# CALDWELL SUTTER CAPITAL, INC. X-17A-5 (2022-11-28) — Broker-dealer annual report - Company: CALDWELL SUTTER CAPITAL, INC. - Form: X-17A-5 - Filed: 2022-11-28 - Period: 2022-09-30 - Accession: 0000702007-22-000008 - CIK: 702007 - File #: 8-27639 - Type: Broker-dealer - Material weakness: No - Auditor: Ernst Wintter & Associates - Auditor location: Walnut Creek, CA - Contact: Christopher Anderson - Phone: (415) 367-4982 - Email: joe@cald.com - Website: cald.com - Signed by: Joseph F. Helmer (President) Original filing: https://www.sec.gov/Archives/edgar/data/702007/000070200722000008/PublicReport.pdf --- {0}------------------------------------------------ ## CALDWELL SUTTER CAPITAL, INC. (SEC ID No. 8-27639) ## ANNUAL AUDIT REPORT SEPTEMBER 30, 2022 ## PUBLIC DOCUMENT Filed Pursuant to Rule 17-A-5(e)(3) as a Public Document {1}------------------------------------------------ # PUBLIC UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OMB APPROVAL OMB Number: 3235-0123 ## ANNUAL REPORTS FORM X-17A-5 PART III | Expires: Oct. 31, 2023 | | |--------------------------|--| | Estimated average burden | | | hours per response: 12 | | | | | SEC FILE NUMBER 8-27639 FACING PAGE Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 | FILING FOR THE PERIOD BEGINNING | 10/01/21 | AND ENDING | 09/30/22 | |----------------------------------------------------------------------------------------------|-----------------------------------------------------------------------|-----------------|--------------------------------------------| | | MM/DD/YY | | MM/DD/YY | | | A. REGISTRANT IDENTIFICATION | | | | NAME OF FIRM: Caldwell Sutter Capital, Inc. | | | | | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
Broker-dealer | _ Security-based swap dealer __ Major security-based swap participant | | | | Check here if respondent is also an OTC derivatives dealer | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | 30 Liberty Ship Way, Suite #3225 | | | | | | (No. and Street) | | | | Sausalito | California | | 94965-3324 | | (City) | (State) | | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | Joseph F. Helmer | (415) 962-2526 | joe@cald.com | | | (Name) | (Area Code - Telephone Number) | (Email Address) | | | | B. Accountant IDENTIFICATION | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | Ernst Wintter & Associates LLP | | | | | | (Name - if individual, state last, first, and middle name) | | | | 675 Ygnacio Valley Road, Suite A200 | Walnut Creek | California | 94596 | | (Address) | (City) | (State) | (Zip Code) | | February 24, 2009 | | 3438 | | | (Date of Registration with PCAOB)(if applicable) | | | (PCAOB Registration Number, if applicable) | | | FOR OFFICIAL USE ONLY | | | | | | | | | * Claims for exemption from the requirement that the annual reports of an independent public | | | | accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-5(e)(1)(ii), if applicable. Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. {2}------------------------------------------------ ### OATH OR AFFIRMATION | Joseph F. Helmer | swear (or affirm) that, to the best of my knowledge and belief, the | | |--------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------|-------| | financial report pertaining to the firm of Caldwell Sutter Capital, Inc. | | as of | | | September 30, 2022 , is true and correct. I further swear (or affirm) that neither the company nor any | | | | partner officer director or gauvalor norson as the race may no nor any interest in any account rassified splein | | as that of a customer. Sec attacher Title: President Notary Public ### This filing \*\* contains (check all applicable boxes): - (a) Statement of financial condition. - 2 (b) Notes to consolidated statement of financial condition. - [ (c) Statement of income (loss) or, if there is other comprehensive in the period(s) presented, a statement of comprehensive income (as defined in § 210.1-02 of Regulation S-X). - [ (d) Statement of cash flows. - [ {e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - [ (f) Statement of changes in liabilities subordinated to claims of creditors. - □ (g) Notes to consolidated financial statements. - [ (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. - [ (i) Computation of tangible net worth under 17 CFR 240.18a-2. - □ (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - | (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable. - □ (I) Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3. - [ (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - □ (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable. - □ (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-1, or 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences exist. - □ (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - 2 (q) Oath or affirmation in accordance with 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. - □ (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - [ (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - 2 (t) Independent public accountant's report based on an examination of the statement of financial condition. - | (u) Independent public accountant's report based on an examination of the financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. - □ (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - [ (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - | (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.17a-12, as applicable. - □ (y) Report describing any material inadequacies found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). - [ (z) Other: \*\* To request confidential treatment of this filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18a-7(d)(2), as applicable. {3}------------------------------------------------ ### CALIFORNIA JURAT WITH AFFIANT STATEMENT GOVERNMENT CODE § 8202 See Attached Document (Notary to cross out lines 1-6 below) D See Statement Below (Lines 1-6 to be completed only by document signer[s], not Notary) Signature of Document Signer No. 1 Signature of Document Signer No. 2 (if any) A notary public or other officer completing this certificate verifies only the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California Subscribed and sworn to (or affirmed) before me County of V Year Month (and (2) DIANA M. VICTORIA Name(s) of Signer(s) Notary Public - California Marin County Commission = 2291068 proved to me on the basis of satisfactory evidence to Ay Comm. Expires Jun 29. 2023 be the person(s) who appeared before me. Signature Place Notary Seal and/or Stamp Above Signature of Notary Public OPTIONAL Completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document. Description of Attached Document Title or Type of Document: Anguill Re Document Date: Number of Pages: Signer(s) Other Than Named Above: ©2017 National Notary Association {4}------------------------------------------------ ## CALDWELL SUTTER CAPITAL, INC. TABLE OF CONTENTS \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ | Report of Independent Registered Public Accounting Firm | 1 | | |---------------------------------------------------------|-------|--| | Statement of Financial Condition | 2 | | | Notes to the Financial Statement | 3 - 9 | | {5}------------------------------------------------ 675 Ygnacio Valley Road, Suite A200 Walnut Creek, CA 94596 (925) 933-2626 Fax (925) 944-6333 ### Report of Independent Registered Public Accounting Firm To the Stockholders of Caldwell Sutter Capital, Inc. ### Opinion on the Financial Statement We have audited the accompanying statement of financial condition of Caldwell Sutter Capital, Inc. (the "Company") as of September 30, 2022, and the related notes (collectively referred to as the "financial statement"). In our opinion, the statement of financial condition presents fairly, in all material position of the Company as of September 30, 2022 in conformity with accounting principles generally accepted in the United States of America. ### Basis for Opinion This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws 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 finaterial 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 statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as everall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion. We have served as the Company's auditor since 2009. Walnut Creek, California November 22, 2022 {6}------------------------------------------------ ## CALDWELL SUTTER CAPITAL, INC. STATEMENT OF FINANCIAL CONDITION SEPTEMBER 30, 2022 ### ASSETS | CALDWELL SUTTER CAPITAL, INC.
STATEMENT OF FINANCIAL CONDITION
SEPTEMBER 30, 2022 | | |-----------------------------------------------------------------------------------------|-----------------| | ASSETS | | | Cash | \$
589,582 | | Cash at clearing broker | 1,163,603 | | Fixed income securities owned | 219,504 | | Due from clearing broker | 104,508 | | Accounts receivable | 28,450 | | Prepaid expenses and other assets | 93,094 | | Operating lease right-of-use assets | 139,677 | | Goodwill | 155,543 | | Total Assets | \$
2,493,961 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | Liabilities | | | Accounts payable and accrued liabilities | \$
50,544 | | Accrued compensation | 191,712 | | Accrued commissions | 16,744 | | Subordinated loan interest payable | 6,500 | | Margin loan | 216,156 | | Income taxes payable | 110,913 | | Deferred revenue | 25,000 | | | | ### LIABILITIES AND STOCKHOLDERS' EQUITY | LIABILITIES AND STOCKHOLDERS' EQUITY | | |-----------------------------------------------------------|--------------| | Liabilities | | | Accounts payable and accrued liabilities | \$
50,544 | | Accrued compensation | 191,712 | | Accrued commissions | 16,744 | | Subordinated loan interest payable | 6,500 | | Margin loan | 216,156 | | Income taxes payable | 110,913 | | Deferred revenue | 25,000 | | Operating lease liabilities | 139,315 | | Total Liabilities | 756,884 | | Subordinated borrowings | 920,000 | | Stockholders' Equity | | | Common stock (no par value; 10,000,000 shares authorized; | | | 1,070,000 shares issued and outstanding) | 9,500 | | Retained earnings | 807,577 | | | 817,077 | | Total Stockholders' Equity | | The accompanying notes are an integral part of this financial statement. {7}------------------------------------------------ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ ### 1. Organization Caldwell Sutter Capital, Inc. (the "Company") was incorporated on February 16, 1982 as Caldwell Securities, Incorporated, and began operations on June 1, 1982. The Company changed its name to Caldwell Sutter Capital, Inc. in July 2017. The Companys main office is located in Sausalito, California. The Company is a member of the Financial Industry Regulatory Authority (FINRA) and the Municipal Securities Rulemaking Board. The Company clears its securities transactions through its correspondent broker, Wedbush Securities Inc. (Wedbush). The Company's primary source of revenue is providing fee-based investment advisory services and brokerage services to customers primarily in California, who are predominately middle to upper income individuals and their estates, trusts, pensions and retirement plans. 2. Significant Accounting Policies Preparation of the financial statement 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 at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and may have impact on future periods. Unless otherwise indicated, the fair values of all reported assets and liabilities that represent financial instruments (none of which are held for trading purposes) approximate the carrying values of such amounts. The Company defines cash and cash equivalents as highly liquid investments with original maturities of less than three months, which are not held for sale in the ordinary course of business. There were no cash equivalents at September 30, 2022. The amount receivable represents commissions and fees due to the Company primarily from advisory services, commissions from the sale of various securities, and 12b-1 fees. Due from clearing broker represents the amount due from Wedbush for commissions and principal trading revenue upon completion of performance obligations. Accounting Standards Update 2016-13 Financial Instruments - Credit Losses (ASU 2016-13) requires companies to evaluate their financial instruments for impairment and record an allowance for credit losses and/or to expense based on certain categories of instruments rather than a specific identification approach. The provisions of this standard were adopted using a method to estimate the allowance for credit losses that considered both the aging of accounts receivable and a projected loss rate of receivables. Accounts receivable and the related allowance for credit losses are written off when it becomes remote that payment for services will be received. Per managements analysis, no allowance was considered necessary as of September 30, 2022. Property and equipment are carried at cost. Maintenance and repairs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful life of five years. Leasehold improvements are amortized over the life of the underlying lease. {8}------------------------------------------------ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ 2. Significant Accounting Policies At inception, the Company determines if an agreement constitutes a lease and, if so, whether the lease is an operating or finance lease. Leases that have terms of one year or less are deemed short term and are expensed on a straight-line basis over the term of the lease. Per FASB 842-20-25-2, the Company has made an accounting policy election not to recognize right-of-use (ROU) assets and lease liabilities that arise from short-term leases for any class of underlying asset. Operating leases that exceed one year are included in operating lease ROU assets and operating lease liabilities on the Statement of Financial Condition. Finance leases that exceed one year are included in property and equipment and other liabilities on the Statement of Financial Condition. For the year ended September 30, 2022, the Company had one short term operating lease, three long term operating leases, and no finance leases. 3. Cash and Cash at Clearing Broker Income taxes provide for the tax effects of transactions reported in the financial statement and consist of taxes currently due plus deferred taxes. Deferred taxes are recognized for differences between the basis of assets and liabilities for financial statement and income tax purposes. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be deductible or taxable when the assets and liabilities are recovered or settled. The Companys clearing broker, Wedbush, requires the Company maintain a minimum of \$100,000 in cash deposits. ### 4. Fair Value Measurements The Fair Value Measurements Topic of the FASB Accounting Standards Codification establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level l measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: - Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. - Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. - Level 3 Unobservable inputs for the asset or liability. {9}------------------------------------------------ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ ### 4. Fair Value Measurements Under the Fair Value Measurements Topic of the FASB Accounting Standards Codification, the Company bases its fair value on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between participants at the measurement date. It is the Company's policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements, in accordance with the fair value hierarchy. Fair value measurements for assets and liabilities where there exists limited or no observable market data and, therefore, are based primarily upon management's own estimates, are often calculated based on current pricing policy, the economic and competitive environment, the characteristics of the asset or liability and other such factors. Therefore, the results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability. Additionally, there may be inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, that could significantly affect the results of current or future value. Goodwill \$ - \$ - \$ 155,543 \$ 155,543 | The table below presents the amounts of assets and liabilities measured at fair value:
Level 1
Level 2
Level 3
Total
Assets at fair value measured
on a nonrecurring basis:
Goodwill
\$
-
\$
-
\$ 155,543
\$ 155,543
Assets at fair value measured
on a recurring basis:
Fixed-Income Securities
\$ 219,504
\$
-
\$
-
\$ 219,504
Margin Loan
The margin loan of \$216,156 is secured by fixed income securities owned. The interest charged is the federal funds
rate plus 2.50% and is payable monthly. If sufficient equity is not maintained in the account, the clearing broker can
initiate a margin call and can request a deposit of additional funds or securities or can sell securities. The clearing
broker has the right to call the margin loan in full at any time. | | | value hierarchy. Fair value measurements for assets and liabilities where there exists limited or no observable market
data and, therefore, are based primarily upon management's own estimates, are often calculated based on current
pricing policy, the economic and competitive environment, the characteristics of the asset or liability and other such
factors. Therefore, the results cannot be determined with precision and may not be realized in an actual sale or
immediate settlement of the asset or liability. Additionally, there may be inherent weaknesses in any calculation
technique, and changes in the underlying assumptions used, including discount rates and estimates of future cash
flows, that could significantly affect the results of current or future value.
On October 2, 2012, the Company acquired Wellington Securities, Inc. At acquisition, goodwill was recognized and
is measured annually for impairment based on a discounted cash flow model. Goodwill is a level 3 fair value
measurement which was not considered impaired at September 30, 2022. | | | | | | | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|--|--| | | | | | | | | | | | | 5. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | The table below presents information pertaining to the four loans subordinated to claims of general creditors
totaling \$920,000 on the Statement of Financial Condition: | | | | | | | | | | | FINRA Approval Date | Payee | Expiration Date | Interest Rate | Amount of Loan | |---------------------|----------------------|--------------------|---------------|----------------| | July 24, 2017 | Minority Stockholder | July 24, 2024 | 8% | \$100,000 | | July 24, 2017 | Minority Stockholder | July 24, 2024 | 8% | \$100,000 | | February 14, 2018 | Minority Stockholder | February 14, 2024 | 8% | \$100,000 | | September 20, 2021 | Majority Stockholder | September 20, 2024 | 10% | \$620,000 | {10}------------------------------------------------ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ ### 7. Revenue from Contracts with Customers Revenue from contracts with customers is recognized when, or as, the Company satisfies performance obligations by transferring the promised goods or services to the customers. A good or service is transferred to a customer when, or as, the customer obtains control of that good or service. A performance obligation may be satisfied over time or at a point in time. Revenue from a performance obligation satisfied over time is recognized by measuring progress in satisfying the performance obligation in a manner that depicts the transfer of the goods or services to the customer. Revenue from a performance obligation satisfied at a point in time is recognized at the point in time when it is determined the customer obtains control over the promised good or service. The amount of revenue recognized reflects the consideration the Company expects to be entitled to in exchange for those promised goods or services (i.e., the transaction price). In determining the transaction price, the Company considers multiple factors, including the effects of variable consideration. Variable consideration is included in the transaction price only to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur and when the uncertainties with respect to the amount are resolved. In determining when to include variable consideration in the transaction price, the Company considers the range of possible outcomes, the predictive value of past experiences, the time period of when uncertainties expect to be resolved and the amount of consideration that is susceptible to factors outside of the Companys influence, such as market volatility or the judgment and actions of third parties. The Company earns fees from providing investment advisory services to private clients. Investment advisory fees are calculated as a percentage of assets under management. The performance obligation is deemed to be fulfilled when the transfer of service has occurred. Therefore, since investment advisory services are performed over time, the Company recognizes advisory income as the services are performed. The Company earns principal trading revenue on the sale of securities purchased and held in the Companys accounts on behalf of the private and institutional clients. Principal trading revenue is based upon an agreed upon transaction fee and is recognized as of the trade date. The Company earns commission revenue on the sale of securities to private and institutional clients. Commissions are based upon an agreed upon transaction fee. The Company considers the performance obligation fulfilled as of the trade date. The Company earns 12b-1 fees after placing private clients in mutual funds. 12b-1 fees are calculated as a percentage of net assets under management. These variable fees are recognized over the period the private clients are invested. The Company earns fees from providing advisory services to municipalities. Municipal advisory fees are based upon an agreed upon transaction fee. The performance obligation is deemed to be fulfilled when the transfer of service has been completed. Therefore, since municipal advisory services are deemed fulfilled upon completion, the Company recognizes advisory income at such time. The Company earns underwriting income by providing underwriting services to institutional customers. Underwriting income is calculated as the difference between the price the Company pays the issuer and the price at which the Company places the issue on the market. The Company considers the performance obligation fulfilled as of the trade date. {11}------------------------------------------------ ### 7. Revenue from Contracts with Customers The Company earns investment banking fees by providing private placement financing services to private clients. Investment banking revenue can be both fixed and variable and is recognized at a point in time when the related performance obligation is complete. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Income is recognized upon completion of the related performance obligation and when an unconditional right to payment exists. The timing of revenue recognition may differ from the timing of customer payments. A receivable is recognized when a performance obligation is met prior to receiving payment by the customer. At October 1, 2021 and September 30, 2022, accounts receivable related to revenue from contracts with customers were \$20,530 and \$28,450, respectively. At October 1, 2021 and September 30, 2022, due from clearing broker related to revenue from contracts with customers were \$122,952 and \$104,508, respectively. There was no significant impairment related to either of these receivables during the year ended September 30, 2022. 8. Income Taxes Alternatively, fees received prior to the completion of the performance obligation would be recorded as deferred revenue on the Statement of Financial Condition until such time when the performance obligation is met. Deferred revenue would primarily relate to initial fees received in investment banking engagements. Deferred revenue was \$0 and \$25,000 at October 1, 2021 and September 30, 2022, respectively. Expenses associated with the Companys revenue streams are recognized as incurred as related performance obligations are satisfied. The Company accounts for income taxes in accordance with generally accepted accounting principles which require recognition of deferred tax assets or liabilities for the expected future tax consequences of events that are included in the financial statement and tax returns in different periods. The Company is no longer subject to United States federal and state income tax examinations by tax authorities for tax years before 2018 and 2017, respectively. Deferred taxes were not significant at September 30, 2022. The Company uses a loss contingencies approach for evaluating uncertain tax positions and continually evaluates expiring statues of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. There were no uncertain tax positions at September 30, 2022. 9. Lease Commitments Operating lease ROU assets represent the Companys right to use an underlying asset for the lease term. Lease liabilities represent the Companys obligation to make lease payments arising from the operating lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Payments made for lease incentives are excluded. Since the Companys lease does not provide an implicit rate, the Company uses its incremental borrowing rate. The incremental borrowing rate is based on the estimated rate of interest for a collateralized borrowing over a similar term of the lease payments at commencement date. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has a lease agreement with lease and non-lease components. Such non-lease components are accounted for separately. {12}------------------------------------------------ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ 9. Lease Commitments The Company has an operating lease for office space in Sausalito, California. The lease began on April 1, 2017 and expires on March 31, 2023 after exercising an option to extend the lease term. Each year, the rent may be increased by a ratio based on the increase in the consumer price index from the previous year. The Company also has an operating lease for an automobile. The lease began on December 30, 2020 and expires on January 1, 2024. In addition, the Company has an operating lease for office space in Columbus, Ohio. The lease began on July 7, 2022 and expires on October 31, 2024. For the year ended September 30, 2022, information pertaining to all operating leases were as follows: | | The Company has an operating lease for office space in Sausalito, California. The lease began on April 1, 2017 and
expires on March 31, 2023 after exercising an option to extend the lease term. Each year, the rent may be increased
by a ratio based on the increase in the consumer price index from the previous year. The Company also has an
operating lease for an automobile. The lease began on December 30, 2020 and expires on January 1, 2024. In
addition, the Company has an operating lease for office space in Columbus, Ohio. The lease began on July 7, 2022
and expires on October 31, 2024. For the year ended September 30, 2022, information pertaining to all operating
leases were as follows: | | |-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------| | | Supplemental Information | | | | Operating Lease ROU Assets
ROU assets as of October 1, 2021
ROU asset addition on July 7, 2022
Weighted-average remaining lease term
Weighted-average discount rate | \$
93,519
115,316
23 months
5.0% | | | Maturities of Operating Lease Liabilities | | | | 2023 | \$
86,265 | | | 2024 | 54,436 | | | 2025 | 4,424 | | | Total lease payments | 145,125 | | | Less discount | ( 5,810) | | | Total operating lease liabilities | \$ 139,315 | | 10. | For the year ended September 30, 2022, the Company had one, month-to-month, short term lease for additional
office space in Sausalito, California. Since this office lease was deemed short term, the Company did not recognize
the related ROU asset or lease liability.
Risk Concentration
The Company maintains its cash in bank deposit accounts which, at times, may have exceeded federally insured
limits during the year. | | | 11. | Financial Instruments with Off-Balance-Sheet Credit Risk | | | | As a securities broker, the Company executes transactions with and on the behalf of customers. The Company
introduces these transactions for clearance to a clearing firm on a fully disclosed basis. In the normal course of
business, the Company's customer activities involve the execution of securities transactions and settlement by its
clearing broker. The agreement between the Company and its clearing broker provides that the Company is
obligated to assume any exposure related to nonperformance by its customers. These activities may expose the | | As a securities broker, the Company executes transactions with and on the behalf of customers. The Company introduces these transactions for clearance to a clearing firm on a fully disclosed basis. In the normal course of business, the Company's customer activities involve the execution of securities transactions and settlement by its clearing broker. The agreement between the Company and its clearing broker provides that the Company is obligated to assume any exposure related to nonperformance by its customers. These activities may expose the Company to off-balance-sheet risk in the event the customer is unable to fulfill its contracted obligations. In the event the customer fails to satisfy its obligations, the Company may be required to purchase or sell financial instruments at the prevailing market price in order to fulfill the customer's obligation. The Company seeks to control off-the-balance-sheet credit risk by monitoring its customer transaction and reviewing information it receives from its clearing broker on a daily basis and reserving for doubtful accounts when necessary. {13}------------------------------------------------ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ 12. Net Capital Requirements The Company is subject to the Securities and Exchange Commission's uniform net capital rule (Rule 15c3-1) which requires the Company to maintain a minimum net capital equal to or greater than \$100,000 and a ratio of aggregate indebtedness to net capital not exceeding 15 to 1, both as defined. At September 30, 2022, the Company's net capital was \$1,444,061 which exceeded the requirement by \$1,344,061. 13. Risks and Uncertainties The global pandemic caused by COVID-19 developed rapidly in 2020 and resulted in a high level of uncertainty and volatility that impacted businesses in all sectors. At this stage, the impact to the Companys business and financial results has not been significant based on the type of business conducted. Based on managements experience to date, management expects this to remain the case. The Company has taken certain health and safety operational measures and continues to follow government policies and advice. While there has not been a material impact thus far, the timeframe and outcome of the pandemic are uncertain. 14. Subsequent Events The Company has evaluated subsequent events through November 22, 2022, the date which the financial statement was issued. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.