Blackwood & Associates PLLC · Management Accounts · January 2026 · Blackpeak CFO

PARTNER-CONFIDENTIAL

B&A

Blackwood & Associates PLLC

Dallas, Texas · Texas Bar Licensed

Civil Litigation
Corporate M&A
Real Estate
Employment Law

Your Numbers, Explained · January 2026 · Blackpeak CFO

Blackwood & Associates PLLC
Management Accounts — January 2026

Civil Litigation · Corporate M&A · Real Estate · Employment Law

Dallas, Texas (Fort Worth satellite office) · 6 Equity Partners · 32 Total Headcount · Est. 2011

Monthly Collections

$962,000

+$18K vs target ↑

Realization Rate

87.4%

Target 85% ✓ On Target

Effective Rate

$342/hr

Blended all timekeepers

Headcount

32

6 Partners · 12 Assoc · 8 Para · 6 Staff

Civil Litigation Corporate M&A Real Estate Employment Law Dallas TX Est. 2011

Prepared by Blackpeak CFO · Fractional Controller & CFO Services · Texas & Florida · This report is Partner-Confidential and prepared solely for the equity partners of Blackwood & Associates PLLC. · blackpeakcfo.com

BLACKWOOD & ASSOCIATES PLLC | PARTNER-CONFIDENTIAL TABLE OF CONTENTS & KEY HIGHLIGHTS January 2026 Management Accounts

Index Report Contents & Key Highlights Monthly Management Accounts · January 2026 · Blackwood & Associates PLLC · Dallas, Texas

Report Sections

P1
Cover Page
Firm overview, period summary and four headline KPIs
P2
Table of Contents & Key Highlights
Index and executive summary of January highlights
P3
Managing Partner Dashboard
8-KPI summary grid · billings vs collections trend (8 months)
P4
Billings by Practice Area
Fee income vs budget by department · practice area donut chart
P5
Utilization & Billing Rate Analysis
Timekeeper productivity report · top 5 billers this month
P6
Income Statement (Profit & Loss)
Net fee income · contribution margin · EBIT · partner profit pool
P7
WIP & Accounts Receivable Aging
WIP by practice area · AR aging · DSO 32.4 days
P8
IOLTA Trust Account Reconciliation
Client trust compliance · zero-variance reconciliation · Texas DRPC
P9
Cash Flow & Working Capital
Operating cash +$259,600 · LOC unused · net working capital $3.9M
P10
Headcount & Capacity Analysis
Utilization by role · 776-hr capacity gap · $268K revenue opportunity
P11
Budget vs Actual & Q1 2026 Forecast
Variance analysis · Q1 projections · EBIT +12% vs budget
P12
CFO Priorities & Action Items
Immediate actions · 30-day plan · strategic initiatives · Texas matters

⭐ Key Highlights — January 2026

✓ Collections $18K Ahead of Target — January collections of $962,000 exceeded the $944,000 budget by $18,000 (1.9%). Corporate M&A billings were exceptionally strong following the Q4 2025 deal surge, with three M&A closings generating $308,400 in fee income against a $280,000 budget — a $28,400 favorable variance.

⚠ Associate Utilization 78.4% vs 80% Target — Associate productivity is 1.6pp below the 80% target. Two new associates joining February 10 will add capacity to the litigation and M&A groups. The shortfall is partly attributable to the new Jan 15 hire’s onboarding period. Equity partner utilization (81.1%) is near the 82% target.

✓ IOLTA Trust Account Fully Compliant — Client trust account reconciled to $0 variance as at January 31, 2026. All $835,000 in client funds segregated at First National Bank of Texas. Interest remitted to Texas Access to Justice Foundation. No Rule 1.14 compliance issues. See Page 8 for full reconciliation.

⚠ Texas Franchise Tax Accrual Updated — Monthly accrual of $2,400 maintained. Annual filing estimated at $28,400 for the 2025 tax year. Firm organized as a PLLC — no Texas state income tax on partner profit distributions (pass-through entity). Annual filing due May 15, 2026; Blackpeak CFO to coordinate with external CPA by March 31.

🚨 What This Report Caught That You’d Have Missed

(1) Two associates billing below 75% utilization — at $350/hr standard rates, every 1% shortfall costs the firm $7,280/month in unbilled capacity. (2) AR aging shows $84,000 over 90 days — law firms that don’t chase receivables past 90 days collect only 33¢ on the dollar. That’s $56,000 at risk of write-off. (3) Corporate group’s realization rate dropped to 82% from 87% — discounting creep that erodes partner profit by $55K annualized if uncorrected.

Report Scope & Accounting Basis: Prepared on the modified cash/accrual basis consistent with law firm reporting standards. “Billings” = fees invoiced to clients at standard rates. “Collections” = cash received during the period. WIP represents accumulated unbilled time at standard rates. IOLTA reconciliation prepared per Texas Disciplinary Rules of Professional Conduct Rule 1.14. Partner draws shown as fixed monthly compensation; the Partner Profit Pool is residual EBIT after all firm expenses and franchise tax accrual.

Prepared by Blackpeak CFO · Fractional Controller & CFO Services · Texas & FloridaPage 2 of 12

BLACKWOOD & ASSOCIATES PLLC | PARTNER-CONFIDENTIAL MANAGING PARTNER DASHBOARD January 2026 Management Accounts

P3 Managing Partner Dashboard — January 2026 8 KPI Summary · Billings vs Collections Trend · Blackwood & Associates PLLC

Monthly Billings

$1,101,400

WIP created this month — all practice areas

↑ vs $1,060,000 budget

Monthly Collections

$962,000

Cash received from clients in January

↑ +$18K vs $944K target

Realization Rate

87.4%

Collections / billings — target 85%

✓ On Target

Effective Billing Rate

$342/hr

Blended all timekeepers, all matters

Standard blended: $385/hr

Total Hours Billed

2,808 hrs

After non-billable adjustments

Total recorded: 3,644 hrs

Partner Utilization

81.2%

Equity + non-equity partners

Near 82% target ✓

Associate Utilization

78.4%

12 associates — target 80%

⚠ 1.6pp below target

WIP Outstanding

$2,847,800

Unbilled time at standard rates

Net collectible est. 90% = $2.56M

Verdicts: ✓ Collections Ahead ⚠ Associate Util Watch ✓ IOLTA Compliant ✓ Realization On Target ✓ EBIT +12% vs Budget Partner Profit Pool: $348,400 — $58,067 per equity partner

Prepared by Blackpeak CFO · Fractional Controller & CFO Services · Texas & FloridaPage 3 of 12

BLACKWOOD & ASSOCIATES PLLC | PARTNER-CONFIDENTIAL BILLINGS BY PRACTICE AREA January 2026 Management Accounts

P4 Fee Income by Practice Area — January 2026 vs Budget All four practice groups · Actual vs Budget vs YTD · Blackwood & Associates PLLC

Practice Area	Jan Billings	Jan Budget	Variance $	YTD Actual	YTD Budget	% of Total
Commercial Litigation	$440,600	$420,000	+$20,600	$440,600	$420,000	40.0%
Corporate / M&A	$308,400	$280,000	+$28,400	$308,400	$280,000	28.0%
Real Estate	$198,200	$210,000	−$11,800	$198,200	$210,000	18.0%
Employment Law	$154,200	$150,000	+$4,200	$154,200	$150,000	14.0%
TOTAL BILLINGS	$1,101,400	$1,060,000	+$41,400	$1,101,400	$1,060,000	100%
Variance %	—	—	+3.9%	—	—	—

Litigation

40.0%

+$20,600 fav

Corp M&A

28.0%

+$28,400 fav

Real Estate

18.0%

−$11,800 adv

Employment

14.0%

+$4,200 fav

Corporate/M&A +$28,400 above budget — Three M&A closings from the Q4 2025 transaction pipeline flowed through in January: Apex Capital acquisition ($142K fees), Westlake industrial sale ($96K), and NorthStar Holdings merger close ($70K). The M&A team has a strong Q1 2026 pipeline with two additional deal closings expected in February.

Real Estate −$11,800 adverse — Dallas commercial real estate market is seasonally slower in January following the holiday period. The Fort Worth office accounts for approximately 60% of real estate billings. Two new commercial lease matters were opened mid-January; billings expected to normalize to budget in February. No deal cancellations reported.

Billing Partner Responsibility

Commercial Litigation J. Blackwood / S. Kim

Corporate / M&A A. Rodriguez / T. Chen

Real Estate M. Okafor / D. Walsh

Employment Law S. Kim / L. Martinez

Prepared by Blackpeak CFO · Fractional Controller & CFO Services · Texas & FloridaPage 4 of 12

BLACKWOOD & ASSOCIATES PLLC | PARTNER-CONFIDENTIAL UTILIZATION & BILLING RATE ANALYSIS January 2026 Management Accounts

P5 Timekeeper Productivity Report — January 2026 All billing timekeepers · hours recorded, billed, utilization and effective rates

Timekeeper Category	Headcount	Target Hrs/Mo	Actual Hrs	Utilization	Std Rate	Effective Rate	Realization
Equity Partners	6	160 hrs	779 hrs	81.1%	$485/hr	$462/hr	95.3%
Non-Equity Partners	2	168 hrs	314 hrs	93.5%	$395/hr	$371/hr	93.9%
Associates (12)	12	168 hrs	1,579 hrs	78.4% ⚠	$285/hr	$252/hr	88.4%
Paralegals (8)	8	152 hrs	972 hrs	79.9%	$165/hr	$148/hr	89.7%

TOTAL BILLERS (28)	28	—	3,644 hrs	—	—	$302/hr	89.6%
Hours billed (after non-billable deductions)	—	—	2,808 hrs	77.1% of total	—	$392/hr blended	= $1,101,400 ✓

Non-billable time includes firm administration, business development, pro bono service, CLE/training and internal meetings. Non-billable hours of 836 represent 22.9% of total hours recorded — slightly above the <20% target. The excess is primarily BD time related to the M&A deal pipeline and two partner speaking engagements at the Dallas Bar Association in January.

🏆 Top 5 Billers — January 2026

Timekeeper	Role	Practice Group	Hrs Billed	Effective Rate	Billings	vs Target
J. Blackwood	Equity Partner	Commercial Litigation	184 hrs	$472/hr	$86,848	+15% vs target
S. Kim	Equity Partner	Litigation / Employment	168 hrs	$481/hr	$80,808	+5% vs target
A. Rodriguez	Equity Partner	Corporate / M&A	172 hrs	$458/hr	$78,776	+7.5% vs target
M. Thompson	Senior Associate	Commercial Litigation	196 hrs	$258/hr	$50,568	+16% vs target
R. Patel	Senior Associate	Corporate / M&A	188 hrs	$261/hr	$49,068	+12% vs target

Prepared by Blackpeak CFO · Fractional Controller & CFO Services · Texas & FloridaPage 5 of 12

BLACKWOOD & ASSOCIATES PLLC | PARTNER-CONFIDENTIAL INCOME STATEMENT (PROFIT & LOSS) January 2026 Management Accounts

P6 Profit & Loss Statement — January 2026 Jan 2026 vs Dec 2025 vs Budget · Variance analysis · Blackwood & Associates PLLC

Line Item	Jan 2026	Dec 2025	Jan Budget	Variance $	Var %	Commentary
INCOME
Fee Income (Gross Billings)	$1,101,400	$1,118,200	$1,060,000	+$41,400	+3.9%	M&A surge; litigation strong
Less: Client Disbursements	($48,200)	($52,400)	($45,000)	−$3,200	—	Court filing fees, expert costs
NET FEE INCOME	$1,053,200	$1,065,800	$1,015,000	+$38,200	+3.8%

DIRECT COMPENSATION
Partner Draws (fixed — 6 equity)	$284,000	$284,000	$284,000	$0	—	$47,333/partner fixed monthly
Associate Salaries (12)	$212,400	$208,200	$212,400	$0	—	Inc. new Jan 15 hire pro-rata
Paralegal Salaries (8)	$84,800	$84,800	$84,800	$0	—	Stable — no changes
TOTAL DIRECT COMPENSATION	$581,200	$577,000	$581,200	$0	0%

CONTRIBUTION MARGIN	$472,000	$488,800	$433,800	+$38,200	+8.8%
Contribution Margin %	44.8%	45.9%	42.7%	+2.1pp	—	Above 42.7% target ✓

OVERHEAD EXPENSES
Office Staff Salaries (6)	$42,400	$42,400	$42,400	$0	—	Stable
Office Rent & Facilities	$28,400	$28,400	$28,400	$0	—	Dallas CBD + Fort Worth
Malpractice Insurance	$18,200	$18,200	$18,200	$0	—	Renewal review Apr 30
Technology (practice mgmt)	$8,400	$8,400	$8,400	$0	—	Clio + document management
Marketing & Business Dev	$12,800	$14,200	$12,000	−$800	—	2 BD dinners hosted in Jan
Professional Development	$6,200	$4,800	$6,000	−$200	—	CLE credits & bar fees
Miscellaneous Overhead	$4,800	$5,200	$5,200	+$400	—	Under budget this month
TOTAL OVERHEAD	$121,200	$121,600	$120,600	−$600	−0.5%

FIRM EBIT (before partner profit)	$350,800	$367,200	$313,200	+$37,600	+12.0%
EBIT Margin %	33.3%	34.4%	30.8%	+2.5pp	—	Strong leverage on overhead
Less: TX Franchise Tax Accrual	($2,400)	($2,400)	($2,400)	$0	—	Est. $28,400 annual — PLLC
NET INCOME (Partner Profit Pool)	$348,400	$364,800	$310,800	+$37,600	+12.1%
Per Equity Partner (6)	$58,067	$60,800	$51,800	+$6,267	+12.1%	Above $51,800 target ✓

Key Metrics: ✓ EBIT +12% vs Budget ✓ Contribution Margin 44.8% ✓ Overhead On Target ✓ Per Partner $58K ⚠ Dec $364.8K vs Jan $348.4K (seasonal)

Prepared by Blackpeak CFO · Fractional Controller & CFO Services · Texas & FloridaPage 6 of 12

BLACKWOOD & ASSOCIATES PLLC | PARTNER-CONFIDENTIAL WIP & ACCOUNTS RECEIVABLE AGING January 2026 Management Accounts

P7 Work-in-Progress & Receivables — January 31, 2026 WIP aging by practice area · AR aging by client type · DSO and write-off metrics

Work-in-Progress Aging (Unbilled Time)

Matter Type	0–30 Days	31–60 Days	61–90 Days	90+ Days	Total WIP
Commercial Litigation	$428,400	$312,200	$148,400	$82,400	$971,400
Corporate / M&A	$342,800	$184,600	$42,200	$18,400	$588,000
Real Estate	$218,200	$142,400	$68,400	$28,400	$457,400
Employment Law	$168,400	$84,200	$48,600	$82,200 ⚠	$383,400
Client Disbursements	$248,400	$142,800	$56,400	$0	$447,600
TOTAL WIP	$1,406,200	$866,200	$364,000	$211,400	$2,847,800
% of Total WIP	49.4%	30.4%	12.8%	7.4%	100%

Employment Law 90+ Day WIP ($82,200 / 21.4% of dept) — Predominantly contingency fee matters. Two plaintiff employment discrimination cases and one wage/hour collective action are in late-stage settlement negotiations. Conversion to billings expected upon settlement — department chair to confirm timelines by Feb 14. No write-off risk anticipated on these matters.

Accounts Receivable Aging (Billed & Unpaid)

Client Category	Current	31–60	61–90	90+	Total AR
Active Litigation	$284,200	$142,400	$48,200	$18,400	$493,200
Corporate Clients	$198,400	$84,200	$22,400	$0	$305,000
Real Estate	$142,800	$68,400	$18,400	$8,200	$237,800
TOTAL AR	$625,400	$295,000	$89,000	$26,600	$1,036,000
% of Total AR	60.4%	28.5%	8.6%	2.6%	100%

Days Sales Outstanding

32.4 days

Target <35 days ✓ On target

Write-off Rate (12mo)

2.1%

Target <3% ✓ Well within range

WIP Net Collectible (90%)

$2,562,000

90% of $2,847,800 WIP

Total Billings Pipeline

$3,883,800

WIP $2.85M + AR $1.04M

AR Quality Strong — 60.4% of AR is current (0–30 days). Corporate clients have $0 in 90+ day balances reflecting excellent payment discipline. The $26,600 in 90+ day AR is primarily from two litigation clients under fee dispute — both matters are being managed; no write-off provisioned at this stage.

Prepared by Blackpeak CFO · Fractional Controller & CFO Services · Texas & FloridaPage 7 of 12

IOLTA COMPLIANCE | TEXAS DISCIPLINARY RULES OF PROFESSIONAL CONDUCT RULE 1.14 CLIENT TRUST ACCOUNT RECONCILIATION PARTNER-CONFIDENTIAL

IOLTA Client Trust Account Reconciliation — January 31, 2026 Texas DRPC Rule 1.14 Monthly Reconciliation · First National Bank of Texas · Account ending ···4829

✓ Trust Balance Reconciliation

Bank Statement Balance	$847,400
Less: Outstanding Checks	($12,400)
Adjusted Bank Balance	$835,000
Firm Book Balance	$835,000
RECONCILING DIFFERENCE	$0 ✓

✓ FULLY RECONCILED — ZERO VARIANCE

IOLTA Compliance Checklist

✅

Segregation of Funds — All client funds held in dedicated IOLTA account at First National Bank of Texas. Zero commingling with firm operating account.

✅

Monthly Reconciliation — Trust account reconciled monthly. January 2026 reconciliation completed January 31 — zero variance confirmed by Blackpeak CFO.

✅

IOLTA Interest Remittance — Interest earned in January ($142) remitted to Texas Access to Justice Foundation per Texas Lawyer’s Trust Account Oversight Program (IOLTA) requirements.

✅

Client Ledger Balance — Individual client ledger balances verified against bank balance. All balances positive; no client’s funds inadvertently used for another matter.

⚠️

Rodriguez Settlement Disbursement — Settlement funds of $284,200 received Dec 28. Written disbursement instructions received Jan 29. Disbursement scheduled February 3, 2026 per client direction.

Client Trust Ledger Summary — January 31, 2026

Client / Matter	Balance Held	Purpose	Date Received	Status
Rodriguez v. Harris County	$284,200	Settlement funds pending disbursement	Dec 28, 2025	Disbursing Feb 3
Apex Capital M&A Escrow	$248,400	Deal escrow pending closing conditions	Jan 12, 2026	Closing Q1
Westlake Properties Ltd	$142,800	Real estate closing deposit — held in escrow	Jan 8, 2026	Close Feb 28
Smith Employment Matter	$84,600	Retainer — contingency matter, held as advance	Nov 14, 2025	Active
Misc Retainers (8 clients)	$75,000	Various retainers — multiple active matters	Various	Active
TOTAL CLIENT FUNDS HELD	$835,000	= Book Balance ✓

📋 Texas IOLTA Regulatory Notes

Texas IOLTA Program: All Texas attorneys holding client funds must maintain an IOLTA account. The firm’s account is registered with the Texas Lawyer’s Trust Account Oversight Program (IOLTAP). Interest from pooled nominal/short-term client funds is paid directly to the Texas Access to Justice Foundation, which funds civil legal aid programs. · Rule 1.14 Compliance: Monthly reconciliation is mandatory under Texas DRPC Rule 1.14 (Safekeeping Property). The three-way reconciliation (bank statement, adjusted balance, client ledger) is complete and confirms zero variance as at January 31, 2026. · No Disciplinary Exposure: No commingling events, no negative client balances, no disbursements made without client authorization.

Prepared by Blackpeak CFO · Fractional Controller & CFO Services · Texas & Florida · IOLTA Compliance MonitoringPage 8 of 12

BLACKWOOD & ASSOCIATES PLLC | PARTNER-CONFIDENTIAL CASH FLOW & WORKING CAPITAL January 2026 Management Accounts

P9 Cash Flow Summary — January 2026 Operating · Investing · Financing · Working Capital as at January 31, 2026

Cash Flow Statement — January 2026

Item	Amount	Notes
OPENING POSITION
Opening Cash — January 1, 2026	$284,200	Firm operating account

OPERATING ACTIVITIES
Collections from Clients	+$962,000	Cash received Jan 1–31
Partner Draws Paid	($284,000)	6 equity partners × $47,333
Associate & Paralegal Salaries	($297,200)	Gross salaries incl. payroll taxes ~$42K
Overhead Expenses Paid	($121,200)	Rent, insurance, tech, marketing
NET OPERATING CASH FLOW	+$259,600	Strong operating cash generation

INVESTING ACTIVITIES
Technology Equipment	($8,400)	Workstation upgrades — litigation team
NET INVESTING CASH FLOW	($8,400)

FINANCING ACTIVITIES
Operating Line of Credit (net)	$0	$750K facility — $0 drawn in January
NET FINANCING CASH FLOW	$0

NET CHANGE IN CASH	+$251,200	Strong January cash generation
CLOSING CASH — January 31, 2026	$535,400	Operating account only (excl. IOLTA)

Operating Line of Credit: $750,000 revolving facility with First National Bank of Texas. Rate: Prime + 0.75% (currently 8.25% p.a.). $0 drawn as at January 31, 2026. The line provides liquidity for the year-end partner distribution peak in December. No covenant issues. Annual review due September 2026. · Non-equity partner compensation of $45,600/month paid through payroll (included in associate/staff payroll line). · IOLTA trust account ($835,000) held separately and is NOT firm operating cash.

Working Capital — January 31, 2026

Component	Amount
CURRENT ASSETS
Cash & Cash Equivalents	$535,400
Accounts Receivable (billed)	$1,036,000
WIP — Net Collectible (90%)	$2,562,000
TOTAL CURRENT ASSETS	$4,133,400

CURRENT LIABILITIES
Accounts Payable	($84,200)
Accrued Liabilities	($128,400)
TOTAL CURRENT LIABILITIES	($212,600)

NET WORKING CAPITAL	$3,920,800

Operating Cash

$535,400

2.1 months overhead cover

Net Op Cash Flow

+$259,600

Strong January generation

LOC Availability

$750,000

$0 drawn — full facility available

Net Working Capital

$3.92M

19.4× current liabilities

Excellent liquidity position — Closing cash of $535,400 represents 2.1 months of overhead cover. The firm’s $750,000 operating line is fully undrawn. Net working capital of $3.92M is driven primarily by the strong WIP and AR pipeline. Accrued liabilities of $128,400 include the Texas franchise tax accrual ($28,800 YTD) and employee benefits payable.

Prepared by Blackpeak CFO · Fractional Controller & CFO Services · Texas & FloridaPage 9 of 12

BLACKWOOD & ASSOCIATES PLLC | PARTNER-CONFIDENTIAL HEADCOUNT & CAPACITY ANALYSIS January 2026 Management Accounts

P10 Headcount & Capacity Report — January 2026 Staffing levels · monthly compensation · capacity utilization · revenue opportunity

Headcount & Monthly Cost Summary

Role	HC Jan	HC Dec	Change	Avg Monthly Cost	Total Cost
Equity Partners	6	6	—	$47,333 draw	$284,000
Non-Equity Partners	2	2	—	$22,800	$45,600
Associates	12	11	+1	$17,700	$212,400
Paralegals	8	8	—	$10,600	$84,800
Support Staff	6	6	—	$7,067	$42,400
TOTAL FIRM (34)	34	33	+1	—	$669,200

Capacity Analysis — January 2026

Total Available Hours (28 billers × avg 162 target)

4,536 hrs

Actual Hours Billed

2,808 hrs

Overall Utilization (billed/available)

61.9%

Target Billed Hrs (80% utilization)

3,629 hrs

Capacity Gap (hours unbilled potential)

776 hrs

Revenue Opportunity (at $342 eff rate)

$265,392

New Associate Hired January 15 — One new litigation associate joined the Dallas office mid-month, contributing partial-month hours. Two additional associates are scheduled to start February 10 (one litigation, one M&A), which will add approximately 300+ billable hours per month once fully ramped. The M&A associate hire is targeted at the growing Corporate/M&A deal pipeline.

Utilization: Target vs Actual by Role Group

Equity Partners 81.1% vs 82% target ≈ On Target

Non-Equity Partners 93.5% vs 84% target ↑ Exceeds

Associates 78.4% vs 80% target ⚠ Below

Paralegals 79.9% vs 80% target ≈ Near Target

Prepared by Blackpeak CFO · Fractional Controller & CFO Services · Texas & FloridaPage 10 of 12

BLACKWOOD & ASSOCIATES PLLC | PARTNER-CONFIDENTIAL BUDGET VS ACTUAL & Q1 2026 FORECAST January 2026 Management Accounts

P11 Budget Variance Analysis & Q1 2026 Forecast January actuals vs annual plan · Q1 projections · key variance commentary

Key Budget Variances — January 2026

P&L Category	Actual	Budget	Variance $	Var %	Driver
INCOME
Gross Billings	$1,101,400	$1,060,000	+$41,400	+3.9%	M&A deal surge
Client Disbursements	($48,200)	($45,000)	−$3,200	—	Litigation experts
Net Fee Income	$1,053,200	$1,015,000	+$38,200	+3.8%
COMPENSATION
Partner Draws	$284,000	$284,000	$0	0%	Fixed — on budget
Associate Salaries	$212,400	$212,400	$0	0%	New hire on plan
Paralegal Salaries	$84,800	$84,800	$0	0%	Stable headcount
Total Direct Compensation	$581,200	$581,200	$0	0%
OVERHEAD
Office Staff & Facilities	$70,800	$70,800	$0	0%	On budget
Insurance & Technology	$26,600	$26,600	$0	0%	On budget
Marketing & Prof Dev	$19,000	$18,000	−$1,000	−5.6%	2 BD dinners, CLE
Miscellaneous	$4,800	$5,200	+$400	+7.7%	Under budget
Total Overhead	$121,200	$120,600	−$600	−0.5%

FIRM EBIT	$350,800	$313,200	+$37,600	+12.0%	Strong revenue leverage
NET INCOME (Profit Pool)	$348,400	$310,800	+$37,600	+12.1%	$6,267 ahead per partner

Revenue over by 3.9% — Corporate M&A driven. All direct compensation lines are exactly on budget, demonstrating strong cost discipline. Marketing is $800 over due to two business development dinners that generated positive pipeline — ROI justified. The $37,600 EBIT beat (+12%) is driven entirely by revenue outperformance with zero overhead overruns of material consequence.

Q1 2026 Forecast (Jan Actual + Feb–Mar Forecast)

Month	Billings	Collections	EBIT	EBIT Margin
Jan 2026 (actual)	$1,101,400	$962,000	$350,800	33.3%
Feb 2026 (forecast)	$1,082,000	$1,024,000	$338,600	31.3%
Mar 2026 (forecast)	$1,124,000	$1,086,000	$362,400	32.2%
Q1 2026 TOTAL	$3,307,400	$3,072,000	$1,051,800	31.8%
Q1 Budget	$3,180,000	$2,832,000	$939,600	29.5%
Q1 Variance vs Budget	+$127,400	+$240,000	+$112,200	+2.3pp

Q1 Billings Forecast

$3,307,400

+$127K vs Q1 budget

Q1 EBIT Forecast

$1,051,800

+$112K vs Q1 budget

Forecast Assumptions: Feb billings assume 2 new M&A closings ($180K combined) + normal litigation run-rate. Mar billings reflect full capacity with 2 new associates onboarded Feb 10. Collections forecast assumes 31-day DSO cycle. Feb collections elevated as Jan billings + WIP convert to cash. EBIT margins reflect fixed cost base with revenue flowing through. Real estate line modelled to recover to budget from Feb.

Prepared by Blackpeak CFO · Fractional Controller & CFO Services · Texas & FloridaPage 11 of 12

BLACKWOOD & ASSOCIATES PLLC | CFO PRIORITIES CFO PRIORITIES & ACTION ITEMS February 2026

P12 CFO Priorities & 90-Day Action Plan Prepared by Blackpeak CFO · Action period: February 2026

⚡ Immediate — This Week

🔴 HIGH — Trust Disbursement

Distribute Rodriguez v. Harris County settlement funds ($284,200) per signed client disbursement instructions received Jan 29. Process via IOLTA account — zero tolerance for delay. Due: Feb 3, 2026

Owner: Trust Accountant + Partner Blackwood

🔴 HIGH — M&A Matter Invoicing

Issue final invoices for three completed M&A matters currently held in WIP (~$142,000 combined). Apex Capital, Westlake acquisition, NorthStar Holdings. Billing coordinator to prepare and send by Feb 7. Due: Feb 7, 2026

Owner: Billing Coordinator + A. Rodriguez

🟡 MED — Employment 90+ WIP Review

Employment Law 90+ day WIP ($82,200) — predominantly contingency matters. Dept chair to review all three matters and confirm settlement timelines. Assess whether any provision for doubtful WIP is warranted. Due: Feb 14, 2026

Owner: Employment Dept Chair + CFO

📅 30-Day Actions — February

🟡 MED — New Associate Onboarding

Two new associates start February 10. HR to coordinate billing system setup, matter assignments, and rate configuration in Clio. Practice managers to assign matters within first 48 hours to ensure billable hour ramp. Due: Feb 10, 2026

Owner: HR + Practice Group Managers

🟡 MED — Texas Franchise Tax Preparation

Engage external CPA to prepare Texas Franchise Tax annual filing. Estimated liability: $28,400 for 2025 tax year. Monthly accrual on track at $2,400/month. Filing due May 15, 2026. Begin data compilation by March 31. Due: Mar 31, 2026

Owner: CFO + External CPA Firm

🟡 MED — Malpractice Insurance Renewal

Professional liability (malpractice) insurance expires April 30, 2026. Obtain minimum 3 competitive quotes by March 15. Current carrier is LexisNexis Risk Solutions. Ensure coverage adequate for M&A deal volume increase. Due: Mar 15, 2026

Owner: CFO + Managing Partner

📊 Strategic Initiatives — Q1–Q2

📈 Real Estate Practice Recovery

Real estate practice is $11,800 below January budget. Review partner capacity and new client pipeline with M. Okafor and D. Walsh. Dallas commercial market seasonally slow — model Q2 recovery assuming Westlake deal close and two new development clients.

⚖️ M&A Lateral Partner Evaluation

Capitalize on Q4/Q1 M&A deal flow momentum. Evaluate lateral hire of experienced M&A partner from Dallas market — one referral already received from A. Rodriguez. Partner compensation model and conflicts check to be reviewed by Q2 2026.

🤖 AI Legal Research Tools

Evaluate AI-assisted legal research tools (Harvey, Casetext CoCounsel) to reduce associate non-billable research time by estimated 15%. Pilot with 3 associates in March. Potential to recover 180+ billable hours/month at $252/hr effective rate = +$45,360 revenue opportunity.

★ Texas Regulatory Reminders

✓ TX Franchise Tax — Est. $28,400; May 15 due date. PLLC pass-through.

✓ IOLTA / Rule 1.14 — Reconciled Jan 31 — zero variance. (See P8)

✓ No TX State Income Tax — Partner profit distributions not subject to state income tax.

⚠ Malpractice Renewal — Due April 30 — begin quotes by Mar 15.

⚠ Fort Worth Expansion — Evaluate 3-day presence for real estate clients in Tarrant County.

Prepared by Blackpeak CFO · Fractional Controller & CFO Services · Texas & Florida — Next report: February 2026 Management Accounts — due March 5, 2026. · Q1 2026 partner equity review scheduled March 31. · blackpeakcfo.com

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