# PEP ADVISORY LLC X-17A-5 (2025-03-13) — Broker-dealer annual report - Company: PEP ADVISORY LLC - Form: X-17A-5 - Filed: 2025-03-13 - Period: 2024-12-31 - Accession: 0001566745-25-000003 - CIK: 1566745 - File #: 8-69224 - Type: Broker-dealer - Material weakness: No - Auditor: Sanville & Company - Auditor location: Dallas, TX - Contact: Walker Moody - Phone: 713-804-7576 - Email: wmoody@pepadvisory.com - Website: pepadvisory.com - Signed by: Walker Moody (Chief Executive Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1566745/000156674525000003/2024auditpepadvisory-.pdf --- {0}------------------------------------------------ | | UNITED STATES | | QMB APPROVAL | | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------|---------|---------------------------------------------------|--| | | SECURITIES AND EXCHANGE COMMISSION | | OMB Number: 3235-0123 | | | | Washington, D.C. 20549 | | Expires:Nov. 30, 2026
Estimated average burden | | | | | | 12
hours per response: | | | | REPORTS
ANNUAL | | SEC FILE NUMBER | | | | X-17A-5
FORM | | 8-69224 | | | | PART
III | | | | | FACING PAGE
Information Required Pursuant to Rules 17a-5,17a-12, and 18a-7 under the Securities Exchange Act of 1934
12/31/2024
01/01/2024
AND ENDING
FILING FOR THE PERIOD BEGINNING
MM/DD/YY
MM/DD/YY
REGISTRANT IDENTIFICATION
A.
LLC
PEP
Advisory
NAME OF FIRM: | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
B
Broker-dealer
Check here if respondent is also an OTC derivatives dealer | Security-based swap dealer | | Major security-based swap participant | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | Waugh
Drive
100
, | Suite
600 | | | | | | (No. and Street) | | | | | Houston | TX | | 77007 | | | (City) | (State) | | (Zip Code) | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | Walker
Moody | 713-804-7576 | | wmoody@pepadvisory.com | | | (Name) | (Area Code -Telephone Number) | | (Email Address) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
Company
Sanville
& | | | | | | | (Name-if individual,state last,first,and middle name) | | | | | St
N
Saint
Paul
325 | Dallas
., #3100 | TX | 75201 | | | (Address) | (City) | (State) | (Zip Code) | | | 09/18/2003 | | 169 | | | | (Date of Registration with PCAOBRif applicable) | | | (PCAOB Registration Number,if applicable) | | | | FOR OFFICIAL USE ONLY | | | | | Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public
*
CFR 240.17a-5(e)(l)(ii),if applicable. | accountant must be supported by a statement of facts andcircumstances relied on as the basis of the exemption. See 17 | | | | Persons who are to respond to the collection of information containedin this form are not required torespond 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 *j* as of | ; Walker Moody financial report pertaining to the firm of PEP Advisory LLC 12/31 2024 . is true and correct. Ifurther 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. Chief Executive Officer Notary Public #### **This filing\*\* contains (check all applicable boxes):** - **B**(a) Statement of financial condition. - (b) Notes to consolidated statement of financial condition. - **B** (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). CHRISTIAN ANDREA ALVARADO Notary Public. Slate of Texas Comm.Expires 03-24-2027 Notary ID 134271517 - **B**(d) Statement of cash flows. - **B**(e) Statement of changes in stockholders'or partners' or sole proprietor's equity. - (f) Statement of changes in liabilities subordinated to claims of creditors. - **B**(g) Notes to consolidated financial statements. - **B**(h) Computation of net capital under 17 CFR 240.15c3-lor 17 CFR 240.18a-l, as applicable. - (i) Computation of tangible net worth under 17 CFR 240.18a-2. - **B**(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 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. - **B**(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 security-based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable. - **B** (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. - (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - **B**(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. - (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - **B**(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. - **B** (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. - (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. - **B** (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 240.15c3-le or 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 certain portions of this filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18a-7(d)(2), as applicable.* {2}------------------------------------------------ **PEP Advisory LLC** **Financial Statements** **and** **Report of Independent Registered Public Accounting Firm** **For the Year Ended December 31, 2024** {3}------------------------------------------------ ## **TABLE OF CONTENTS** | REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
1 | |---------------------------------------------------------------------------------| | STATEMENT
OF
FINANCIAL
CONDITION
3 | | OF
MEMBER'S
STATEMENT
INCOME
AND
CAPITAL
.4 | | MEMBER'S
STATEMENT
OF
CAPITAL
5 | | STATEMENT
OF
CASH
FLOWS
,6 | | NOTES
TO
FINANCIAL
STATEMENTS
7-11 | | SUPPLEMENTAL
INFORMATION
12 | | SCHEDULE
13
I | | SCHEDULE
and
III
14
II | | INDEPENDENT
REPORT
OF
REGISTERED
PUBLIC
ACCOUNTING
FIRM
15 | | EXEMPTION
REPORT
16 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) Report of Independent Registered Public Accounting Firm To the Member and Those Charged With Governance of PEP Advisory LLC #### Opinion on the Financial Statements We have audited the accompanying statement of financial condition of PEP Advisory LLC (the Company) as of December 31, 2024, the related statements of income, changes in member's capital, and cash flows for the year then ended, and the related notes to the financial statements (collectively, 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, 2024, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. #### Basis for Opinion These financial statements are the responsibility of 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 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. #### Supplemental Information The supplementary information contained in The Schedule I, Computation of Net Capital Under SEC Rule 15c3-1, Schedule II, Computation for Determination of Reserve Requirements Under Rule SEC 15c3-3 and Schedule III, Information Relating to the Possession or Control Requirements Under SEC Rule 15c3-3 have 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 > **325 North Saint Paul Street Suite 3100 Dallas, Texas 75201 214.738.1998** {5}------------------------------------------------ supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 C.F.R. §240.17a-5. In our opinion, the supplementary information contained in the Schedule I, Computation of Net Capital Under SEC Rule 15c3- 1, Schedule II, Computation for Determination of Reserve Requirements Under SEC Rule 15c3-3 and Schedule III, Information Relating to the Possession or Control Requirements Under SEC Rule 15c3-3 are fairly stated, in all material respects, in relation to the financial statements as a whole. */ - JjCy* This is the initial year we have served as the Company's auditor. Dallas, Texas March 6, 2025 {6}------------------------------------------------ ## **PEP ADVISORY LLC STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2024** #### Assets Current Assets: | Cash | \$
1,595,933 | |-------------------------------------------------|-----------------| | Accounts
receivable | 1,738,676 | | Due
from
affiliate | 44,701 | | Prepaids
and
deposits | 196,929 | | assets
Total
current | 3,576,239 | | Total
assets | \$
3,576,239 | | Member's
Capital
and
Liabilities | | | Liabilities:
Current | | | Accounts
payable | \$
335,055 | | Deferred
revenue | 141,917 | | Accrued
state
tax
income | 64,453 | | Total
liabilities | 541,425 | | Member's
capital | 3,034,814 | | member's
Total
liabilities and
capital | \$
3,576,239 | The accompanying notes are an integral part of the financial statements. 3 {7}------------------------------------------------ ## **PEP ADVISORY LLC STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 2024** | Revenues | | | |------------------------------------------------------------------------------|----|------------| | Investment
banking
income | \$ | 12,087,171 | | Success
fee
income | | 2,485,324 | | research
and
fees
Consulting
income | | 4,693,150 | | Reimbursed
income | | 14,596 | | | | 19,280,241 | | | | | | Costs
and
expenses: | | | | and
Salaries
benefits | | 4,013,714 | | expense
Commissions | | 1,443,802 | | expense
Technology
and
communication | | 275,316 | | General,
administrative,
and
expense
regulatory
miscellaneous | | 380,415 | | Research
fees | | 334,942 | | Legal
and
professional
fees | | 185,132 | | Occupancy
expense | | 96,026 | | Total
costs
expenses
and | | 6,729,347 | | Other
(expense):
income | | | | Interest
income | | 63,150 | | Total
other
income | | 63,150 | | taxes
Provision
for
income | | | | State
franchise
tax | | 64,453 | | Total
provision
taxes
for
income | | 64,453 | | | | | | Net
income | S | 12,549,591 | The accompanying notes are an integral part of the financial statements. {8}------------------------------------------------ ## **PEP ADVISORY LLC STATEMENT OF CHANGES IN MEMBER S EQUITY YEAR ENDED DECEMBER 3E 2024** | | Total | |------------------------------------------|-----------------| | 31,
2023
at
December
Balance | \$
2,135,223 | | Capital
distributions | (11,650,000) | | Net
income | 12,549,591 | | 31,
2024
Balance
at
December | \$
3,034,814 | The accompanying notes are an integral part of the financial statements. {9}------------------------------------------------ ## PEP ADVISORY LLC STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2024 | OPERATING
ACTIVITIES | | | |-----------------------------------------------------------------|----|--------------| | activities:
Cash
operating
flows
from | | | | Net
income | \$ | 12,549,591 | | to
Adjustments
reconcile
net
income | | | | activities:
cash
by
to
net
provided
operating | | | | assets
Changes
operating
and
in
liabilities | | | | Accounts
receivable | | (1,333,039) | | Prepaids
and
deposits | | 9,575 | | Accounts
payable
and
accrued
liabilities | | 319,885 | | Deferred
revenue | | (81,417) | | Accrued
state
tax
income | | 45,339 | | Net
cash
by
provided
Operating
Activities | | 11,509,934 | | FINANCING
ACTIVITIES | | | | Member's
contribution | | | | Member's
distribution | | (11,650,000) | | Due
to
affiliate | | (44,701) | | Net
cash
used
in
Financing
Activities | | (11,694,701) | | Net
cash
decrease | | (184,767) | | Cash
at
of
year
beginning | | 1,780,700 | | of
Cash
at
year
end | S | 1,595,933 | | disclosure:
Supplemental | | | | Income
tax
paid | \$ | 19,114 | | Interest
paid | \$ | | The accompanying notes are an integral part of the financial statements. {10}------------------------------------------------ # SUMMARY OF SIGNIFICANT ACCOUNTING POUICIES: #### Business and operations CDH Securities (the "Company") changed its name to Heikkinen Energy Securities LLC on October 14, 2015. On July 31, 2021, Heikkinen Energy Securities LLC changed its name to PEP Advisory LLC. It is a Texas LLC formed in December 2012 and is a limited broker-dealer registered with the Securities and Exchange Commission ("SEC"). The Company is a wholly owned subsidiary of Invicta XV+ LP (the "Parent"). The Company provides investment banking, financial advice, equity research and sales to energy and institutional investment investors. The Company also participates in the underwriting of securities offered for sale in public markets. The Company is based in Houston, Texas, and maintains a branch office in New Orleans, Louisiana. At December 31, 2024, the Company was registered as a limited broker-dealer in several states. The Company limits its business activities exclusively to Selling Group Participants in a Firm Commitment Underwriting, Private placement of securities, publish and distribute research, participation in commission sharing program related to research activities and merges and acquisitions advisory services from certain regulations concerning reserves and protection of customer securities. #### Management estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("U.S. 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 amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. #### Segment Reporting The Company operates as a single operating segment. The Chief Executive Officer evaluates the Company'sfinancial performance and allocatesresources on an entity-wide basis, and the Company does not manage its operations or allocate resources based on differences in products, services, or geographic regions. As such, the Company has determined that it has one reportable segment in accordance with ASC 280, *Segment Reporting.* #### Cash and cash flows For purposes of the statement of cash flows, cash includes demand deposits, time deposits, certificates of deposit and short-term liquid investments with original maturities of three months or less when purchased. {11}------------------------------------------------ ## Revenue recognition The Company recognizes revenues in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers. Under this guidance, the Company recognizes revenue from sales when performance obligations under the terms of a contract with a customer are satisfied by analyzing exchanges with its customers using a five-step approach (1) identify the contract(s) with a customer; (2) identify the performance obligation in the contract(s); (3) determine the transaction price; (4) allocate the transaction price to the performance obligation(s) in the contract(s); and (5) recognize the revenue when (or as) the Company satisfies a performance obligation.. Such revenue is recorded at the amount of consideration expected to be received in exchange for the transfer of goods and services to its customers. Revenue from contracts with customers includes fees from investment banking services,successfees, and research revenue. The recognition and measurement of revenue is based on the assessment of individual contract terms. Significant judgment is required to determine whether performance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance obligations are identified; when to recognize revenue based on the appropriate measure of the Company's progress under the contract; and whether constraints on variable consideration should be applied due to uncertain future events. The Company's contracts typically do not have multiple performance obligations or any variable consideration. #### Investment Banking Revenue Investment banking revenues include gains, losses, and fees, net of syndicate expenses, arising from securities offerings in which the Company acts as an underwriter or agent. Investment banking management fees, underwriting fees and sales concessions are recorded at a point in time, which generally isthe offering date. The Company earnsfees and commissions in connection with the placement services it provides and recognizes revenue when the Company has completed its contractual obligations and collection is reasonably assured. #### Success Fee Income Revenue is recognized when security deals are closed, securities are exchanged, performance obligations have been met, and all elements of contractual fulfillment are met. Success Fee revenues include fees earned from providing merger-and-acquisition and financial restructuring advisory services. Success Fees from securities related transactions are recognized at a point in time when earned under the respective agreements. {12}------------------------------------------------ #### Research Revenue The Company provides research on the oil and gas exploration and production industry and related equity on a daily basis. The Company also produces research on topical issues within the energy sector. Recipients of this research compensate the Company for these market insights by direct payment, or through third-party commission sharing agreements. The Company believes the performance obligation is satisfied when the research is provided for the appropriate period as defined by the agreement between the parties. The direct payments and commissions are recognized as revenue when the performance obligation is satisfied, and the collection is reasonably assured. #### Deferred Revenue Deferred revenue represents revenues collected but not earned as of December 31, 2024. This is primarily composed of revenue for research. If the subscription period is conducted over the yearend, deferred revenue is recorded for all revenue related to fulfillment of subscriptions in the next fiscal year. #### Subsequent events In preparing the financial statements, the Company has reviewed, as determined necessary by the Company's management, eventsthat have occurred after December 31, 2024, up until the issuance of the financial statements, which occurred on March 6, 2025 and noted no items requiring an adjustment to the accompanying financial statements and notes to financial statements. On February 6, 2025, Management identified a Net Capital deficiency that occurred from February 3-5, 2025. The deficiency was due to the recognition of monthly intercompany management expenses recorded on February 3, 2025, before the corresponding revenue recognized for February. The deficiency resulted in a Net Capital violation where Management immediately selfreported to the SEC and FINRA. The deficiency was resolved on February 6, 2025, through a \$250,000 capital contribution from Invicta XV + LP, restoring compliance with net capital requirements. Additionally, Management assessed itsfinancial reporting processes and has implemented measuresto preventsimilar timingrelated issues going forward. ## 2. TRANSACTIONS WITH RELATED PARTY During the year ended December 31, 2024, \$3,140,214 was paid to Pickering Energy Partners, a related party through common ownership, to settle the payable balance related to the management fees. {13}------------------------------------------------ The Company has an Office and Administrative Services Agreement with Pickering Energy Partners LP ("Pickering Energy") whereby Pickering Energy provides administrative and backoffice support services, including office space, payroll, marketing, and overhead expense management, excluding direct broker-dealer activities. The Agreement renews annually unless terminated with 30 days' notice. The Company pays Pickering Energy a monthly Incremental Allocation Services Fee based on allocated Overhead Expenses, totaling \$4,213,528 for the year ended December 31, 2024. These costs are reflected in technology and communication expense, rent, and salaries and benefits. ## **3. INCOME TAXES:** The Company is organized as a limited liability company under the provisions of the Internal Revenue Code of 1986 as amended. Accordingly, the accompanying financial statements do not include a provision for federal income taxes because the Company does not incur federal income tax liabilities. Instead, its earnings and losses are included in the Member's income tax return and are taxed based on the Member's income tax rate. ## **4. NET CAPITAL REQUIREMENTS:** The Company is subject to the SEC Uniform Net Capital Rule (SEC Rule 15c3-l), 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). At December 31, 2024, the Company was in compliance with \$399,508 of aggregate indebtedness and net capital of \$1,054,508. ## **5. RISKS AND CONCENTRATIONS:** The Company maintains depositsin three financial institutions. At December 31, 2024, the Federal Deposit Insurance Corporation ("FDIC") provided insurance coverage of up to \$250,000, per depositor, per institution. At December 31, 2024, the Company's cash was approximately \$995,330 in excess of federally insured limits. #### Customer concentrations For the year ended December 31, 2024, the Company had the following customer concentrations with respect to its revenues: | | Sales | Accounts
Receivable | | | |---------------|-------|------------------------|--|--| | Customer
1 | 34% | * | | | | 2
Customer | 9% | * | | | | 3
Customer | 9% | | | | | 4
Customer | 5% | | | | \*amount less than 10% {14}------------------------------------------------ # 6. RULE 15c3-3 EXEMPTION: The Company is a Non-Covered Firm as it relies on Footnote 74 of the SEC Release No. 34-70073 adopting amendmentsto 17 C.F.R. § 240.17a-5. because the Company limitsits business activities exclusively to Selling Group Participants in a Firm Commitment Underwriting, Private placement of securities, publish and distribute research, participation in commission sharing program related to research activities and merges and acquisitions advisory services from certain regulations concerning reserves and protection of customer securities; consequently, Computation for Determination of Reserve Requirements and Information Relating to the Possession or Control Requirements pursuant to SEC Rule 15c3-3 are not required. # 7. REVOLVING CREDIT FACILITY: On March 19, 2024, the Company entered into a Revolving Note and Cash Subordination Agreement, providing a revolving credit facility up to \$15,000,000. The facility is available through March 19, 2025, with all outstanding principal due by March 19, 2026. Advances bear interest at the lesser of the prime rate (per The Wall Street Journal, with a 0.00% floor) or the highest lawful rate, payable monthly. As of December 31, 2024, the outstanding balance was \$0, with a weighted average interest rate of 0.00%. Interest expense for the year ended December 31, 2024, was \$19,930. {15}------------------------------------------------ #### SUPPLEMENTAL INFORMATION {16}------------------------------------------------ ## **PEP ADVISORY LLC SCHEDULE I DECEMBER 31, 2024** | 1/15%
\$
of
26,634
aggregate
indebtedness
100,000
Minimumdollar
requirement
Net
1 ,054,508
capital
954,508
\$
Excess
net
capital
399,508
Aggregate
indebtedness
37.89%
of
to
Ratio
aggregate
indebtedness
net
capital
120,000
120%
ofrequired
net
capital
\$
934,508
Net
of
120%
of
capital
excess
required
net
capital
in
3,576,239
\$
Total
assets
541,425
Less:
total
liabilities
Less:
141,917
deferred
revenue
399,508
Aggregate
indebtedness
3,034,814
Net
worth
and/or
charges
worth
Deductions
from
to
net
1,980,306
\$
non-allowable
Total
assets
1,980,306
Total
deductions
fromnet
worth
1,054,508
Net
on
capital
before
haircuts
securities
positions
on
of
and
Haircuts
certificates
deposit
paper
commercial
Other
securities
Other
positions
Undue
concentrations
ofsecurities
Total
haircuts
\$
1,054,508
Net
capital | requirement,
Net
capital | of
greater
the | | | \$
100,000 | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------|----------------------|--|--|---------------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | There are no material differences between the amounts presented above and the amounts reported on the Company's FOCUS report as ofDecember 31, 2024. {17}------------------------------------------------ #### Schedule **II & III** #### PEP ADVISORY LLC #### Computation For Determination Of Reserve Requirements And Information Relating To Possession Or Control Requirements Under Rule 15c3-3 of the Securities and Exchange Commission #### December 31.2024 The Company is considered a Non-Covered Firm exempt from 17 C.F.R. § 240.15c3-3 relying on Footnote 74 of the SEC Release No.34-70073 adopting amendments to 17 C.F.R. § 240.17a-5. The Company limitsits business activities exclusively to receiving transaction-based compensation for identifying potential merger and acquisition opportunities for clients and private placements of securities. As a Non-Covered Firm, the Computation of Determination of the Reserve Requirements and Information Relating to the Possession or Control Requirements are not required. {18}------------------------------------------------ ![](_page_18_Picture_0.jpeg) #### Report of Independent Registered Public Accounting Firm To the Member and Those Charged With Governance of PEP Advisory LLC We have reviewed management's statements, included in the accompanying Exemption Report, in which PEP Advisory LLC (the Company) stated that: - 1. The Company does not claim an exemption under paragraph (k) of 17 C.F.R. § 240.15c3-3; - 1. The Company is filing an Exemption Report relying on Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5 because the Company limits its business activities exclusively to (1) selling group participants in a firm commitment underwriting, advising clients in connection with securities transactions made with relation to mergers and acquisitions and private placements throughout the most recent fiscal year; and - 2. The Company (1) did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers (other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of 17 C.F.R. § 240.15c2-4;(2) did not carry accounts of or for customers; and (3) did not carry proprietary accounts of broker-dealers (as defined in 17 C.F.R.§ 240.15c3-3) throughout the most recent fiscal year without exception. The Company's management is responsible for 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 that the Company limited its business activities exclusively to (1) selling group participants in a firm commitment underwriting, advising clients in connection with securities transactions made with relation to mergers and acquisitions and private placements and (1) did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers (other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of 17 C.F.R. § 240.15c2-4; (2) did not carry accounts of or for customers; and (3) did not carry proprietary accounts of broker-dealers (as defined in 17 C.F.R. § 240.15c3-3) throughout the most recent fiscal year without exception. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements.Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to management's statements referred to above for them to be fairly stated,in all material respects, based on the provisions set forth in 17 C.F.R. § 240.17a-5. Dallas, Texas March 6, 2025 **325 North Saint Paul Street Suite 3100 Dallas, Texas 75201 214.738.1998** {19}------------------------------------------------ **PEP Advisory LLC 100 Waugh Drive, Suite 600 / Houston, Texas 77007 713-804-7575** #### Exemption Report PEP Advisory LLC (the "Company") is a registered broker-dealer subject to Rule 17a-5 promulgated by the Securities and Exchange Commission (17 C.F.R. §240.17a-5, "Reportsto 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 belief, the Company states the following: (1) The Company does not claim an exemption under paragraph (k) of 17 C.F.R. § 240. 15c3-3, and (2) The Company is filing this Exemption Report relying on Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5 because the Company limits its business activities exclusively to Selling Group Participants in a Firm Commitment Underwriting, Private placement of securities, publish and distribute research, participation in commission sharing program related to research activities and merges and acquisitions advisory services. #### PEP Advisory LLC I, Walker Moody,swear (or affirm) that, to my best knowledge and belief this Exemption Report istrue and correct. Walker Moody, ChiefExecutive Officer January 10, 2025 Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.