12. Deferred Contract Incentive

Effective August 1, 2021, MSCO entered into an amendment to its clearing agreement with NFS that, among other things, extended the term of the arrangement for an additional four-year period ending July 31, 2025. Under this amendment, the Company received a one-time business development credit of $3.0 million and four annual credits of $100,000. These amounts were recorded in the line item “Deferred contract incentive” on the statements of financial condition and were recognized as contra expense within “Clearing fees, including execution costs” on the statements of operations - the business development credit over four years and the annual credits over one year. The 2021 amendment term was completed as of July 31, 2025 and there were no early termination fees recognized during the period of this arrangement.

Effective September 29, 2025, MSCO entered into a subsequent amendment to its clearing agreement with NFS, extending the term of the arrangement for an additional five-year period, commencing September 26, 2025 and ending October 1, 2030. In connection with this amendment, the Company received a one-time business development credit of $4.8 million, which is recorded in “Deferred contract incentive” on the statements of financial condition and will be recognized as a contra expense over the five-year contract term within “Clearing fees, including execution costs.” The amendment also includes an early termination fee provision. Refer to Note 18 – Commitments, Contingencies, and Other for further information.

In relation to these agreements, the Company recognized $240,000 and $213,000 in contra expense for the three months ended June 30, 2026, and 2025, respectively. For the six months ended June 30, 2026 and 2025 the Company recognized $480,000 and $425,000 in contra expense, respectively. As of June 30, 2026 and December 31, 2025, the balance of the deferred contract incentive was approximately $4.1 million and $4.6 million, respectively.