# ARKADIOS CAPITAL, LLC X-17A-5 (2024-03-29) — Broker-dealer annual report - Company: ARKADIOS CAPITAL, LLC - Form: X-17A-5 - Filed: 2024-03-29 - Period: 2023-12-31 - Accession: 0001663996-24-000002 - CIK: 1663996 - File #: 8-69729 - Type: Broker-dealer - Material weakness: No - Auditor: DAVID LUNDGREN AND COMPANY - Auditor location: OLATHE, KS - Contact: NATALIE MILLER - Phone: 404-480-4629 - Email: nmiller@arkadios.com - Website: arkadios.com - Signed by: DAVID MILLICAN (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1663996/000166399624000002/arkadiosaudit23.pdf --- {0}------------------------------------------------ | | UNITED STATES | PP OVA | |----------------------------------------------|--------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------| | | SECURITIES AND EXCHANGE COMMISSION
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12 | | | ANNUAL REPORTS | | | | FORM X-17A-5 | SEC FILE NUMBER | | | PART Ill | | | | | | | | FACING PAGE
Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 | | | FILING FOR THE PERIOD BEGINNING 0 1/01 /23 | | AND ENDING 12/31 /23 | | | MM/0D/YY | MM/DD/YY | | | A. REGISTRANT IDENTIFICATION | | | | | | | NAME or FR,. Arkadios Capital | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.)
309 East Paces Ferry Road Suite 1000 | | | | (No. and Street) | | | Atlanta | GA | 30305 | | (City) | (State) | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | Natalie Miller | 404-480-4629 | nmiller@arkadios.com | | (Name) | (Area Code -- Telephone Number) | (Email Address) | | | B. ACCOUNTANT IDENTIFICATION | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing | | | | | | | David Lundgren and Company | (Name -- if individual, state last, first, and middle name) | | | | | | | | KS | 66062 | |--------|---------|--------------------------------------------------------------------------| | (City) | (State) | (Zip Code) | | | | | | | | | | | | | | | | | | | Olathe | 6075
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FOR OFFICIAL USE ONL V | Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-5(e)(1)(ii), if applicable. **Persons who are to respond to the collection of information contained** in **this form are not required to respond unless the form displays a currently valid 0MB control number.** {1}------------------------------------------------ #### **OATH OR AFFIRMATION** | | I, David Mihcan
swear (or affirm) that, to the best of my knowledge and belief, the | | | | |-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--| | | financial report pertaining to the firm of Arkadios Capital
as of | | | | | | 12/31
20@,is true and correct. 1further 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.
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a ta) statement or fan¢al coi6,NTY, | | | | | | ii (b) Notes to consolidated statemehf 6#nit)) baition. | | | | | | 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). | | | | | | iii (d) Statement of cash flows. | | | | | ii | (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. | | | | | ii | (f) Statement of changes in liabilities subordinated to claims of creditors. | | | | | ii | (g) Notes to consolidated financial statements. | | | | | ii | (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. | | | | | i | (i) Computation of tangible net worth under 17 CFR 240.18a-2. | | | | | ii | (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. | | | | | | D (kl Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.1Sc3-3 or | | | | | | Exhibit A to 17 CFR 240.18a-4, as applicable. | | | | | | D (I) Computation for Determination of PAB Requirements under Exhibit A to 5 240.15c3-3.
D (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 explanations, of the FOCUS Report with computation of net capital or tangible net | | | | | | worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-1, or 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17
CFR 240.1Sc3-3 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. | | | | | | ii (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.
ii (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. | | | | | | ii (t) Independent public accountant's report based on an examination of the statement of financial condition. | | | | | | ii (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. | | | | | | ii (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. | | | | | | ii (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. | | | | | | ii (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-1e 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).
D (z) Other:
_ | | | | {2}------------------------------------------------ ARKADIOS CAPITAL LLC STATEMENT OF FINANCIAL CONDITION For the Year Ended December 31, 2023 With Report of Independent Registered Public Accounting Firm {3}------------------------------------------------ # ARKADIOS CAPITAL LLC FINANCIAL STATEMENTS for the Year Ended December 31, 2023 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 Member Equity | 4 | | | Statement of Cash Flows | 5 | | | Notes to Financial Statements | | | | Schedule I- Computation of Net Capital Under Rule 15c3-1 of the Securities
and Exchange Commission | | | | Schedule II- Computation for Determination of Reserve Requirements under
the Securities and Exchange Commission Rule 15c3-3 | | | | Schedule III - Information Relating to the Possession or Control Requirements
under the Securities and Exchange Commission Rule 15c3-3 | | | {4}------------------------------------------------ #### **DAVID LUNDGREN** & **COMPANY** CERTIFIED PUBLIC ACCOUNTANTS, CHARTERED 505 NORTH MUR-LEN ROAD OLATHE, KANSAS 66062 DAVID B. LUNDGREN, **MBA,** CPA TELEPHONE (913) 782-9530 FACSIMILE (913) **782-9564** #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Members of Arkadios Capital LLC #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of Arkadios Capital LLC as of December 3 1, 2023, the related statements of operations, changes in member's equity, and cash flows for the year then ended, and the related notes and schedules (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of Arkadios Capital LLC as of December 3 1, 2023, 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 Arkadios Capital LLC's management. Our responsibility is to express an opinion on Arkadios Capital LL C'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 Arkadios Capital LLC 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. 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** Schedules I, II, Ill have been subjected to audit procedures performed in conjunction with the audit of Arkadios Capital LLC's financial statements. The supplemental information is the responsibility of Arkadios Capital LLC'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. \$240.17a-5. In our opinion, the Schedules I, II, Ill are fairly stated, in all material respects, in relation to the financial sta�·m•��hole / 22.Z±*<7 4* We have served as Arkadios Capital LLC's auditor since 2017. Olathe, Kansas March 29, 2024 {5}------------------------------------------------ # **ARKADIOS CAPITAL LLC STATEMENT OF FINANCIAL CONDITION Year Ended December 31, 2023** #### ASSETS | Cash and cash equivalents
Deposit with clearing organization | 2,228,973
\$
150,000 | |-----------------------------------------------------------------|----------------------------| | Receivables: | | | Clearing organizations | 2,709,828 | | Other Receivables | 278,707 | | Financial instruments owned, at fair value: | | | Fixed Assets, net of depreciation | 612,069 | | Prepaid expenses and other assets | 3,254,611 | | Total Assets | 9,234,188
\$ | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | LIABILITIES | | | Accounts payable and accrued expenses | 420,676 | | Commissions payable | 1,745,892 | | Due to Bond Group | 800,000 | | Contingent liability | 100,000 | | Total Liabilities | 3,066,568
\$ | | STOCKHOLDERS' EQUITY | | | Member's Equity | 6,167,620 | | Total Liabilities and Equity | 9,234,188
\$ | {6}------------------------------------------------ #### **ARKADIOS CAPITAL LLC STATEMENT OF INCOME Year Ended December 31, 2023** | REVENUES | | |-------------------------------------------|---------------| | Brokerage commissions | \$ 29,465,708 | | Consulting income | 646,311 | | Advisory fees | 14,009,626 | | Mutual funds and insurance product trails | 8,873,039 | | Trading, proprietary | 6,048,130 | | Other revenue | 6,594,440 | | Net Revenues | 65,637,254 | | | | | GENERAL AND ADMINISTRATIVE EXPENSES | | | Commissions, compensation, and benefits | 41,595,821 | | Advisory fees | 11,973,222 | | Clearing fees | 1,111,193 | | Communications, information technology | 644,927 | | Consulting fees | 639,193 | | Interest expense | 58,514 | | Licenses and registrations | 72,351 | | Occupancy costs | 423,140 | | Professional fees | 342,032 | | Sundry costs, other trade fees | 897,966 | | Travel and entertainment | 326,352 | | Other operating expenses | 2,969,143 | | Total expenses | 61,053,854 | | NET OPERA TING INCOME | \$ 4,583,400 | {7}------------------------------------------------ ## **ARKADIOS CAPITAL LLC STATEMENT OF CHANGES IN MEMBERS' EQUITY Year Ended December 31, 2023** Beginning Balance, December 31, 2022 Member's Draw Net Income Ending Balance, December 31, 2023 3,604,220 (2,020,000) 4,583,400 6,167,620 {8}------------------------------------------------ ## **ARKADIOS CAPITAL LLC STATEMENT OF CASH FLOWS Year Ended December 31, 2023** ## CASH FLOWS FROM OPERA TING ACTIVITIES: | Net income | \$ 4,583,400 | |---------------------------------------------------------------------------------------------------|----------------| | Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation | 56,582 | | Changes in operating assets and liabilities: | | | (Increase) in Furniture and Equipment | (623,964) | | (Increase) in receivable from broker dealer | (1,052,673) | | (Decrease) in Accounts Receivable | 238,911 | | (Increase) in Forgivable Loans | (1,216,889) | | (Increase) in Non Forgivable Loans | (225,542) | | (Decrease) in Rep Commission Payable | 560,628 | | (Increase) in other assets | (22,694) | | (Decrease) in accounts payable & accrued expenses | 101,200 | | NET CASH PROVIDED BY OPERA TING ACTIVITIES | 2,398,959 | | CASH FLOWS FROM FINANCING ACTIVITIES:
Member Distributions | (2,020,000) | | NET CASH (USED) BY FINANCING ACTIVITIES | \$ (2,020,000) | | NET (INCREASE) IN CASH AND CASH EQUIVALENTS | (378,959) | | CASH AND CASH EQUIVALENTS BALANCE:
Beginning of year | 1,951,583 | | End of year | \$ 2,330.542 | {9}------------------------------------------------ # NOTE A -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Description of Business: Arkadios Capital LLC (the "Company"), a Georgia Limited Liability Company organized in November 2018, is a securities broker-dealer registered with the Securities and Exchange Commission ("SEC") and the Financial Industry Regulatory Authority ("FINRA") approved on October 17, 2016. The Company was previously known as MSY Securities, LLC, a Georgia limited liability company. The Company adopted the new name of Arkadios Capital LLC effective November 21, 2016. The Company is wholly-owned by Arkadios Holdings, Inc. (the "Parent"). The Company operates as a "general securities" broker-dealer executing trades for institutional and retail customers. The Company does not carry customer accounts or perform custodial functions relating to customer securities. Customers of the Company are introduced to a carrying broker-dealer (the "clearing broker") on a fully disclosed basis. The Company's customer are located throughout the United States. A summary of the Company's significant accounting policies are as follows: Accounting policies: The Company follows generally accepted accounting principles (GAAP), as established by the Financial Accounting Standards Board (the FASB) to ensure consistent reporting of financial condition, results of operations, and cash flows. Cash and Cash Equivalents: The Company considers all cash and money market instruments with a maturity of ninety days or less to be cash and cash equivalents. The Company maintains its demand deposits in a high credit quality financial institution. Balances at times may exceed federally insured limits. Property and Equipment: Property and equipment are recorded at cost. Depreciation is provided by use of straight-line methods over the estimated useful lives of the respective assets. Maintenance and repairs are charged to expense as incurred; major renewals and betterments are capitalized. When items of property or equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in the results of operations. Depreciation expense for 2023 was \$56,582. **Income Taxes:** The Company is taxed as a sole proprietorship. Therefore the income or losses of the Company flow through to its member and no income taxes are recorded in the accompanying financial statements. {10}------------------------------------------------ # NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Income Taxes (Continued): The Company has adopted the provisions of F ASB Accounting Standards Codification 740-10, Accounting for Uncertainty in Income Taxes. Under ASC 740-10, the Company is required to evaluate each of its tax positions to determine if they are more likely than not to be sustained if the taxing authority examines the respective position. A tax position includes an entity's status, including its status as a pass-through entity, and the decision not to file a tax return. The Company has evaluated each of its tax positions and has determined that no provision or liability for income taxes is necessary. Tax years 2020,2021 and 2022 are open. Estimates: Management uses estimates and assumptions in preparing financial statements in accordance with GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could vary from the estimates that were assumed in preparing the financial statements. Revenue Recognition: The Company earns Investment Advisory Fees from its contracts with brokerage customers to manage assets for investment, and/or to transact on their accounts. The Investment Advisory Fees are primarily earned over time as the Company provides the contracted monthly services and are generally assessed based on a tiered scale of the market value of assets under management (AUM) at month-end. The Company earns brokerage fees from its contracts with brokerage customers to transact on their account. Fees are transaction based, including trade execution services, are recognized at the point in time that the transaction is executed, i.e., the trade date. This includes riskless principal (government and corporate bonds) transactions in which the company receives a buy order from a customer and the Company purchases the security from another person or entity to offset the sale to the customer. Company buys the bond at a lower price than it sells it. The riskless principal revenue is earned at the time the transaction is executed. Other related services provided include financial planning services and the fees the Company earns, which are based on a fixed fee schedule, are recognized when the services are rendered. The Company elected the modified retrospective approach of adoption. Mutual Funds: Mutual Funds or pooled investment vehicles (collectively, "funds") have entered into agreements with the Company to distribute/sell its shares to investors. Fees are paid up front and over time (12b-1 fees) on the basis of a contractual rate applied to the monthly or quarterly market value of the fund (that is, net asset value, the fund may also pay, upon investor exit from the fund (that is, a contingent deferred sales charge), or as a combination thereof. Revenue is recognized monthly as services are provided. {11}------------------------------------------------ # NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Principal Trading Revenue: Principal transactions include revenues from customers' purchases and sales of financial instruments, including fixed income and municipal securities, in which we transact on a principal basis. To facilitate such transactions, we carry inventories of financial instruments. The gains and losses on such inventories, both realized and unrealized, are reported as principal trading revenues. Securities Transactions: Principal transactions and related revenues and expenses are recorded at fair value on a trade-date basis (as if they had settled). Profit and loss arising from all securities transactions entered into for the account and risk of the Company are recorded in trading revenue in the statement of operations. Amounts receivable and payable for securities transactions that have not reached their contractual settlement date are recorded net as receivable from clearing broker on the statement of financial condition. Date of Management's Review: Subsequent events were evaluated through the date of the financials statements, the date which the financial statements were available to be issued. Accounting Standards: The Company is evaluating new accounting standards and will implement as required. NOTE B LEASES The Company does not have any lease obligations. NOTE C -NET CAPITAL The Company, as a registered broker dealer is subject to the Securities and Exchange Commission Uniform Net Capital Rule (Rule 15c3-1), 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. At December 31, 2023, the Company had net capital of \$2,402,510, which was \$2,204,739 in excess of its required net capital of\$197,771 and its ratio of aggregate indebtedness to net capital was 0. 10 to 1.0. NOTE D-OFF BALANCE SHEET RISK In the normal course of business, the Company's customers execute securities transactions through the Company. These activities may expose the Company to off balance sheet risk in the event the customer or other broker is unable to fulfill its contracted obligations and the Company has to purchase or sell the financial instrument underlying the contract at a loss. {12}------------------------------------------------ # NOTE E -FAIR VALUE F ASB ASC 820 defines fair value, establishes a framework for measuring fair value, and establishes a fair value hierarchy which prioritizes the inputs to valuation techniques. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Valuation techniques that are consistent with the market, income or cost approach, as specified by F ASB ASC 820, are used to measure fair value. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: - Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities the Company has the ability to access. - Level 2 inputs are inputs ( other than quoted prices included within level 1) that are observable for the asset or liability, either directly or indirectly. - Level 3 are unobservable inputs for the asset or liability and rely on management's own assumptions about the assumptions that market participants would use in pricing the asset or liability. The following table presents the Company's fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2023. | | Fair Value | | | | | |----------------------|--------------|-----------|-----------|-----------|--| | | Measurements | Level 1 | Level2 | Leve 3 | | | | 2023 | Valuation | Valuation | Valuation | | | Securities
owned, | | | | | | | municipal
bonds | \$
0 | \$ - 0­ | | \$ - 0­ | | | Total | 0
\$ | \$-0­ | | \$ - 0­ | | {13}------------------------------------------------ # NOTE E -FAIR VALUE (CONTINUED) The fair value of these Level 2 securities is based on a market approach with prices obtained from third party pricing services. Observable inputs used to value these securities can include, but are not limited to, reported trades, benchmark yields, issuer spreads and non-binding broker quotes. There were no transfers between Level 1 and Level 2 during the year. The availability of observable inputs can vary from instrument to instrument and is affected by a wide variety of factors, including, for example, the type of instrument, whether the instrument is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the instrument. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an instrument's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the instrument. Fair value of investments securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges when available. If quoted prices are not available, fair value is determined using matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities' relationship to other benchmark quoted securities. State and municipal government obligations which include U.S. Government securities and Government-sponsored enterprises are stated at fair value based on third-party dealer quotes. These financial instruments are classified in Level 2 of the fair value hierarchy. # NOTE F -CLEARING BROKER AND CLEARANCE AGREEMENT The Company has an agreement with a clearing broker to execute and clear, on a fully disclosed basis, customer accounts of the Company. In accordance with this agreement, the Company is required to maintain a deposit in cash or securities. The deposit with its clearing broker is refundable but, subject to offsets, if and when the Company ceases doing business with the clearing broker. {14}------------------------------------------------ # NOTE F CLEARING BROKER AND CLEARANCE AGREEMENT (CONTINUED) The Company's clearing agreement requires that a minimum balance of \$150,000 be maintained on deposit with the clearing broker and that minimum net capital of \$250,000 be maintained. The Company was in compliance with respect to this agreement as of December 3 1, 2023. NOTE G-RELATED PARTY TRANSACTIONS The Company has an expense sharing agreement with the Parent. Under the agreement the Company pays the Parent monthly fees for use of office facilities. The amount expensed in the financial statements for 2022 is approximately \$423,139.94. The Company receives reimbursed expenses from a related party. The amount recorded as income in the financial statements for 2022 is approximately \$79,053.86. NOTE H - PROPERTY AND EQUIPMENT A summary of the cost and accumulated depreciation of premises and equipment follows: | December 3 1, 20223 | | |------------------------------|-----------| | Website, at cost | \$ 15,754 | | Computer equipment, at cost | 88,024 | | Furniture equipment, at cost | 789,483 | | Accumulated depreciation | (281,192) | | Property and equipment, net | \$612,069 | The Company uses the straight-line depreciation method over the useful life of the asset. Depreciation expense for the year ended December 3 1, 2022 amounted to \$56,582 NOTE I - CONTINGENCIES AND CLAIMS The Company carries a contingent liability in the amount of \$100,000 for the deductible on its E&O policy. NOTE J-NOTE PAYABLE The Company entered into a Promissory Note in 2019. The note gives the Company the option to borrow up to \$1,500,000. The outstanding principal amount shall bear interest at the rate of 5% per year. As of December 3 1, 2023, the Company had a balance borrowed of \$0 on the note. {15}------------------------------------------------ # NOTE KNEW ACCOUNTING PRONOUNCEMENT In February 2016, FASB issued ASU 2016-02, Leases (Topic 842). FASB issued ASU 2016-02 to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Certain qualitative and quantitative disclosures are required, as well as retrospective recognition and measurement of impacted leases. The new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2021, with early adoption permitted. Management is currently evaluating this standard. # NOTE L- ACCOUNTS RECEIVABLE Accounts receivable consist of commission receivable from clearing broker and other trade receivables. The Company regularly reviews its accounts receivable for any bad debts. The review for bad debts is based on an analysis of the Company's collection experience, customer worthiness, and current economic trends. The Company believes all receivables are collectible and no allowance is needed. {16}------------------------------------------------ # SUPPLEMENT AL INFORMATION {17}------------------------------------------------ #### **ARKADIOS SCHEDULE I CAPITAL LLC** ## **COMPUTATION OF NET CAPITAL UNDER RULE 15c3-1 OF THE SECURITIES AND EXCHANGE COMMISSION ACT OF 1934 AS OF DECEMBER 31, 2023** # NET CAPITAL: | Total members' equity | \$6,167,620 | |-------------------------------------------------------------------------------------------------------------|-----------------------| | Less nonallowable assets:
Other assets | (3.765.110) | | Net capital before haircuts | 2,402,510 | | Less haircuts | (0) | | Net capital
Minimum net capital required | 2,402,510
(97,771) | | Excess net capital | \$2,204,739 | | Aggregate indebtedness total liabilities, less securities bought,
And securities sold, not yet purchased | \$2,966.568 | | Net capital based on aggregate indebtedness | \$2,204,739 | | Ratio of aggregate indebtedness to net capital | 0.1010 1.0 | RECONCILIATION WITH COMPANY'S COMPUTATION OF NET CAPITAL INCLUDED IN PART IIA OF FORM X-17A-5 AS OF DECEMBER 31, 2023. There was no significant difference between the net capital in Part IIA of Form X-17A-5 and net capital above. {18}------------------------------------------------ # **ARKADIOS CAPITAL LLC** # **SCHEDULE** II **COMPUTATION FOR DETERMINATION OF RESERVE REQUIREMENTS UNDER RULE 15c3-3 OF THE SECURITIES AND EXCHANGE COMMISSION AS OF DECEMBER 31, 2023** The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934, pursuant to paragraph (k)(2)(ii) of the Rule, and was in compliance with the conditions of the exemption at December 31, 2023. # **SCHEDULE** III **INFORMATION RELATING TO THE POSSESSION OR CONTROL REQUIREMENTS UNDER RULE 15c3-3 OF THE SECURITIES AND EXCHANGE COMMISSION AS OF DECEMBER 31, 2023** The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934, pursuant to paragraph (k)(2)(ii) of the Rule, and was in compliance with the conditions of the exemption at December 31, 2023. {19}------------------------------------------------ **DAVID LUNDGREN & COMPANY** CERTIFIED PUBLIC ACCOUNTANTS, CHARTERED 505 NORTH MUR-LEN ROAD OLATHE, **KANSAS 66062** DAVID B. LUNDGREN, MBA, CPA TELEPHONE (913) 782-9530 FACSIMILE (913) **782-9564** #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Members of Arkadios Capital LLC We have reviewed management's statements, included in the accompanying Exemption Report in which (1) Arkadios Capital LLC identified the following provisions of 17 C.F.R. \$15c3-3(k) under which Arkadios Capital LLC claimed an exemption from 17 C.F.R. §240.15c3-3: (k)(2)(ii) (exemption provisions) and (2) Arkadios Capital LLC stated that Arkadios Capital LLC met the identified exemption provisions throughout the most recent fiscal year without exception. Arkadios Capital LLC'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 Arkadios Capital LLC'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 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 paragraph (k)(2)i of Rule 15c3-3 under the Securities Exchange Act of 1934. *7, \_4/(* Olathe, Kansas March 29, 2024 {20}------------------------------------------------ 309 E. Paces Ferry Rd.] Suite 1000 ] Atlanta GA 30305 Office 1 404.445.0035 **A RKADI OS** C A **P** T A L March 14. 2024 David Lundgren & Co 505 N. Mur-Len Road Olathe, KS 66062 (913) 782-9530 Attention: David Lundgren Arkadios Capital LLC (the " Company") is a registered broker-dealer subject to Rule l 7a-5 promulgated by the Securities and Exchange Commission (I7C.F.R. 240.17a-5, " Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by I7C 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 claimed an exemption from I7C.F.R. \$240.1 5c3-3 under the following provisionsof 17C.F.R. \$240.15c3-3(k)02)(ii): - (2) The Company met the identified exemption provisions in 17CF.R. 8240.15c3-3(k)02)(ii) from January I, 2023 through December 31, 2023 without exception. I, David Millican affirm that, to the best of my knowledge and belief, this Exemption report is true and correct. ·gf== Title: CEO Date: March 24, 2024 {21}------------------------------------------------ DAVID B. LUNDGREN, **MBA,** CPA TELEPHONE (913) 782-9530 **FACSIMILE** (913) **782-9564** #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON APPL YING AGREED-UPON PROCEDURES #### Board of Directors of Arkadios Capital LLC We have performed the procedures included in Rule 17a-5(e)(4) under the Securities Exchange Act of 1934 and with the Securities Investor Protection Corporation (SIPC) Series 600 Rules, which are enumerated below, which were agreed to by Arkadios Capital LLC (Company) and the SIPC, solely to assist you and the SIPC in evaluating the Company's compliance with the applicable instructions of the General Assessment Reconciliation (Form SIPC-7) for the year ended December 31, 2023. Management of the Company is responsible for its Form SIPC-7 and for its compliance with those requirements. This agreedupon procedures engagement was conducted in accordance with attestation standards of the Public Company Accounting Oversight Board (United States) and in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures we performed and our findings are as follows: - 1) Compared the listed assessment payments in Form SIPC-7 with respective bank disbursement records entries, noting no differences; - 2) Compared the Total Revenue amount reported on the Annual Audited Report Form X-17A-5 Part Ill for the year ended December 3 1, 2023 with the Total Revenue amount reported in Form SIPC-7 for the year ended December 31, 2023, noting no differences; - 3) Compared any adjustments reported in Form SIPC-7 with supporting schedules and working papers, noting no differences; - 4) Recalculated the arithmetical accuracy of the calculations reflected in Form SIPC-7 and in the related schedules and working papers supporting the adjustments, noting no differences; and - 5) Compared the amount of any overpayment applied to the current assessment with the Form SIPC-7 on which it was originally computed, noting no differences. We were not engaged to, and did not conduct an examination, the objective of which would be the expression of an opinion on compliance with the applicable instructions of the Form SIPC-7. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the information and use of the specified parties listed above and is not intended to be and should not be used by anyone other than these specified parties. **2ah A** March 29, 2024 {22}------------------------------------------------ #### SECURITIES INVESTOR PROTECTION CORPORATION SIPC-7 37 REV0722 # **GENERALASSESSMENTFORM** For the fiscal year ended 12/31/2023 | L | Determination of "SIPC NET Operating Revenues" and General Assessment for:
MEMBER NAME
ARKADIOS CAPITAL LLC | SEC No.
8-69729 | | |---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------|------------------| | | 1/1/2023
and ending
For the fiscal period beginning | 12/31/2023 | | | 1 | Total Revenue (FOCUS Report- Statement of Income (Loss) - Code 4030) | | \$ 65,637,253.00 | | 2 | Additions: | | | | | a Total revenues from the securities business of subsidiaries (except foreign
subsidiaries) and predecessors not included above. | | | | | b Net loss from principal transactions in securities in trading accounts.
c Net loss from principal transactions in commodities in trading accounts. | | | | | | | | | | d Interest and dividend expense deducted in determining item 1.
e Net loss from management of or participation in the underwriting or
distribution of securities. | | | | | f Expenses other than advertising, printing, registration fees and legal fees
deducted in determining net profit management of or participation in
underwriting or distribution of securities. | | | | | g Net loss from securities in investment accounts. | | | | | h Add lines 2a through 2g. This is your total additions. | | \$ 0.00 | | 3 | Add lines 1 and 2h | | \$65,637,253.00 | | 4 | Deductions: | | | | | a Revenues from the distribution of shares of a registered open end investment
company or unit investment trust, from the sale of variable annuities, from the
business of insurance, from investment advisory services rendered to
registered investment companies or insurance company separate accounts
and from transactions in security futures products. | \$ 25,125,048.00 | | | | b Revenues from commodity transactions. | | | | | c Commissions, floor brokerage and clearance paid to other SIPC members
in connection with securities transactions. | \$ 1,111,193.00 | | | | d Reimbursements for postage in connection with proxy solicitations. | | | | | e Net gain from securities in investment accounts. | \$ 6,048, 130.00 | | | | f 100% commissions and markups earned from transactions in (I) certificates
of deposit and (ii) Treasury bills, bankers acceptances or commercial paper
that mature nine months or less from issuance date. | \$ 118,457.00 | | | | g Direct expenses of printing, advertising, and legal fees incurred in connection
with other revenue related to the securities business (revenue defined by
Section 16(9)(L) of the Act). | | | | | h Other revenue not related either directly or indirectly to the securities business.
Deductions in excess of \$100,000 require documentation | | | | 5 | a Total interest and dividend expense (FOCUS Report - Statement
of Income (Loss)- Code 4075 plus line 2d above) but
not in excess of total interest and dividend income
\$ 98,514.00 | | | | | b 40% of margin interest earned on customers securities accounts
(40% of FOCUS Report - Statement of Income (Loss)­
Code 3960) | | | | | c Enter the greater of line 5a or 5b | \$98,514.00 | | | 6 | Add lines 4a through 4h and 5c. This is your total deductions. | | \$ 32,501,342.00 | {23}------------------------------------------------ SIPC-7 37 REV0722 SIPC-7 37 REV0722 ## **GENERALASSESSMENTFORM** For the fiscal year ended 12/31/2023 | 7 | Subtract line 6 from line 3. This is your SIPC Net Operating Revenues. | | | | \$ 33,135,911.00 | |-------------------------------------|-------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------|--------------------|--------------|------------------| | 8 | Multiply line 7 by .0015. This is your General Assessment. | | | | \$49,703.00 | | 9 | Current overpayment/credit balance, if any | | | | \$ 0.00 | | 10 | | General assessment from last filed 2023 SIPC-6 or 6A | | \$19,366.00 | | | 11 | a Overpayment(s) applied on all 2023 SIPC-6 and 6A(s)
b Any other overpayments applied | | \$ 0.00
\$ 0.00 | | | | | d Add lines 11a through 11c | c All payments applied for 2023 SIPC-6 and 6A(s) | \$19,366.00 | \$19,366.00 | | | 12 | LESSER of line 10 or 11d. | | | | | | | \$49,703.00
13 a Amount from line 8 | | | | | | | \$ 0.00
b Amount from line 9 | | | | | | | c Amount from line 12 | | | \$19,366.00 | | | | | d Subtract lines 13b and 13c from 13a. This is your assessment balance due. | | | \$30,337.00 | | 14 | Interest (see instructions) for
O
days late at 20% per annum | | | | | | 15 | [Amount you owe SIPC. Add lines 13d and 14. | | | | s
3o,337.0] | | 16 | Overpayment/credit carried forward (if applicable) | | | \$ 0.00 | | | 8-69729 | SEC No. | Designated Examining Authority
DEA: FINRA | FYE
2023 | Month
Dec | | | MEMBER NAME
MAILING ADDRESS
1 | | ARKADIOS CAPITAL LLC
309 E PACES FERRY RD STE 1000
ATLANTA, GA 30305 | | | | Subsidiaries (S) and predecessors (P) included in the form (give name and SEC number) By checking this box, you certify that you have the authority of the SIPC member to sign this form; that all information in this form is true and complete; and that on behalf of the SIPC member, you are authorized, and do hereby consent, to the storage and handling by SIPC of the data in accordance with SIPC's Privacy Policy | ARKADIOS CAPITAL LLC | Natalie Miller | | | |-----------------------|------------------------|--|--| | (Name of SIPC Member) | (Authorized Signatory) | | | | 2/13/2024 | nmiller@arkadios.com | | | | (Date) | (e-mail address) | | | Completion of the "Authorized Signatory" line will be deemed a signature. *This form and the assessment payment are due 60 days after the end of the fiscal year.* Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.