# BLACK EDGE SECURITIES LLC X-17A-5 (2026-03-02) — Broker-dealer annual report
- Company: BLACK EDGE SECURITIES LLC
- Form: X-17A-5
- Filed: 2026-03-02
- Period: 2025-12-31
- Accession: 0001811726-26-000003
- CIK: 1811726
- File #: 8-70525
- Type: Broker-dealer
- Material weakness: No
- Auditor: DeMarcho Sciaccotta Wilkens & Dunleavy LLP
- Auditor location: Frankfort, IL
- Contact: Patricia Cerny
- Phone: 708-308-5756
- Email: pcerny@blackedge.com
- Website: blackedge.com
- Signed by: David Kent (Chief Operating Officer)
Original filing: https://www.sec.gov/Archives/edgar/data/1811726/000181172626000003/blackedgesecuritiesaudit.pdf
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STATES HANGE COMMISSION D.C. 20549 UNITED SECURITIES AND EXCH Washington,
### REPORTS -17A-5 ANNUAL I FORM X PAR
OMB APPROVAL OMB Number: 3235-0123 Expires: Nov. 30, 2026 Estimated average burden hours per response: 12
> SEC FILE NUMBER 8-70525
| Information Required Pursuant to Rules 17a-5, 17a-12, | FACING
PAGE | | | | | |
|---------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------|---------------------------------------------------------|----------------------|--|--|--|
| and 18a-7 under the Securities Exchange Act of 1934
AND ENDING 12/31/25
FILING FOR THE PERIOD BEGINNING 01/01/25 | | | | | | |
| | MM/DD
YY | | MM/DD/YY | | | |
| DГITIГLCATIO
A. REGISTRANTII
DENTIFICATTON | | | | | | |
| NAME OF FIRM: Black Edge Securitie | es, LLC | | | | | |
| TYPE OF REGISTRANT (check all applicable boxes):
Broker-dealer
☐Check here if respondent is also an OTC derivatives deale | Security-based swap dealer | Major security-based swap participant | | | | |
| ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not | use a P.O. box no.) | | | | | |
| 811 WEST FULTON, SUITE 4 | 400 | | | | | |
| | (No. and
Street) | | | | | |
| nicago | | | 6060Л | | | |
| (City) | (State) | | (Zip Code) | | | |
| PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | |
| Patricia Cerny | 708-308-
-5756 | | pcerny@blackedge.com | | | |
| (Name) | none Number)
(Area Code - Teleph | | (Email Address) | | | |
| B. ACCOUNTANT
DENTIFICATION | | | | | | |
| | | | | | | |
| are contained in this filing*
INDEPENDENT PUBLIC ACCOUNTANT whose reports a | | | | | | |
| DeMarco Sciaccotta Wilkens &
& Dunleavy, LLP | | | | | | |
| 20646 Abbey Woods Ct. N., Suite 201 | (Name - if individual, state
la
st, first, and middle name)
Fran
kfort | IL | 60423 | | | |
| | | (State) | | | | |
| (Address)
12/21/2010 | (City) | 5376 | (Zip Code) | | | |
| (Date of Registration with PCAOB)(if applicable) | | | | | | |
| (PCAOB Registration Number, if applicable)
FOR OFFICIA
L USE ONLY | | | | | | |
| | | | | | | |
| * Claims for exemption from the requirement that the annual rep | | orts be covered by the reports of an independent public | | | | |
umstances relied on as the basis of the exemption. See 17 R 240.17a-5(e)(1)(11), if applicable. accountant must be supported by a statement of facts and circ CER 24017 E/1Y:: ifnnliga9
ained in this form are not required to respond unless the form Persons who are to respond to the collection of information cont displays a currently valid OMB control number.
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#### AFFIRMATION OATH OR A
| David Kent
1, | | r (or affirm) that, to the best of my knowledge and belief, the
swea | |
|-----------------------------------------------------------------|------|---------------------------------------------------------------------------------------|-------|
| financial report pertaining to the firm of Black Edge Securitic | | es, LLC | as of |
| 12/31 | 2025 | ect. I further swear (or affirm) that neither the company nor any
is true and corr | |
y be, has any proprietary interest in any account classified solely partner, officer, director, or equivalent person, as the case ma as that of a customer.
Sienature:T
Chiet Operating Officer Title:
Notary Public
## This filing\*\* contains (check all applicable boxes):
- (P) C lol statomont of finapcial condition
- (b) Notes to consolidated statement of financial condition.
- nsive income in the period(s) presented, a statement of on S-X). (c) Statement of income (loss) or, if there is other comprehe comprehensive income (as defined in § 210.1-02 of Regulatic
- (d) Statement of cash flows.
- e proprietor's equity. (e) Statement of changes in stockholders' or partners' or sole
- of creditors. (f) Statement of changes in liabilities subordinated to claims
- (g) Notes to consolidated financial statements.
- 기 CFR 240.18a-1, as applicable. (h) Computation of net capital under 17 CFR 240.15c3-1 or 1
- -2. (i) Computation of tangible net worth under 17 CFR 240.18a-
- irements pursuant to Exhibit A to 17 CFR 240.15c3-3. (j) Computation for determination of customer reserve requi
- eserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable. (k) Computation for determination of security-based swap re
- der Exhibit A to § 240.15c3-3. (I) Computation for Determination of PAB Requirements und
- nts for customers under 17 CFR 240.15c3-3. (m) Information relating to possession or control requireme
- nts for security-based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable. (n) Information relating to possession or control requiremer
- e FOCUS Report with computation of net capital or tangible net FR 240.18a-2, as applicable, and the reserve requirements under 17 al differences exist. or a statement that no material differences exist. (o) Reconciliations, including appropriate explanations, of th worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-1, or 17 CF CER 240 15c3-3 or 17 CER 240. 18a-4. as anplicable. if materi
- ed in the statement of financial condition. (p) Summary of financial data for subsidiaries not consolidate
- 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. (q) Oath or affirmation in accordance with 17 CFR 240.17a-5,
- r 17 CFR 240.18a-7, as applicable. (r) Compliance report in accordance with 17 CFR 240.17a-5 c
- 17 CFR 240.18a-7, as applicable. (s) Exemption report in accordance with 17 CFR 240.17a-5 or
- mination of the statement of financial condition. (t) Independent public accountant's report based on an exan
- mination of the financial report or financial statements under 17 pplicable. (u) Independent public accountant's report based on an exar CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as a
- mination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. (v) Independent public accountant's report based on an exar
- w of the exemption report under 17 CFR 240.17a-5 or 17 (w) Independent public accountant's report based on a revie CFR 240.18a-7, as applicable.
- es, in accordance with 17 CFR 240.15c3-1e or 17 CFR 240.17a-12, as applicable. (x) Supplemental reports on applving agreed-upon procedure
- st or found to have existed since the date of the previous audit, or FR 240.17a-12(k). (y) Report describing any material inadequacies found to exis a statement that no material inadequacies exist, under 17 CF
- (z) Other
- filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18a-7(d)(2), as \*\*To request confidential treatment of certain portions of this applicable.
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(A Delaware Limited Liability Company) Financial Statements and Independent Audit Report For the period January 1, 2025 through December 31, 2025
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,2025 Table of Contents For the period January 1, 2025 through December 31 C4 Delaware Iimited Iiahility Comnan)
| | Page |
|-----------------------------------|------|
| Report of Independent Auditor | 1 |
| Financial Statements | |
| Statement of Financial Condition. | 2 |
| Notes to Financial Statements | 3-8 |
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## REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Member of Black Edge Securities, LLC
## Opinion on the Financial Statement
We have audited the accompanying statement of financial condition of Black Edge Securities, LLC (the "Company") as of December 31, 2025, and the related notes (collectively referred to as the "financial statement"). In our opinion, the statement of financial condition presents fairly, in all material respects, the financial position of Black Edge Securities, LLC as of December 31, 2025 in conformity with accounting principles generally accepted in the United States of America.
### Basis for Opinion
This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with 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. 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 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.
We have served as Black Edge Securities, LLC's auditor since 2024.
Frankfort, Illinois February 28, 2026
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(A Delaware Limited Liability Company) Statement of Financial Condition For the period January 1, 2025 through December 31, 2025
| Assets | | |
|--------------------------------------------------------|---|------------|
| Cash | S | 370,885 |
| Securities owned: | | |
| Options, at fair value | | 50,861,227 |
| Total securities owned | | 50,861,227 |
| Open trade equity futures | | 1,537,650 |
| Prepaid expense | | 2.218 |
| Total Assets | S | 52,771,980 |
| Liabilities | | |
| Accounts payable | S | 23,188 |
| Securities sold short: | | |
| Options sold short, at fair value | | 24,818,003 |
| Total securities sold, not yet purchased at fair value | | 24,818,003 |
| Due to clearing firm | | 8,215,956 |
| Accrued expenses payable | | 7,493 |
| Payable to affiliate | | 2,815,921 |
| Total Liabilities | S | 35,880,561 |
| Member's Equity | | |
| Member's equity | S | 16,891,419 |
| Total Liabilities & Member's Equity | S | 52,771,980 |
The accompanying notes are an integral part of these financial statements.
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,2025 Notes to Financial Statements For the period January 1, 2025 through December 31 C4 Delaware Iimited Iiahility Comnan)
## NOTE 1 Organization
Its trading accounts with a registered clearing parther transactlons in uniisted options and clears and carries of the Exchange. ons only with other broker-dealers, does not affect less or tne cofmpany is to engage in the ptions thereon, for their own account on organized egistered as a Broker-Dealer with the Securities and CBOE Exchange, Inc (the "Exchange"). The Company ule 15c3-1(a/6) ofthe SEC since the Comnany does aware Limited Liability Company and a wholly owned Tho bucin of tho Comрonu ig to аоdo in tho not trade on behalf of customers, effects transactic 이 snasidlary of Black Euge Group, speculative trading of index options, futures, and exchanges in the United States. The Company is re Exchange Commission ("SEC") and a member of the is exemnt from certain filing requirements under the R Black Edge Securities, LLC (the "Company") is a Dela ouboidion of Bloo Edan Croun (tho "Doront")
## NOTE 2 Significant Accounting Policies
sistent with accounting principles generally accepted nary of the Company's significant accounting policies: The financial statements are prepared on a basis con in the United States of America. The following is sumn
omake estimates and assumptions that affect the ures of contingent assets and liabilities at the date of s of revenues and expenses during the reporting S. with generally accepted accounting principles in the United States of America requires management reported amounts of assets and liabilities and disclos the financial statements and the reported amount period. Actual results could differ from those estimate ta The preparation of financial statements in conformity
nses are recorded on tme trade date. ng strategy, the Company enters into transactions in including options thereon. These derivative financial heir trading strategy. Proprietary trading of principal transactions togetner witn related revenues and expе In the normal course of business, as part of its tradin exchange traded futures and broad-based indexes, contracts are used to adjust the risk and return of t
utures contract is closed. Company recognizes a realized gain or loss when a f nd are recorded as unrealized gain or loss. The is required to deposit either cash or securities (initial f the contract value. Subsequent payments (variation day The yariation margin nayments are generally equal to the daily changes in the contract value a Upon entering into a futures contract, the Company margin) in an amount equal to a certain percentage o margin) are made or received by the Comnany each
n an accrual basis. All dividend income is recognized its financing activities on an accrual basis. The Company recognizes interest paid and earned o on the ex-dividend date. The Company accounts for
Receivables and payables relating to trades pending ables to clearing firm in the statement of financial obtain short-term financing against its positions. Receivables from and payables to clearing firm: settlement are netted in receivables from and pay condition, netted by clearing firm. The Company may
ompany offsets certain amounts recognized for cash mounts recognized for net derivative positions held at Additionally, when the requirements are met, the Cc collateral receivables or payables against fair value a the same clearing firm.
ot pay federal income taxes. The Company is treated disregarded entity. The member is responsible for n their tax returns. The Company reports their income Income Taxes: A Limited Liability Company does nc for Federal and State income taxes as if it were reporting their pro-rata share of the profits or losses on a
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#### NOTE 2 Significant Accounting Policies (continued)
for taxes on a calendar year basis. Primary differences between book and tax income are related to holding gains and losses on investments held at year end.
The Company applies the provision of FASB ASC 740, Income Taxes, which provides guidance for how uncertain tax positions should be recognized, measured, present, and disclosed in the financial statements. FASB ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company's financial statements to determine whether the tax positions are more-than-likelythan-not of being sustained by the applicable tax authority. The managing member has concluded there is no tax expense to be recorded by the Company for the year ended December 31, 2025.
Statement of Cash Flows: For purposes of the Statement of Cash Flows, the Company has defined cash equivalents as highly liquid investments, with original maturities of less than ninety days that are not held for sale in the ordinary course of business.
Fixed Assets: The Company has an agreement with Black Edge Capital, LLC (the "Affiliate") a brothersister relationship through the parent. The Company utilizes those fixed by the Affiliate. Accordingly, the Company will not record fixed assets on their balance sheet. The Affiliate will charge the Company on a monthly basis for the use of assets and record those charges as intercompany charges.
Segment Reporting: The Company operates as a single line of business as a securities broker-dealer, which is comprised of arranging for transactions in listed securities. The Company has identified the CEO as the Chief Operating Decision Maker ("CODM") as specified in ASU 2023-07, 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 reporting 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 same as those described in the summary of significant accounting policies. Company management reviewed the ASU 2023-07 disclosure requirements and determined that no additional disclosures are required as the Company has only a single reportable segment.
#### NOTE 3 Revenue Recognition
The accounting for a broker-dealer's proprietary trading operations and lending activities (including securities lending and repurchase arrangements) will not be in the scope of Revenue From Contracts With Customers (ASC Topic 606). Recognition of interest and dividend income and expense from financial instruments owned or sold short, interest (rebate) from securities lending, repurchase agreements and similar arrangements also will be outside the scope of the standard. Recognition of realized gains and losses on the transfer and de-recognition of financial instruments will continue to be within the scope of Accounting Standards Codification (ASC) 860.
#### NOTE 4 Clearing Agreements
The Company has a joint back office ("JBO") clearing agreement with ABN AMRO Clearing Chicago, LLC ("ABN"). The agreement allows JBO participants to receive favorable margin treatment as compared to a regular customer. The Company's interest in ABN is reflected as a preferred stock on the balance sheet. Under the rules of the Exchange, the Company is required to maintain a minimum net liquidly trading value of \$1,000,000 in ABN and is exclusive of the preferred stock value of \$10,000.
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### NOTE 5 Fair Value Measurements
an asset or paid to transfer a liability in an orderly rement date. A fair value measurement assumes that occurs in the principal market for the asset or liability advantageous market. Valuation techniques that are эс срocifiod by EASB 18820 are urod to monsuro Fair value is the price that would be received to sel transaction between market participants at the measu the transaction to sell the asset or transfer the liability or, in the absence of aprincipal market, the most a consictont with tho markot incomo or coct approach
tion techniques used to measure fair value into three The fair value hierarchy prioritizes the inputs to valua broad levels:
ets for identical assets or liabilities that the reporting ate. Level 1 are unadjusted quoted prices in active mark. entity has the ability to access at the measurement da
I within Level 1) that are observable for the asset or liability, either directly or indirectly. Level 2 are inputs (other than quoted prices included
ty and rely on management's own assumptions about pricing the asset or liability. Level 3 are unobservable inputs for the asset or liabili the assumptions that market participants would use in
ue hierarchy is based on the lowest level of input that pany's assessment of the significance of a particular quires judgment and considers factors specific to the may fall into different levels of the fair value hierarchy. In such cases, an investment's level within the fair val is significant to the fair value measurement. The Com input to the fair value measurement in its entirety rec investment. In certain cases, the inputs used to measure fair value
options on futures contracts, convertible preferred fair value based on quoted market prices, which are ds are valued at the daily closing price as reported by tME TUNA. Equity securities, equity options, futures contracts, shares and exchange-traded funds are recorded at t generally the exchange settlement prices. Mutual fun tho fund
be reliable including financial statements provided by Company has invested. arket are recorded at fair value as determined by e amount that the Company could reasonably expect valuation. based on information reasonably available at the time of valuation that the Company believes to management of the operating company in which the Private placements for which there is no ready m management. Generally, the fair value represents the to receive if the investment were sold at the time of
t be reasonably determined. sent the amounts that may be ultimately realized due to the occurrence of future circumstances that cannot Those estimated fair values do not necessarily repres
es on the Level 1 inputs for quoted prices in active ents. The Company valued their liquid assets and liabilitic markets which are essentially cash and cash equivale
of change in circumstances that cause the transfer in ere were no transfers among Levels 1, 2, and 3 during s at each measurement date, and transfers between levels are recognized on the actual date of the event accordance with the Company's accounting policy. Th the year. The Company assesses the levels of its investments
\_evel 3. The following is a summary of their fair value. The Company did not value any assets at Level 2 or L
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#### ed) NOTE 5 Fair Value Measurements (continu
| Assets at fair value | Level 1 | Level 2 | Level 3 | Total |
|---------------------------------|--------------|---------|---------|--------------|
| Options and derivatives | \$50,861,227 | \$0 | \$0 | \$50,861,227 |
| Open trade equity futures | \$1,537,650 | \$O | \$0 | \$1,537,650 |
| Total at fair value | \$52,398,877 | \$O | \$O | \$52,398,877 |
| | | | | |
| Liabilities at fair value | Level 1 | Level 2 | Level 3 | Total |
| Options sold, not yet purchased | \$24,818,003 | \$O | \$O | \$24,818,003 |
| Due to clearing firm | \$8,215,956 | \$O | \$O | \$8,215,956 |
## NOTE 9 Net Capital Requirements
ompanУ Tequired compute a Management monitors the Company's capital position with all relevant regulatory requirements. pany had total member equity of \$16,819,419. The is not subject to a net capital requirement under Companu ic not roquirod to mointoin or comрuto a appiicabie Tegulatory p giy, minimum net capital amount for regulatory purposes. on an ongoing basis to ensure continued compliance For the year ended December 31, 2025, the Comp Company operates as a B-1 market maker, which opplieablo roauloto provicione Sccordinabu tho a
inquiry. These matters could result in censures, fines ne of any resulting actions will not be material to the er, the Company is unable to predict the outcome of discusses matters with its regulators raised during regulatory examinations or otherwise subject to their or other sanctions. Management believes the outcon Company's statement of financial condition. Howeve these matters. In the normal course of business. the Company
#### nd Off-Balance Sheet Risk NOTE 7 Derivative Financial Instruments ar
risk that include exchange-traded futures and futures stocks. All derivative instruments are held for trading ying statement of financial condition at fair value. rs into transactions in derivative financial instruments and other financial instruments with off-balance sheet options contracts, equity and index options, and short purposes. All positions are reported in the accompan In the normal course of business, the Company ente
ecified date at specified price. ceint of securities or monewmarket instruments with the seller/buyer agreeing to make/take delivery at spe Eutures contracts provide for the delaved deliverw/re
mium, the right to either purchase from or sell to the writer of options, the Company receives premium in es in the price of the financial instruments underlying emt 'suonpo Options grant the purchaser for the payment of prer writer specified instrument under agreed terms. As exchange for bearing the risk of unfavorable change tho optione
ns of the Company to deliver specified securities and che market at prevailing prices. Securities sold not yet purchased represent obligation thereby create liability to repurchase the securities in t
transactions it has established accounts with clearing ult in concentration of credit risk with these firms. sk as the Company's ultimate obligation to satisfy its exceed the amount recognized in the statement of ny generally holds other equity securities options or tle or offset the risk of these obligations. Since the Company does not clear its own securities and futures brokers for this purpose. This can and often does res These transactions may result in off-balance sheet ri obligation for securities sold not yet purchased may financial condition. To minimize this risk the Compa financial futures contracts which can be used to se
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## NOTE 7 Derivative Financial Instruments and Off-Balance Sheet Risk (continued)
Such risk however is mitigated by each clearing broker's obligation to comply with rules and regulations of the SEC and the Commodity Futures Trading Commission ("CFTC").
The Company is subject to credit risk to the extent any broker with whom it conducts business is unable to fulfill contractual obligations on its behalf. The Company attempts to minimize its exposure to credit risk by monitoring brokers with which it conducts investment activities. In management's opinion, market risk is substantially diminished when all financial instruments are aggregated.
Risk arises from the potential inability of counterparties to perform under the terms of the contracts, credit risk and from changes in the values of the underlying financial instruments market risk.
Greater than 99% of the Company's assets are held at their Broker-Dealer ABN.
The Company maintains cash deposits with financial institutions. On occasion, these deposits may exceed the maximum insurance level provided by the Federal Deposit Insurance Corporation ("FDIC").
#### Derivative Instruments and Hedging Activities NOTE 8
The Company's derivative activities are limited to the trading of index options on futures. As market maker and liquidity provider in various markets, the Company's activities may result in notional value of open derivative positions that is not representative of the risk in the outstanding derivatives contract.
The Company's trading activities involve the use of hedging strategies to reduce directional and nondirectional risks based on models and there is no guarantee that the hedging strategies will achieve their desired result. The Company may also employ arbitrage trading strategies.
Derivative contracts are recorded on the statement of financial condition as assets or liabilities measured at fair value or receivables from clearing firm and the related realized gain or loss associated with these derivatives is recorded on the statement of income. The Company does not consider any derivative instruments to be hedging instruments as those terms are generally under generally accepted accounting principles.
As of December 31, 2025, and for the year then ended, the Company's derivative activities had the following impact on the statement of financial condition (the gross amounts of assets and liabilities are subject to netting and gross amounts offset in the statement of financial condition as of December 31, 2025):
| | | Notional Value | | Notional Value |
|---------------------------------|--------------|-----------------|---------------|-----------------|
| Derivatives | Asset FMV | Long | Liability FMV | Short |
| Long options | \$50,861,227 | \$3,474,692,750 | \$0 | \$0 |
| Options sold, not yet purchased | \$0 | \$0 | \$24,818,003 | \$2,481,800,250 |
| OTE equity futures | \$1,537,650 | \$0 | \$0 | \$575,523,750 |
#### NOTE 9 Due from and Due to Clearing Firm
Net amounts Due from and Due to clearing firm as of December 31, 2025, consist of the following:
Due from ABN = \$0 and Due to ABN = \$8,215,956
These clearing firm accounts relate to the proprietary transactions cleared through such clearing firm, which amounts are collateralized by securities and derivative financial instruments held by the Company. On December 31, 2025, substantially all assets of the Company are deposited with the clearing firm.
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#### NOTE 10 Commitments and Contingencies
The Company, from time to time, is involved in certain claims, and regulatory matters that are incidental to it business operations. The Company contests liability and the amount of damages or fines as appropriate in each pending matter. The Company accrues the estimated liability by a charge to income when the Company has information available to it which indicates that it is probable that a liability has been incurred and the Company can reasonably estimate the amount of that liability. For the year ended December 31, 2025, no accrual for commitments and contingencies was deemed necessary.
#### Concentrations and Credit Risks NOTE 11
The Company is a proprietary trading firm and doesn't have any customers.
#### NOTE 12 Related-Party Transactions
The Company pays all direct expenses associated with its trading activities. The Company has an agreement with Black Edge Capital, LLC (the "Affiliate") a brother-sister relationship through the Parent whereby certain operating expenses are paid by the Affiliate and charged to the Company based on a series of usage factors and are reported as Shared Services Expenses on the Statement of Income. Payable to Affiliate on the statement of financial condition of approximately \$2,815,921 related to those activities.
Black Edge Holdings, LLC (the "Member"), the top-tiered Parent company, made an income tax election at the Member level which will allow the entity to pay the state income taxes of their members (pass through entity tax). Those taxes are deducted as an operating expense at the Member level. A distribution based on the tax effect will be made to the lower-tiered entities during 2026.
#### Indemnifications NOTE 13
In the normal course of its business, the Company indemnifies certain service providers, such as clearing firms, against specified potential losses in connection with their as an agent of or providing service to the Company. The maximum potential amount of futures payments that the company could be required to make under these indemnifications cannot be estimated. However, the Company believes that it is unlikely it will have to make material payments under these arrangements and has not recorded any contingent liability in the financial statements for these indemnifications.
#### NOTE 14 Subsequent Events
The Company has evaluated subsequent events for potential recognition and/or disclosure through the date the financials were available to be issued
Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.