# HAROLD H. OSHIMA X-17A-5 (2021-03-22) — Broker-dealer annual report - Company: HAROLD H. OSHIMA - Form: X-17A-5 - Filed: 2021-03-22 - Period: 2020-12-31 - Accession: 0000700368-21-000003 - CIK: 700368 - File #: 8-27123 - Material weakness: No - Auditor: Ohab & Company - Auditor location: Maitland, FL - Contact: Harold H Oshima - Phone: 6175231527 - Email: pam@ohabco.com - Website: ohabco.com - Signed by: Harold H Oshima (CCO) Original filing: https://www.sec.gov/Archives/edgar/data/700368/000070036821000003/public.pdf --- {0}------------------------------------------------ # PUBLIC **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** | QMB APPROVAL | | | | |---------------------------|------------------|--|--| | QMB Number. | 3235-0123 | | | | Expires: | October 31, 2023 | | | | Estimated average burden | | | | | hours per resoonse 12.00 | | | | ## **ANNUAL AUDITED REPORT FORM X-17A-5 PART** Ill | SEC FILE NUMBER | | | |-----------------|--|--| | 8-27123 | | | **FACING PAGE** **Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder** · | REPORT FOR THE PERIOD BEGINING | ___
___
J_A_N_U_A_R_Y_t,_2_02_0
MM/DDNY | AND ENDING | DECEMBER 31, 2020
MM/DDNY | | | |----------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------|--------------------|------------------------------|--|--| | A. REGISTRANT IDENTIFICATION | | | | | | | NAME OF BROKER DEALER: | OSHIMA & ASSOCIATES | | OFFICAL USE ONLY | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | FIRM ID. NO. | | | | | 21 MERCHANTS ROW, 5TH FLOOR | | | | | | | (No. and Street) | | | | | | BOSTON | MA | | 02109 | | | | (City) | (State) | | (Zip Code) | | | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
HAROLD OSHIMA
617-523-1527 | | | | | | | | | | (Area Code -Telephone No.) | | | | | B. ACCOUNTANT DESIGNATION | | | | | | INDEPENDENT PUBLIC ACCOUNT ANT whose opinion is contained in this Report* | | | | | | | | ORAB AND COMPANY, PA | | | | | | (Name - | if individual, state last, first, middle name) | | | | | | 100 E. SYBELIA AVENUE, SUITE 130, MAITLAND
(Address and City) | | FLORIDA
(State) | 32751
(Zip Code) | | | | CHECK ONE:
[XI Certified Public Accountant
D Public Accountant
D Accountant not resident in United States or any of its possessions | | | | | | | | FOR OFFICIAL USE ONLY | | | | | | *Claims for exempt ion from the requirement that the annual audit be covered by the opinion of an independent public accountant | | | | | | *must be supported by a statement of/acts and circumstances relied on as the basis/or the exemption. See section 240. /7a-5(e)(2).* **Potential persons who are to respond to the collection of information contained in this form are required to respond unless** the form displays a current valid 0MB control number. **SEC 1410 (11-05)** {1}------------------------------------------------ ## **OATH OR AFFIRMATION** | I, | HAROLD OSHIMA | , swear (or affinn) that, to the | |------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------| | | | best of my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the finn or | | | OSHIMA & ASSOCIATES | , as of | | DECEMBER | 31,
2020 | are true and correct. I further swear (or affinn) 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: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | . AHl:.t·.,. | | | | Ublic | | | | USETTS
Expires | Signature | | | e | cco | | | | Title | | | | | | | | | | | Public Notary | | | | | | | | | | | | | | | This report** contains (check all applicable boxes); | | | | ~ (a) Facing page. | | | | [8J (b) Statement of Financial Condition. | | D (c) Statement oflncome (Loss) or, ifthere 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 Changes in Financial Condition. | | | | | D (e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietor's Capital. | | | | D (t) Statement of changes in Liabilities Subordinated to Claims of Creditors. | | | D (g) Computation of Net Capital. | | | | | D (h) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3.
D (i) Information Relating to the Possession or control Requirements Under Rule l 5c3-3. | | | | D (j) A Reconciliation, including appropriate explanation of the Computation ofNet Capital Under Rule 15c3-l and the | | | | Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3. | | | | D (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of con | | | solidation. | | | - [8J (1) An Oath or Affirmation. - D (m) A copy of the SIPC Supplemental Report. - D (n) A report describing any material inadequacies found to exist or found to have existed since the date of the previous audit. \*\* *For conditions of confidential treatment of certain portions of this filing, see section 240. l 7a-5(e)(3).* {2}------------------------------------------------ ![](_page_2_Picture_0.jpeg) ![](_page_2_Picture_1.jpeg) {3}------------------------------------------------ ![](_page_3_Picture_0.jpeg) I 00 E. Sybelia Ave. Suite 130 Maitland, FL 3275 I *Certified Public Accollnlants* 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 Owner's of Oshima & Associates #### **Opinion on the Flnanclal Statement** We have audited the accompanying statement of financial condition of Oshima & Associates as of December 31, 2020, and the related notes (collectively referred to as the 1 'flnancial statement''). In our opinion, the financial statement presents fairly, in all material respects, the financial position of Oshima & Associates as of December 31, 2020 in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** This financial statement is the responsibility of Oshima & Associates' management. Our responsibility is to express an opinion on Oshima & Associates' 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 Oshima & Associates 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. *~,Pl--* we have served as Oshima & Associates' auditor since 2009. Maitland, Florida March 15, 2021 {4}------------------------------------------------ ## **STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2020** ## **ASSETS** | Assets: | | |------------------------------------------|--------------| | Cash and cash equivalents | \$
1,916 | | Commissions Receivable | 17,215 | | Prepaid expenses | 734 | | Marketable securities available for sale | 6,043 | | | \$
25,908 | | | | | LIABILITIES AND OWNER'S EQUITY | | | Liabilities: | | | Accounts payable and accrued liabilities | \$
880 | | | 880 | | | | | Owner's equity: | | | Accumulated Comprehensive Income | 2,654 | | Owner's equity | 22,374 | | Total Owner's Equity | 25,028 | | | \$
25,908 | The accompanying notes are an integral part of these financial statements. {5}------------------------------------------------ #### **NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020** #### **Note 1** - **Summary of Significant Accounting Policies** #### Nature of Business Oshima & Associates (the "Company") is a proprietorship of Harold Oshima, and is registered with the Securities Exchange Commission ("SEC"), a member of the Financial Industry Regulatory Authority ("FINRA"), and a member of the Securities Investor Protection Corporation ("SIPC"). The Company's brokerage activity is transacted on a fully disclosed basis through a clearing broker. As is typical in the industry, the Company engages in activities with various financial institutions and brokers. In the event these counter parties do not fulfill their obligations, the Company may be exposed to risks. #### Revenue Recognition Revenue from contracts with customers includes commission income and distribution fees from mutual fund companies. The recognition and measurement of revenue is based on the assessment of individual contract terms. Significant judgment is required to determine whether performance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance obligations are identified; when to recognize revenue based on the appropriate measure of the Company's progress under the contract; 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. The company buys and sells securities on behalf of its customers. Each time a customer enters into a buy or · sell transaction, the Company charges a commission. Commissions and related clearing expenses are recorded on the trade date (the date that the Company fills the trade order by finding and contracting with a counterparty and confirms the trade with the customer). The Company believes that the performance obligation is satisfied on the trade date because that is when the underlying financial instrument or purchaser is identified, the pricing is agree upon and the risks and rewards of ownership of the securities have been transferred to/from the customer. The Company enters into arrangements with managed accounts or other pooled investment vehicles (funds) to distribute shares to investors. The Company may receive distribution fees paid by the fund up front, over time, upon the investor's exit from the fund (that is, a contingent deferred sales charge), or as a combination thereof. The Company believes that its performance obligation is the sale of securities to investors and as such this is fulfilled on the trade date. Any fixed amounts are recognized on the trade date and variable amounts are recognized to the extent it is probable that a significant revenue reversal will not occur once the uncertainty is resolved. For variable amounts, as the uncertainty is dependent on the value of the shares at future points in time as well as the length of time the investor remains in the fund, both of which are highly susceptible to factors outside the Company's influence, the Company does not believe that it can overcome this constraint until the market value of the fund and the investor activities are known, which are usually monthly or quarterly. Distribution fees recognized in the current period are primarily related to performance obligations that have been satisfied in prior periods. #### Cash and Cash Equivalents For purposes of reporting the statement 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 December 31, 2020, the Company had no uninsured cash balances. {6}------------------------------------------------ #### **NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020** #### Property and equipment Property and equipment are recorded at cost. Repair and maintenance costs are charged to operations as incurred. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any gains or losses are included in operations. Depreciation of property and equipment is provided utilizing the straight-line method over the estimated useful lives of the related assets. Depreciation for the year ended December 31, 2020 is \$0. #### Estimates The preparation of financial statements in accordance 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 disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates. #### Income Taxes As a proprietorship, all income of the Company is taxed to Harold Oshima. Therefore, no provision is shown for federal or state income taxes in the financial statements. The Company has adopted the provisions of FASB Accounting Standards Codification 740-10, Accounting for Uncertainty in Income Taxes. Under ASC 740-10, 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, including its status as a pass-through entity, and the decision not to file a tax return. The Company has evaluated each of its tax positions and has determined that no provision or liability for income taxes is necessary. The Company is generally not subject to U.S. federal, state or local income tax examinations related to the Company's activities for tax years before 2014. #### Marketable Securities Marketable securities are classified as available-for-sale and, accordingly, are reported at fair value with the unrealized gains or losses on these securities included in gain or loss on securities. #### **Note 2** - **Net Capital Requirements** The Company is subject to the Securities and Exchange Commission's Uniform Net Capital Rule (Rule15c3- 1 ), which requires the maintenance of minimum net capital at amounts equal to the greater of \$5,000 or 6 2/3% of aggregate indebtedness, and requires that the ratio of aggregate indebtedness to net capital not to exceed 15 to 1. At December 31, 2020, the Company had excess net capital of \$16,877 and a net capital ratio of 4.02% to 1. #### **Note 3** - **Fair Value Measurements** In determining fair value, the Company uses various valuation approaches. In accordance with GAAP, a fair value hierarchy for inputs is used in measuring fair value that maximizes the observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the {7}------------------------------------------------ #### **NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020** Company's assumptions about the inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstance. The fair value hierarchy is categorized into three levels based on inputs as follows: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2-Inputs are inputs other than quoted prices included within Level 1 that are directly or indirectly observable, such as quoted prices for similar instruments in active markets, or quoted prices for identical or similar instruments in inactive markets. Level 3 - Inputs are unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from techniques in which one or more significant value drivers are observable. The availability of valuation techniques and observable inputs can vary from security to security and is affected by a wide variety of factors including, the type of security, whether the security is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment Those estimated values do not necessarily represent the amounts that may be ultimately realized due to the occurrence of future circumstances that cannot be reasonably determined. Because of the inherent uncertainty of valuation, those estimated values may be materially higher or lower than the values that would have been used had a ready market for the securities existed. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for securities categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Company's own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. The Company uses prices and inputs that are current as of the measurement date, including periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many securities. This condition could cause a security to be reclassified to a lower level within the fair value hierarchy. The following table summarizes the basis used to measure the fair value of securities on a recurring basis in the Company's statement of financial condition as of December 31, 2020: | | Quoted Prices in
Active Markets for
Identical Assets
(Level 1) | Significant Other
Observable Inputs
(Level 2) | Significant
Unobservable
Inputs
(Level 3) | Collateral | Balance as of
December 31
2019 | |------------------------------------------|-------------------------------------------------------------------------|-----------------------------------------------------|----------------------------------------------------|------------|--------------------------------------| | Securities owned, at FMV
Money Market | | | | | | | Options and Futures
Corporate Bonds | | | | | | | Equity Securities | | | | | | | Mutual Funds | 6,042 | | | | | | | 6,042 | 0 | 0 | 0 | 6,042 | {8}------------------------------------------------ #### **NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020** The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value: #### Securities owned For securities, the fair value approximates quoted prices in active markets for identical assets. #### **Note 4** - **Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk** The Company's customer securities activities are transacted on either a cash or margin basis. In margin transactions, the Company's Clearing Broker extends credit to the customer, subject to various regulatory and internal margin requirements, collateralized by cash and securities in the customer's account. As a result of guaranteeing customer margin balances carried by the Clearing Broker, the Company may be exposed to off-balance sheet risk in the event margin requirements are not sufficient to fully cover losses the customer may incur. At December 31, 2020, there were no margin accounts guaranteed by the Company. The Company is also exposed to off-balance sheet risk of loss on transactions during the period from the trade date to the settlement date, which is generally three business days. If the customer fails to satisfy its contractual obligations to the Clearing Broker, the Company may have to purchase or sell financial instruments at prevailing market prices in order to fulfill the customer's obligations. Settlement of these transactions is not expected to have a material effect on the Company's financial position. The Company seeks to control the risks associated with its customer activities by requiring customers to maintain margin collateral in compliance with various regulatory and the Clearing Broker's guidelines. The Company monitors required margin levels daily and, pursuant to such guidelines, requires customers to deposit additional collateral, or to reduce positions, when necessary. The Company maintains cash and other deposits with banks and brokers, and, at times, such deposits exceed applicable insurance limits. The Company reduces its exposure to credit risk by maintaining such deposits with high quality financial institutions. #### **Note 5** - **Commitments and Contingencies** The Company does not have any commitments or contingencies #### **Note 6** - **Related Party Transaction** Office space has been provided under a tenancy-at-will owned by the sole proprietor. Rent charged for the year was \$39,000 plus special assessments and utilities and was paid directly to building owner. #### **Note 7** - **Subsequent Events** In accordance with the Subsequent Events Topic of the FASS Accounting Standards Codification No. 855 ("FASS ASC 855"), the Company has evaluated those events and transactions that occurred through the date the financial statements were available to be issued. No material events or transactions have occurred during this period which would render these financial statements to be misleading. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.