# JOHNSTONE BROKERAGE SERVICES, LLC X-17A-5 (2023-04-13) — Broker-dealer annual report - Company: JOHNSTONE BROKERAGE SERVICES, LLC - Form: X-17A-5 - Filed: 2023-04-13 - Period: 2022-12-31 - Accession: 0001774377-23-000005 - CIK: 1774377 - File #: 8-70335 - Type: Broker-dealer - Material weakness: No - Auditor: Jerome Davies, CPA, P C. - Auditor location: Marietta, GA - Contact: Brian Megenity - Phone: 7702636003 - Email: bmegenity@bdcaonline.com - Website: bdcaonline.com - Signed by: Grant Johnstone (Chief Executive Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1774377/000177437723000005/jbsaudit.pdf --- {0}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OMB APPROVAL OMB Number: 3235-0123 Expires: Oct. 31, 2023 Estimated average burden hours per response: 12 SEC FILE NUMBER # ANNUAL REPORTS FORM X-17A-5 PART III FACING PAGE Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 AND ENDING 12/31/2022 filing for the period beginning 01/01/2022 MM/DD/YY MM/DD/YY A. REGISTRANT IDENTIFICATION # NAME OF FIRM: JOHNSTONE BROKERAGE 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.) # 117 SAN AUGUSTINE STREET | | (No. and Street) | | | |--------------------------------------------------|----------------------------------------------------------------------------|-----------------|--------------------------------------------| | CENTER | IX | | 75935 | | (City) | (State) | | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | Brian Megenity | (770) 263-6003 | | bmegenity@bdcaonline.com | | (Name) | (Area Code - Telephone Number) | (Email Address) | | | | B. ACCOUNTANT IDENTIFICATION | | | | Jerome Davies, CPA, P C. | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing * | | | | | (Name - if individual, state last, first, and middle name) | | | | 3605 Sandy Plains Rd., Suite 240-480 | Marietta | GA | 30066 | | (Address) | (City) | (State) | (Zip Code) | | April 25, 2017 | | 6363 | | | (Date of Registration with PCAOB)(if applicable) | | | (PCAOB Registration Number, if applicable) | | | FOR OFFICIAL USE ONLY | | | \* 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. | 8-7033
5 | | |-------------|--| | | | {1}------------------------------------------------ # OATH OR AFFIRMATION | Grant Johnstone | | , swear (or affirm) that, to the best of my knowledge and belief, the | | |-----------------|--|-----------------------------------------------------------------------------------|-------| | | | financial report pertaining to the firm of JOHNSTONE BROKERAGE SERVICES, LLC | as of | | | | is true and correct. I further swear (or affirm) that neither the company nor any | | partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely as that of a customer. ![](_page_1_Picture_3.jpeg) | Signature: | | | | | l | |------------|--|--|--|--|---| | | | | | | | Title: Chief Executive Officer 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 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. - | | | | 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. - | - (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. - 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. - | (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. - 1 (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.17a-12, as applicable. - □ (γ) 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 this filing, see 17 CFR 240.170-5(e)(3) or 17 CFR 240.180-7(d)(2), as applicable. {2}------------------------------------------------ JOHNSTONE BROKERAGE SERVICES, LLC Financial Statements For the Year Ended December 31, 2022 With Report of Independent Registered Public Accounting Firm {3}------------------------------------------------ ![](_page_3_Picture_0.jpeg) 3605 Sandy Plains Rd. Suite 240-480 Marietta, GA 30066 (347) 512-6085 # **5(32572),1'(3(1'(175(\*,67(5('38%/,&\$&&2817,1\*),50** 7RWKH0HPEHURI -RKQVWRQH%URNHUDJH6HUYLFHV//& #### **2SLQLRQRQWKH)LQDQFLDO6WDWHPHQWV** :H KDYH DXGLWHG WKH DFFRPSDQ\LQJ VWDWHPHQW RI ILQDQFLDO FRQGLWLRQ RI -RKQVWRQH %URNHUDJH 6HUYLFHV //& WKH &RPSDQ\ DVRI'HFHPEHUDQGWKHUHODWHGVWDWHPHQWVRIRSHUDWLRQVFKDQJHVLQPHPEHU¶VHTXLW\DQGFDVK IORZVIRUWKH\HDUWKHQHQGHGDQGWKHUHODWHGQRWHVFROOHFWLYHO\UHIHUUHGWRDVWKHILQDQFLDOVWDWHPHQWV ,QRXURSLQLRQ WKHILQDQFLDOVWDWHPHQWVSUHVHQWIDLUO\LQDOOPDWHULDOUHVSHFWVWKHILQDQFLDOSRVLWLRQRI-RKQVWRQH%URNHUDJH6HUYLFHV //&DVRI'HFHPEHUDQGWKHUHVXOWVRILWVRSHUDWLRQVDQGLWVFDVKIORZVIRUWKH\HDUWKHQHQGHGLQFRQIRUPLW\ ZLWKDFFRXQWLQJSULQFLSOHVJHQHUDOO\DFFHSWHGLQWKH8QLWHG6WDWHVRI\$PHULFD #### **%DVLVIRU2SLQLRQ** 7KHVHILQDQFLDOVWDWHPHQWVDUHWKH UHVSRQVLELOLW\RIWKH&RPSDQ\¶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¶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¶V5HSRUWRQ6XSSOHPHQWDO,QIRUPDWLRQ** 7KHVXSSOHPHQWDOLQIRUPDWLRQFRQWDLQHGLQVFKHGXOHV,WKURXJK,,,KDVEHHQVXEMHFWHGWRDXGLWSURFHGXUHVSHUIRUPHGLQ FRQMXQFWLRQZLWKWKHDXGLWRIWKH&RPSDQ\¶VILQDQFLDOVWDWHPHQWV7KHVXSSOHPHQWDOLQIRUPDWLRQLVWKHUHVSRQVLELOLW\RI WKH &RPSDQ\¶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¶VDXGLWRUVLQFH 0DULHWWD\*HRUJLD \$SULO {4}------------------------------------------------ # **Johnstone Brokerage Services, LLC Statement of Financial Condition December 31, 2022** # **Assets** | Cash
Accounts receivable
Due from members
Prepaid expenses and other assets | \$
90,291
47,396
42,625
18,262 | |--------------------------------------------------------------------------------------|--------------------------------------------| | Total assets | \$
198,574 | | Liabilites and members' equity
Liabilities | | | Accrued expenses
Due to member
Due to related party | \$
14,232
20,174
2,000 | | Total liabilities | 36,406 | | Members' equity | 162,168 | | Total liabilities and members' equity | \$
198,574 | {5}------------------------------------------------ # **Johnstone Brokerage Services, LLC Statement of Operations Year Ended December 31, 2022** # **Revenue** | Commissions | \$
406,830 | |-------------------------------|-----------------| | Interest income | 303 | | Other revenue | 21,816 | | | | | Total Revenue | 428,949 | | Expenses | | | Compensation and benefits | 189,512 | | Communications and technology | 67,737 | | Occupancy | 24,000 | | Other operating expenses | 248,173 | | Total Expenses | 529,422 | | Net loss | \$
(100,473) | {6}------------------------------------------------ # **Johnstone Brokerage Services, LLC Year Ended December 31, 2022 Statement of Changes in Members' Equity** | Balance at | | |---------------------------------|---------------| | December 31, 2021 | \$
232,641 | | Contributions from members | 30,000 | | Net loss | (100,473) | | Balance at
December 31, 2022 | \$
162,168 | {7}------------------------------------------------ # **Johnstone Brokerage Services, LLC Statement of Cash Flows Year Ended December 31, 2022** | Cash flows from operating activities: | | |--------------------------------------------------------------------------------|-----------------| | Net loss | \$
(100,473) | | Adjustments to reconcile net loss to net cash used
by operating activities: | | | Changes in assets and liabilities: | | | Increase in accounts receivable | (4,673) | | Decrease in due from members | 45,704 | | Decrease in prepaid expenses and other assets | 38 | | Increase in due to member | 20,174 | | Increase in due to related party | 2,000 | | Increase in accrued expenses | 6,831 | | Net cash used by operating activities | (30,399) | | Cash flows from financing activities: | | | Contributions from members | 30,000 | | Net cash provided by financing activities | 30,000 | | Net decrease in cash | (399) | | Cash at beginning of year | 90,690 | | Cash at end of year | \$
90,291 | {8}------------------------------------------------ # **JOHNSTONE BROKERAGE SERVICES, LLC NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022** # Note 1 **Organization and Summary of Significant Accounting Policies** # **Organization and Business** Johnstone Brokerage Services, LLC ('"Company'') was formed February 2, 2019 under the laws of the state of Oregon, and converted to a Texas Limited Liability Company in December 2020. The Company is a broker-dealer registered with the Securities and Exchange Commission ("SEC") effective August 8, 2019. The Company is a member of the Financial Industry Regulatory Authority. The Company sells mutual funds, 529 plans and variable annuities. As a limited liability company, the members' liability is limited to their investment. Upon the dissolution of the former parent company, Johnstone Financial, Inc., effective December 31, 2022, the Company is directly owned by the owners of the former parent. # **Revenue Recognition** The Company recognizes revenue from contracts with customers in accordance with ASC 606 Revenue from Contracts with Customers ("ASC 606"), which creates a single framework for recognizing revenue from contracts with customers that fall within its scope. Revenue is recognized when the Company satisfies its performance obligation by transferring control over goods or services to a customer. The Company receives commissions and fees ("commissions") from the sale of mutual funds, 529 Plans and variable annuities. The Company receives commissions that may be paid up front, over time, upon the investor's exit from the investment (that is, a contingent deferred sales charge, as applicable), or as a combination thereof. The Company believes that its performance obligation is the sale of securities to investors and as such this is fulfilled on the trade date (date of issuance for annuities). 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 may be dependent on the value of the investment at future points in time and/or the length of time the investor remains in the investment, both of which are highly susceptible to factors outside the Company's influence, the Company does not believe that it can overcome this constraint until the market value of the investment and/or the investor activities are known, which are usually monthly or quarterly. # **Accounts Receivable** The carrying amount of accounts receivable is reduced by a valuation allowance that reflects management's best estimate of the amounts that will not be collected. Management individually reviews all delinquent accounts receivable balances and based on an assessment of current creditworthiness, estimates the portion, if any, of the balance that will not be collected. There was no allowance for credit losses as of December 31, 2022. {9}------------------------------------------------ # **JOHNSTONE BROKERAGE SERVICES, LLC NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022** ## **Income Taxes** The Company is treated as a partnership for income tax purposes. Consequently, income taxes are not payable by, or provided for, the Company. Members are taxed individually on their shares of the Company's earnings. The Company has adopted the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 740-10, Accounting for Uncertainty in Income Taxes. Under FASB 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 return. The Company has evaluated each of its tax positions and has determined that it has no uncertain tax positions for which a provision or liability for income taxes is necessary. ## **Use of Estimates** The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. ## Note 2 **Financial Instruments and Concentration of Risk** The Company maintains cash on deposit with several banking institutions. Depository accounts are insured by the Federal Depository Insurance Corporation ("FDIC") to a maximum of \$250,000 per bank, per depositor. Commissions from three product providers accounted for approximately 80% of the Company's revenue. ## Note 3 **Contingencies** The Company is subject to litigation in the normal course of business. The Company had no litigation matters during 2022. # Note 4 **Net Capital Requirements** 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, 2022, the Company had net capital of \$53,885, which was \$48,885 in excess of its required net capital of \$5,000 and its ratio of aggregate indebtedness to net capital was 0.68 to 1.0. ## Note 5 **Related Party Transactions** A short-term loan of \$42,625 was due from the members as of December 31, 2022. The loan is payable on demand, does not charge interest and is included in "Due from members" on the statement of financial condition. A short-term loan of \$20,000 was due from the Company to a member as of December 31, 2022. The loan was payable on demand, did not charge interest and is included in {10}------------------------------------------------ # **JOHNSTONE BROKERAGE SERVICES, LLC NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2022** "Due to member" on the statement of financial condition. The loan was repaid in full in January 2023. \$174 is due to a member for reimbursement of company expenses paid by the member and is included in "Due to member" on the statement of financial condition. The Company leases office space from an entity under common ownership under a month-to-month operating lease with an initial term beginning January 1, 2022. The lease automatically renews each month unless cancelled. Lease expense for the year ended December 31, 2022 under this lease agreement amounted to \$24,000 and is included in "Occupancy" in the Statement of Operations. \$2,000 is due to the lessor under this lease agreement at December 31, 2022 and is reflected as "Due to related party" on the accompanying statement of financial condition. The Company has elected, for all underlying classes of assets, to not recognize right-ofuse assets and lease liabilities for short-term leases that have a lease term of 12 months or less at lease commencement, and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. The Company recognizes lease cost associated with its short-term leases on a straight-line basis over the lease term. Financial position and results of operations could differ from the amounts in the financial statements if the above transactions were with entities that were autonomous. #### Note 6 **Other Revenue** In June 2022 the Company received payroll tax refunds and tax credits of \$21,816 under the Employee Retention Tax Credit program established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This amount is included as "Other revenue" on the accompanying statement of operations. #### Note 7 **Net Loss** The Company has incurred a net loss for the year ended December 31, 2022. The members intend to make equity contributions as needed to continue operations and ensure compliance with regulatory capital requirements for one year subsequent to the date of the report of independent registered public accounting firm (at minimum). #### Note 8 **Subsequent Events** The Company has performed an evaluation of subsequent events through the date the financial statements were issued. {11}------------------------------------------------ # SUPPLEMENTAL INFORMATION {12}------------------------------------------------ #### **Schedule I** # **Johnstone Brokerage Services, LLC Pursuant to Rule 17a-5 December 31, 2022 Supplemental Information** #### **Computation of Net Capital** | Total members' equity qualified for net capital | \$
162,168 | |-----------------------------------------------------|---------------| | | | | Non-allowable assets: | | | Accounts receivable | 47,396 | | Due from members | 42,625 | | Prepaid expenses and other assets | 18,262 | | Total non-allowable assets | 108,283 | | Net capital before haircuts | 53,885 | | Less haircuts on securities positions | \$
- | | Net capital | \$
53,885 | | Aggregate indebtedness | \$
36,406 | | Computation of basic net capital requirement | | | Minimum net capital required (greater of \$5,000 or | | | 6 2/3% of aggregate indebtedness) | \$
5,000 | | Excess Net Capital | \$
48,885 | | Ratio of aggregate indebtedness to net capital | .68 to 1 | #### **Reconciliation of Computation of Net Capital** There is no significant difference between net capital above and net capital as reported on Part IIA of Form X-17a-5 (as amended) as of December 31, 2022. {13}------------------------------------------------ # **JOHNSTONE BROKERAGE SERVICES, LLC SCHEDULE** II **COMPUTATION FOR DETERMINATION OF RESERVE REQUIREMENTS UNDER SEC RULE 15c3-3 OF THE SECURITIES EXCHANGE ACT OF 1934 AS OF DECEMBER 31, 2022** With respect to the Computation for Determination of Reserve Requirements under Rule 15c3-3, the Company does not claim an exemption from Rule 15c3-3 in reliance upon footnote 74 of SEC Release No. 34-70073 dated July 30, 2013, and as discussed in Question 8 of the related FAQ released by SEC staff on April 4, 2014. The Company does not hold customer funds or securities. # **SCHEDULE III INFORMATION RELATING TO THE POSSESSION OR CONTROL REQUIREMENTS UNDER RULE 15c3-3 OF THE SECURITIES EXCHANGE ACT OF 1934 AS OF DECEMBER 31, 2022** With respect to the Information Relating to Possession or Control Requirements under Rule 15c3-3, the Company does not claim an exemption from Rule 15c3-3 in reliance upon footnote 74 of SEC Release No. 34-70073 dated July 30, 2013, and as discussed in Question 8 of the related FAQ released by SEC staff on April 4, 2014. The Company does not hold customer funds or securities. {14}------------------------------------------------ ![](_page_14_Picture_0.jpeg) 3605 Sandy Plains Rd. Suite 240-480 Marietta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¶VPDQDJHPHQWLVUHVSRQVLEOHIRUFRPSOLDQFHZLWKWKHH[HPSWLRQSURYLVLRQVDQG LWVVWDWHPHQWV 2XUUHYLHZZDVFRQGXFWHGLQDFFRUGDQFHZLWKWKHVWDQGDUGVRIWKH3XEOLF&RPSDQ\\$FFRXQWLQJ2YHUVLJKW%RDUG 8QLWHG6WDWHV DQGDFFRUGLQJO\LQFOXGHGLQTXLULHVDQGRWKHUUHTXLUHGSURFHGXUHVWRREWDLQHYLGHQFHDERXWWKH &RPSDQ\¶VFRPSOLDQFHZLWKWKHH[HPSWLRQSURYLVLRQV\$UHYLHZLVVXEVWDQWLDOO\OHVVLQVFRSHWKDQDQH[DPLQDWLRQ WKHREMHFWLYHRIZKLFKLVWKHH[SUHVVLRQRIDQRSLQLRQRQPDQDJHPHQW VVWDWHPHQWV\$FFRUGLQJO\ZHGRQRWH[SUHVV VXFKDQRSLQLRQ %DVHG RQ RXU UHYLHZ ZH DUH QRW DZDUH RI DQ\ PDWHULDO PRGLILFDWLRQV WKDW VKRXOG EH PDGH WR PDQDJHPHQW V VWDWHPHQWVUHIHUUHGWRDERYHIRUWKHPWREHIDLUO\VWDWHGLQDOOPDWHULDOUHVSHFWVEDVHGRQWKHFRQGLWLRQVVHWIRUWK LQ)RRWQRWHRIWKH6(&5HOHDVH1RDGRSWLQJDPHQGPHQWVWR&)5D 0DULHWWD\*HRUJLD \$SULO {15}------------------------------------------------ # **Johnstone Brokerage Services, LLC Exemption Report December 31, 2022** Johnstone Brokerage 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 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; and the Company (1) did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers; (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. Johnstone Brokerage Services, LLC I, Grant Johnstone, swear (or affirm) that, to my best knowledge and belief, this Exemption Report is true and correct. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Chief Executive Officer April 11, 2023 Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.