# HERBERT J. SIMS & CO, INC. X-17A-5 (2022-03-31) — Broker-dealer annual report - Company: HERBERT J. SIMS & CO, INC. - Form: X-17A-5 - Filed: 2022-03-31 - Period: 2021-12-31 - Accession: 0000090608-22-000004 - CIK: 90608 - File #: 8-03315 - Type: Broker-dealer - Material weakness: No - Auditor: APRIO LLP - Auditor location: NEW YORK, NY - Contact: JASON DIAMOND - Phone: 2034189006 - Email: jdiamond@hjsims.com - Website: hjsims.com - Signed by: JASON DIAMOND (MANAGING PRINCIPAL) Original filing: https://www.sec.gov/Archives/edgar/data/90608/000009060822000004/sec8033152021shortz.pdf --- {0}------------------------------------------------ #### **UNITED STATES SECURITIES AND EXCHANGE COMMISSION** Washington, D.C. **20549** 0MB APPROVAL 0MB Number: 3235-0123 Expires: Oct. 31, 2023 Estimated average burden hours per response: 12 # **ANNUAL REPORTS FORM X-17A-5 PART Ill** | SEC FILE NUMBER | | | | | | | | |-----------------|--|--|---------|--|--|--|--| | | | | 8-03315 | | | | | **FACING PAGE** Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 FI LING FOR THE PER I OD BEGINNING \_0\_1\_I\_0\_1\_ 12\_0\_2\_1 \_\_\_ AND ENDING \_1\_2\_1 3\_1\_1\_2\_0\_2\_1 \_\_ \_ MM/DD/VY MM/DD/VY **A. REGISTRANT IDENTIFICATION** NAME OF FIRM: HERBERT J. SIMS & CO., INC. -------------------------------- TYPE OF REGISTRANT (check all applicable boxes): 00 Broker-dealer □ Security-based swap dealer □ Check here if respondent is also an OTC derivatives dealer D Major security-based swap participant ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) 2150 POST ROAD, SUITE 301 (No. and Street) FAIRFIELD CT (City) (State) PERSON TO CONTACT WITH REGARD TO THIS FILING 06824 (Zip Code) JASON DIAMOND 203 418 9006 JDIAMOND@HJSIMS.COM (Name) (Area Code -Telephone Number) (Email Address) **B. ACCOUNTANT IDENTIFICATION** INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing\* APRIO, LLP {Address) {Name - if individual, state last, first, and middle name) 7 PENN PLAZA, SUITE 210 NY {City) (State) 926 1 0 0 0 1 {Zip Code) (r te **of** Registration with PCAOB)(if applicable) **FOR OFFICIAL USE ONLY** ( PCA0B Registration Number, i I applicable ^II \* Claims for exemption from the requirement that the annual reports be covered by the 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-S(e)( l)(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 0MB control number. {1}------------------------------------------------ #### **OATH OR AFFIRMATION** I, J AS ON D I AM O N D , swear (or affirm) that, to the best of my knowledge and belief, the financial report pertaining to the firm of H E R B E R T J . S I M S & C O . , I **N** C as of D E C E **M B** E R 3 1 , 2 0 2 1, 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 as that of a customer. / *,Ccdk.......,* -X:::, *le.-* **CATHERINE VANCHO NOTARY PUBLIC OF CONNECTICUT My Commission Expires 2/28/2023** Title: Nata ry Public ### **This filing\*\* contains (check all applicable boxes):** - !XI (a) Statement of financial condition. - Del (b) Notes to consolidated statement of financial condition. - 0 (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). - D (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. - D (g) Notes to consolidated financial statements. - D (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. - D (i) Computation of tangible net worth under 17 CFR 240.18a-2. - D (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - D (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. - D (I) Computation for Determination of PAB Requirements under Exhibit A to§ 240.15c3-3. - D (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - D (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. - 0 (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. - D (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. - D (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. - D (t) Independent public accountant's report based on an examination of the statement of financial condition. - D (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. - il (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. - ~ (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-1e or 17 CFR 240.l 7a-12, as applicable. - D (y} Report describing any material inadequacies found to exist or found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). ^D(z) Other: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_ - ^\*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18a-7(d)(2}, as applicable. {2}------------------------------------------------ ![](_page_2_Picture_1.jpeg) #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholder of Herbert J. Sims & Co., Inc. and Subsidiaries #### **Opinion on the Financial Statement** We have audited the accompanying consolidated statement of financial condition of Herbert J. Sims & Co., Inc. and Subsidiaries (the "Company") as of December 31, 2021, and the related notes (collectively referred to as the "consolidated financial statement"). In our opinion, the consolidated financial statement presents fairly, in all material respects, the consolidated financial position of Herbert J. Sims & Co., Inc. and Subsidiaries as of December 31, 2021, in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** This consolidated financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated 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 required to be independent with respect to the Company 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 consolidated 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 consolidated 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 consolidated 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 consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. We have served as Herbert J. Sims & Co., Inc. and Subsidiaries' auditor since 2014. New York, New York March 31, 2022 {3}------------------------------------------------ CONSOLI DATE D FINANC I AL STATEMENTS DECEMBER 3 1, 202 1 {4}------------------------------------------------ # HERBERT J. SIMS & CO., INC. AND SUBSIDIARIES DECEMBER 31, 2021 #### TABLE OF CONTENTS | | Page | |---------------------------------------------------------|------| | CONSOLIDATED FINANCIAL STATEMENTS: | | | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 1 | | CONSOLIDATED STATEMENT OF FINANCIAL CONDITION | 2 | | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | 3-16 | {5}------------------------------------------------ # HERBERT J . SI MS & CO ., I NC . AND SUBS I DI ARIES CONSOLI DATE D STATEMENT OF FINANC I AL COND ITI ON #### DECEMBER 3 1, 202 1 #### ASSET S | l ents (Note
Cash and cash equi
va
) | \$
1,
8 1 4 , 740 | |------------------------------------------------------------------------------------------------|-------------------------| | a ir va
Securit
at f
i es owned
l ue (Note
,
) | 7 , 49 1,
483 | | om c l earing agent (Note
Due fr
) | 8 , 873 , 532 | | r est r
nte
ece
Acc r ued i
i vabl
e | 95 , 904 | | net (Note
es,
r r ece
Othe
i vabl
) | 1,127
, 8 1 2 | | Ce r t ificates o
deposi
(Note
f
t
) | 1,
789 , 386 | | oans and othe
Emp l oyee l
advances
r | 1,
543
, 22 1 | | assets
d expenses and othe
Prepai
r | 4 , 0 1 4 , 626 | | equipment & l
net (Note
i t ure
easeho
Furn
l d i mp r ovements
,
,
) | 457 , 04 1 | | ts
Deposi | 1 72 , 887 | | u se assets -
Ope r ati
Ri ght o
ng Leases (Note
f
) | 5 ,1
73 , 0 1 5 | | r a li
llate
rketabl
Secured demand note r
ece
zed by ma
i vabl
e co
e | | | securit
i es | 1,
750 , 000 | | TOTAL ASSET S | \$ 34 , 303
, 647 | | | | #### LIAB ILITIES AND STOCKHOLDER ' S EQU ITY #### LI AB ILITIES | a ir va
Securit
at f
lue
l d not yet p
urchased,
i es so | | |----------------------------------------------------------------------------|----------------------| | | 6 , 28 1
\$ | | nts payabl
rued expenses
e and acc
Accou | 8 , 573
, 046 | | Ope r ati
eases payabl
ng l
(Note
e
) | 5 ,1
89 , 85 1 | | eases payabl
Fi
nanc
(Note
i ng l
e
) | 20 ,11
8 | | I ncome taxes (Note
) | 97 , 283 | | rrowi
r d i nated bo
Su bo
ngs (Note
) | 6 , 250 , 000 | | ILITIES
TOTAL LIAB | 20 ,1
36 , 579 | | STOCKHOLDER ' S EQU ITY | | | ri
lue
Common stoc
; a u tho
k, no pa
va
zed
r | | | 2 , 500 s h a r es,
i ss
,11
9 s h a r es
u ed 2 | 64 , 939 | | tal
Addi t i ona
pai
d i n capi
l | 1 84 , 2 1 2 | | i ned ear
Reta
n i ngs | 1 4 , 56 1,
700 | | at cost
Treasury stock,
994 s h a r es, | ( 643 , 783
) | | TOTAL STOCKHOLDER ' S EQU ITY | 1 4 ,1
67 , 068 | | ILITIES AND STOCKHOLDER
TOTAL LIAB
' S EQU ITY | \$ 34 , 303
, 647 | {6}------------------------------------------------ #### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021 #### 1. ORGANIZATION AND NATURE OF BUSINESS Herbert J. Sims & Co., Inc. ( "HJS") is a Delaware Corporation re-incorporated on November 15, 2012. Previously, it was incorporated under the laws of the State of New York. Herbert J. Sims & Co., Inc. and its "Company") are principally engaged investment advisory, retail brokerage services are provided to institutions, wholly owned subsidiaries (collectively, the in investment banking, financial advisory, and other related financial services. These businesses and individuals. HJS is a broker-dealer registered with The Securities and Exchange Commission and is a member of the Financial Industry Regulatory Authority and the Securities Investor Protection Corporation. #### 2. SIGNIFICANT ACCOUNTING POLICIES ## a. Principles of Consolidation The consolidated financial statements include the accounts of HJS and its wholly owned subsidiaries: > Sims Mortgage Funding, Inc. HJS Advisors, Inc. Herbert J. Sims Capital Management Inc. All intercompany balances and transactions have been eliminated in consolidation. b. Use of Estimates The Company's consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The preparation of financial statements requires management to make assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. c. Cash Equivalents Cash equivalents are defined as unrestricted short-term investments with original maturities within three months of the date of purchase and money market investments. The Company maintains deposits in financial institutions that consistently exceed the FDIC limit of \$250,000. d. Investments Securities The Company classifies its investments in government bonds as held-to-maturity since the Company has the positive intent and ability to hold the bonds to maturity. Therefore, the bonds are recorded at amortized cost. Subsequent to initial measurement, held-to-maturity investments are measured at amortized cost using the effective interest method less impairment, with revenue recognized on an effective yield basis. {7}------------------------------------------------ #### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS #### DECEMBER 31, 2021 ### 2. SIGNIFICANT ACCOUNTING POLICIES (cont'd) # d. Investments Securities (cont'd) Purchases and sales of securities are reported on a trade-date basis. The cost of securities sold is based on the specific identification method; realized gains and losses resulting from such sales are included in other income. Interest income is recorded on the accrual basis. The Company periodically reviews their investment securities for indications of other than temporary impairment considering many factors, including the extent and duration to which a security's fair value has been less than its cost, overall economic and market conditions, and the financial conditions and specific prospects of the issuer. Impairment of investment securities results in a charge to income when a market decline below cost is other than temporary. ### e. Furniture, Equipment & Leasehold Improvements Furniture, equipment & leasehold improvements are stated at cost. The Company provides for depreciation of assets using the straight-line method for financial reporting purposes. Furniture and equipment are depreciated over 3 to 7 years. Leasehold improvements are amortized over the lesser of the economic useful life of the improvement or over the term of the lease, which range from 1 to 6 years in length. Depreciation and amortization expense was \$267,611 for the year. Cost of maintenance and repairs that do not improve or extend the useful lives of assets are expensed as incurred. # f. Employees Loans and Advances The company has extended credit to certain employees upon commencement of employment with the Company. The credit is in the form of notes signed by the individuals. The outstanding balance of the notes is \$1,543,221 at December 31, 2021. The loans average five years and are amortized on a monthly basis over their term and are charged a market rate of interest. g. Revenue Recognition Revenues are recorded when: (i) a contract with a client has been identified, (ii) the performance obligation (s) in the contract have been identified, (iii) the transaction price has been determined, (iv) the transaction price has been allocated to each performance obligation in the contract, and (v) the Company has satisfied the applicable performance obligation. The expenses that are directly related to such transactions are recorded as incurred and presented within operating expenses. Revenue associated with the reimbursement of such expenses are recorded when the company is contractually entitled to reimbursement and presented as expense reimbursement revenue on the statement of income. The timing of the Company's revenue recognition may differ from the timing of payment by its customers. The Company records a receivable when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied. {8}------------------------------------------------ #### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS #### DECEMBER 31, 2021 ### 2. SIGNIFICANT ACCOUNTING POLICIES (cont'd) ### g. Revenue Recognition (cont'd) #### Trading & Commissions Acting as a principal, the Company earns substantially all income by buying and selling securities and various other investment products on behalf of its customers by applying a mark-up or mark-down on the related transaction. The Company also marks to market its securities inventory generating unrealized gain and losses taken into income during the period. Commission revenue represents commission generated from buying and selling securities and various other investment products on behalf of customers. The Company recognizes commission revenue at the point in time when the transaction occurs. #### Investment Banking Investment banking revenues include income and fees from fixed income securities offerings where the Company acts as underwriter or placement agent. The Company provides financial advisory and transaction related services to its customers. The benefits of the Company's services are generally transferred to the customers over time, since the customers simultaneously receive and consume the benefits as the Company performs the service. The Company's contracts are usually cancellable by either party at any time and the considerations typically include retainer fees and success fees. Retainer fees are generally fixed and charged on a periodic basis, recognized over the period in which the advisory services are performed. However, success fees are variable and subject to constraints, and typically not recognized until the transaction completion date, due to uncertainty associated with those events. Investment banking revenues also include fees earned from providing consulting, risk management and financial advisory services, recognized over time as services are delivered to the customers. Investment banking management fees are recorded when the income is reasonably determinable. The recognition and measurement of revenue is based on the assessment of individual contract terms; whether revenue should be presented gross or net of certain costs; and whether constraints on variable consideration should be applied due to uncertain future events. Underwriting and placement revenues are recognized upon the completion of the underlying transactions, based on the terms of the agreements. Expenses associated with the arrangements are generally deferred until the related revenue is recognized. Client reimbursements for such expenses are included in revenues. # h. Securities Transactions Proprietary securities transactions are recorded on a settlement date basis which is generally two business days after trade date. The recording of securities transactions on a trade date basis was considered, and the difference was deemed immaterial. In the normal course of business, the Company purchases and sells securities as both principal and agent. Financial instruments are recorded at fair value in accordance with FASB ASC 820, Fair Value Measurements. {9}------------------------------------------------ #### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS #### DECEMBER 31, 2021 ### 2. SIGNIFICANT ACCOUNTING POLICIES (cont'd) # i. Advertising and Promotion The Company expenses advertising and promotion costs as incurred. The advertising and promotion expense was \$783,896 for the year. # j. Income Taxes The Company files its federal and most state and local income tax returns as part of a consolidated group. The Company calculates federal, state and local income taxes as if the Company filed on a separate return basis, and the amount of tax or benefit calculated is either remitted to or received from the parent. Deferred income taxes are computed annually for differences between the financial statement and tax bases of assets and liabilities that will result in deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. While management expects the Company to utilize the deferred tax assets in future years by generating operating profits, a valuation allowance against the deferred tax assets has been recorded in the amount of approximately \$44,549, due to prior cumulative net operating losses, loss carryforwards and other temporary differences, as of December 31, 2021. As of December 31, 2021, the Company had net Federal operating losses of approximately \$1,346,993 available to be offset against taxable income which will not expire under the Tax Cuts and Jobs Act of 2017 ("the TCJA"). As of December 31, 2021, the Company had State and City operating losses ranging from approximately \$28,000 to \$304,000 available to be offset against state and city taxable income during the years ending December 31, 2022 through 2038. k. Subsequent Events The Company has evaluated subsequent events through March 31, 2022 the date the financial statements are available to be issued. ### 1. Leases The Company recognizes and measures its leases in accordance with FASB ASU No. 2016-02, Leases (ASC Topic 842). The Company is a lessee in various non-cancellable operating lease for office space and office equipment. The Company determines if an arrangement is a lease, or contains a lease, at inception of a contract and when the terms of an existing contract are changed. The Company recognizes a lease liability and a right of use (ROU) asset at the commencement date of each lease. The lease liability is initially and subsequently recognized based on the present value of the contract's future lease payments. Variable payments are included in the future lease payments when those payments depend on an index or a rate. The discount rate is the implicit rate, if it is readily determinable, or the Company's incremental borrowing rate. The implicit rate of the Company's leases is not readily determinable and accordingly, the Company uses its incremental borrowing rate, based on information available at each lease commencement date. The Company's incremental borrowing rate for a lease is the rate of interest it would have to {10}------------------------------------------------ #### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS #### DECEMBER 31, 2021 ### 2. SIGNIFICANT ACCOUNTING POLICIES (cont'd) ### 1. Leases (continued) pay on a consolidated basis to borrow an amount equal to the lease payments under similar terms in a similar economic environment. The ROU asset is subsequently measured throughout the lease term at the amounts of the remeasured lease liability (i.e. present value of the remaining lease payments), plus unamortized initial direct costs plus (minus) any prepaid (accrued) lease payments, less the amortized balance of lease incentives received, and any impairment recognized. Lease cost for the lease payments is recognized on a straight-line basis over the lease term. Lastly, in computing the Company's net capital, the Company adds back the ROU assets to the extent of the associated lease liability, in accordance with the SEC Division of Trading and Markets' noaction relief dated October 2018. The Company recognizes the cost of short-term leases (duration of 12 months or less), in the statement of income on a straight-line basis over the term of the lease. #### 3. REVENUES FROM CONTRACTS WITH CUSTOMERS As of December 31, 2021, \$1,31,810 customers and are included in other financial condition. of net receivables are due to contracts with receivables on the consolidated statement of The net receivable reflects an allowance for uncollectible amounts of \$737,584, due from customers that are under financial distress. The Company did not have any deferred revenue at December 31, 2021. #### 4. SECURITIES OWNED Securities owned at December 31, 2021 consist of trading securities at fair value as follows: | Municipal bonds - | | | at fair value | \$7,437,483 | |-------------------|--|--|---------------|-------------| | Corporate bonds | | | at fair value | 54,000 | | | | | | \$7,491,483 | Municipal bonds consist primarily of revenue bonds issued by state and local governmental authorities related to continuing care retirement communities and health care facilities. #### 5. INVESTMENTS HELD TO MATURITY The Company invests surplus cash in certificates of deposit or U.S. government bonds that are less than 12 months in maturity from the acquisition date. There were no positions that exceeded the FDIC insurance limit of \$250,000. At December 31, 2021 The Company held investments in marketable securities that were classified as held {11}------------------------------------------------ #### NOTE S TO CONSOLI DATE D FINANC I AL STATEMENTS DECEMBER 3 1, 202 1 #### 5 . I NVESTMENTS HEL D TO MATURITY (cont ' d ) to matu rity and consi sted o f the f ^o llowi ng : | | Amo r t i zed
Cost | Un r eali
zed
Ho l d i ng
Ga i ns | Un r eali
zed
Ho l d i ng
Losses | Fa ir Va
lue | |--------------------------------------------------------------------------|-----------------------|--------------------------------------------|-------------------------------------------|----------------------| | Ce r t ificates o
Deposi
f
t
Total
i nvestments he
l d | \$1,
79 1,
994 | \$ | 2 , 608
\$ | \$1,
789
, 386 | | to maturity | \$1l
79 1l
994 | \$ | 2 l 608
\$ | \$1l
789 l 386 | #### 6 . FAI R VALUE OF FINANC I AL I NS TRUMENTS FASB ASC 820 , Fa ir Va lue Meas urements , de fi nes f ^a ir va lue , establishes a fr amewo rk ^f ^o r meas uring f ^a ir va lue and expands d ⁱ sc ^l os ure abou t f ^a ir va lue meas urements r equired ^u nde r othe r accou nti ng p ^r ono ^u ncements , b ^u t does not change exi sti ng g uidance as to whethe r o r not an i nstrument i s ca rried at f ^a ir va lue . Fa ir va lue i s de fi ned as the exchan ge p ri ce that wo ul d be r ece ⁱ ved f ^o r an asset o r pai d to t ^r ^a ⁿ ^s ^f ^e r a liab ility in the p rinc ⁱ pa l o r most advantageou s ma rket f ^o r the assets o r liability i n an o ^r de rl ^y ^t ^r ansacti on between ma rket pa ^r ^t ⁱ ^c ⁱ pants on t ^h e meas urement date . The Company dete ^r mines t ^h e f ^a ir va lues o f i ts fina ⁿ ^c ⁱ ^a l instrume ⁿ ts a ⁿ d assets a ⁿ d liabilit ⁱ es ^r ecogni zed at f ^a ir va lue in t ^h e fi nanc ⁱ ^a l statemen ts on a r ecurring basi s in acco ^r dance wi th ASC 820 . The Company ' s fi nanc ⁱ ^a l i nstruments a ^r e ca rried at f ^a ir va lue o r amo ^u nts that app ^r oxi mate f ^a ir va lue . To d iffe ^r enti ate between t ^h e app ^r oach to f ^a ir va lue meas uremen ts, ASC 820 u ses a f ^a ir va lue hi ^e ^r ^a ^r ^c ^h y a ⁿ d desc ribes t hree l eve ^l s u sed to ^c ^l assify f ^a ir meas urements . Leve l 1 i npu ts a ^r e q ^u oted p ri ces (unad justed) i n acti ve ma rkets f ^o r i denti cal assets o ^r liabilit ⁱ es that the Company h as t ^h e ability to access at t ^h e meas urement date . An acti ve ma rket f ^o r t ^h e asset o r liab ility i s a ma rket in whi ^c h t ^r ^a ⁿ sacti ^o ⁿ s f ^o r t ^h ^e asset o r liability occur wi ^t h s uffi ^c ⁱ ent frequ ency a ⁿ d vo lume to p ^r ovi de p ri ^c ing i n f o r mat i on on an ongo i ng basi s . Leve l 2 i npu ts a ^r e obse ^r vabl e i npu ts oth ^e r t ^h an Leve l 1 p ri ces, s ^u ^c h as q ^u oted p ri ces ^f ^o r s ⁱ mila r assets o r liabilit ⁱ es; q ^u oted p ri ces i n ma rkets t ^h at a ^r e n ot acti ve ; o ^r oth ^e r i npu ts t ^h at a ^r e obse ^r vabl e o r can be co rrobo ^r ated by obse ^r vabl e ma rket data , ^s ^u ch as matrix p ri ^c ⁱ ng o f fi xed i ncome securit ⁱ es . Leve l 3 f ^a ir va lue measurements a ^r e based on u nobse ^r vabl e i npu ts f ^o r the asset o ^r liability . Unobse ^r vabl e i npu ts a ^r e u sed to meas ure f ^a ir va lue to t ^h e extent t ^h at obse ^r vab ^l e inp ^u ts a ^r e n ot ava ilabl ^e , t ^h ^e ^r eby a llowing f ^o r s ⁱ ^t ^u ati ^o ⁿ s in whi ^c h t ^h ^e ^r e i ^s littl ^e , if a ⁿ ^y , ma rket acti ^v ⁱ ty f ^o r t ^h e asset o r liab ility at t ^h e meas uremen t date . The ^r ^e ^f ^o ^r ^e , u nobse ^r vabl e i npu ts r ^e fl ect t ^h e Company ' s own ass umpt ⁱ ons abou t t ^h e i npu ts ^t ^h at ma rket pa ^r ^t ⁱ ^c ⁱ pan ts wo ul d u se i n p ri ^c ing the asset o r liability (inc lud ing ass umpt ⁱ ^o ⁿ s abou t ris k). The f ^o llowi ng va luati on f acto ^r s a ^r e consi de ^r ed f ^o r t ^h e fi nan ^c ⁱ ^a l assets and liabilit ⁱ es o f the Compan ^y : {12}------------------------------------------------ #### NOTE S TO CONSOLI DATE D FINANC I AL STATEMENTS DECEMBER 3 1, 202 1 #### 6 . FAI R VALUE OF FINANC I AL I NS TRUMENTS (cont ' d ) Cash equi va ^l ents consi st o f i nvestments i n money ma ^r ket f unds . Such i nstr uments a ^r ^e ^c ^l assified wi thi n l eve l 1 o f the f ^a ir va ^l ue h ⁱ ^e ^r ^a ^r chy . Fixed r ate mun ⁱ ^c ⁱ pa l bonds may be p ri ced usi ng matrix p ri ^c ⁱ ng mode ^l ^s . The Company ^r ^e lies on outsi de p ri ^c ⁱ ng se ^r ^v ⁱ ces to dete ^r mi ne the f ^a ir va ^l ue o f the fi xed r ate mun ⁱ ^c ⁱ pa l obligati ons . Fixed r ate mun ⁱ ^c ⁱ pa l bonds a ^r e c ^l assified wi thi n Leve l 2 o ^f the f ^a ir va ^l ue h ⁱ ^e ^r ^a ^r chy because they a ^r e t ^r aded i n an ove r the counte r ma rket (OTC) ^o r Leve l 3 based on othe r spec ifi c f acto ^r ^s , such the bo rrowe r' s c ^r edi t str ength and ope ^r ati ng environment , i n the case o f p ^r ^o ^j ect r evenue bonds . Fixed r ate co ^r po ^r ate bonds may be p ri ced usi ng matrix p ri ^c ⁱ ng mode ^l ^s . The Company ^r ^e lies on outsi de p ri ^c ⁱ ng se ^r ^v ⁱ ces to dete ^r mi ne the f ^a ir va ^l ue o f the fi xed r ate co ^r po ^r ate obligati ons . Fixed Co ^r po ^r ate bonds a ^r e c ^l assified as Leve l 2 i n the f ^a ir va lue h i e r a r chy . Co ^r po ^r ate bon ds i ss ^u ed as p rivate p ^l acemen ts va lued u ^s ⁱ ng u nobse ^r vab ^l e i npu ts, suc ^h as d ⁱ scount r ates, l ong- te ^r m r evenue g ^r owth r ates, ope ^r ati ng ma ^r ^g ⁱ ns , cap r ates and othe r ass umpt ⁱ ons abou t the securit ⁱ es a ^r e c ^l assified as Leve l 3 i n the f ^a ir value h i e r a r chy . The f ^o llowi ng tabl e p ^r esents the Company ' s f ^a ir va lue h ⁱ ^e ^r ^a ^r chy f ^o r those assets and liabilit ⁱ es at f ^a ir va lue basi s as at Decembe r 3 1, 202 1. | Assets | Leve
l
1 | Leve
l
2 | Leve
l
3 | Total | |----------------------------|----------------|--------------------|----------------|--------------------| | Securit
i es owned
: | | | | | | Mu n i c i pal
bonds | \$ | \$7 , 437 , 483 | \$ | \$7 , 437 , 483 | | r ate bonds
Co r po | | 54 , 000 | | 54 , 000 | | | \$ | \$7 , 49 1,
483 | \$ | \$7 , 49 1,
483 | #### **Level 3 Roll forward** | | Begi nn
i ng
Ba l ance
1 / 1 /2
1 | li
Un r ea
zed
(Loss
Ga i n
) | Rea li
zed
(Loss
Ga i n
) | Purchases
I
l es)
(Sa | Endi
ng
Ba l ance
1 2/31
/2
1 | |------------------------|-----------------------------------------------|----------------------------------------------|---------------------------------------|--------------------------------|----------------------------------------------| | Mun i c i pal
bonds | 9 , 000
\$ | \$ | \$ | ( 9 , 000 )
\$ | \$ | | r ate bonds
Co r po | 230
, 446 | | | (230
, 446 ) | | | | \$239
l 446 | \$ | \$ | \$ {239
l 446 } | \$ | {13}------------------------------------------------ #### NOTE S TO CONSOLI DATE D FINANC I AL STATEMENTS DECEMBER 3 1, 202 1 #### 7 . FURN ITURE, EQU I PMENT AND LEAS EHOLD I MPROVEMENTS | Fu r n i tur
e | 760 , 790
\$ | |-------------------------------------------------------------|------------------| | Equ
i pment | 1,1
74 , 997 | | Leasehol
d i mp r ovements | 265
, 098 | | | 2 , 200 , 887 | | i ati
Less Accumu
l ated dep
r ec
on | 1,
743 , 846 | | Fu r n i tur
easehol
equ
i pment and l
e ,
d | | | net
i mp r ovements
, | 457 , 04 1
\$ | #### 8 . DUE FROM CLEARI NG AGENT The Company c ^l ea ^r s a ll i ts fi nanc ⁱ ^a l transacti ons wi th custome ^r s through a c ^l earing agent , on a f ^u lly d ⁱ sc ^l osed basi s as an i ntr oduc ⁱ ng b ^r ^o ke r, and meets a ll othe ^r ^r equirements o f r ^u ^l e 1 ⁵ ( ^c ) ³ - 3 o f the Secu rit ⁱ es and Exchange Commi ssi on . Unde r i ts ^f ^u lly d ⁱ sc ^l osed c ^l earing ag ^r eement , the Company has ag ^r eed to ma ⁱ nta ⁱ n a " Deposi ^t Account " that shall, at a ll t ⁱ mes , contai n cash and/o r securit ⁱ es wi th a mi ⁿ ⁱ mum ma rket va ^l ue o f \$ ¹ ⁰⁰ , ⁰⁰⁰ . The Company has va ri ous accounts at the c ^l ea ring b ^r ^o ke r f ^o r ma ^r ^g ⁱ ⁿ ⁱ ng o f securit ⁱ es he ^l d i n the Company ' s t ^r adi ng i nvento ^r ^y . The c ^l ea ring b ^r oke r has the right to net (o ffset ) the bal ances i n these firm accounts wh ⁱ ch r esul ts i n a net r ece ⁱ vabl e fr om the c ^l ea ring b ^r ^o ke r o r a net liability to the c ^l earing b ^r ^o ke r. The liab ility i ^s co llate ^r ^a li zed by the securit ⁱ es he ^l d by the c ^l ea ring b ^r ^o ke r. #### 9 . LOANS PAYABLE ^I n Ap ril and May 2020 , as the COVI D-1 9 pandemi c c ^r eated s ⁱ gn ifi cant g ^l oba l economi ^c unce ^r tai nty , the Company applied f ^o r and r ece ⁱ ved two l oans fr om the Sma ll Bu ^s ⁱ ness Admi ⁿ ⁱ str ati on ' s (SBA ) Pay ^r ^o ll Pr otecti on Prog ^r am (PP ^P ) First Dr aw , totaling \$2 , 804 , 580 . Both l oans ba ^r ed an i nte ^r est r ate o f 1 %. I n 202 1, both l oans we ^r e f ^o ^r ^g ⁱ ven by the SBA and , i n acco ^r dance wi th FASB ASC 470 - ⁵⁰ , Debt Modificati ons and Exti ngu ⁱ shments , and FASB ASC 405 - ²⁰ , Exti ngu ⁱ shment o f Li abilit ⁱ es , a ^r e r ^e fl ected as a separ ate component o f i ncome on the conso lidated statement o f i ncome . ^I n Ma ^r ch 202 1, the Company app lied f ^o r and r ece ⁱ ved an addi ^t ⁱ ona l l oan fr om the SBA ' ^s PPP Second Dr aw , i n the amount o f \$ 11 ⁴ , 600 . The l oan ba ^r ed an i nte ^r est r ate o f 1 % and had a matu rity o f fi ve yea ^r ^s . I n 202 1, thi s l oan was a ^l so f ^o ^r ^g ⁱ ven by the SBA . The Taxpaye r Ce ^r tai nty and Di saster Tax Re lie f Act o f 2020 , enacted Decembe r 27 , 2020 , made a numbe r o f changes to the emp ^l oyee r etenti on tax c ^r edi ts p ^r evi ousl ^y made ava ilabl e unde r the Co ^r onavirus Ai ^d , Re lie f, and Economi c Security Act (CARES Act), i nc ^l udi ng modify ⁱ ng and extendi ng the Emp ^l oyee Retent ⁱ on Cr edi t (ERC ), f ^o ^r ^s ⁱ x months thr ough June 30 , 202 1. Seve ^r ^a l o f the changes appl y on ^l y to 202 1, wh ile othe r s appl y to both 2020 and 202 1. As a r esul t o f the new l egi ^s ^l ati on , e lig ⁱ ^b ^l e emp ^l oyers can now c ^l ^a ⁱ m a refundabl e tax ^c ^r edi t aga ⁱ nst the emp ^l oyer share o f Soc ⁱ ^a l Securi ty tax equal to 70 % o f the qua lif ⁱ ed wages they pay to emp ^l oyees after December 3 1, 2020 , through June 30 , 202 1. Qua lif ⁱ ed wages a ^r e limi ted to \$ ¹ ⁰ , 000 pe r emp ^l oyee pe r cal enda r qua ^r te r i n 202 1. Thus , the {14}------------------------------------------------ #### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021 ### 9. LOANS PAYABLE (cont'd) maximum ERC amount available is \$7,000 per employee per calendar quarter, for a total of \$14,000 in 2021. Based on the number of eligible employees, the Company has accrued ERC credits for tax years 2020 and 2021 totaling \$2,419,997. The Company believes that the Internal Revenue Service (IRS) will approve these credits. #### 10. SECURED DEMAND NOTE & SUBORDINATED BORROWINGS The subordinated borrowings from the Company's principal officer are pursuant to secured demand note collateral agreements which mature no earlier than June 30, 2022. These agreements have been approved by the Financial Industry Regulatory Authority, Inc. and the subordinated borrowings are available for use in computing net capital. Such borrowings may not be repaid to the extent it is required to maintain compliance with minimum net capital requirements. Cash and securities in the amount of approximately \$1,750,000 have been secured, as collateral, with the clearing agent as required by the agreements, noted below. In June 2013, the Company entered into a secured demand note with the principal stockholder in the amount of \$250,000 with an automatic renewal maturity date of June 30, 2022 at an annual interest rate of 3%. In June 2018, the Company entered into a new secured demand note with the principal stockholder in the amount of \$1,500,000 with an automatic renewal maturity date of June 29, 2022 at an annual interest rate of 3%. In October 2019, the Company entered into a subordinated loan with the principal stockholder in the amount of \$2,500,000 that had a maturity date of October 25, 2020 and bore an annual interest rate of 3%. In November 2020, the Company entered into a new subordinated loan with the principal stockholder in the amount of \$2,500,000 with an automatic annual renewal maturity date of November 30, 2022 at an annual interest rate of 1%. In May 2020, the Company entered into an equity subordinated loan with the principal stockholder in the amount of \$2,000,000 with a maturity date of May 29, 2023 at an annual interest rate of 1%. #### 11. INCOME TAXES On December 2017, the TCJA was signed into law, which enacted various changes to the U.S. corporate tax law. Some of the most significant provisions impacting corporations include a reduced corporate income tax rate from 35% to 21% effective in 2018, a onetime "deemed repatriation" tax on earnings in non-U.S. jurisdictions, limitation on deductibility of interest, the transition of U.S. international taxation from a worldwide tax system to a territorial tax system and other provisions. U.S. GAAP accounting for income taxes requires companies to record the impacts of any tax law change on the Company's deferred income taxes in the quarter that the tax law change is enacted. The temporary difference, giving rise to the deferred tax liability, consists primarily of the book to tax basis difference for net operating loss carryforwards, prepaid expenses, furniture, equipment and leasehold improvements. The Company has provided for deferred income taxes using Federal and State rates of 21% and 4%, {15}------------------------------------------------ #### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021 ### 11. INCOME TAXES (cont'd) respectively. The components of the non-current deferred tax assets and liabilities at December 31, 2021, consists of the following: | Non-current deferred tax assets: | | |---------------------------------------|-------------| | Net operating loss carryforwards | \$ 338,022 | | Deferred rent | 4,263 | | Less: valuation allowance | (44,549) | | Net deferred tax assets | 297,736 | | Non-current deferred tax liabilities: | | | | | | Prepaid expense | \$(166,135) | | Intangibles | (19,763) | | Other | (111,838) | | Net deferred tax liabilities | (297,736) | | Net deferred tax assets | \$===== | The allowance for income taxes for the year ended December 31, 2021, consists of the following: Current: | | Federal | \$ 61,602 | |-----------|------------------|---------------| | | State | 53,201 | | | Total Current | \$114,803 | | | | | | Deferred: | | | | | Federal
State | \$ | | | Total Deferred | __
\$
_ | Total allowance for income taxes Audit periods remain open for examination until the applicable statute of limitations has expired. The statute of limitations for the tax years is generally three years. The Company is no longer subject to income tax examinations for years prior to 2018. \$114,803 The authoritative guidance for uncertainty of income taxes, as amended, requires the Company to determine whether a tax position is more likely than not to be sustained upon examination by the applicable taxing authority, including the resolution of any related appeals or litigation processes, based on the technical merits of the {16}------------------------------------------------ #### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021 ### 11. INCOME TAXES (cont'd) position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than 50 % likely or being realized upon ultimate settlement, which could result in the Company recording a tax liability. The Company reviews and evaluates tax positions in its major jurisdictions and determines whether there are uncertain tax positions that require financial statement recognition. The Company has determined that the guidance for uncertainty in income taxes had no impact on its consolidated financial statements during the year ended December 31, 2021. #### 12. 401K EMPLOYEE SAVINGS AND RETIREMENT PLAN As of January 1, 1995, the Company adopted a 401(k) Employee Savings and Retirement Plan covering all eligible employees, as defined. Employee contributions of up to 100% of paid compensation may be made, subject to defined limitations. Employer contributions to the plan are discretionary and are based on participants' annual compensation. For the year ended December 31, 2021 the Company made matching contributions to the plan of \$137,418. The Company did not make any discretionary contributions. #### 13. RELATED PARTY TRANSACTIONS The Company provides investment advisory and administrative services to its wholly owned subsidiaries, HJS Advisors, Inc., Sims Mortgage Funding, Inc., Herbert J. Sims Capital Management, Inc. and Braintree Capital Partners, LLC. All intercompany transactions have been eliminated from the consolidation. The Company acting as placement agent, advisor or manager for a separate limited liability company owned by two executives of the Company realized revenue in the amount of \$1,819,546. Income from related parties accounted for approximately 4.1% of total revenue for the year ended December 31, 2021. As of December 31, 2021, the Company carried a receivable of \$250,000 due from the related party. #### 14. COMMITMENTS & CONTINGENCIES In the normal course of business, the Company enters into underwriting contractual commitments. At December, 31, 2021, there were no open contractual commitments relating to such transactions. #### 15. LEASES The Company has obligations as a lessee for office spaces and office equipment with initial non-cancellable terms in excess of one year. The Company classified such leases as operating leases. Some of the leases contain renewal options for a period of one year or more. Because the Company is not reasonably certain to exercise the renewal options, the optional periods are not included in determining each lease term and associated payments under the renewal options are excluded from these payments. The Company's operating leases do not include termination options for either party to the leases or restrictive financial or other covenants. Payments due under the lease contracts include fixed payments plus material variable payments. The Company's office space leases require it to make variable payments for the Company's proportionate share of each building's property taxes, insurance and common area maintenance. These variable lease payments are included in the lease payments used {17}------------------------------------------------ #### NOTE S TO CONSOLI DATE D FINANC I AL STATEMENTS DECEMBER 3 1, 202 1 to dete ^r mi ne l ease liab ility . #### 1 5 . LEASES (cont ' d) The Company has non- cance llabl e ope ^r ati ng l eases f ^o r o ffi ce space i n Connecti cut , Flori da , New Jersey , Mi nnesota , Ma ^r ^y ^l and, No ^r th Ca ^r ^o lina , Pue ^r to Ri co and Texas unde ^r ag r eements extendi ng thr ough May 2029 . Pu r suant to ASC 842 , the p r esent va l ue o f the ^f utur e mi ⁿ ⁱ mum l ease payments i s r eco ^r ded as a right to use asset ("ROU ") and r ^e ^l ated ^l ease liability . An ope ^r ati ng l ease o ri ^g ⁱ na lly commenc ⁱ ng i n 202 1 was s ubsequ entl y amended , wi th the ^l ease te ^r m commenc ⁱ ng i nstead i n 2022 , at wh ⁱ ch po ⁱ nt the asset will be comp ^l eted and the Company will take possessi ^o n. As such, t ^h e Compan ^y ' s fin anc ⁱ ^a l statements as o ^f Decembe r 3 1, 202 1 do not i nc ^l ude a l ease liab ility o r an ROU asset r ^e ^l ati ng to th ⁱ ^s l ease . The Company has l eased va rious e ^l ectr oni c equi pment wi th a nomi na l payment d ^u e at the end o f the l ease te ^r m. The cost o f thi s equ ⁱ pment has been capi tali zed and i s be ⁱ ng dep ^r ec ⁱ ated ove r i ts use ful life . The r ^e ^l ated liability i s shown as a fi nance l ease . The components o f the l eases a ^r e as f ^o llows : Yea r Endi ng Decembe r 3 1, 202 1: | | Ope r ating | Finance | |---------------------------------------------------------------------|-----------------------|---------------| | ability as o
1 2/31
Li
/202
f
1 | \$5 ,1
89 , 85 1 | \$20 ,11
8 | | r m liab
ility (less t
Sh o r t - te
h a n 1 2 months
) | \$ 1,
022 , 28 1 | \$20 ,11
8 | | r m liability
te
Long- | \$4 ,1
67 , 570 | \$ | | Diffe
scounted cash fl
r ence between u
ndi
ows | | | | r m liab
ility
(long te
nted cash
) and d
i scou | \$2 , 444 , 871 | \$ | | fl
ows | | | | Lease cost | \$ 1,
303
, 972 | \$35
, 844 | | We i ghted Ave
i n i ng Lease Te
r age Rema
r m i n | 60 . 26 | 8 . 00 | | months | | | | nt Rate
We i ghted Ave
scou
r age Di | 3 . 945% | 4 . 260% | Maturit ⁱ es o f t ^h e l ease liability unde r con- can ce llabl e l eases a ^r e as f ^o llows : | Leases | Ope r ati
ng | Finance | |---------------------------------------------------|-------------------------|-------------| | 2022 | ,1
\$1,
375
79 | \$ 23 , 375 | | 2023 | 1,
373
, 629 | | | 2024 | 1,
280 , 61 4 | | | 2025 | 998 ,1
90 | | | 2026 | 494 , 3 1 6 | | | 2027 & beyond | 1,
090 , 5 1 3 | | | Total
nted l
ease payments
i scou
und | \$6 , 61 2 , 44 1 | \$ 23 , 375 | {18}------------------------------------------------ #### NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2021 | Less imputed interest | (1,422,590) | (3,257) | |-----------------------|-------------|-----------| | Total lease liability | \$5,189,851 | \$ 20,118 | #### 16. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK At December 31, 2021 cash on deposit in high quality financial institutions exceeded Federal Deposit Insurance Corporation limits by approximately \$1,192,126. The Company has not experienced any losses in such accounts. The Company clears its securities transactions through major financial services firms. These activities may expose the Company to off-balance sheet risk in the event that the institution is unable to fulfill its obligation and the Company has to purchase or sell the securities at a loss. The Company invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could affect the amounts reported on the consolidated statement of financial condition. #### 17. LITIGATION The Company is, from time to time, a party to legal proceedings arising in the normal course of its business. Management believes that none of the legal proceedings currently outstanding will have a material adverse effect on the Company's business, financial condition or results of operations. #### 18.MINIMUM NET CAPITAL The company is subject to Rule 15c3-1 of the Securities Exchange Act of 1934 which requires that the ratio of aggregate indebtedness to net capital, as defined, shall not exceed 15 to 1. Net capital and related net capital ratio may fluctuate on a daily basis. At December 31, 2021, the Company's net capital and aggregate indebtedness, as defined, were \$10,502,177 and \$7,760,795 respectively. The net capital ratio was .739 or 73.9%. Excess net capital was \$9,984,790. #### 19.ANNUAL REPORT Pursuant to rule 17a-5 of the Securities and Exchange Commission, the Statement of Financial Condition is available for examination at the Company's principal place of business located at 2150 Post Road, Suite 301, Fairfield, Connecticut 06824 and at the regional office of the Commission located at 33 Arch Street, 23rd Floor, Boston, MA 02110-1424. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.