# INTEGRAL WEALTH SECURITIES LLC X-17A-5 (2024-09-19) — Broker-dealer annual report - Company: INTEGRAL WEALTH SECURITIES LLC - Form: X-17A-5 - Filed: 2024-09-19 - Period: 2024-06-30 - Accession: 0002013816-24-000061 - CIK: 920301 - File #: 8-47026 - Type: Broker-dealer - Material weakness: No - Auditor: Sanville & Company - Auditor location: Huntingdon Valley, PA - Contact: Robert W. Peters - Phone: 212-668-8700 - Signed by: David Franklin (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/920301/000201381624000061/integralaudit.pdf --- {0}------------------------------------------------ **to SEC Rule 17a-5 Financial Statements and Supplemental Schedules Pursuant As of and for the Year Ended June 30, 2024** {1}------------------------------------------------ | Table of Contents | | |--------------------------------------------------------------------------------------------------------------|------| | As of and for the Year Ended June 30, 2024 | | | ANNUAL AUDITED FOCUS REPORT FACING PAGE | 1-2 | | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON THE FINANCIAL STATEMENTS | 3-4 | | FINANCIAL STATEMENTS | | | Statement of Financial Condition | 5 | | Statement of Operations | 6 | | Statement of Changes in Member's Equity | 7 | | Statement of Cash Flows | 8 | | Notes to Financial Statements | 9-10 | | SUPPLEMENTARY INFORMATION | | | Schedule I - Computation of Net Capital Pursuant to SEC Rule 15c3-1 | 11 | | Schedule II - Computation for Determination of Reserve Requirements
Pursuant to SEC Rule 15c3-3 | 12 | | Schedule III - Information Relating to the Possession or Control Requirements
Pursuant to SEC Rule 15c3-3 | 12 | | Report of Independent Registered Public Accounting Firm Exemption Report Review | 13 | | Exemption Report | 14 | {2}------------------------------------------------ | | (No. and Street) | | |---------------------------------------------|------------------|------------------------| | NEW YORK | NY | 10281 | | (City) | (State) | (Zip Code) | | ERSON TO CONTACT WITH REGARD TO THIS FILING | | | | DODEDT W DETEDS (212) 669 9700 | | matore alaqicoauro com | | ROBERT W. PETERS (212) 668-8700
rpeters@acise | |--------------------------------------------------| |--------------------------------------------------| | 2617 HUNTINGDON PIKE HUNTINGDON VALLEY PA | | | 19006 | |-------------------------------------------|--------|---------|------------| | (Address) | (City) | (State) | (Zip Code) | | 09/18/2003 | | 169 | | | | | | | {3}------------------------------------------------ - - - - - - - - - - - - - - - - - - - - - - - - - {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) # **Report of Independent Registered Public Accounting Firm** To the Member and Those Charged With Governance of Integral Wealth Securities LLC # **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of Integral Wealth Securities LLC (the Company) as of June 30, 2024, the related statements of operations, changes in member's equity, and cash flows for the year then ended, and the related notes to the financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2024, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. # **Basis for Opinion** These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to 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 statements are 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 statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. # **Supplemental Information** The supplementary information contained in The Schedule I, Computation of Net Capital Under SEC Rule 15c3-1, Schedule II, Computation for Determination of Reserve Requirements Under Rule SEC 15c3-3 and Schedule III, Information Relating to the Possession or Control Requirements Under SEC Rule 15c3-3 have been subjected to audit procedures performed in conjunction with the audit of the Company's financial statements. The supplemental information is the responsibility of the Company's management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the > 325 North Saint Paul Street Suite 3100 Dallas, Texas 75201 214.738.1998 {5}------------------------------------------------ supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 C.F.R. §240.17a-5. In our opinion, the supplementary information contained in the Schedule I, Computation of Net Capital Under SEC Rule 15c3- 1, Schedule II, Computation for Determination of Reserve Requirements Under SEC Rule 15c3-3 and Schedule III, Information Relating to the Possession or Control Requirements Under SEC Rule 15c3-3 are fairly stated, in all material respects, in relation to the financial statements as a whole. in relation to the financial statements as a wh We have served as the Company's auditor since 2002. W h d th C ' dit i 2002 Dallas, Texas September 17, 2024 {6}------------------------------------------------ Statement of Financial Condition As of June 30, 2024 | ASSETS | | |--------------------------------------------------------------|----------------------------------| | Cash and cash equivalents
Fees receivable
Other assets | \$
56,349
26,905
11,829 | | TOTAL ASSETS | \$
95,083 | | LIABILITIES AND MEMBER'S EQUITY | | | LIABILITIES:
Accounts payable and accrued expenses | \$
33,360 | | TOTAL LIABILITIES | 33,360 | | Member's Equity | \$
61,723 | | TOTAL LIABILITIES AND MEMBER'S EQUITY | \$
95,083 | {7}------------------------------------------------ For the Year Ended June 30, 2024 Statement of Operations ## **REVENUE:** | Private placement fees
Marketing Fees
Management fees
Corporate Advisory Fees
Total revenue | \$
493,836
49,700
66,814
129,000
739,350 | |---------------------------------------------------------------------------------------------------------|---------------------------------------------------------| | EXPENSES: | | | Compensation expense | 502,023 | | Commission expense | 0 | | Professional fees | 143,456 | | Office expense | 30,969 | | Regulatory fees and expenses | 32,629 | | Other expenses | 10,092 | | Total expenses | 719,169 | | Net income | \$
20,181 | {8}------------------------------------------------ Statement of Changes in Member's Equity For the Year Ended June 30, 2024 | MEMBER'S EQUITY, JULY 1, 2023 | \$
286,442 | |--------------------------------|---------------| | Net income | 20,181 | | Member withdrawals | (244,900) | | MEMBER'S EQUITY, JUNE 30, 2024 | \$
61,723 | {9}------------------------------------------------ Statement of Cash Flows For the Year Ended June 30, 2024 | Net income | \$
20,181 | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------| | Adjustments to reconcile net income to net cash used in
operating activities
Changes in operating assets and liabilities
Decrease in fees receivable
Increase in other assets
Decrease in accounts payable and accrued expenses | 88,583
(427)
(111,565) | | NET CASH USED IN OPERATING ACTIVITIES | (3,228) | | CASH USED BY FINANCING ACTIVITIES: | | | Equity withdrawals from Member | (244,900) | | NET CASH USED BY FINANCING ACTIVITIES | (244,900) | | NET DECREASE IN CASH | (248,128) | | CASH - JULY 1, 2023 | 304,477 | | CASH - JUNE 30, 2024 | \$
56,349 | | Supplemental Information: | | | Taxes Paid | \$
- | |---------------|---------| | Interest Paid | \$
- | {10}------------------------------------------------ Notes to Financial Statements For the Year Ended June 30, 2024 ## **1. Organization and Nature of Business** Integral Wealth Securities LLC, is a Pennsylvania limited liability company that is a registered broker dealer with the Securities and Exchange Commission ("SEC") and the Financial Industry Regulatory Authority ("FINRA"). The Company, which has agreed to limit its business to corporate finance and investment banking activities, is directly affected by general economic and market conditions, including fluctuations in volume and price level of securities and changes in interest rates, which have an impact on the Company's liquidity. Since the Company is a limited liability company, the Member is not liable for the debts, obligations, or liabilities of the Company, whether arising in contract, tort or otherwise, unless the Member has signed a specific guarantee. ### **2. Summary of Significant Accounting Policies** ### **Basis of Presentation** The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). ### **Revenue Recognition** Effective July 1, 2018, the Company adopted Financial Accounting Standards Board (FASB) ASC Topic 606, Revenue from Contracts with Customers ("ASC Topic 606"). The new revenue recognition guidance requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires an entity to follow a five step model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. #### **Use of Estimates** The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts expensed during the reporting period. Actual results could differ from those estimates. #### **Income Taxes** The Company has elected to be treated as an entity not subject to tax and accordingly is a Single Member LLC treated as a Disregarded Entity. The Company is not subject and does not pay Federal, state or local taxes. ### **Allowance for Doubtful Accounts** The Company's accounts receivable consist primarily of amounts due for capital raising fees. The Company records an allowance for estimated uncollectible accounts in an amount approximating anticipated losses. Individual uncollectible accounts are written off against the allowance when collection of the individual accounts appears doubtful. Management has determined that no allowance is necessary at June 30, 2024. #### **3. Net Capital Requirement** The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (SEC Rule 15c3-1), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. At June 30, 2024, the Company had net capital of \$47,124, which was \$42,124 in excess of its required net capital of \$5,000. The Company's aggregate indebtedness to net capital ratio was 70.96%. The Company does not hold customers' cash or securities and, therefore, is exempt from the provision of SEC Rule 15c3-3 under SEC Footnote 74. ### **4. Concentration Risk** The Company maintains its cash accounts in commercial banks. The Company does not consider itself to be at risk with respect to its cash balances. ### **5. Subsequent Events** The Company has evaluated all subsequent events for recognition and disclosure through the date these financial statements were available to be issued. Based upon this evaluation, the Company did not identify any recognized or nonrecognized subsequent events that would have required adjustment or disclosure in the financial statements. 9 {11}------------------------------------------------ Notes to Financial Statements For the Year Ended June 30, 2024 ### **6. Revenues** Private placement, management, and marketing fees are earned for achieving various fundraising objectives. Such fees may be earned based upon a percentage of funds raised and/or a flat fee and may include a retainer, or partial payment, to commence services. #### *Private Placement of Securities* The Company earns commissions for acting as either the managing dealer or selling group member in the private placement of securities. These commissions are recognized as revenue based on the following criteria: **Performance Obligation:** Revenue is recognized when the Company has fulfilled its performance obligations, which typically occurs at the closing of the private placement when the securities have been successfully placed with investors. **Collectibility:** Revenue is recognized when it is probable that the economic benefits associated with the transaction will flow to the Company, and the commission amount is reasonably assured of collection. **Commission Measurement**: Commissions are recognized when they are fixed or determinable according to the terms of the private placement agreement and are not subject to significant adjustment or contingency. ### *Management Fees* The Company earns management and incentive fees from providing investment management services to pooled investment vehicles. These fees are recognized as revenue based on the following criteria: **Management Fees**: Management fees are calculated as a percentage of the assets under management (AUM) and are typically earned on a recurring basis (e.g., monthly or quarterly). Revenue is recognized over time as the related services are provided, in line with the contractual agreement with the pooled investment vehicles. **Incentive Fees**: Incentive fees, also known as performance fees, are earned based on the performance of the pooled investment vehicles relative to a predetermined benchmark or hurdle rate. These fees are recognized as revenue when it is probable that a significant reversal of cumulative revenue recognized will not occur, typically when the performance metrics are met, and the fees are crystallized according to the terms of the pooled investment vehicles' agreement(s). #### *Corporate Advisory Fees* The Company earns corporate advisory fees for providing strategic financial advisory services to clients. These fees are recognized as revenue based on the following criteria: **Performance Obligation:** Revenue is recognized when the Company has satisfied its performance obligations under the advisory agreement. This typically occurs when the agreed-upon advisory services have been rendered, which may include activities such as mergers and acquisitions consulting, capital restructuring, or other strategic financial advice. **Fee Measurement**: Advisory fees are recognized when the amount is fixed or determinable in accordance with the terms of the advisory agreement. Fees may be based on a fixed fee, a percentage of the transaction value, or other arrangements as specified in the contract. **Timing of Recognition:** Depending on the terms of the engagement, revenue may be recognized over time as the services are provided or at a point in time when a significant milestone is achieved, such as the successful completion of a transaction. **Collectibility**: Revenue is recognized when it is probable that the economic benefits associated with the transaction will flow to the Company and the fee amount is reasonably assured of collection. #### *Marketing Fees* The Company, acting as the managing dealer in private placement transactions, earns marketing reallowance fees for its efforts in the marketing and distribution of securities. These fees are recognized as revenue when the following criteria are met: **Performance Obligation**: Revenue is recognized upon the completion of the Company's performance obligations, which generally occurs at the closing of the private placement when the securities are successfully placed with investors. **Collectibility**: Revenue is recognized when it is probable that the economic benefits will flow to the Company and the fee amount is reasonably assured of collectio **Fee Measurement**: The fee is recognized when it is fixed or determinable, as specified in the private placement agreement, and is not subject to significant adjustment or contingency. {12}------------------------------------------------ # Computation of Net Capital Pursuant to SEC Rule 15c3-1 As of June 30, 2024 | TOTAL MEMBER'S EQUITY | \$
61,723 | |-------------------------------------------------------------------------------------------------------------------------------------|------------------| | OTHER ALLOWABLE ASSETS | 24,214 | | TOTAL CAPITAL AND OTHER ALLOWABLE ASSETS | 85,937 | | AND/OR CHARGES:
Non-allowable assets: | | | Fees receivable | 26,905 | | Other assets
Total non-allowable assets | 11,908
38,813 | | NET CAPITAL | \$
47,124 | | AGGREGATE INDEBTEDNESS:
Account payable and accrued expenses | \$
33,440 | | COMPUTATION OF BASIC NET CAPITAL REQUIREMENT -
Minimum net capital required (greater of \$5,000 or 6.67% aggregate indebtedness) | 5,000 \$ | | Excess net capital | \$
42,124 | | Net capital less greater of 10% of aggregate indebtedness or 120% of minimum net capital | 41,124 \$ | | Percentage of aggregate indebtedness to net capital | 70.96% | There were no material differences between the above computation of net capital and the Company's corresponding unaudited Focus Report. {13}------------------------------------------------ June 30, 2024 Computation of Determination of Reserve Requirement Pursuant to SEC Rule 15c3-3 and Information for Possession or Control Requirements Pursuant to SEC Rule 15c3-3 **SCHEDULE II** ## **COMPUTATION FOR DETERMINATION OF RESERVE REQUIREMENT PURSUANT TO SEC RULE 15c3-3** The firm has no possession or control obligations under SEA Rule 15c3-3(b) or reserve deposit obligations under SEA Rule 15c3-3(e) because its business is limited to private placements of securities on a best efforts basis only, mutual fund wholesaling and corporate advisory services. ### **SCHEDULE III** ### **INFORMATION RELATING TO THE POSSESSION OR CONTROL REQUIREMENTS PURSUANT TO SEC RULE 15c3-3** The firm has no possession or control obligations under SEA Rule 15c3-3(b) or reserve deposit obligations under SEA Rule 15c3-3(e) because its business is limited to private placements of securities on a best efforts basis only, mutual fund wholesaling and corporate advisory services. See Report of Independent Registered Public Accounting Firm {14}------------------------------------------------ ![](_page_14_Picture_0.jpeg) # **Report of Independent Registered Public Accounting Firm** To the Member and Those Charged With Governance of Integral Wealth Securities LLC We have reviewed management's statements, included in the accompanying Exemption Report, in which Integral Wealth Securities LLC (the Company) stated that: - 1. The Company does not claim an exemption under paragraph (k) of 17 C.F.R. § 240.15c3-3; - 2. The Company is filing an 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 (1) private placement of securities (2) corporate advisory services (3) acting as a mutual fund wholesaler throughout the most recent fiscal year; and - 3. The Company (1) did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers (other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of 17 C.F.R. § 240.15c2-4; (2) did not carry accounts of or for customers; and (3) did not carry proprietary accounts of broker-dealers (as defined in 17 C.F.R. § 240.15c3-3) throughout the most recent fiscal year without exception. The Company's management is responsible for its statements. Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included inquiries and other required procedures to obtain evidence that the Company limited its business activities exclusively to (1) private placement of securities (2) corporate advisory services (3) acting as a mutual fund wholesaler and (1) did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers (other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of 17 C.F.R. § 240.15c2-4; (2) did not carry accounts of or for customers; and (3) did not carry proprietary accounts of broker-dealers (as defined in 17 C.F.R. § 240.15c3-3) throughout the most recent fiscal year without exception. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to management's statements referred to above for them to be fairly stated, in all material respects, based on the provisions set forth in 17 C.F.R. § 240.17a-5. to above for them to be fairly in all material respect Dallas, Texas September 17, 2024 Dallas 325 North Saint Paul Street Suite 3100 Dallas, Texas 75201 214.738.1998 {15}------------------------------------------------ # **Integral Wealth Securities, LLC Exemption Report** Integral Wealth Securities, 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 is considered "Non-Covered Firm" exempt from 17 C.F.R. §240.15c3-3 and is filing an Exemption Report relying on footnote 74 to SEC Release 34-70073, and as discussed in Q&A 8 of the related FAQ issued by the SEC staff. The Company limits its business activities exclusively to: (1) private placement of securities (2) corporate advisory services (3) acting as a mutual fund wholesaler. - (2) The Company (1) did not directly or indirectly receive, hold or otherwise owe funds or securities for or to customers, other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of Rule 15c2-4; (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts (as defined in Rule 15c3-3), throughout the most recent fiscal year without exception. I, David Franklin, swear (or affirm) that, to my best knowledge and belief, this exemption report is true and correct. Regards, David Franklin Chief Executive Officer Date of Report: August 5, 2024 Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.