# XLII FINANCIAL SERVICES LLC X-17A-5 (2026-05-14) — Broker-dealer annual report - Company: XLII FINANCIAL SERVICES LLC - Form: X-17A-5 - Filed: 2026-05-14 - Period: 2026-03-31 - Accession: 0001711358-26-000002 - CIK: 1711358 - File #: 8-69986 - Type: Broker-dealer - Material weakness: No - Auditor: Phillip V George - Auditor location: Celeste, TX - Contact: Clarence Anderson - Phone: 972-721-3613 - Email: clarencejanderson@yahoo.com - Signed by: Clarence Anderson (President) Original filing: https://www.sec.gov/Archives/edgar/data/1711358/000171135826000002/XLIIfinancialaudit2026.pdf --- {0}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 # ANNUAL REPORTS FORM X-17A-5 PART III | - DIVID ALL ROVAL | |--------------------------| | OMB Number: 3235-0123 | | xpires: Nov. 30, 2026 | | stimated average burden | | ours per response:
12 | | | | | SEC FILE NUMBER 8-69986 IAAD ADDROWAI #### FACING PAGE Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 AND ENDING 03/31/2026 FILING FOR THE PERIOD BEGINNING 04/01/2025 MM/DD/YY A. REGISTRANT IDENTIFICATION NAME OF FIRM: XLII Financial Services, LLC TYPE OF REGISTRANT (check all applicable boxes): Broker-dealer □ Check here if respondent is also an OTC derivatives dealer ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) 10023 Apple Creek Drive (No. and Street) 75423 Dallas Texas (Zip Code) (State) (City) PERSON TO CONTACT WITH REGARD TO THIS FILING Clarence Anderson 972-721-3613 clarencejanderson@yahoo.com (Area Code – Telephone Number) (Email Address) (Name) B. ACCOUNTANT IDENTIFICATION INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing\* Phillip V. George, PLLC (Name - if individual, state last, first, and middle name) 75423 5179 CR 1026 Celeste Texas (State) (Zip Code) (City) (Address) 3366 2/24/2009 (PCAOB Registration Number, if applicable) (Date of Registration with PCAOB)(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 accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-5(e)(1)(ii), if applicable. Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. {1}------------------------------------------------ #### OATH OR AFFIRMATION | Clarence Anderson | swear (or affirm) that, to the best of my knowledge and belief, the | | |-------------------------------------------------------------------------|---------------------------------------------------------------------|-------| | tinancial report pertaining to the firm of XLII Financial Services, LLC | | as of | | 3/37 | 2 026 | | partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any accoupt classified solely as that of a customer. Signatur Title: President #### This filing\*\* contains (check all applicable boxes): - (a) Statement of financial condition. - □ (b) Notes to consolidated statement of financial condition. - | {c} Statement of income (loss) or, if there is other comprehensive income in the period(s) presented, a statement of comprehensive income (as defined in § 210.1-02 of Regulation S-X). - (d) Statement of cash flows. - = (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - [] (f) Statement of changes in liabilities subordinated to claims of creditors. - (g) Notes to consolidated financial statements. - @ (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. - □ (i) Computation of tangible net worth under 17 CFR 240.18a-2. - {j} Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - □ {k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit 8 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. - (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. - {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-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. - (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. - □ pursuant to Rule 17a-5 | 9 | | | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 10 | | | EXEMPTION REPORT | 11 | | {3}------------------------------------------------ # REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Member XLII Financial Services LLC #### Opinion on the Financial Statements We have audited the accompanying statement of financial condition of XLII Financial Services LLC as of March 31, 2026, the related statements of income, changes in member's equity, and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of XLII Financial Services LLC as of March 31, 2026, 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 XLII Financial Services LLC's management. Our responsibility is to express an opinion on XLII Financial Services LLC'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 XLII Financial Services 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. #### Auditor's Report on Supplemental Information The supplemental information contained in Schedule I has been subjected to audit procedures performed in conjunction with the audit of XLII Financial Services LLC's financial statements. The supplemental information is the responsibility of XLII Financial Services 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 supplemental information contained in Schedule I is fairly stated, in all material respects, in relation to the financial statements as a whole. PHILLIP V. GEORGE, PLLC We have served as XLII Financial Services LLC's auditor since 2019. Celeste, Texas May 11, 2026 {4}------------------------------------------------ # XLII FINANCIAL SERVICES LLC Statement of Financial Condition March 31, 2026 # ASSETS | Cash
Commissions receivable | \$
11,690
10,221 | |---------------------------------------|------------------------| | Prepaid expenses | 236 | | TOTAL ASSETS | \$
22,147 | | LIABILITIES AND MEMBER'S EQUITY | | | Liabilities | | | Accounts payable | \$
3,300 | | Member's Equity | 18,847 | | TOTAL LIABILITIES AND MEMBER'S EQUITY | \$
22,147 | {5}------------------------------------------------ # XLII FINANCIAL SERVICES LLC Statement of Income Year Ended March 31, 2026 | Revenue | | |----------------------------------------|--------------| | Mutual fund commissions | \$
17,727 | | Variable annuity insurance commissions | 35,353 | | TOTAL REVENUE | 53,080 | | Expenses | | | Professional fees | 13,200 | | Regulatory expenses | 1,620 | | Insurance | 1,150 | | Other | 304 | | TOTAL EXPENSES | 16,274 | | NET INCOME | \$
36,806 | {6}------------------------------------------------ # XLII FINANCIAL SERVICES LLC Statement of Changes in Member's Equity Year Ended March 31, 2026 | Balance at | | |------------------------------|--------------| | March
31, 2025 | \$
56,363 | | Net income | 36,806 | | Distributions to member | (74,322) | | Balance at
March 31, 2026 | \$
18,847 | | | | {7}------------------------------------------------ # XLII FINANCIAL SERVICES LLC Statement of Cash Flows Year Ended March 31, 2026 | Cash flows from operating activities
Net income | | |----------------------------------------------------|--------------| | | \$36,806 | | Adjustments to reconcile net income to | | | net cash provided by operating activities: | | | Change in assets and liabilities: | | | Decrease in commissions receivable | 34,717 | | Increase in prepaid expenses | (11) | | Increase in accounts payable | 3,300 | | Net cash provided by
operating activities | 74,812 | | Cash flows from financing activities | | | Distributions to member | (74,322) | | Net increase in cash | 490 | | Cash
at beginning of
year | 11,200 | | CASH AT END OF YEAR | \$
11,690 | ### Supplemental Disclosure of Cash Flow Information: There was no cash paid during the year for interest or income taxes. {8}------------------------------------------------ # XLII FINANCIAL SERVICES LLC Notes to Financial Statements March 31, 2026 ### Note 1 - Nature of Business and Significant Accounting Policies # Nature of Business: XLII Financial Services LLC (the "Company") was organized as a Texas limited liability company in June 2017. The Company is a wholly-owned subsidiary of KLC Anderson Holding Company LLC (the "Parent"), a Texas limited liability company. The Company is registered with the Securities and Exchange Commission (SEC) as a broker-dealer in securities and is a member of the Financial Industry Regulatory Authority (FINRA) and Securities Investor Protection Corporation (SIPC). 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's operations consist primarily in selling mutual funds and variable annuity insurance products to individuals in Texas. #### Significant Accounting Policies: ### Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that could affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. ### Current Expected Credit Losses The Company accounts for estimated credit losses on financial assets measured at an amortized cost basis and certain off-balance sheet credit exposures in accordance with FASB ASC 326-20, Financial Instruments — Credit Losses. FASB ASC 326-20 requires the Company to estimate expected credit losses over the life of its financial assets and certain off-balance sheet exposures as of the reporting date based on relevant information about past events, current conditions, and reasonable and supportable forecasts. The Company records the estimate of expected credit losses as an allowance for credit losses. For financial assets measured at an amortized cost basis the allowance for credit losses is reported as a valuation account on the balance sheet that adjusts the asset's amortized cost basis. Changes in the allowance for credit losses are reported in Credit Loss expense. There were no credit losses during the year. {9}------------------------------------------------ # XLII FINANCIAL SERVICES LLC Notes to Financial Statements March 31, 2026 #### Note 1 - Nature of Business and Significant Accounting Policies (continued) #### Revenue Recognition The Company enters into arrangements with pooled investment vehicles (funds) to distribute shares to investors and insurance companies to issue variable annuity contracts. The Company may receive distribution fees and variable annuity fees paid by the fund and insurance companies up front, over time, upon the investor's exit from the fund and annuity contracts (that is, a contingent deferred sales charge), or as a combination thereof. The Company believes that its performance obligation is the sale of securities or variable annuity contracts to investors and as such this is fulfilled on the trade date or variable annuity contract funding date. Any fixed amounts are recognized on the trade date and variable amounts are recognized to the extent it is probable that a significant revenue reversal will not occur once the uncertainty is resolved. For variable amounts, as the uncertainty is dependent on the value of the shares or annuity contracts at future points in time as well as the length of time the investor remains in the fund and annuity contracts, both of which are highly susceptible to factors outside the Company's influence, the Company does not believe it can overcome this constraint until the market value of the fund and annuity contracts and the investor activities are known, which are usually monthly or quarterly. Distribution and annuity contract fees recognized in the current period are primarily related to performance obligations that have been satisfied in prior periods. #### Income Taxes The Company is a single member limited liability company and is treated as a disregarded entity for federal income tax purposes. The Parent is also a single member limited liability company and is treated as a disregarded entity for federal income tax purposes. The Company's and Parent's taxable income or loss is included in the individual tax return of the Parent's member; therefore, federal income taxes are not payable by or provided for the Company. #### Segment Reporting The Company is engaged in a single line of business as a securities broker-dealer, which is comprised of selling mutual funds and variable annuity insurance products. The Company has identified its President as the chief operating decision maker ("CODM"), who uses net income to evaluate the results of the business, predominantly in the forecasting process, to manage the Company. Additionally, the CODM uses excess net capital, which is not a measure of profit and loss, to make operational decisions while maintaining capital adequacy, such as whether to reinvest profits or pay distributions. The Company's operations constitute a single operating segment and therefore, a single reportable segment, because the CODM manages the business activities using information of the Company as a whole. The accounting policies used to measure the profit and loss of the segment are the same as those described in the summary of significant accounting policies. Segment financial information is identical to that presented in the accompanying financial statements. {10}------------------------------------------------ # XLII FINANCIAL SERVICES LLC Notes to Financial Statements March 31, 2026 #### Note 2 – Net Capital Requirements The Company is subject to the SEC Uniform Net Capital Rule (SEC 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. Rule 15c3-1 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 March 31, 2026, the Company had net capital of \$8,390 which was \$3,390 in excess of its required net capital of \$5,000. The Company's net capital ratio was 0.39 to 1. #### Note 3 – Related Party Transactions/Economic Dependency/Concentration of Revenue The Company is under the control of and economically dependent on its Parent's sole member (the "Member"), who is also an officer and registered representative of the Company. The Company has a concentration of services provided by the Member. The existence of that control, dependency, and concentration creates operating results and financial position significantly different than if the Member and the Company were autonomous. Transactions between the Company and the Member were not consummated on terms equivalent to arm's length transactions. The Member generated all of the revenue for the year ended March 31, 2026, and received no compensation. The Member provides office space and general overhead for the Company at no cost to the Company. The value of such services has not been recorded in the financial statements and, accordingly, expenses may not be comparable to those of similar entities. # Note 4 – Concentration of Credit Risk The Company has a receivable of \$9,045, or 41% of total assets, due from one financial services company at March 31, 2026. ### Note 5 – Contingencies There are currently no asserted claims or legal proceedings against the Company, however, the nature of the Company's business subjects it to various claims, regulatory examinations, and other proceedings in the ordinary course of business. The ultimate outcome of any such action against the Company could have an adverse impact on the financial condition, results of operations, or cash flows of the Company. #### Note 6 – Subsequent Events Management has evaluated the Company's events and transactions that occurred subsequent to March 31, 2026, through May 11, 2026, the date which the financial statements were available to be issued. There have been no material subsequent events that occurred during such period that would require disclosure in this report or would be required to be recognized in the financial statements as of March 31, 2026. {11}------------------------------------------------ # Schedule I #### XLII FINANCIAL SERVICES LLC Supplemental Information Pursuant to Rule 17a-5 March 31, 2026 #### Computation of Net Capital | Total member's equity qualified for net capital | \$
18,847 | |-----------------------------------------------------------------------------------------------------|--------------| | Deduction and/or charges | | | Non-allowable assets: | | | Commissions receivable | 10,221 | | Prepaid expenses | 236 | | Total deductions and/or charges | 10,457 | | Net Capital | \$
8,390 | | Aggregate Indebtedness | | | Accounts payable | \$
3,300 | | Computation of Basic Net Capital Requirement
Minimum net capital required (greater of \$5,000 or | | | 6 2/3% of aggregate indebtedness) | \$
5,000 | | Net capital in excess of minimum requirement | \$
3,390 | | Ratio of aggregate indebtedness to net capital | .39 to 1 | #### Reconciliation of Computation of Net Capital There were no material differences between net capital reported in the Company's unaudited Amended Form X-17A-5 as of March 31, 2026, and the Company's audited financial statements as of March 31, 2026. Accordingly, no reconciliation is necessary. #### Statement Regarding Changes in Liabilities Subordinated to Claims of General Creditors No statement is required as no subordinated liabilities existed at any time during the period. #### Statement Regarding Reserve Requirements and Possession or Control Requirements 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 limits its business activities exclusively to effecting securities transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company. The Company does not hold customer funds or securities. As a Non-Covered Firm, the Computation for Determination of Reserve Requirements and Information Relating to the Possession and Control Requirements are not required. See accompanying report of independent registered public accounting firm. {12}------------------------------------------------ # PHILLIP V. GEORGE, PLLC Certified Public Accountant #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Member XLII Financial Services LLC We have reviewed management's statements, included in the accompanying Rule 15c3-3 Exemption Report pursuant to SEC Rule 17a-5, in which (1) XLII Financial Services LLC (the Company) did 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 effecting securities transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company. In addition, the Company 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 Rule 15c2-4 and/or funds received and promptly transmitted for effecting transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company; did not carry accounts of or for customers; and did not carry PAB accounts (as defined in Rule 15c3-3) throughout the most recent fiscal year without exception. XLII Financial Services LLC 's management is responsible for compliance with the provisions contemplated by Footnote 74 of SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5 and related SEC Staff Frequently Asked Questions 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 XLII Financial Services 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 upon the Company's business activities contemplated by Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5, and related SEC Staff Frequently Asked Questions. Je. Pul PHILLIP V. GEORGE, PLLC Celeste, Texas May 11, 2026 ![](_page_12_Picture_10.jpeg) {13}------------------------------------------------ #### XLII Financial Services LLC #### Exemption Report XLII Financial Services 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, "Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R. § 240.17a-5(d)(1) and (4). To the best of its knowledge and belief, the Company states the following: (1) The Company does not claim an exemption from 17 C.F.R. § 240.15c3-3. (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 effecting securities transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company, and 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 Rule 15c2-4 and/or funds received and promptly transmitted for effecting transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company); (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts (as defined in Rule 15c3-3) throughout the most recent fiscal year without exception. I, Clarence Anderson, swear (or affirm) that, to my best knowledge and belief, this Exemption Report is true and edriee Title: President April 30, 2026 Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.