital Markets, LLC (the "Company") is a registered broker-dealer subject to Rule l 7a-5 promulgated by the Securities and Exchange Commission (17 C.F.R. §240. l 7a-5, "Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R. § 240.17a-5(d)(l) and (4). To the best of its knowledge and beliief, the Company states the following: - (I) The Company claimed an exemption from 17 C.F.R. § 240.15c3-3 under the following provisions of 17 C.F.R. § 240.1 5c3-3 (k): (2)(i) - (2) The Company met the identified exemption provisions in 17 C.F.R. § 240.15c3-3(k) throughout the most recent fiscal year without exception. I, Brent E. Hippert, swear (or affirm) that, to my best knowledge and belief, this Exemption Report is true and correct. By: Brent E. Hippert Title: CFO March 15, 2022 270 South Service Road, Suite 45 • Melville, NY 11747 Tel: 631.465.9950 www.netrexcapitalmarkets .com Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.