# ELEQUIN SECURITIES LLC X-17A-5 (2025-03-31) — Broker-dealer annual report - Company: ELEQUIN SECURITIES LLC - Form: X-17A-5 - Filed: 2025-03-31 - Period: 2024-12-31 - Accession: 0001841454-25-000003 - CIK: 1841454 - File #: 8-70654 - Type: Broker-dealer - Material weakness: No - Auditor: RSM US LLP - Auditor location: Chicago, IL - Contact: James Finlayson - Phone: 9293467126 - Email: james@elequincapital.com - Website: elequincapital.com - Signed by: James Finlayson (President & COO) Original filing: https://www.sec.gov/Archives/edgar/data/1841454/000184145425000003/EleqSecLLC_PublicDec2024.pdf --- {0}------------------------------------------------ ## **Elequin Securities LLC** **Report on Audit of Statement of Financial Condition** **December 31, 2024** {1}------------------------------------------------ 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 | | | | | | | | SEC FILE NUMBER 8-70654 花 # 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 | filing for the period beginning 01/01/24 | MM/DD/YY | AND ENDING 12/31/24 | | MM/DD/YY | | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------|---------------------|-----------------|--------------------------------------------|--| | | A. REGISTRANT IDENTIFICATION | | | | | | NAME OF FIRM: ELEQUIN SECURITIES, LLC | | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
Security-based swap dealer
Broker-dealer
L Major security-based swap participant
Check here if respondent is also an OTC derivatives dealer | | | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | | 1333 Broadway, Suite 500 | | | | | | | | (No. and Street) | | | | | | New York | | NY | | 10018 | | | (City) | | (State) | | (Zip Code) | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | James Finlayson | 929 346 7126 | | | james@elequincapital.com | | | (Name) | (Area Code - Telephone Number) | | (Email Address) | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
RSMILP US | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | | | 30 South Wacker Drive, Suite 3300 | Chicago | | | 60606 | | | (Address) | (City) | | (State) | (Zip Code) | | | 9/24/2003 | | 49 | | | | | (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. {2}------------------------------------------------ ### OATH OR AFFIRMATION | James Finlayson | swear (or affirm) that, to the best of my knowledge and belief, the | |--------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------| | financial report pertaining to the firm of Elequin Securities, LLC | as of | | 12/31 | mille 2024 , is true and correct. I further swear (or affirm) that neither the company nor any | | | partner, officer, director, & Equilded of general be, has any proprietary interest in any account classfied solely | | as that of a customer.
STATE | | | OF NEW YOF | | | | Signature: | | CHRISTOFER C. CRET | | | 02CR0025200 | Title: | | | President& COO | | | | # 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. - L (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(d)(2), as applicable. {3}------------------------------------------------ #### **Contents** | Report of Independent Registered Public Accounting Firm | 1 | |---------------------------------------------------------|-----| | Statement of Financial Condition | 2 | | Notes to Financial Statement | 3-9 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) ## **Report of Independent Registered Public Accounting Firm** To the Member of Elequin Securities, LLC ## **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of Elequin Securities, LLC (the Company) as of December 31, 2024, and the related notes. 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 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 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. 1 We have served as the Company's auditor since 2023. Chicago, Illinois March 28, 2025 {5}------------------------------------------------ #### Statement of Financial Condition December 31, 2024 #### **ASSETS** | Cash
Securities owned, at fair value
Due from clearing brokers
Interest receivable
Dividend receivable | \$
144,976
207,250,545
18,635,856
2,299,907
303,918 | |--------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------| | Prepaid expenses and other assets | 91,076 | | TOTAL ASSETS | \$
228,726,278 | | LIABILITIES AND MEMBER'S EQUITY | | | LIABILITIES: | | | Securities sold, not yet purchased | \$
112,287,354 | | Due to clearing brokers | 70,692,453 | | Accounts payable and accrued expenses | 2,081,352 | | Loan payable to parent Company | 100,000 | | Interest payable
Dividend payable | 1,295,116
339 | | TOTAL LIABILITIES | 186,456,614 | | Member's Equity | 42,269,664 | | TOTAL LIABILITIES AND MEMBER'S EQUITY | \$
228,726,278 | See accompanying notes to financial statement {6}------------------------------------------------ #### **1. Organization and Nature of Business** Elequin Securities, LLC ("Company"), a Delaware limited liability company wholly-owned by Elequin Holdings LLC ("Parent"), is a registered broker-dealer in securities under the Securities Exchange Act of 1934 and is a member of the Chicago Board Options Exchange ("CBOE") and the Financial Industry Regulatory Authority ("FINRA"). The Company commenced operations on December 27, 2021. The Company is engaged in proprietary trading and making markets in various types of securities. Equity securities, inclusive of ETFs, are traded on the National Securities Exchanges. The Company also takes hedge positions in futures and options. The Company does not claim an exemption from the provisions of Rule 15c3-3 of the SEC. For the year ended December 31, 2024, the Company did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers; did not carry accounts for or to customers; did not carry proprietary accounts of broker dealer (PAB) (as defined in Rule 15c3- 3); and its business activities are limited to proprietary trading. #### **2. Summary of Significant Accounting Policies** #### **Basis of Accounting** The financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Revenue is recognized when earned, while expenses and losses are recognized when incurred. #### **Cash** The Company maintains its cash balance at a financial institution. At times, the amount on deposit at this institution may exceed the maximum balance insured by the Federal Deposit Insurance Corporation. #### **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 affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. #### **Income Taxes** The Company is a single member limited liability company disregarded for income tax purposes. The Parent is individually responsible for income taxes that result from the Company's operations. Therefore, no provision for federal, state, or local income taxes is included in the accompanying financial statements. Tax laws are complex and subject to different interpretations by the taxpayer and taxing authorities. Significant judgment Is required when evaluating tax positions and related uncertainties. Future events such as changes in tax legislation could require a provision for income taxes. Any such changes could significantly affect the amounts reported in the Statement of Operations. Management is responsible for determining whether a tax position taken by the Company is more likely than not to be sustained on the merits. The Company has not recognized in these financial statements any interest or penalties related to income taxes, and have no material unrecognized tax benefits. The Company is generally subject to examination by U.S. federal or state taxing authorities for current and three past tax years. #### **Translation of Foreign Currency** Assets and liabilities denominated in foreign currencies are translated into US dollar amounts at the period end exchange rates. Transactions denominated in foreign currencies, including purchases and sales of investments, and income and expenses, are translated into US dollars on the transaction date. Adjustments arising from foreign current transactions are reflected in the Statement of Operations. The Company does not isolate that portion of the results of operations arising from the effect of changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of investments held. Such fluctuations are included in trading revenue in the Statement of Operations. {7}------------------------------------------------ #### **2. Summary of Significant Accounting Policies (continued)** #### **Receivable from and Payable to Brokers, Dealers and Clearing Organizations** The receivable from and payable to brokers, dealers and clearing organizations may include cash balances, unsettled transactions and open trade equity related to certain derivative financial instruments. The Company clears the majority of its proprietary transactions through clearing brokers. The net receivables/payables from/to brokers, dealers and clearing organizations related to the aforementioned transactions contain cash margin balances and are collateralized by securities owned by the Company. The clearing brokers' internal and regulatory collateral requirements on open short positions and securities purchased on margin require that cash and/or securities be maintained in the Company's accounts to satisfy such requirements. #### **Financial Instruments** Financial instruments owned and financial instruments sold, not yet purchased include equities measured at fair value, recorded on a trade date basis. Resulting realized and change in unrealized gains and losses are reported in principal transactions in the statement of operations. The Company recognizes contractual interest on securities and interest expense on an accrual basis, and dividend income and expense are recognized on the ex-dividend date. Commission and related clearing expenses are recorded on a tradedate basis as securities transactions occur. #### **Credit Losses on Financial Assets** The Company evaluates all financial assets that are measured at amortized cost for credit losses under the Current Expected Credit Losses model. Financial assets evaluated include cash, receivables from broker-dealers, and other receivables. Expected credit losses are measured based on historical experience, current conditions and forecasts that affect the collectability of the reported amount. Due to the short duration of the financial assets, there are no material estimates of credit losses related to these financial assets as of December 31, 2024. #### **3. Segment Reporting (Topic 280)** In accordance with FASB ASU 2023-07, Segment Reporting (Topic 280), the Company has expanded its disclosures to provide enhanced transparency regarding the financial performance of its reportable segments. This update requires disclosure of significant segment expenses and a reconciliation to consolidated financial results to improve comparability and investor understanding. The Company is engaged in a single line of business as a securities broker-dealer. The Company's chief operating decision maker (CODM) consists of a group of top executives (CEO, COO and CFO) who use net income to evaluate business performance, primarily 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. 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. #### **4. Fair Value** The fair value of the Company's assets and liabilities which qualify as financial instruments in accordance with US GAAP approximate the carrying amounts presented in the Statement of Financial Condition. The Company carries its securities owned and sold short at fair value. US GAAP establishes a hierarchy for inputs used in measuring Fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs are inputs that market participants would use in pricing the investment based on available market data. Unobservable inputs are inputs that reflect the Company's assumptions about the facts market participants would use in valuing the investment based on the best information in the circumstances. {8}------------------------------------------------ #### For the Year Ended December 31, 2024 Notes to Financial Statements #### **4. Fair Value (continued)** The fair value hierarchy is categorized into three levels based on the inputs as follow: Level 1) Valuations based on unadjusted quoted priced in active markets for identical investments. Level 2) Valuations based on (a) quoted prices in markets that are not active; (b) quoted prices for similar investments in active markets; (c) inputs other than quoted prices that are observable or inputs derived from or corroborated by observable market data correlation or otherwise. Level 3) Valuations based on inputs that are unobservable, supported by little or no market activity, and significant to the overall fair value measurement. An asset or liability's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The availability of observable inputs can vary from financial instrument to financial instrument and is affected by a wide variety of factors, including, for example the type of product, whether the product is new and not yet established in the marketplace, the liquidity of markets, and other characteristic's particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the management in determining fair value is greatest for instruments categorized in Level 3. The fair value of the Company's assets and liabilities which qualify as financial instruments in accordance with US GAAP approximate the carrying amounts presented in the Statement of Financial Condition, due to their short term nature. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement entirety. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment. #### *Investments in Securities* The Company values investments in securities that are freely tradeable and are listed on a national securities exchange at their last sales price as of the date of determination. ETFs that are freely tradeable and are listed on a national stock exchange are included in securities, at fair value, and securities sold not yet purchased for fair value hierarchy presentation. To the extent securities are actively traded and valuation adjustments are not applied, they are categorized in Level 1 of the fair value hierarchy, otherwise the securities are categorized as level 2. #### *Warrants* The Company values warrants that are traded on an exchange at their last reported sales price to determine their fair value. Warrants that are traded on an exchange in an active market are generally classified in Level 1 of the fair value hierarchy. If adjustments are necessary or if the warrants are not actively traded, they are categorized as Level 2. #### *Municipal Bonds* The Company values municipal bonds based on prices from independent pricing services. These bonds are generally classified as Level 2. If observable data is unavailable or adjustments are significant, they are categorized as Level 3. As we have not made any adjustments to the market quotes provided to us and as they are based on observable market data, they have been categorized as Level 2 within the fair value hierarchy. #### *Corporate Bonds* The Company values corporate bonds based on prices from independent pricing services. When such data is readily available, the bonds are typically Level 2. Securities with limited trading or requiring significant assumptions may be categorized as Level 3. As we have not made any adjustments to the market quotes provided to us and as they are based on observable market data, they have been categorized as Level 2 within the fair value hierarchy. {9}------------------------------------------------ #### **4. Fair Value (continued)** #### *Preferred Equities* The Company values exchange-listed preferred equities based on the Bid price from independent pricing source, placing them in Level 1. If trading is limited or valuation adjustments are required, they are categorized as Level 2. Securities relying on significant unobservable inputs are classified as Level 3. #### *U.S. Treasury Bills* The Company values U.S. Treasury Bills based on the quoted market prices in active markets and included them in the Level 1 fair value hierarchy due to the U.S. Treasury Bills being actively traded. The following table presents information about the Company's assets and liabilities measured at fair value as of December 31, 2024. | | Level 1 | Level 2 | Level 3 | Total | |-------------------------------------------|------------------|-------------------|---------|-------------------| | Assets | | | | | | Securities owned, at fair value | | | | | | Equities | \$
26,731,343 | \$
- | \$
- | 26,731,343 | | Municipal Bonds | - | 179,516,494 | - | 179,516,494 | | Treasury Bills | 1,002,612 | - | - | 1,002,612 | | Warrants | 96 | - | - | 96 | | Total Securities, at fair value | \$
27,734,051 | \$
179,516,494 | \$
- | \$
207,250,545 | | Liabilities | | | | | | Securities sold, not yet purchased | | | | | | Equities | \$
32,698,598 | \$
- | \$
- | 32,698,598 | | Corporate Bonds | - | 77,726,346 | - | 77,726,346 | | Preferred Equity | 1,862,409 | - | - | 1,862,409 | | Total Securities sold, not yet purchased, | \$
34,561,008 | \$
77,726,346 | \$
- | \$
112,287,354 | | at fair value | | | | | #### **5. Related Party Transactions** #### **Amounts Due to Parent Company** As of December 31, 2024, the Company had \$1,651,171 due to the Parent which is included in accounts payable and accrued expenses as well as the accrued bonus on the accompanying statement of financial condition. As of July 15, 2022, the Company has established an Expense Sharing Agreement with its parent entities, Elequin Holdings, LLC and Elequin Capital, LP. The Second Amended and Restated version of this agreement became effective as of June 1, 2024. This agreement delineates the allocation of shared expenses and their settlement based on predetermined sharing percentages. The Company entered into multiple short-term loan agreements with its parent company, Elequin Holdings, LLC. Under the terms of the loan agreements, any loan not repaid within 30 days would bear interest at an annualized rate of 10%. As of December 31, 2024, the Company had an outstanding balance of \$100,000 payable to Elequin Holdings, LLC. This amount was fully repaid on January 3, 2025. {10}------------------------------------------------ #### **6. Financial Instruments and Risk** In the normal course of its business, the Company trades various financial instruments and enters into various financial transactions where the risk of potential loss due to market risk, currency risk, and credit risk and other risks can equal or exceed the related amounts recorded. The success of any investment activity is influenced by general economic conditions that may affect the level and volatility of equity, futures, and options prices and the extent and timing of investor participation in these markets. Market risk represents the potential loss that can be caused by increases or decreases in the fair value of investments resulting from market fluctuations. Currency risk is the risk that the fair value of an investment will fluctuate because of changes in foreign exchange rates. Investments that are denominated in a non-U.S. currency are subject to the risk that the value of a particular currency will change in relation to one or more other currencies. Among the factors that may affect currency values are trade balances, the level of short term interest rates, differences in relative values of similar assets in different currencies, long term opportunities for investment and capital appreciation and political developments. Credit risk represents the potential loss that would occur if counterparties fail to perform pursuant to the terms of their obligations. In addition to its investments, the Company is subject to credit risk to the extent a custodian or broker with whom it conducts business in unable to fulfill contractual obligations. Liquidity risk represents the potential loss that would occur if counterparties fail to perform pursuant to the terms of their obligations. In addition to its investments, the Company is subject to credit risk to the extent a custodian or broker with whom it conducts business is unable to fulfill contractual obligations. Short selling, or the sale of securities not owned by the Company, expose the Company to the risk of loss in an amount greater than the initial proceeds, and such losses can increase rapidly and in the case of equities, without effective limit. There is the risk that the securities borrowed by the Company in connection with a short sale would need to be returned to the securities lender on short notice. If such request for return of securities occurs at a time when other short sellers of the subject security are receiving similar requests, a "short squeeze" can occur, wherein the Company might be compelled, at the most disadvantageous time, to replace borrowed securities previously sold short with purchases on the open market, possibly at prices significantly in excess of the proceeds received earlier. Borrowings are usually from securities brokers and dealers and are typically secured by the Company's securities and other assets. Under certain circumstances, such a broker-dealer may demand an increase in the collateral that secures the Company's obligations and if the Company is unable to provide additional collateral, the broker-dealer could liquidate assets held in the account to satisfy the Company's obligations to the broker-dealer. Liquidation in that manner could have adverse consequences. In addition, the amount of the Company's borrowings and the interest rates on those borrowings, which will fluctuate, could have a significant effect on the Company's profitability. While the use of certain forms of leverage, including margin borrowings, can substantially improve the return on invested capital, such use may also increase the adverse impact to which the portfolio of the Company may be subject. #### *Derivative Contracts* In the normal course of business, the Company utilizes derivative contracts in connection with its trading activities. Investments in derivative contracts are subject to additional risks that can result in a loss of all or part of an investment. The Company's derivative activities and exposure to derivative contracts are classified by the following primary underlying risks: foreign currency exchange rate risk and equity price fluctuation risk. {11}------------------------------------------------ #### **6. Financial Instruments and Risk (continued)** The following table identifies the fair value amounts of derivative contracts included in the Statement of Financial Condition categorized by primary underlying risk, at December 31, 2024. The following table also identifies the realized and unrealized gain and loss amounts included in the Statement of Operations, categorized by primary underlying risk, for the period from January 1, 2024 to December 31, 2024: **Deriviative Deriviative** | Primary underlying risk | | assets | liabilities | | |-------------------------|----|--------|-------------|---| | Equity risk | | | | | | Warrants | \$ | 96 \$ | | - | | Options | | - | | - | | Digital Asset risk | | | | | | Futures | | - | | - | | Options | | - | | - | | Total | \$ | 96 \$ | | - | \*Derivative assets contribute to the 'Due from clearing brokers' classification, while derivative liabilities are included in 'Securities sold, not yet purchased' within the Statement of Financial Condition. Realized gains (losses) and Unrealized appreciation (depreciation) are presented under 'Trading revenue' in the Statement of Operations. The following table details notional amounts of derivatives positions open at December 31, 2024: | | Long Exposure | | | | Short Exposure | | | | | | |----------|--------------------|----|------------------------|--|----------------|--------------------|--|------------------------|--|--| | | Notional
Amount | | Number of
contracts | | | Notional
Amount | | Number of
contracts | | | | Warrants | | 96 | 34,352 | | | - | | - | | | | | \$ | 96 | 34,352 | | | - \$ | | - | | | #### **7. Due to/from Broker** The Company clears its proprietary and market making trades through multiple clearing brokers. All of the Company's assets and liabilities held at each Clearing Broker are subject to a master netting arrangement. The master netting arrangement allows each Clearing Broker to transfer amounts between different accounts at that Clearing Broker to satisfy margin requirements. Cash and securities are maintained on deposit with the Clearing Broker, which represents the minimum balance required to be maintained in order to utilize its services. These balances are presented net (assets less liabilities) across balances with the Clearing Broker. As part of the Company's relationship with one of its Clearing Brokers, the Company invested \$50,000 in preferred shares of the Clearing Broker, pursuant to a Joint Back Office Agreement. The preferred shares are subject to redemption restrictions. Amounts Receivable from and Payable to brokers, dealers and clearing organizations at December 31, 2024, consist of the following: | | Assets | Liabilities | |-----------------------------------------------------------------------|---------------|-----------------| | Receivable/Payable cash from/to brokers & dealers | 18,635,856 | (70,692,453) | | Receivable/Payable derivative OTE contracts from/to brokers & dealers | - | - | | Total | \$ 18,635,856 | \$ (70,692,453) | {12}------------------------------------------------ #### For the Year Ended December 31, 2024 Notes to Financial Statements #### **8. Net Capital Requirement** The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (15c3-1), which requires the maintenance of minimum net capital that is the greater of (i) \$100,000, (ii) \$2,500 for each security that it is registered as a Market Maker (unless a security in which it makes a market has a market value of \$5 of less. In this event the amount of net capital shall be not less than \$1,000 for each security), (iii) six and two-thirds percent (6 2/3%) of aggregate indebtedness. The Uniform Net Capital Rule also requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 1500%. At December 31, 2024, the Company had net capital of \$14,339,264 which was \$14,091,764 in excess of its required net capital of \$247,500. The Company's aggregate indebtedness to net capital ratio was 24.25%. #### **9. Subsequent Events** The Company has evaluated events and transactions that occurred between January 1, 2025 and March 28, 2025, which is the date the financial statements were available to be issued, for possible disclosure and recognition in the financial statements. From January 1, 2025 through March 28, 2025, the Company had no capital withdrawals and \$23,000,000 of capital contributions. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.