# FIRST PALLADIUM, LLC X-17A-5 (2025-03-03) — Broker-dealer annual report - Company: FIRST PALLADIUM, LLC - Form: X-17A-5 - Filed: 2025-03-03 - Period: 2024-12-31 - Accession: 0001715136-25-000003 - CIK: 1715136 - File #: 8-70007 - Type: Broker-dealer - Material weakness: No - Auditor: FGMK, LLC - Auditor location: Chicago, IL - Contact: Fred Bush - Phone: 5124154009 - Email: mcglothlin@ashbrokerage.com - Website: ashbrokerage.com - Signed by: Michael McGolthlin (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1715136/000171513625000003/FpPublicfb.pdf --- {0}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OMB APPROVAL OMB Number: 3235-0123 Expires: Nov. 30, 2026 Estimated average burden hours per response: 12 # ANNUAL REPORTS FORM X-17A-5 PART III SEC FILE NUMBER | 8- | 70007 | | |----|-------|--| | | | | | Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 | FACING PAGE | | | | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|------------|-----------------|-------------------------------------------| | filing for the period beginning 01/01/24 | | | 12/31/24 | | | | MM/DD/YY | AND ENDING | | MM/DD/YY | | | A. REGISTRANT IDENTIFICATION | | | | | NAME OF FIRM: First Palladium, 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.) | | | | | | 888 S Harrison Street, Suite 900 | | | | | | | (No. and Street) | | | | | Fort Wayne | IN | | | 46802 | | (City) | (State) | | | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | Michael McGlothlin | 260-434-9710 | | | Mike. McGlothlin@ashbrokerage.com | | (Name) | (Area Code - Telephone Number) | | (Email Address) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
FGMK, LLC | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | 333 W Wacker Drive, 6th Floor Chicago | | | | 60606 | | (Address) | (City) | | (State) | (Zip Code) | | (Date of Registration with PCAOB)(if applicable) | FOR OFFICIAL USE ONLY | | | (PCAOB Registration Number, if applicable | | * Claims for exemption from the requirement that the annual 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}------------------------------------------------ ### FIRST PALLADIUM, LLC ### FINANCIAL STATEMENT AND ### INDEPENDENT AUDITOR'S REPORT DECEMBER 31, 2024 {2}------------------------------------------------ ### FIRST PALLADIUM, LLC ### TABLE OF CONTENTS | FIRST PALLADIUM, LLC
TABLE OF CONTENTS | | |---------------------------------------------------------|------| | | Page | | LETTER OF OATH OR AFFIRMATION | 1 | | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 2 | | FINANCIAL STATEMENT | | | | 3 | | Statement of Financial Condition | | {3}------------------------------------------------ ### OATH OR AFFIRMATION swear (or affirm) that, to the best of my knowledge and belief, the I. Michael McGlothlin financial report pertaining to the firm of First Palladium, LLC as of , 2 024 12/31 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. ![](_page_3_Picture_4.jpeg) | | Signature: . Michol 1 - Jul'Clo W | | |--------|-----------------------------------|--| | Title: | | | | CEO | | | Notary Public ## 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 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 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. - □ (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-1, 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. - @ (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. - [ (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. - □ (u) Independent public accountant's report based on an examination of the 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. - □ (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 240.17a-12, as applicable. - □ (y) Report describing any material inadequacies 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. {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) ### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Managers of First Palladium, LLC ### Opinion on the Financial Statement We have audited the accompanying statement of financial condition of First Palladium, LLC December 31, 2024, and the related notes (collectively referred In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. #### Basis for Opinion This financial statement is ement based on our audit. We are a public accounting firm registered with the Public Company 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 statement is free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion. since 2018. Chicago, Illinois February 21, 2025 {5}------------------------------------------------ ## FIRST PALLADIUM, LLC STATEMENT OF FINANCIAL CONDITION December 31, 2024 ## Assets | FIRST PALLADIUM, LLC | | |---------------------------------------------------------------------|----------------------| | STATEMENT OF FINANCIAL CONDITION | | | December 31, 2024 | | | Assets | | | Cash | \$
2,930,974 | | Other Assets
Commissions Receivable - Short-Term | 34,503
2,904,083 | | Commissions Receivable - Long-Term | 7,518,152 | | Total Assets | \$
13,387,712 | | Liabilities and Member's Equity | | | Accounts Payable and Accrued Liabilities | \$
47 | | Accounts Payable - Parent | 13,539 | | Commissions Payable - Short-Term
Commissions Payable - Long-Term | 248,618
1,086,692 | | Total Liabilities | 1,348,896 | | Member's Equity | 12,038,816 | | Total Liabilities and Member's Equity | \$
13,387,712 | | | | {6}------------------------------------------------ ## FIRST PALLADIUM, LLC NOTES TO THE FINANCIAL STATEMENT ### NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business: First Palladium, LLC (the "Company", "First Palladium") is a broker-dealer registered with the U.S. Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority ("FINRA"). The Company is a wholly-owned subsidiary of Ash Brokerage, LLC ("Parent") and operates out of its principal office in Fort Wayne, Indiana. First Palladium is engaged in the wholesale brokerage of variable life insurance and variable annuity products. A small percentage of First Palladium's business is engaged in retail sales of variable life insurance and variable annuity products. Significant Accounting Policies: A summary of the Company's significant accounting policies are as follows. The Company follows accounting principles generally accepted in the United States of America ("GAAP") as established by the Financial Accounting Standards Board ("FASB") to ensure consistent reporting of financial condition, results of operations and cash flows. Management Estimates and Assumptions: Management uses estimates and assumptions in preparing this financial statement in accordance with GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement. Significant estimates include commissions receivable and payable. Actual results could vary from those estimates. Future events and their effects cannot be predicted with certainty; accordingly, accounting estimates require the exercise of judgment. Accounting estimates used in the preparation of this financial statement change as new events occur, as more experience is acquired, as additional information is obtained, and as the operating environment changes. Cash: The Company maintains its cash balances in a financial institution insured by the Federal Deposit Insurance Corporation and may at times exceed the insurance provided on such deposits. The Company has not experienced any losses in such accounts. Commissions Receivable/Payable: Commissions receivable/payable represent an estimate of commissions due from insurance carriers and to agencies over the term of the policies placed. The Company establishes an estimate based on multiple factors including but not limited to expected duration of commission payments, type of product sold and average expected rate of renewal. Receivables and payables classified as short-term do not include any material amounts that are collectible or due after one year. First Palladium records a receivable and payable to coincide with the net revenue recognized when a case is placed in-force. The receivable associated with the first-year commissions earned on a policy is recognized as short-term with any estimates of revenue for case renewals recognized as a long-term receivable. As time elapses, a portion of the long-term receivable and payable is moved to short-term receivable/payable. All of the Company's receivables are due from companies in the insurance industry. The Company continually monitors creditworthiness of companies for which product offerings are brokered to mitigate risk of credit loss. No allowance for uncollectable commissions receivable was deemed necessary by management as of December 31, 2024 and January 1, 2024. Short-term and long-term commissions receivable were \$2,659,045 and \$6,384,156 as of January 1, 2024, respectively. Financial Instruments – 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 Accounting Standards Codification ("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, if applicable. The Company estimates expected credit losses over the life of the {7}------------------------------------------------ ## FIRST PALLADIUM, LLC NOTES TO THE FINANCIAL STATEMENT financial assets as of the reporting date based on relevant information about past events, current conditions, and reasonable and supportable forecasts. Revenue Recognition: Revenue from contracts with customers is recognized when, or as, the Company satisfies its performance obligations by transferring promised goods or services to customers. A good or service is transferred to a customer when, or as, the customer obtains control of that good or service. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for those promised goods or services. Significant Judgments: Revenue from contracts with customers includes commissions on the sale of variable life insurance and variable annuity products. Sale of such variable products by insurance carriers must be transacted through a registered broker-dealer. The recognition 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 do to uncertain future events. The following provides detailed information on the recognition of the Company's revenue from contracts with customers. First Palladium provides its customers with policy placement services of variable life insurance and variable annuity products. Customers can only benefit from the services that the Company provides if a policy is formally placed with an insurance carrier and coverage is extended to the policyholder. Placement services are highly interdependent and not capable of being distinct; therefore, management deems the placement of a policy as a singular performance obligation. The Company does not provide any additional services beyond the placement of policies; therefore, no additional performance obligations were identified by management. The Company receives consideration for services in the form of a commission from the applicable insurance company. Commissions include first-year and renewal amounts that are received over time and at a rate determined by the underlying insurance product placed. Because First Palladium has a singular performance obligation, the associated revenue for the full commissionable duration of the policy is estimated and recognized upon placement of the policy. The consideration for both first-year and renewal commission amounts include variable components which are dependent upon a policy remaining in-force (persistency) over a period of time. Management utilized the most likely amount method to estimate the variable component of commission consideration which includes a calculation for average persistency and an estimate of the commissionable duration for each product. Persistency rates are applied to policies as a means for discounting projected revenues associated with renewals. Revenue is recorded at the transaction price which is calculated as follows: Transaction price equals policy premium multiplied by contract rate multiplied by commissionable duration multiplied by persistency factor (renewals only). The Company acts as an agent between the carriers and the end policyholder; therefore, commission revenue is recognized on a net basis excluding any commission amounts paid or payable to other agents associated with each case. Income Taxes: First Palladium is a single member limited liability company, which is disregarded for income tax purposes and its operating results are allocated to Parent. No provision or liability for income taxes has been included in this financial statement. {8}------------------------------------------------ ## FIRST PALLADIUM, LLC NOTES TO THE FINANCIAL STATEMENT Recently Issued Accounting Pronouncement Adopted: The FASB issued ASU 2023-07 on November 27, 2023, which is intended to improve reportable segment disclosure requirements. Under previous guidance, while entities were required to disclose segment revenue and measure of profit or loss, there has been limited disclosure around the reporting of segment expenses. In addition to enhanced disclosures about significant segment expenses, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of the amendments is to enable investors to better understand an entity's overall performance and assess potential future cash flows. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted this standard effective January 1, 2024. ## NOTE 2 – RELATED-PARTY TRANSACTIONS The Company participates in a services agreement with the Parent to provide certain services, including but not limited to, finance and accounting, compliance, IT support, and office facilities and related services for \$13,539 per month. At December 31, 2024, \$13,539 was due to the Parent. ## NOTE 3 – COMMITMENTS, CONTINGENCIES AND INDEMNIFICATIONS In the ordinary course of business, the Company may be subject to various claims, litigation, regulatory and arbitration matters. Although the effects of these matters cannot be determined, the Company's management believes that their ultimate outcome will not have a material effect on the Company's financial position, results of operations, or net cash flows. The Company enters into contracts that contain a variety of representations and warranties that provide indemnification under certain circumstances. The Company's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. The Company expects the risk of future obligations under these indemnifications to be remote. ## NOTE 4 – NET CAPITAL REQUIREMENT The Company is subject to the SEC's 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, should not exceed 15 to 1. At December 31, 2024, the Company had net capital of \$1,582,078 which was \$1,492,152 in excess of its required net capital of \$89,926. The Company's net capital ratio was 0.85 to 1 for 2024. ## NOTE 5 – SUBSEQUENT EVENTS Management has evaluated all subsequent events after December 31, 2024 through the date the accompanying financial statements were available to be issued. Effective January 31, 2025, the Company merged with and into Integrity Capital, LLC ("Integrity Capital"), whereupon Integrity Capital was the surviving entity. At the merger date, Integrity Capital became the assignee of the Company and assumed all of First Palladium's assets, liabilities, and responsibilities. First Palladium also filed Form BDW (Uniform Request for Broker-Dealer Withdrawal) on January 31, 2025, to fully withdrawal its registration from FINRA. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.