JEFFERIES EMPLOYEES PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS AS OF NOVEMBER 30, 2023 AND 2022
AND FOR THE YEAR ENDED NOVEMBER 30, 2023
As of November 30, 2023 and 2022, the Plan held 1,932,562 and 1,955,514 shares,
respectively, of Jefferies Common Stock, with a market value of $68,493,329 and $74,292,777, respectively. During the year ended November 30, 2023, the Plan recorded dividend income of $2,426,301 related to the Jefferies Common Stock. On
January 13, 2023, Jefferies Common Stock also recognized a spinoff of the Companys holdings in Vitesse Energy Common Stock whereby holders of Jefferies Common Stock, including participants who held such shares within the Plan, received a
reduction in the cost basis of their Jefferies Common Stock investment for the amount of basis received in their new direct holdings in Vitesse. Shareholders received 1 share of Vitesse Energy stock for every 8.49668 shares of Jefferies Stock. Such
spinoff was recognized as a dividend which transferred the cost basis from one investment holding to the other. Such spinoff resulted in a cost basis transfer of $3,504,225 for participants in the Plan, with no reduction in number of shares of
Jefferies Common Stock.
During the year ended November 30, 2023, sales of Jefferies Common Stock were $6,756,988 and the purchases of
Jefferies Common Stock were $3,380,804. Realized losses on the sale of Jefferies Common Stock were $863,558 for the year ended November 30, 2023.
Certain employees and officers of the Company, who may also be participants in the Plan, perform administrative services to the Plan at no cost
to the Plan.
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions set forth in ERISA. In the event of Plan termination, participants would become 100% vested in their employer contributions and their accounts would be distributed in accordance with the Plan document.
The Internal Revenue Service (IRS) has provided a determination letter dated November 21, 2017 and informed the Company that
the Plan, and related trust, were designed in accordance with applicable sections of the IRC.
U.S. GAAP requires Plan management to
evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS. The Plan is subject to routine audits by
taxing jurisdictions; however, there are currently no audits for any tax periods in progress.
In December 2022, Securing a Strong Retirement Act (SECURE 2.0) was passed into law. The provisions of SECURE 2.0 continue the themes and
reforms that began with the 2019 CARES Act. Most of the provisions of SECURE 2.0 will become effective in 2024 and beyond. Therefore, for the year ended November 30, 2023 there is no current impact to the Plan. Since the provisions include both
required and optional elements, the Plan Administrator will determine the optional provisions to elect.
Plan management has evaluated events and transactions for potential recognition or disclosure through May 24, 2024, which is the date the
financial statements were available to be issued.
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