# JRL CAPITAL CORPORATION X-17A-5 (2021-03-01) — Broker-dealer annual report - Company: JRL CAPITAL CORPORATION - Form: X-17A-5 - Filed: 2021-03-01 - Period: 2020-12-31 - Accession: 0000355421-21-000001 - CIK: 355421 - File #: 8-26657 - Material weakness: No - Auditor: LMHS, P.C. - Auditor location: Norwell, MA - Contact: Larry R. Law - Phone: 949-650-2928 - Website: lmhspc.com - Signed by: Larry R. Law (President) Original filing: https://www.sec.gov/Archives/edgar/data/355421/000035542121000001/jrlauditedfinancials.pdf --- {0}------------------------------------------------ #### JRL CAPITAL CORPORATION (A WHOLLY OWNED SUBISIDIARY OF JRL CAPITAL MANAGEMENT GROUP) SEC ID No. 8-26657 #### FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE For the Year Ended December 31,2020 The report is filed in accordance with Rule 1 7a-5(e)(3) under the Securities Exchange Act of 1934 as a PUBLIC DOCUMENT. {1}------------------------------------------------ ### JRL CAPITAL CORPORATION | SEC Form X-17A-5 | PAGE
AlB | |--------------------------------------------------------------------------------------------------------------------------------------------------|-------------| | Report of Independent Registered Public Accounting Firm | 1 | | Statement of Financial Condition | 2 | | Statement of Earnings | 3 | | Statement of Changes in Stockholder's Equity | 4 | | Statement of Cash Flows | 5 | | Notes to Financial Statements | 6-11 | | Supplementary Information | | | Statement of Net Capital
Schedule I | 12 | | Determination of Reserve Requirements
Schedule II | 13 | | Schedule III Information Relating to Possession or Control | 13 | | Schedule IV SIPC Form 7 | 14-15 | | Independent Accountant's Report on Applying Agreed -
Ua)on Procedures Related to an Entity's SIPC Assessment
Reconciliation | 16 | | Exemption Report Pursuant to Rule 17a-5 of the Securities and Exchange
Commission and Report of Independent Registered Public Accounting Firm | 17-18 | Table of Contents {2}------------------------------------------------ | | UNITEDSTATES | | OMB APPROVAL | |-----------------------------------------------------------------------------------------|-----------------------------------------------------------|---------------------|-----------------------------------------------------------| | | SECURITIESANDEXCHANGECOMMISSION | | OMB Number:
3235.0123 | | | Washington, D.C. 20549 | | Expires:
October 31,2023 | | | | | Estlmilttd iiVerilge burden
hours per response 12.00 | | | ANNUAL AUDITED REPORT | | | | | FORM X·17A-5 | | SEC FILE NUMBER | | | PART Ill | | a-26657 | | Information Required of Brokers and Dealers Pursuant to Section 17 of the | FACING PAGE | | | | | Securities Exchange Act of 1934 and Rule 17a-S Thereunder | | | | REPORT FOR THE PERIOD BEGINNINGQ1/01/20 | | AND ENDING 12/31/20 | | | | MM/00/YY | | ---------------------
MMIDDIYY | | | A. REGISTRANT IDENTIFICATION | | | | NAME OF BROKER-DEALER: JRL Capital Corporation | | | OFFICIAL USE ONLY | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | FIRM 1.0. NO. | | 100 Pacifica, Suite 360 | | | | | | (No. and Srreel) | | | | Irvine | CA | | 92618 | | (City) | (Siale) | | (Zip Code) | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
Larry R. Law | | | 949-650-2928 | | | | | (Area Code - Telephone Numb~r) | | | B. ACCOUNTANT IDENTIFICATION | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report• | | | | | LMHS, P.C. | | | | | | (Name - 1/ lndi~ldu , stole lost, first, m/ddlt namt) | | | | 80 Washington St, Bldg S | Norwell | MA | 02061 | | (Address) | (Cily) | (Slate) | (Zip Code:) | | CHECK ONE: | | | | | Certified Public Account11nt | | | | | Public Accountant | | | | | §
Accountant not resident in United States or any of its possessions. | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | | | | | | | | *•c laims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a s/atemenl offac:ts and circumstances relied on as the basis for the exemption. See Section 240. / 7a-5(e)(2)* > Potential persona 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. SEC1410(11-05) {3}------------------------------------------------ #### OATH OR AFFIRMATION 1, Larry R. Law , swear (or affirm) that, to the best of my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of JRL Capital Corporation --~--~--~~----------------------------~~---------------------------------------'as of December 31 2020 are true and correct. I further swear (or affirm) that neither the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account classified solely as that of a customer, except as follows: | President | |--------------------------------------------------------------------------------------------------------------------------------| | | | Title | | RABSY couiHs ( | | Couu.l2321941
: | | NOTMY "*'C·CALJJCMA W
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This report •• contains (check all applicable boxes): | | ~ (a) Facing Page. | | (3 (b) Statement of Financial Condition. | | 0 (c) Statement of Income (Loss) or, if there is other compreheJ.lsive income in the period(s) presented, a Statement | | of Comprehensive Income (as defined in §210.1-02 of Regulation S-X). | | (d) Statement of Changes in Financial Condition. | | (e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital. | | (f) Statement of Changes in Liabilities Subordinated to Claims of Creditors. | | (g) Computation of Net Capital. | | (h) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3. | | (i) Information Relating to the Possession or Control Requirements Under Rule l5c3-3. | | 0 (j) A Reconciliation, including appropriate explanation ofthe Computation of Net Capital Under Rule I 5c3-l and the | | Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3. | | 0 (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of | | consolidation. | | (I) An Oath or Affirmation. | | (m) A copy of the SIPC Supplemental Report. | | (n) A report describing any material inadequacies found to exist or found to have existed since the date ofthe previous audit. | | | | | •• *For conditions of confidential treatment of certain portions of this filing, see section 240.17a-5(e)(3).* {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) ### *Report of lndepe11dent Registered Public Accoullting Firm* To the Members JRL Capital Corporation Newport Beach, California #### *Opi11ioll* 011 *the Fillatlcial Stateme111s* We have audited the accompanying statement of fmancia I condition of JRL Capital Corporation, as of December 31, 2020, and the related statements of earnings, changes in stockholder's equity and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). fn our opinion, the financial statements present fairly, in all material respects, the fmancial position of JRL Capital Corporation as of December 31, 2020, and the results of its operations and its cash flows for the year then ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America. #### *Basis for Opi11i011* These financial statements are the responsibility of the entity's management. Our responsibility is to express an opinion on these financial statements 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 JRL Capital Corporation 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 perfonn the audit to obtain reasonable assurnnce abo11t whether the financial statements are 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 statements, whether due to error or fraud, and performing procedures that respond to those risks. Such pi'Ocedures 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. #### *Supplementallnformatioll* The supplemental information appearing on pages 12 through IS has been subjected to audit procedures performed in conjunction with the audit of JRL Capital Corporation's financial statements. The supplemental information is the responsibility of JRL Capital Corpomtion management. Our audit procedures included detem1ining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and pe1forming procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content. is presented in conformity with C. F. H. §240.17a-5. In our opinion, rhe supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole. LMHS, P.C. We have served as lhe JRL Capiral Corporal ion's auditor since 2020. Norwell, Massachusclls February 22, 2021 *Mt.•mltt..-1•(* d) 80 Washington Slreet, BuildingS, Norwell, Massachusetts 02061 (781) 878-9111 FX (781) 878-3666 www.lmhspc.com A I **CPA)** {5}------------------------------------------------ #### JRL CAPITAL CORPORATION (A WHOLLY OWNED SUBISIDIARY OF JRI. CAPITAL :MANAGEMENT GROUP) ### STATEMENT OF FINANCIAL CONDITION | | | December 31, 2020 | |-------------------------------------------------------------------------------|-------|-------------------| | ASSETS | | | | Cun·ent assets:
Cash and cash equivalents
Accounts receivable | \$ | 48,138
93,306 | | Other Current Assets | | 25,436 | | Defened tax asset
Prepaid expenses | | 2,960
1.988 | | | \$ | 171.828 | | LIABILITIES AND STOCKHOLDER'S EQUITY | | | | Liabilities: | | | | Accounts payable and accrued expenses | \$, _ | ___!.7~1.~30~6 | | Total liabilities | | 71,306 | | Stockholder's equity:
Common stock, no par value; 1,000 shares authorized, | | | | issued and outstanding | | 5,000 | | Additional Paid in Capital | | 68,404 | | Accumulated Deficit | | (6,329) | | Net Income | | 33 447 | | Total stockholder's equity | | 100.522 | | | \$ | 171.828 | {6}------------------------------------------------ #### JRL CAPITAL CORPORATION (A WHOLLY OWNED SUBISIDIARY ot' JRL CAI'ITAL 1\IANAGEI\IENT GROUP) ### STATEMENT OF EARNINGS | | | For the Year Ended
December 31, 2020 | |--------------------------------------------------------------|---------------------------|-----------------------------------------| | Revenues: | | | | Commissions | | | | DPP-Private Placements | | \$
905,456 | | Corporate Notes | | 170,393 | | REITs | | 10,825 | | Equities | | 38,432 | | Mutual Fund | | 79,773 | | Insurance Products | | 13,583 | | | | \$
1,218,462 | | Other | | | | Licensing Revenue | | 509 | | Due Diligence Fees | | 180,528 | | Marketing Fees | | 48,843 | | Interest Income | | \$
17
229,897 | | Total Revenues | | \$
1.448,359 | | Expenses: | | | | Commissions | | 979,242 | | Due Diligence Costs | | 209,172 | | General and administrative, and other related party expenses | | 225.698 | | Total expenses | | \$
1.414.112 | | Net Income before State Income Taxes | | 34,247 | | Provision for income taxes | | | | | State Franchise Tax (min) | (800) | | State Income Tax Expense | | (800) | | Net Income (Loss) | | \$
33.441 | {7}------------------------------------------------ #### JRL CAPITAL CORPORATION (A WHOLLY OWNED SUDISIDIARY OF JRL CAPITAL 1\IANAGEMENT GROUP) ### STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY #### For the Year Ending December 31,2020 | | Common Stock | | Paid ln | Accumulated | Total
Stockholdu's | | |------------------------------|--------------|----------|-----------|---------------|-----------------------|--| | | Shares | Amount | ~ | ~ | Equity | | | Balance atJanuary 1, 2020 | 1,000 | \$ 5,000 | .\$68,404 | \$ (6,329) | \$
67,075 | | | Net Income | | --
- | | | 33.447 | | | Balance at December 31, 2020 | I OOil | \$~ | ~ | (6,322)
\$ | \$
JOO 522 | | {8}------------------------------------------------ #### JRL CAPITAL CORPORATION (A WHOLLY OWNED SUBISIDIARY OF JRL CAPITAL MANAGEMENT GROUP) ### STATEMENT OF CASH FLOWS ### For the Year Ending December 31, 2020 | | For the Year
Ended
December 31, 2020 | | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------|--| | Cash flows used in operating activities:
Net (loss)
Adjustments to reconcile net loss to net cash used in
operating activities: | 33,447
\$ | | | Changes in operating assets and liabilities
(Increase) Decrease
Accounts receivable
Prepaid expenses
Other assets
Increase (Decrease)
Accounts payable and accrued expenses
Taxes Payable | (56,602)
( 60)
(117)
43,966 | | | Net Increase in Cash | 20,634 | | | Cash and cash equivalents at beginning of year | 27,504 | | | Cash and cash equivalents at end of year | \$
4:8.138 | | | Supplemental cash flow information -
Cash paid during the year for: | | | | Income taxes | \$=~~
80!9!';0 | | {9}------------------------------------------------ #### JRL CAPITAL CORPORATION (A WHOLLY OWNED SUBJSIDIARY OF JRL CAPITAL 1\IANAGEI\IENT GROUP) ### NOTES TO FINANCIAL STATEMENTS ### For the Year Ended December 31,2020 ### NOTE 1- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES #### Nature of Business JRL Capital Corporation (the "Company") was incorporated in California on June 4, 1981 . The Company is a wholly owned subsidiary of JRL Capital Management Group ("CMG"). The Company is registered with the Securities and Exchange Commission ("SEC") as a broker/dealer in securities and is a member of the Financial Industry Regulatory Authority ("FINRA"). The Company is exempt from the provisions of Rule 15c3-3 (pursuant to paragraph (k)(2)(ii) of such rule) under the Securities Exchange Act of 1934, as the Company provides securities brokerage services through a relatively small number of registered representatives licensed with the finn. The Company does not; maintain its own securities accounts, trade securities from its own inventory, hold customer funds or securities or perform custodial functions related to the securities transactions. Because of such exemption, the Company is not required to prepare a determination of reserve requirements and possession or control requirements of Rule 15c3-3. #### Liquidity and Risks As a small Firm, the Company relies on a relatively small group of registered representatives to generate its operating cash flow, as opposed to firms with larger numbers of representatives. The Company's ability to continue in existence is dependent on, among other factors, the Company's ability to continue to generate adequate cash flows from transactional investment operations and from debt and equity financing to fund its operations- ne ither debt nor equity infusions have been needed in recent past. The Company has addressed the factors mentioned above by focusing on its business plan to increase its transactional business through the addition of more representatives and their customer base. Management believes that this plan is sufficient to allow the Company to fund its operations on an annual basis. In the event that additional funds are required, CMG has committed to provide such funding. #### Registration The Company must register with each state department that governs compliance with securities laws for the states in which it does business. The Company generates a substantial amount of commission income in the State of California. Various regulatory requirements exist in each state with which the Company must comply. Should the Company violate certain state securities laws, it could be prohibited from doing business in that state. {10}------------------------------------------------ #### JRL CAPITAL CORPORATION (A WHOLLY OWNED SUBISIDIARY OF JRL CAPITAL MANAGEMENT GROUP) ### NOTES TO FINANCIAL STATEMENTS ### For the Year Ended December 31,2020 ### NOTE 1- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. continued #### Concentrations of Credit Risk #### *Cash and cash equivalents* The Company maintains its cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation ("FDIC"). The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk related to these deposits. #### *Customers* In the normal course of business, the Company's customer activities involve the provision of securities brokerage services through the registered representatives licensed with the Company. This is facilitated by entering into "selling group and clearing agreements" with product sponsors and/or trading/custodian finns that enable the Company's representatives to sell financial products to clients. These activities may expose the Company to off-balance-sheet credit risk in the event the customer is unable to fulfill its contracted obligations, which, to date, has never happened. The Company mitigates this risk by dealing with product sponsors and/or trading/custodian firms through an extensive review process. For the year ended December 31, 2020, there was an increase in overall revenue of 82% over 2019 revenue, with most of the increase due to the activity in two product categories - the 1031 Exchange and alternative asset securities sales. The increase is a result of having a large increase in exchange transactions from 2019. These transactions generally generate much larger fees than traditional securities transactions. 1031 Exchange and alternative asset business accounted for 74% of the Company's commissions revenues, which is a direct result of the enhanced business model enacted by management. As of December 31, 2020, revenues from over thirty product sponsors and trading/custodial firms accounted for the Firm's total revenues, which indicates a broad diversity in revenue sources. While it is possible to correlate an increase or decrease in customer activity to variations in revenue, the current increased activity in alternative investment needs of the customer base and the addition of new representatives to the Firm roster should continue to drive successful numbers to the Firm's revenue base. Jf the Company's transaction volume decreased, the reduction in commissions could have a significant impact on the Company's commissions and operations. The Company records an allowance for doubtful receivables based on certain factors, including the length of time the receivables are past due and hist01ical collection experience with customers. An allowance for doubtful receivables was not necessary at December 31,2020. #### Cash and Cash Equivalents The Company considers highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents are recorded at cost, which approximates fair value. {11}------------------------------------------------ #### JRL CAPITAL CORPORATION {A WHOLLY OWNED SUDISIDIARY OF JRI. CAPITAL 1\lANAGEl\ffiNT GROUP) ### NOTES TO FINANCIAL STATEMENTS ### For the Year Ended December 31,2020 ### NOTE 1- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. continued #### Revenue Recognition For securities brokerage services, the Company recognizes commission revenue on a trade-date basis. For commissions revenue related to real estate and private placement transactions, revenue is recognized upon closing of escrow. Other revenues consist primarily of reimbursement for due diligence costs and revenues earned on marketing assistance programs with third party securities/annuities companies. The Company recognizes these revenues upon notification from the third-party securities/annuity companies of these fees. #### Income Taxes The Company files as part of a consolidated return of JRL Capital Management Group the Parent Company. The amount of current and deferred taxes payable or refundable is recognized as of the date of the financial statements as if the Company were a separate taxpayer in accordance with the accounting guidance for income taxes. Deferred tax assets and liabilities are recognized for future tax benefits or consequences attributable to temporary differences between the financial statement canying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for significant deferred tax assets when it is more likely than not, that such assets will not be realized through future operations. The Company recognizes any uncertain tax positions on income tax returns at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. There are no unrecognized tax benefits as of the date of adoption. There are no unrecognized tax benefits included in the statement of financial condition that would, if recognized, affect the effective tax rate. The Company's policy is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no amounts accrued for interest and penalties on its statement of financial condition at December 31, 2020. The Company is subject to taxation in the U.S and State of California. The Company does not foresee material changes to its gross uncertain income tax position liability within the next twelve months. The Company is no longer subject to IRS or state examinations prior to 2015. {12}------------------------------------------------ #### JRL CAPITAL CORPORATION (A WHOLLY OWNED SUBISIDIARY OF JRL CAPITAl, I\IANAGEI\IENT GROUP) ### NOTES TO FINANCIAL STATEMENTS For the Year Ended December 31,2020 #### NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued #### Use of Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the recorded amounts of revenues and expenses during the reporting period. Significant estimates made by the Company's management include but are not limited to, the collectibility of receivables and the realize-ability of deferred tax assets. Actual results could differ from those estimates. ### NOTE 2-INCOME TAXES For the year ended December 31, 2019, the provision for income taxes consists of the following: Federal: California: Current (minimum) (800) \$ 800 #### NOTE 3 - RELATED PARTY TRANSACTIONS The Company has cost sharing arnmgements for certain operating expenses with CMG. Accordingly, the accompanying financial statements may not be indicative of the financial position or results of operations that would have occurred had the Company operated without this affiliation. CMG provided the Company with office space, miscellaneous office expenses, due diligence and recruiting support. The Company incurred a total of \$ 167,435 in related pa11y expenses for the year ended December 31, 2020. This was an overall increase of 52% in related party expenses from 2019 primarily due to the significant increase in sales and the fact that the expenses that the Parent used to incur on behalf of the Broker-Dealer were relegated to third-party resources which were recorded as due diligence expenses and cost of goods sold as they were directly tied to the income generated by transactional business. As was noted in previous years there was and will likely continue to be an increase in total related pat1y expenses primarily due to the increase in recntiting new representatives by management. Additionally, in the future increases and decreases in the due diligence expenses tied to Alternative Investments, Direct Private Partnership and 1031 Exchange business will be tied more closely to the overall transactional activity of the Firm and expenses incurred through CMG. These costs were reimbursed to CMG from the revenue generated by these transactions. {13}------------------------------------------------ #### JRL CAPITAL CORPORATION (A WHOLLY OWNED SUBISIDIARY OF JRL CAPITAL MANAGEMENT GROUI') ### NOTES TO FINANCIAL STATEMENTS ### For the Year Ended December 31, 2020 ## NOTE 3-RELATED PARTY TRANSACTIONS, continued In addition to costs of goods sold and due diligence cost increases related to additional transaction income. The firm moved its offices in the 4~ quarte r of 2020. A portion of these costs (\$13,050) were allocated to the firm. At December 31, 2020, the Company has no amount recorded in accounts payable and accrued expenses related to other related party e:xpenses to CMG. #### NOTE 4 - COMMITMENTS AND CONTINGENCIES #### Indemnities and Guarantees The Company has made certain indemnities and guarantees as part of traditional dealer Agreements, under which it may be required to make payments to a guaranteed or indemnified party, in relation to cancelled or failed transactions. The Company also indemnifies its director to the maximum extent pennitted under the laws of the State of California. The duration of these indemnities and guarantees varies and, in ce1tain cases, is indefinite. These indemnities and guarantees do not provide for any limitation of the ma;w;imum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated to make any payments for any of these obligations and as such no liabilities have been recorded for these indemnities and guarantees in the accompanying statement of financial condition. The Company, on occasion, consults with securities counsel regarding questions related to operations or securities matters. Further there is the possibility that the Firm could be involved from time to time in arbitration or claims arising in the ordinary course of its business. While the ultimate liability, if any, arising from these claims cannot be predicted with certainty, the Company believes that the resolution of these matters would not likely have a material adverse effect on the Company's financial statements. No litigation or claims are ongoing or anticipated as of December 3 1, 2020. Additionally, ownership has been considering options to merge or sell the firm in a staged transaction structure as current ownership looks to migrate away from the business. Both securities and corporate counsel have been asked to assist in this process, the cost of which will be shared by the Company under the Expense Sharing Agreement. #### NOTE 5 -NET CAPITAL REQUIREMENTS As a registered broker-dealer, the Company is subject to the Securities and Exchange Commission's Uniform Net Capital Rule (Rule 15c3-1), which requires that the Company maintain a minimum net capital, as defined, and may not permit its aggregate indebtedness, as defined, to exceed fifteen times its net capital. At December 31, 2020, under the most restrictive requirement, the Company had net capital of \$83,106- which was \$78,106 in excess of its minimum required net capital of \$5,000. The Company's ratio of aggregate indebtedness to net capital was 0.86 to I. {14}------------------------------------------------ #### JRL CAPITAL CORPORATION (A WHOLJ, Y OWNED SUDISIDIARY 01<' JRL CAPITAL MANAGEl\IENT GROUP) ### NOTES TO FINANCIAL STATEMENTS ### For the Year Ended December 31, 2020 ### NOTE 6-FAIR VALUE The Company adopted Financial Accounting Standards ("SF AS") ASC 820 Measurements and Disclosures, for assets measured at fair value on a recurring basis. The ASC 820 had no effect on the Company's financials ### NOTE 7- RECENTLY ISSUED ACCOUNTING STANDARDS ASC 606, Revenue from Contracts with Customers, was issued on May 28, 2014. ASC 606 provides guidance related to revenue from contracts with customers. Guidance applies to all entities and to all contracts with customers, with the exception of the following transactions noted in ASC 606-10: lease contracts, insurance contracts, financial instmments and other contractual rights or obligations, guarantees, nonmonetary exchanges between entities in the same line of business. For public business entities, certain not-for-profit entities, and certain employee plans, the effective date for ASC 606 is annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017. Early application is permitted only as of annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. The effective date for all other entities is annual repmting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. As of the reporting date, the company has adopted the recently issued accounting standards as of January I, 2018, with no change, using the modified method. The Company has performed an assessment of its revenue contracts and has not identified any material changes to the timing or amount of its revenue recognition under ASU 2014-09. Substantially all revenue is earned at a point in time. #### Lease Accounting Standard In February 2016, the FASB issued ASU 2016-02, Leases. Under the new guidance, lessees will be required to recognize a lease liability and a right-of-use asset for all leases (with the exception of shortterm leases) at the commencement date. ASU 2016-02 is effective for annual and interim periods beginning on or after December 15, 2018 and early adoption is permitted. During 2019 the Company consulted with its Controller and its operating CPA Firm on this matter and determined that there were no leases of equipment or facilities that are for periods of time beyond thirty days (30 days). As such JRL has no reportable liability to show on its financial statements as of December 31, 2020. #### NOTE 8 - SUBSEQUENT EVENTS Management has evaluated subsequent events through February 22, 2021, the date which the financial statements were available to be issued. As a result of the COVID-19 outbreak in the United States, financial and operational challenges have arisen. The Company has been able to enact procedures to abate the financial and operational effects of the outbreak without a reduction in its workforce. Although these challenges are expected to be temporary, the extent of the financial impact and other matters that may come up going forward are unknown at this time. {15}------------------------------------------------ #### JRL CAPITAL CORPORATION (A WHOLLY OWNED SUBISIDIARY OF JRL CAPl'f AL 1\IANAGEI\IENT GROUP) ### SCHEDULE I - COMPUTATION OF NET CAPITAL UNDER RULE 1Sc3-1 OF THE SECURITIES AND EXCHANGE COMMISSION ### As of December 31, 2020 | | Unaudited
Amounts per
FOCUS Report | Amounts Based
on Annual
Report | Difference
Increase
(Decrease) | |------------------------------------------------------------------------------------------------|------------------------------------------|--------------------------------------|--------------------------------------| | Net capital -
Total stockholder's equity from | | | | | statement of financial condition | 100,522
\$ | 100,522
\$ | \$ | | Deductions and/or charges: | | | | | Nonallowable assets included in the
following statement of financial
condition captions: | | | | | Cash and cash equivalents | 0 | 0 | | | Accounts receivable | 11,860 | 11,860 | | | Deferred tax asset | 2,960 | 2,960 | | | Prepaid expenses | 2,089 | 2,089 | | | Haircut on securities | 507 | 507 | | | Total deductions and/or charges | 17.415 | 17 415 | | | Net capital | 83, 106 | 83, 106 | | | Minimum net capital required | 5.000 | 5.000 | | | Excess net capital | \$
78.106 | \$
78.106 | \$ | | Total aggregate indebtedness | \$
7 1,306 | \$
71.306 | \$ | | Ratio of aggregate indebtedness to
net capital | Q.~~ 112 1 | 086tol | | There were no differences between the Focus Report and the audit numbers. {16}------------------------------------------------ #### JRL CAPITAL CORPORATION (A WHOU,Y OWNED SUUJSIDIARY 0}' JRL CAI'l'fAL MANAGEMENT GROUP) ### SCHEDULE II, Ill As of December 31, 2020 ### Schedule II Determination of Reserve Requirements Under rule tSc-3-3 or the Secua;ities and Exchange Commission The company is exempt from the Reserve Requirement of computation Accounting to the provision of Rule 15c-3-3(k)(l), (k)(2)(i) and (k)(2)(ii). ### Schedule III Information Relating to Possession or Control Requirement Under Rule lSc-3-3 The Company is exempt from the Rule 15c3-3 as it relates to Possession and Control requirements under the (k)( I), (k)(2)(i) and (k)(2)(ii). {17}------------------------------------------------ # **JRL CAPITAL CORPORATION** Exemption Report of JRL Capital Corporation JRL Capital Corporation (the "Company") is a registered broker-dealer subject to Rule 17a-5 promulgated by the Securities and Exchange Commission (17 C.F.R. §240.17a-5, "Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R. § 240.17a-5(d)(1) and (4). To the best of its knowledge and belief, the Company states the following: (1) The Company claimed an exemption from 17 C.P.R. § 240.15c3-3 under the following provisions of 17 C.P.R. § 240.15c3-3: (k)(l), (k)(2)(i) and (k)(2)(ii). (2) The Company met the identified exemption provisions in 17 C.F.R. § 240.15c3- 3(k)(l), (k)(2)(i) and (k)(2)(ii) throughout the year ended December 31, 2020 without exception. JRL Capital Corporation I, Larry Law, swear (or affinn) that, to my best knowledge and belief, this Exemption Report is true and correct. Date: February 22, 2021 {18}------------------------------------------------ ![](_page_18_Picture_0.jpeg) ### *REPORT OF INDEPENDENT REGISTERED PUBUC ACCOUNTING FIRM* To the Members JRL Capital Corporation Newport Beach, Califomia We have reviewed management's statements, included in the accompanying JRL Capital Corporation Exemption Report in which (I) JRL Capital Corporation, identified the following provisions of I 7 C.F.R. *§* 15c3-3(k) under which JRL Capital Corporation claimed an exemption from 17 C.F.R. §240.15c3-3: (kX2)(ii), (k)(l), k(2)(i) (the "exemption provision") and (2) JRL Capital Corporation, stated that JRL Capital Corporation met the identified exemption provision throughout the most recent fiscal year of2020, without exception. JRL Capital Corporation management is responsible for compliance with the exemption provision and its statements. Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and accordingly, included inquiries and other required procedures to obtain evidence about the Company's compliAnce with the exemption provision. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to management's statements referred to above for them to be fairly stated, in all material respects, based on the provisions set fot1h in paragraph (k)(2)(ii), (kX I), k(2)(i) of Rule l5c3-3 under the Securities Exchange Act of 1934. 1-1111~ ;;,~ LMHS, P.C. We have served as the Company's auditor since 2020. Norwell, Massachusetts february 22, 2021 ![](_page_18_Picture_9.jpeg) Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.