# FNC AG STOCK, LLC X-17A-5 (2024-11-27) — Broker-dealer annual report - Company: FNC AG STOCK, LLC - Form: X-17A-5 - Filed: 2024-11-27 - Period: 2024-09-30 - Accession: 0001559005-24-000001 - CIK: 1559005 - File #: 8-69177 - Type: Broker-dealer - Material weakness: Yes - Auditor: Mayer Hoffman McCann PC - Auditor location: Minneapolis, MN - Contact: Nicholas Watson - Phone: 7017570889 - Email: nwatson@fncagstock.com - Website: fncagstock.com - Signed by: Nicholas Watson (Chief Executive Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1559005/000155900524000001/X-17A-5Public.pdf --- {0}------------------------------------------------ # **FNC Ag Stoel<, LLC** (SEC l.D. No. 8-69177) Staterrtent of Financial Condition as of September 30, 2024 and Report oflndependent Registered Public Accounting Firm > Filed pursuant to 17 a-5(e)(3) as a **PUBLIC** document. {1}------------------------------------------------ **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** 0MB APPROVAL 0MB Number: 3235-0123 Expires: Nov. 30, 2026 Estimated average burden hours per response: 12 # **ANNUAL REPORTS FORM X-17A-5 PART** Ill | | SEC FILE NUMBER | | |--|-----------------|--| | | FACING PAGE | | | | | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|-----------------------------------------|-----------------------------------------------|--|--| | Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 | | | | | | | AND ENDING 09/30/2024
FILING FOR THE PERIOD BEGINNING 10/01/2023
MM/DD/YY | | | MM/DD/YY | | | | | A. REGISTRANT IDENTIFICATION | | | | | | NAME oF FIRM: FNC Ag Stock, LLC | | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
~ Broker-dealer
□ Security-based swap dealer
□ Check here if respondent is also an OTC derivatives dealer | | □ Major security-based swap participant | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | | 4050 Garden View Drive, Suite 103 | | | | | | | | (No. and Street) | | | | | | Grand Forks | ND | | 58201 | | | | (City) | (State) | | (Zip Code) | | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | Nicholas Watson
(701) 780-2828 | | | nwatson@fncagstock.com | | | | (Name) | (Area Code -Telephone Number)
(Email Address) | | | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
Mayer Hoffman Mccann P. C. | | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | | 1000 Campbell Mithyn Tower, 222 S 9th St | Minneapolis | MN | 55402 | | | | (Address)
10/22/2003 | (City) | (State)
199 | (Zip Code) | | | | l"
of Reglmatloo with PCAOB}(lf applicable) | FOR OFFICIAL USE ONLY | | (PCAOB Regl~rntloo N om bee, If applicable) I | | | \* 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)(l)(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 0MB control number. {2}------------------------------------------------ #### **OATH OR AFFIRMATION** | I, Nicholas Watson | | | , swear (or affirm) that, to the best of my knowledge and belief, the | | |--------------------|--|-----|-----------------------------------------------------------------------------------|-------| | | | | financial report pertaining to the firm of FNC Ag Stock, LLC | as of | | 11 /27 | | 2~, | is true and correct. I further swear (or affirm) that neither the company nor any | | partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely as that of a customer. **JAMESIVERS Notary Public State of North Dakota My Commission Expires April 26, 2026** itle: Chief Executive Officer # **This filing\*\* contains (check all applicable boxes):** - **liiil** (a) Statement of financial condition. - **liiil** (b) Notes to consolidated statement of financial condition. - D {c) Statement of income {loss) or, if there is other comprehensive income in the period{s) presented, a statement of comprehensive income {as defined in§ 210.1-02 of Regulation S-X). - D {d) Statement of cash flows . - D {e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - D {f) Statement of changes in liabilities subordinated to claims of creditors. - □ {g) Notes to consolidated financial statements. - **liiil** {h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-l, 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. - **liiil** (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - D (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.15c3-3(p}{2) or 17 CFR 240.18a-4, as applicable. - □ {o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3-l, 17 CFR 240.18a-l, 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. - D {p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - **liiil** (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. - D (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - **liiil** (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - D (t) Independent public accountant's report based on an examination of the statement of financial condition . - D (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. - 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. - **liiil** (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. - D (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-le or 17 CFR 240.17a-12, as applicable. - D (y) Report describing any material inadequacies found to exist or found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). D(z) Other: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_ - - \*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18a-7(d)(2), as applicable. {3}------------------------------------------------ #### **TABLE OF CONTENTS** | | Page | |----------------------------------------------------------|------| | REPORT OF lNDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 1 | | FINANCIAL STATEMENT: | | | Statement ofFinancial Condition as of September 30, 2024 | 2 | | Notes to Financial Statement as of September 30, 2024 | 3-5 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) # **Report of Independent Registered Public Accounting Firm** To the Managing Member of PNC Ag Stock, LLC: ### *Opinion* **011** *the Financial Statement* We have audited the accompanying statement of financial condition of FNC Ag Stock, LLC (the "Company") as of September 30, 2024, and the related notes. In our opinion, the financial statement presents fairly, in all material respects, the :financial position of the Company as of September 30, 2024, 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 our audit to obtain reasonable assurance about whether the financial statement is 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 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. # *CBIZ CPA~ P.C.1* We have served as the Company's auditor since 2022. New York, New York November 27, 2024 **CBIZ CPAs P.C.** 685 Third Avenue New York, NY 10017 Phone: 212.503.8800 cbizcpas.com 'In cMain jurisc.iclions, CBIZ CPAs P. c. opera/es under 11s previous name. Mayer Hollman Mccann P.C. ![](_page_4_Picture_15.jpeg) {5}------------------------------------------------ ## **STATEMENT OF FINANCIAL CONDITION AS OF SEPTEMBER 30, 2024** | | 2024 | |--------------------------------------------------------------------------------------------|------------------------------------| | ASSETS | | | CURRENT ASSETS:
Cash and cash equivalents
Other current assets | \$
232,872
11,166
244,038 | | TOTAL | \$
244,038 | | LIABILITIES AND MEMBER'S EQUITY | | | CURRENT LIABILITIES:
Commissions payable
Contract liabilities
Accrued liabilities | \$
4,435
40,834
2,500 | | Total current liabilities | 47,769 | | MEMBER'S EQUITY:
Farmers National Company Member's equity | 196,269 | | Total member's equity | 196,269 | | TOTAL | \$
244,038 | See notes to financial statement. {6}------------------------------------------------ #### NOTES TO FINANCIAL STATEMENT AS OF SEPTEMBER 30, 2024 #### **l. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** Nature of Opcl'ations - FNC Ag Stock, LLC (the "Company") is a broker-dealer J'egistered with the Securities and Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authol'ity (FINRA) and the Securities Investor Prntection Corporation (SIPC). The Company is a Delaware Limited Liability Company. Operations for the Compuny began 011 August 27, 2013 andisn wholly owned entity of !•armers National Company (the "Parent'') which is a wholly owned subsidiary of PNC, Inc. Th~ Company's limited liability company agreement defines the period of the duration. The agreement states the Company's continuation as a limited liability company is dependent upon the existence of the member of the LLC. The Company operates an alternative tmding service for the secondary trading of securities issued by cooperatives and limited partnerships in the agricultural and energy sectors. The Company mns a qualified matching service, The Company had three individuals who served as agents as of September 30, 2023. In August 2022, the firm filed a Continuing Membership Application (CMA) with FINRA to add Investment Banking, specifically mergers and acquisitions, as a product line. Approval for this CMA was granted in December 2022. All expense related to the mergers and acquisitions product line ure disclosed in .M and A consultation expense. Furthermore, the Company has an agl'eement in place with an escrow agent. The escrow agent is responsible for holding the purchasers' funds and distributing commissions and remaining sales price to the Company and the sellers, respectively. Under its membership agreement with FINRA and relying on Footnote 74 ofthe SEC Releases No. 34-70073 adopting amendments to 17 C.F.R § 240.l 7a-5, the Company (!) does not directly or indirectly receive, hold or othel'wise owe funds or securities for or to customers, (2) does not and wi II not carry accounts of or for customers, and (3) docs not and will not carry PAB accounts. **Use of Estimates** - In preparing the accompanying financial statement in accordance with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statement. Actual results could differ from those estimates. **Accounts Receivable-** The Company's accounts receivable consist of commission due from the escrow agent. Historically, tl1e Company has not experienced losses related to receivables and it is not considered to be a signifieant credit risk. Cash Equivalents - The Company considers all instrnmcnts with an original maturity of three months or less when acquired to be cash equivalents. Concentl'ation of Cl'edit Risk - The Company's cash balances a!'C maintained in a bank deposit account, the balance of which may periodically exceed federally insured limits. Income Taxes -- The Company is operating as a limited liability company; consequently, earnings pass through to the member and are taxed at the member level. Accordingly, no federal or state income *tax* provision has been included in these financial statements, If the Company were subject to income taxes, interest and penalties, if any, would be recorded in federnl income tax expense. The Company 1·ecognizes the tax benefit of an uncertain tax position only if it is more likely than not that the tax position will be sustained by the taxing authorities, based on the technical merits of the position. There are 110 uncertain tnx positions as ofSeptember 30, 2024. **Leases** - Under ASU No, 2016-02, "Leases" (Topic 842), leases are classified as either finance or operating leases. Fot finance leases, a lessee will recognize interest expense nnd amortization of the right-of-use asset, and for opetating leases, the lessee will recognize a straight-line total lease expense. The guidance also requires qualitative and specific quantitative disclosures to supplement the amounts recorded in the ·financial statements, to afford better understanding of an entity's leasing activities, including any significant judgments and estimates. Under the standard, entities may make an accounting policy election not to record a right-of-use {7}------------------------------------------------ asset and lease liability for short•term leases, which are defined us leases with a lease tel'm of 12 months or less. The Company's lease liability falls under its expense sharing agreement with the Parent. This expense shal'ing agreement is a 12-month agreement effective September 1, 2023 through September 30, 2024 and on a monthto-month basis thereafter. Due to the short-term nature of the expense sharing agreement, the Company has made the policy election not to record a right-of-use asset and lease liability, Subsequent Events - The Company has evaluated subsequent events through November 27, 2024, the date the financial statement was available to be issued. #### 2. **REVENUE FROM CONTRACTS WITH CUSTOMERS** **Broket•nge Commissions** - The Company facilitates the execution of buy and sell transactions on behalf of its customers. Commission revenues and !'elated commission expenses are recorded on a trade-date basis. 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 to/from the customer as transactions are approved by the board of directors of the Company issuing the units. **Contl'act J?ccs** - The Company has written trade agreements with cooperatives and ei1ergy producers to facilitate the stock trades on behalf of these b,1sinesses. Many of the trade agreements include an annual contract maintenance fee paid to the Company for the services provided to the buying and selling shareholders. The Company believes the performance obligation is satisfied equally over the 12 month contract period because the business is eligible to utilize the services of the Company equally throughout duration of the agl'eement. Contract Liabilities - The timing of.revenue recognition related to contract fees results in colitract liabilities. The annual payment is received 011 the anniversary of the trading service contract. The payment represents services for one yenr after the payment ls made. Revenue for these payments ls recognized on a monthly basis with the balance of the contract considered a contract liability. For the fiscal year ending September 30, 2024, contract liabilities (deferred revenue) had a beginning balance of\$43,796 and a year end balance of\$40,834. #### **3. COMMISSIONS PAYABLE** Commissions are paid to the agents. The payable at Septe111be1· 30, 2024 consists of \$4,435 payable to agents. #### **4. ACCJUJED LlABILl'l'IES** The Company's accrued liabilities consist of mergers and acquisitions costs. The payable at September 30, 2024 consists of\$2,500 payable to a vendor. #### **5. RELATED PARTY TRANSACTIONS** The Company has transactions with its Parent, including rent and the performance of administrative services. There is an expense sharing agreement in place between the Company and its Parent. There was not a payable to member as of September 30, 2024. The expense sharing agreement was effective beginning September 1, 2023 through September 30, 2024, and 011 a month-to-month basis thereafter untll either parly provides the other not less than 30 days advance written notice of its intent to modify or terminate the agreement. A new expense sharing agreement was signed and effective September I, 2023 through September 30, 2024 and on a month-to-month basis thereafter. {8}------------------------------------------------ #### **NOTES TO FINANCIAL STATEMENT AS OF SePTEMBE~ 30, 2024** #### **5. RELATED PARTY TRANSACTIONS** The Company has transactions with its Pal'ent, including 1·ent and the performance of administrative services. There is an expense shal'ing agreement in place between the Company and its Parent. There was not a payable to member as of September 30, 2024. The expense shadng agreement was effective beginning September 1, 2023 through September 30, 2024, and on a month-to-month basis (hereafter until either party provides the other not less than 30 days advance written notice of its intent to modify or terminate the agreement. #### 6. **LEASE OBLIGATIONS** The Company leases office space under its expense sharing agreement with the Parent. #### 7, **NET CAPITAL REQUlREl\1ENTS** The Company is subject to the SEC Uniform Net Capital Rule (SEC Rule 15c3~1), which requires the maintenance of minimum net capital. The Company is required to maintain "adjusted net ca1,ital" equivalent to the greater of \$5,000 or 6 2/3% of aggregated indebtedness. At Septe111ber 30, 2024, the Company had net capital of \$185,103, which was \$180,103 in excess of its required net capital of \$5,000. #### **8. COMMITMENTS AND CONTINGENGIES** The Company may be involved in various legal matters from time to time, Management is of the opinion none of these legal actions will result in losses material to the financial position of the Company. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.