# CAPE SECURITIES INC. X-17A-5 (2025-01-16) — Broker-dealer annual report - Company: CAPE SECURITIES INC. - Form: X-17A-5 - Filed: 2025-01-16 - Period: 2024-09-30 - Accession: 0000017071-25-000002 - CIK: 17071 - File #: 8-20747 - Type: Broker-dealer - Material weakness: No - Auditor: Ohab and Company, PA - Auditor location: Maitland, FL - Contact: Philip Ciantro - Phone: 6462269300 - Email: philip.ciantro@amglobepartners.com - Website: amglobepartners.com - Signed by: James Webb (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/17071/000001707125000002/capesecurities24publicFINAL.pdf --- {0}------------------------------------------------ ## UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OMB APPROVAL OMB Number: 3235-0123 Expires: Nov. 30, 2026 nated average b # ANNUAL REPORTS FORM X-17A-5 PART III | 1 1 1 1 1 1 6 1 2 1 1 6 1 8 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
ours per response: 12 | |------------------------------------------------------------------------------------------------------------------------------------| | | | SEC FILE NUMBER | | 8-20727 | MM/DD/YY 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 10/01/23 AND ENDING MM/DD/YY A. REGISTRANT IDENTIFICATION NAME OF FIRM: Cape Securities Inc. TYPE OF REGISTRANT (check all applicable boxes): ■ Broker-dealer □ Check here if respondent is also an OTC derivatives dealer 09/30/24 ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) # 1600 Pennsylvania Ave | | | (No. and Street) | | | | |---------------------------------------------------------------------------|--------|------------------------------------------------------------|------------------------------------|--------------------------------------------|--| | McDonough | | GA
(State) | | 30253 | | | (City) | | | | (Zip Code) | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | Philip Ciantro
646-226-9300 | | | philip.ciantro@amglobepartners.com | | | | (Name) | | (Area Code - Telephone Number) | | (Email Address) | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | | | Ohab and Company, PA | | | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | 100 E Sybelia Ave Ste 13 Maitland | | | L | 32751 | | | (Address) | (City) | | (State) | (Zip Code) | | | 07/28/2004 | | | 1837 | | | | (Date of Registration with PCAOB)(if applicable) | | | | (PCAOB Registration Number, if applicable) | | \* 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. {1}------------------------------------------------ ## OATH OR AFFIRMATION I. James Webb swear (or affirm) that, to the best of my knowledge and belief, the financial report pertaining to the firm of Cape Securities Inc. -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------al 30 2 024\_\_ is true and correct. I further swear (or affirm) that neither the company nor any partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely ![](_page_1_Picture_4.jpeg) Signature Ehief Executive Officer ## 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 income in the period(s) presented, a statement of comprehensive income (as defined in § 210.1-02 of Regulation S-X). - O (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. - O (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. - □ (l) 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 (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. - O (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.17a-12, as applicable. - □ (y) Report describing any material inadequacies found to 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(e)/3) or 17 CFR 240.18o-7(d)/2), as applicable. {2}------------------------------------------------ **Financial Statements** **For the Year Ended September 30, 2024** **With** **Report of Independent Registered Public Accounting Firm** {3}------------------------------------------------ #### **Contents** As of and for Year Ended September 30, 2024 Report of Independent Registered Public Accounting Firm #### **Financial Statements** Statement of Financial Condition {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) 100 E. Sybelia Ave. Suite 130 Maitland, FL 32751 Certified Public Accountants Email: pam@ohabco.com Telephone 407-740-7311 Fax 407-740-6441 ## REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholder's of Cape Securities, Inc. ## Opinion on the Financial Statement We have audited the accompanying statement of financial condition of Cape Securities, Inc. as of September 30, 2024 and the related notes (collectively referred to as the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of Cape Securities, Inc. as of September 20, 2024 in conformity with accounting principles generally accepted in the United States of America. ### Basis for Opinion This financial statement is the responsibility of Cape Securities, Inc.'s management. Our responsibility is to express an opinion on Cape Securities, Inc.'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 reguired to be independent with respect to Cape Securities, Inc. in accordance with the 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. 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 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. Offal and and Company . P. We have served as Cape Securities, Inc.'s auditor since 2024. Maitland, Florida January 15, 2025 {5}------------------------------------------------ ## Statement of Financial Condition September 30, 2024 #### ASSETS | Cash & cash equivalents | ಳಿ | 561,097 | |-----------------------------------|----|---------| | Clearing deposit | | 103,404 | | Commissions receivable | | 31,712 | | Due from clearing broker | | 23,268 | | Other receivable | | 45.000 | | Prepaid expenses and other assets | | 1,054 | | | | | | TO TAL ASSETS | ಳಿ | 765.535 | #### LIABILITIES AND STOCKHOLDER'S EQUITY #### LIABILITIES | Accounts payable and accrued expenses | S | 6,563 | |----------------------------------------------------------|---|-----------| | Commissions pay able | | 37,668 | | Reserve for litigation | | 170,000 | | Due to related party | | 43,963 | | Deferred revenue | | 159,914 | | TO TAL LIABILITIES | | 418,108 | | STOCKHOLDER'S EQUITY | | | | Common stock, \$1 par value, 1,500,000 shares authorized | | | | 230,000 shares issued and outstanding | | 230,000 | | Additional paid in capital | | 335,360 | | Retained earnings (deficit) | | (217,933) | | TOTAL STOCKHOLDER'S EQUITY | | 347,427 | | TO TAL LIABILITIES AND STOCKHOLDER'S EQUITY | S | 765,535 | {6}------------------------------------------------ Notes to Financial Statements September 30, 2024 #### **NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** Organization and Description of Business: Cape Securities, Inc. (the "Company") is a registered broker dealer organized under the laws of the state of North Carolina in 1985. The Company is registered with the Securities and Exchange Commission, the Financial Industry Regulatory Authority and the securities commissions of appropriate states. The Company's primary business is brokerage of investment securities. Cash & Cash Equivalents: For purposes of reporting the settlement of cash flows, the Company considers all cash accounts, which are not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Cash balances in excess of FDIC and similar insurance coverage are subject to the usual banking risks associated with funds in excess of those limits. At September 30, 2024, the Company had an uninsured cash balance of approximately \$311,100. Property and Equipment: Property and equipment are recorded at cost. Depreciation is provided by use of straight-line methods over the estimated useful lives of the respective assets. Maintenance and repairs are charged to expense as incurred; major renewals and betterments are capitalized. When items of property or equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in the results of operations. Income Taxes: The Company has elected S corporation status whereby the income or losses of the Company flow through to and are taxable to its stockholder. Under the provisions of FASB Accounting Standards Codification 740-10, Accounting for Uncertainty in Income Taxes, the Company is required to evaluate each of its tax positions to determine if they are more likely than not to be sustained if the taxing authority examines the respective position. A tax position includes an entity's status and the decision not to file a return. The Company has evaluated each of its tax positions and has determined that it has no uncertain tax positions for which a provision or liability for income taxes is necessary. Estimates: Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could vary from the estimates that were assumed in preparing the financial statements. Commissions Receivable: The carrying amount of commissions receivable is reduced by a valuation allowance that reflects management's best estimate of the amounts that will not be collected. The Company regularly reviews its commissions receivable for any uncollectible amounts. The review for uncollectible amounts is based on an analysis of the Company's collection experience, customer credit worthiness, and current economic trends. Based on management's review, no allowance for credit losses is considered necessary. Other Receivable: The Company was engaged in a customer dispute, for which it received a \$45,000 settlement, which is still due at September 30, 2024. Credit Losses: The Company follows ASC Topic 326, Financial Instruments – Credit Losses ("ASC 326"). ASC 326 impacts the impairment model for certain financial assets by requiring a current expected credit loss ("CECL") methodology to estimate expected credit losses over the entire life of the financial asset. Under the accounting update, the Company has the ability to determine that there are no expected credit losses in certain circumstances (e.g. based on the credit quality of the customer). Credit Risk: The Company is engaged in various trading and brokerage activities in which counterparties include broker-dealers and other financial institutions. In the event counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty or issuer of the instrument. It is the Company's policy to review, as necessary, the credit standing of each counterparty. Date of Management's Review: Subsequent events were evaluated through the date the financial statements were issued. {7}------------------------------------------------ #### **NOTE B - NET CAPITAL** The Company, as a registered broker dealer is subject to the Securities and Exchange Commission Uniform Net Capital Rule (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 September 30, 2024, the Company had net capital of \$269,661 which was \$241,787 above its required net capital of \$27,874 and the percentage of aggregate indebtedness to net capital was 155%. #### **NOTE C - RELATED PARTIES** The Company leases office premises from a related party for monthly rent payments under an administrative services agreement. The Company has elected for all underlying classes of assets to not recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less at lease commencement and do not include an option to purchase the underlying assets that the Company is reasonably certain to exercise. The Company recognizes lease costs associated with its short-term lease with a related party on a straight - line basis over the lease term. Separately, the related party paid payroll costs and other costs incurred by the Company for which the related party was partially reimbursed by the Company pursuant to the administrative services agreement. The due to related party at September 30, 2024 of \$43,963 arises from an outstanding payment under the administrative services agreement with this entity. The Company shares its errors and omissions insurance with other related entities pursuant to an informal arrangement. An affiliated Registered Investment Advisor pays all fees due under the policy for which it subsequently seeks reimbursement. There are no amounts due under this informal arrangement at September 30, 2024. Financial position and results of operations could differ from the amounts in the accompanying financial statements if these related party transactions did not exist. #### **NOTE D – FINANCIAL INSTRUMENTS** Financial Instruments with Off-Balance-Sheet Risk: In the normal course of business, the Company's customer activities involve the execution and settlement of various customer securities transactions. These activities may expose the Company to off-balance-sheet risk in the event the customer or other broker is unable to fulfill its contracted obligations and the Company must purchase or sell the financial instrument underlying the contract at a loss. #### **NOTE E – CLEARING BROKER & CLEARING AGREEMENT** The Company has an agreement with a clearing broker to execute and clear, on a fully disclosed basis, customer accounts of the Company. In accordance with this agreement, the Company is required to maintain a deposit in cash or securities, which is refundable to the company should it discontinue its arrangement. Amounts receivable from its clearing organization consist of commissions receivable and funds on deposit in various accounts. #### **NOTE F – CONTINGENCIES** At September 30, 2024, the Company is engaged in defending claims brought by customers. The Company establishes accruals for legal actions when potential losses associated with the actions become probable and the costs can be reasonably estimated. For such accruals, the Company records the amount considered to be the best estimate within a range of potential losses that are both probable and estimable; however, if the Company cannot determine a best estimate, then the low end of the range of those potential losses is recorded. The actual costs of resolving legal actions may be substantially higher than the amounts accrued for those actions. Based on information currently available, the Company has accrued \$170,000 for the expected cost to settle the matters. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.