# R.M. DUNCAN SECURITIES, INC. X-17A-5 (2021-08-26) — Broker-dealer annual report - Company: R.M. DUNCAN SECURITIES, INC. - Form: X-17A-5 - Filed: 2021-08-26 - Period: 2021-06-30 - Accession: 0000729162-21-000003 - CIK: 729162 - File #: 8-30534 - Material weakness: No - Auditor: Tuttle & Bond, PLLC - Auditor location: China Spring, TX - Contact: Romeo Portillo - Phone: 501-280-0298 - Signed by: Romeo Portillo (Chief Financial Officer) Original filing: https://www.sec.gov/Archives/edgar/data/729162/000072916221000003/annualreport2021p.pdf --- {0}------------------------------------------------ ## hours per response.. . . . . 12.00 ANNUAL AUDITED REPORT FORM X-17A-5 PART III | SEC FILE NUMBER | |-----------------| | 8- | | 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 BEGINNING______________________________
AND ENDING______________________________
MM/DD/YY
MM/DD/YY
A.
REGISTRANT IDENTIFICATION
NAME OF BROKER-DEALER:
OFFICIAL USE ONLY
ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.)
FIRM I.D. NO.
___________________________________________________________________________________________________________________
(No. and Street)
___________________________________________________________________________________________
__________________________
(City)
(State)
(Zip Code) | |-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | | | | | | | | | | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT | | _
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(Area Code – Telephone Number) | | B.
ACCOUNTANT IDENTIFICATION | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report*
_____________________________________________________________________________________________________________________ | | (Name – if individual, state last, first, middle name) | | _____________________________________________________________________________________________________________________
(Address)
(City)
(State)
(Zip Code) | | CHECK ONE: | | PUBLIC
Certified Public Accountant
Public Accountant
Accountant not resident in United States or any of its possessions. | | FOR OFFICIAL USE ONLY | \*Claims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis for the exemption. See Section 240.17a-5(e)(2) Potential persons who are to respond to the collection of information contained in this form are not required to respond SEC 1410 ( ) unless the form displays a currently valid OMB control number. {1}------------------------------------------------ - - - {2}------------------------------------------------ R.M. Duncan Securities, Inc. Financial Statements and Supplemental Schedules Required by the U.S. Securities and Exchange Commission Including Independent Auditor's Report Thereon For the Year-Ended June 30, 2021 {3}------------------------------------------------ ![](_page_3_Picture_0.jpeg) ## REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To Director and Shareholder of R.M. Duncan Securities, Inc. ## Opinion on The Financial Statements We have audited the accompanying statement of financial condition of R.M. Duncan Securities, Inc. (the "Company") as of June 30, 202 , and the related statements of operations, stockholder's equity, and cash flows for the year then ended, including the related notes (collectively referred to as "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 202 , and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. ## Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's 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 the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit of these financial statements in accordance with standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. 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 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 the audit provides a reasonable basis for our opinion. ## Report on Supplementary Information The accompanying information contained in the Supplementary Information section has been subjected to audit procedures performed in conjunction with the audit of the Company's financial statement. The supplemental information is the responsibility of the Company's management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing 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 Rule 17a-5 under the Securities Exchange Act of 1934 and, if applicable, under Regulation 1.10 under the Commodity Exchange Act. In our opinion, the information contained in the Supplementary Information section is fairly stated, in all material respects, in relation to the financial statements as a whole. China Spring, Texas August 24, 202 We have served as the R.M. Duncan Securities, Inc.'s auditor since June 30, 2019. {4}------------------------------------------------ ## R.M. Duncan Securities, Inc. Financial Statements Statement of Financial Condition | | R.M.
Duncan
Securities,
Inc.
Financial
Statements
Statement of Financial Condition
As
of
and
for
the Year-Ended
June 30, 2021 | | |-------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------| | | | | | Assets | | | | Current | Assets | | | | Cash | \$
287,413 | | | Accounts
Receivable
Other
Current Assets | 36,117
30,398 | | | Secured
Demand
Note | 50,000 | | | Prepaid Expenses | 7,296 | | Total | Current
Assets | 411,224 | | Fixed | Assets | | | | Furniture and equipment | 10,581 | | | Less
Accumulated
Depreciation | (10,581)
- | | Total Assets | | \$
411,224 | | | | | | Liabilities & Equity
Liabilities | | | | | Current Liabilities | | | | Accounts Payable | 278 | | | Subordinated Loan
(Secured Demand
Note) | 50,000 | | | Other
Current
Liabilities | 20,004 | | | Current Maturities of Long-Term
Debt | 4,781 | | | Total Current
Liabilities | 75,063 | | | Long-Term Liabilities | | | | Long-Term
Debt
less
Current
Maturities | 38,221 | | Total Liabilities | | 113,284 | | Equity | | | | | Additional Paid-in Capital | 71,518 | | | Common
Stock,
no par
value,
1,000
shares | | | | Authorized, 100 shares issued and outstanding | 6,000 | | | Retained Earnings
(Deficit) | 220,422 | | Total | Equity | 297,940 | | Total
Liabilities | &
Equity | \$
411,224 | {5}------------------------------------------------ # R.M. Duncan Securities, Inc. Notes to Financial Statements - As of and for the Year-Ended JUNE 30, 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. BUSINESS ENTITY - R.M. DUNCAN SECURITIES, INC. (THE COMPANY) IS A REGISTERED BROKER-DEALER WITH THE SECURITIES AND EXCHANGE COMMISSION. THE COMPANY'S ACTIVITIES INCLUDE DIRECT PARTICIPATION PROGRAMS, PRIVATE PLACEMENTS, RETAILING OF CORPORATE SECURITIES OVER-THE-COUNTER, BROKERING OF U.S. GOVERNMENT SECURITIES, SOLICITING OF INSTITUTIONS AND RETAIL CLIENTS, AND WRITING OF PUTS AND CALLS AS A BROKER. THE COMPANY'S SECURITIES TRANSACTIONS ARE EXECUTED AND CUSTOMER ACCOUNTS ARE CARRIED ON A FULLY DISCLOSED BASIS WITH HILLTOP SECURITIES INCORPORATED. b. CASH AND CASH EQUIVALENTS - FOR THE PURPOSES OF THE STATEMENT OF CASH FLOWS, THE COMPANY CONSIDERS c. SECURITIES TRANSACTIONS - PROPRIETARY SECURITIES TRANSACTIONS IN REGULAR WAY TRADES ARE RECORDED ON THE TRADE DATE, AS IF THEY HAD SETTLED. PROFIT AND LOSS ARISING FROM ALL SECURITIES TRANSACTIONS ENTERED INTO FOR THE ACCOUNT AND RISK OF THE COMPANY ARE RECORDED ON A TRADE DATE BASIS. CUSTOMERS' MARKETABLE SECURITIES ARE VALUED AT MARKET VALUE, AND SECURITIES NOT READILY MARKETABLE ARE VALUED d. FURNITURE AND FIXTURES - FURNITURE AND FIXTURES ARE STATED AT COST. DEPRECIATION IS PROVIDED USING THE - ALL CERTIFICATES OF DEPOSIT AND ALL LIQUID CASH INVESTMENTS WITH ORIGINAL MATURITIES OF LESS THAN THREE MONTHS TO BE CASH EQUIVALENTS. - SECURITIES TRANSACTIONS AND THE RELATED COMMISSION INCOME AND EXPENSES ARE REPORTED ON A TRADE DATE BASIS. AT FAIR VALUE AS DETERMINED BY MANAGEMENT. - STRAIGHT LINE METHOD OVER THE ESTIMATED USEFUL LIVES OF THE ASSETS. - e. INCOME TAXES THE COMPANY, WITH THE CONSENT OF ITS STOCKHOLDER, HAS ELECTED UNDER THE INTERNAL REVENUE CODE AND THE ARKANSAS STATE INCOME TAX LAWS TO BE AN S CORPORATION. IN LIEU OF CORPORATION INCOME TAXES, THE STOCKHOLDER OF AN S CORPORATION IS TAXED ON HIS/HER PROPORTIONATE SHARE OF THE COMPANY'S TAXABLE INCOME. THEREFORE, NO PROVISION OR LIABILITY FOR FEDERAL OR STATE INCOME TAXES HAS BEEN INCLUDED IN THE FINANCIAL STATEMENTS. THE FEDERAL INCOME TAX RETURNS OF THE COMPANY FOR 2020, 2019, and 2018 ARE SUBJECT TO EXAMINATION BY THE IRS, GENERALLY FOR THREE YEARS AFTER THEY WERE FILED. - f. ACCOUNTS RECEIVABLE RECOGNITION OF BAD DEBT THE COMPANY CONSIDERS ACCOUNTS RECEIVABLE TO BE FULLY COLLECTIBLE. UNCOLLECTIBLE ACCOUNTS RECEIVABLE ARE CHARGED DIRECTLY AGAINST EARNINGS WHEN THEY ARE DETERMINED TO BE UNCOLLECTIBLE. USE OF THIS METHOD DOES NOT RESULT IN A MATERIAL DIFFERENCE FROM THE VALUATION METHOD REQUIRED BY GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. - g. CLEARING DEPOSIT THE COMPANY HAS PLACED A \$30,000 CLEARING DEPOSIT WITH HILLTOP SECURITIES INCORPORATED WHICH IS FULLY REFUNDABLE TO THE COMPANY SHOULD IT CLOSE THE CLEARING ACCOUNT. - h. USE OF ESTIMATES THE PREPARATION OF FINANCIAL STATEMENTS IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES 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 THE REPORTED AMOUNTS OF REVENUES AND EXPENSES DURING THE REPORTING PERIOD. ACTUAL RESULTS COULD DIFFER FROM THOSE ESTIMATES. - i. CONCENTRATIONS OF CREDIT RISK FINANCIAL INSTRUMENTS THAT POTENTIALLY EXPOSE THE ORGANIZATION TO CONCENTRATIONS OF CREDIT RISK ARE CASH EQUIVALENTS. CASH EQUIVALENTS ARE MAINTAINED AT HIGH-QUALITY FINANCIAL INSTITUTIONS AND CREDIT EXPOSURE IS LIMITED TO ANY ONE INSTITUTION. THE ORGANIZATION HAS NOT EXPERIENCED ANY LOSSES ON ITS CASH EQUIVALENTS. THE COMPANY IS ENGAGED IN VARIOUS TRADING AND BROKERAGE ACTIVITIES IN WHICH COUNTERPARTIES PRIMARILY INCLUDE BROKER-DEALERS, BANKS, AND OTHER FINANCIAL INSTITUTIONS. IN THE EVENT COUNTERPARTIES DO NOT FULFILL THEIR OBLIGATIONS, THE COMPANY MAY BE EXPOSED TO RISK. THE RISK OF DEFAULT DEPENDS ON THE CREDITWORTHINESS OF THE COUNTERPARTY OR ISSUER OF THE INSTRUMENT. IT IS THE COMPANY'S POLICY TO REVIEW, AS NECESSARY, THE CREDIT STANDING OF EACH COUNTERPARTY. {6}------------------------------------------------ ## R.M. Duncan Securities, Inc. Notes to Financial Statements As of and for the Year-Ended JUNE 30, 2021 THE FOLLOWING: | | R.M.
Duncan
Notes
to
Financial
As
of
and
for
the
Year-Ended | Securities,
Inc.
Statements
JUNE 30,
2021 | | |----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------|--------------------------------------| | 2. | RECEIVABLE FROM AND PAYABLES TO BROKER AND CLEARING HOUSE | | | | | AMOUNTS
RECEIVABLE
FROM
AND
PAYABLE
TO
BROKER-DEALERS
THE FOLLOWING: | AND
CLEARING | HOUSE
AT
JUNE 30, 2021 CONSIST | | | AT
JUNE
30,
2021: | RECEIVABLE | PAYABLE | | | PAYABLE
TO
CLEARING
HOUSE | \$
- | \$ | | | RECEIVABLE
FROM
CLEARING
HOUSE | 36,117 | | | | TOTAL | \$
36,117 | \$ | | | THE COMPANY CLEARS CERTAIN OF ITS PROPRIETARY AND CUSTOMER TRANSACTIONS THROUGH ANOTHER BROKER
DEALER
ON A FULLY
DISCLOSED
BASIS.
THE
AMOUNT
AFOREMENTIONED TRANSACTIONS AND IS COLLATERALIZED BY SECURITIES OWNED BY THE COMPANY. | PAYABLE
TO
THE | CLEARING
HOUSE | | 3. | SUBORDINATED BORROWINGS | | | | | THE BORROWINGS UNDER SUBORDINATION AGREEMENTS CONSISTED OF THE FOLLOWING: | | | | | 4.00% NOTE PAYABLE TO REVA L. DUNCAN, PAYABLE IN ANNUAL
INSTALLMENTS OF INTEREST, SECURED BY PLEDGED UNITED
STATES TREASURY NOTES AS DEFINED IN THE COLLATERAL | | | THE COMPANY CLEARS CERTAIN OF ITS PROPRIETARY AND CUSTOMER TRANSACTIONS THROUGH ANOTHER BROKER-AFOREMENTIONED TRANSACTIONS AND IS COLLATERALIZED BY SECURITIES OWNED BY THE COMPANY. CONTINUED COMPLIANCE WITH MINIMUM NET CAPITAL REQUIREMENTS, THEY MAY NOT BE REPAID. 4.00% NOTE PAYABLE TO REVA L. DUNCAN, PAYABLE IN ANNUAL INSTALLMENTS OF INTEREST, SECURED BY PLEDGED UNITED STATES TREASURY NOTES AS DEFINED IN THE COLLATERAL AGREEMENT, DUE ON JUNE 8, 2022. \$ 50,000 THE SUBORDINATED BORROWINGS ARE WITH REVA L. DUNCAN AND ARE AVAILABLE IN COMPUTING NET CAPITAL UNDER THE SEC'S UNIFORM NET CAPITAL RULE. TO THE EXTENT THAT SUCH BORROWINGS ARE REQUIRED FOR THE COMPANY'S 4. LONG-TERM DEBT ON APRIL 30, 2020 THE COMPANY RECEIVED LOAN PROCEEDS IN THE AMOUNT OF \$61,730 AND BEARS INTEREST AT A RATE OF 1% PER ANNUM UNDER THE PAYCHECK PROTECTION PROGRAM ("PPP"). THE PPP, ESTABLISHED AS PART OF THE CORONAVIRUS AID, RELIEF AND ECONOMIC SECURITY ACT ("CARES ACT"), PROVIDES FOR LOANS TO QUALIFYING BUSINESSES FOR AMOUNTS UP TO 2.5 TIMES OF THE AVERAGE MONTHLY PAYROLL EXPENSES OF THE QUALIFYING BUSINESS. THE LOANS AND ACCRUED INTEREST ARE FORGIVABLE AFTER EIGHT WEEKS AS LONG AS THE BORROWER USES THE LOAN PROCEEDS FOR ELEGIBLE PURPOSES, INCLUDING PAYROLL, BENEFITS, RENT AND UTILITIES, AND MAINTAINS ITS PAYROLL LEVELS. ON JUNE 23, 2021, THE COMPANY OBTAINED FULL FORGIVENESS ON THE LOAN AND INTEREST DUE. THE FORGIVENESS OF THE LOAN AND INTEREST IS RECOGNIZED AS OTHER INCOME IN THE AMOUNT OF \$61,730. ON MARCH 31, 2021, R.M. DUNCAN SECURITIES, INC. WAS GRANTED A SECOND LOAN FROM FIRST HORIZON BANK IN THE AGGREGATE AMOUNT OF \$43,002, PURSUANT TO THE PAYCHECK PROTECTION PROGRAM UNDER DIVISION A, TITLE I OF THE CARES ACT, WHICH WAS ENACTED MARCH 27, 2020. THE LOAN, WHICH WAS IN THE FORM OF A NOTE DATED MARCH 31, 2021 ISSUED BY THE BORROWER, MATURES ON MARCH 31, 2026 AND BEARS INTEREST AT A RATE OF 1.00% PER ANNUM, PAYABLE MONTHLY COMMENCING ON JANUARY 31, 2022. THE NOTE MAY BE PREPAID BY THE BORROWER AT ANY TIME PRIOR TO MATURITY WITH NO PREPAYMENT PENALTIES. FUNDS FROM THE LOAN MAY ONLY BE USED FOR BUSINESS-RELATED PURPOSES AS SPECIFIED IN THE LOAN APPLICATION AND CONSISTENT WITH THE PAYCHECK PROTECTION PROGRAM RULES INCLUDING THE PROHIBITION ON USING LOAN PROCEEDS FOR LOBBYING ACTIVITIES AND EXPENDITURES. THE COMPANY INTENDS TO USE THE ENTIRE LOAN AMOUNT FOR QUALIFYING EXPENSES. UNDER THE TERMS OF THE PPP, CERTAIN AMOUNTS OF THE LOAN MAY BE FORGIVEN IF THEY ARE USED FOR QUALIFYING EXPENSES AS DESCRIBED IN THE CARES ACT. {7}------------------------------------------------ ## R.M. Duncan Securities, Inc. Notes to Financial Statements As of and for the Year-Ended JUNE 30, 2021 | | R.M. | Duncan
Securities, | Inc. | | |----|--------------------------------------------------------|-----------------------|------|--| | | | | | | | 4. | LONG-TERM DEBT | | | | | | AGGREGATE MATURITIES OF LONG-TERM DEBT ARE AS FOLLOWS: | | | | ## NET CAPITAL REQUIREMENT \$ 43,002 THE COMPANY IS REQUIRED TO MAINTAIN MINIMUM NET CAPITAL AS DEFINED UNDER RULE 15c3-1 OF THE SECURITIES EXCHANGE ACT OF 1934 AND RELATED REGULATIONS. THE COMPANY USES THE AGGREGATE INDEBTEDNESS METHOD WHICH REQUIRES A BROKER-DEALER TO MAINTAIN MINIMUM NET CAPITAL OF 6-2/3% OF AGGREGATE INDEBTEDNESS OR \$100,000, WHICHEVER IS GREATER, AND ALSO REQUIRES THAT THE RATIO OF AGGREGATE INDEBTEDNESS TO NET CAPITAL NOT EXCEED 15 TO 1. NET CAPITAL (AS DEFINED) AT JUNE 30, 2021 WAS \$340,644, AND THE COMPANY'S AGGREGATE INDEBTEDNESS TO NET CAPITAL RATIO WAS .1858 TO 1. ## RELATED PARTY TRANSACTIONS THE COMPANY RENTED OFFICE SPACE FROM R.M. DUNCAN CONSULTING GROUP, LLC, OF WHICH THE GENERAL PARTNER IS ALSO THE PRESIDENT OF R.M. DUNCAN SECURITIES, INC.. THE COMPANY PAID \$29,628 IN 2021 FOR RENT. THE COMPANY EARNED NO GROSS COMMISSIONS ON TRADES EXECUTED FOR RELATIVES OF OFFICERS OF THE CORPORATION AND OTHER RELATED ENTITIES. ONLY TICKET CHARGES WERE COLLECTED FOR SUCH TRANSACTIONS. THE PRESIDENT / SHAREHOLDER OF R.M. DUNCAN SECURITIES, INC. SERVES AS THE MANAGER OF EMINENCE ENERGY RESOURCES, LLC WHICH OWNS A 40% INTEREST OF WARRIOR EXPLORATION & PRODUCTION, LLC. DURING 202 THE COMPANY RECEIVED COMMISSIONS OF APPROXIMATELY \$112,000 FOR THE PRIVATE PLACEMENT OF DEBT SECURITIES FROM WARRIOR EXPLORATION & PRODUCTION, LLC. OTHER PROCEEDINGS IN THE ORDINARY COURSE OF BUSINESS. THE ULTIMATE OUTCOME OF ANY SUCH ACTION AGAINST THE COMPANY COULD HAVE AN ADVERSE IMPACT ON THE FINANCIAL CONDITION, RESULTS OF OPERATIONS, ## COMMITMENTS AS OF JUNE 30, 2021, THE COMPANY HAD NO OTHER COMMITMENTS OR CONTINGENCIES. ## CONTINGENCIES THERE ARE CURRENTLY NO ASSERTED CLAIMS OR LEGAL PROCEEDINGS AGAINST THE COMPANY, HOWEVER, THE NATURE OF THE COMPANY'S BUSINESS SUBJECTS IT TO VARIOUS CLAIMS, REGULATORY EXAMINATIONS, AND OR CASH FLOWS OF THE COMPANY. ## RENT THE RENT EXPENSE FOR THE YEAR WAS \$29,628; THE AMOUNT PAID WAS FOR THE LEASE ON THE OFFICE SPACE AND PARKING. ## MAJOR CUSTOMER REVENUE FROM THREE CUSTOMERS APPROXIMATED \$393,322 OR 75% OF TOTAL REVENUES FOR THE YEAR ENDED JUNE 30, 2021. {8}------------------------------------------------ # R.M. Duncan Securities, Inc. Notes to Financial Statements As of and for the Year-Ended JUNE 30, 2021 11. REVENUE RECOGNITION THE COMPANY ADOPTED ASU 2014-09, REVENUE FROM CONTRACTS WITH CUSTOMERS, (CODIFIED IN ASC 606). THE COMPANY RECOGNIZES REVENUE WHERE SERVICES ARE RENDERED. REVENUE IS RECOGNIZED BASED ON THE AMOUNT OF CONSIDERATION THAT MANAGEMENT EXPECTS TO RECEIVE IN EXCHANGE FOR THESE SERVICES IN ACCORDANCE WITH THE TERMS OF THE CONTRACT WITH THE CLIENT. TO DETERMINE THE AMOUNT AND TIMING OF REVENUE RECOGNITION, THE COMPANY MUST (1) INDENTIFY THE CONTRACT WITH THE CLIENT, (2) IDENTIFY THE PERFORMANCE OBLIGATIONS IN THE CONTRACT, (3) DETERMINE THE TRANSACTION PRICE, (4) ALLOCATE THE TRANSACTION PRICE TO THE PERFORMANCE OBLIGATIONS IN THE CONTRACT, AND (5) RECOGNIZE REVENUE WHEN THE COMPANY SATISFIES A PERFORMANCE OBLIGATION. REVENUE FROM CONTRACTS WITH CUSTOMERS INCLUDES COMMISSIONS FROM RETAIL, INSTITUTIONAL MUTUAL FUNDS AND BROKER/DEALER CLIENTS, AND IS RECOGNIZED WHEN PROMISED GOODS OR SERVICES ARE DELIVERED TO THE CLIENT IN AN AMOUNT THE COMPANY EXPECTS TO RECEIVE IN EXCHANGE FOR THOSE GOODS OR SERVICES (I.E., THE TRANSACTION PRICE). THE RECOGNITION AND MEASUREMENT OF REVENUE IS BASED ON THE ASSESSMENT OF INDIVIDUAL CONTRACT TERMS. COMMISSIONS AND RELATED CLEARING EXPENSES ARE RECORDED ON THE TRADE DATE. THE COMPANY BELIEVES THAT THE PERFORMANCE OBLIGATION IS SATISFIED ON THE TRADE DATE BECAUSE THAT IS WHEN THE UNERLYING FINANCIAL INSTRUMENT OR PURCHASER IS IDENTIFIED, THE PRICING IS AGREED UPON AND THE RISKS AND REWARDS OF OWNERSHIP HAVE BEEN TRANSFERRED TO/ FROM THE CUSTOMER. 12. RECENT ACCOUNTING PRONOUNCEMENTS THERE WERE NO UNSATISFIED PERFORMANCE OGLIGATIONS AF OF JUNE 30, 2021 IN FEBRUARY 2016, THE FASB ESTABLISHED TOPIC 842, LEASES, BY ISSUING ACCOUNTING STANDARDS UPDATE NO. 2016- 02, WHICH REQUIRES LESSORS TO CLASSIFY LEASES AS SALES-TYPE, DIRECT FINANCING, OR OPERATING LEASE. TOPIC 842 WAS SUBSEQUENTLY AMENDED BY ASU NO. 2018-01, LAND EASEMENT PRACTICAL EXPEDIENT FOR TRANSITION TO TOPIC 842; ASU NO. 2018-10, CODIFICATION IMPROVEMENTS TO TOPIC 842; AND ASU NO. 2018-11, TARGETED IMPROVEMENTS. THE NEW STANDARD IS EFFECTIVE FOR THE COMPANY ON JANUARY 1, 2022, WITH EARLY ADOPTION PERMITTED. THE COMPANY EXPECTS TO ADOPT THE NEW STANDARD ON ITS EFFECTIVE DATE. A MODIFIED RETROSPECTIVE TRANSITION APPROACH IS REQUIRED, APPLYING THE NEW STANDARD TO ALL LEASES EXISTING AT THE DATE OF INITIAL APPLICATION. AN ENTITY MAY CHOOSE TO USE EITHER (1) ITS EFFECTIVE DATE OR (2) THE BEGINNING OF THE EARLIEST COMPARATIVE PERIOD PRESENTED IN THE FINANCIAL STATEMENTS AS ITS DATE OF INITIAL APPLICATION. IF AN ENTITY CHOOSES THE SECOND OPTION, THE TRANSITION REQUIREMENTS FOR EXISTING LEASES ALSO APPLY TO LEASES ENTERED INTO BETWEEN THE DATE OF INITIAL APPLICATION AND THE EFFECTIVE DATE. THE ENTITY MUST ALSO RECAST ITS COMPARATIVE PERIOD FINANCIAL STATEMENTS AND PROVIDE THE DISCLOSURES REQUIRED BY THE NEW STANDARD FOR THE COMPARATIVE PERIODS. THE COMPANY EXPECTS TO ADOPT THE NEW STANDARD ON JANUARY 1, 2022 AND USE THE EFFECTIVE DATE AS OUR DATE OF INITIAL APPLICATION. CONSEQUENTLY, FINANCIAL INFORMATION WILL NOT BE UPDATED AND THE DISCLOSURES REQUIRED UNDER THE NEW STANDARD WILL NOT BE PROVIDED FOR DATES AND PERIODS BEFORE JANUARY 1, 2022. THE NEW STANDARD PROVIDES A NUMBER OF OPTIONAL PRACTICAL EXPEDIENTS IN TRANSITION. THE COMPANY EXPECTS TO ELECT THE 'PACKAGE OF PRACTICAL EXPEDIENTS', WHICH PERMITS US NOT TO REASSESS UNDER THE NEW STANDARD OUR PRIOR CONCLUSIONS ABOUT LEASE IDENTIFICATION, LEASE CLASSIFICATION AND INITIAL DIRECT COSTS. THE COMPANY DOES NOT EXPECT TO ELECT THE USE-OF- HINDSIGHT OR THE PRACTICAL EXPEDIENT PERTAINING TO LAND EASEMENTS; THE LATTER NOT BEING APPLICABLE TO US. THE COMPANY CONTINUES TO EVALUATE CERTAIN ASPECTS OF THE NEW STANDARD, AND DOES NOT EXPECT THE NEW STANDARD TO HAVE A MATERIAL EFFECT ON THE FINANCIAL STATEMENTS OR HAVE A SIGNIFICANT CHANGE IN LEASING ACTIVITIES BETWEEN NOW AND ADOPTION. {9}------------------------------------------------ ## R.M. Duncan Securities, Inc. Notes to Financial Statements As of and for the Year-Ended JUNE 30, 2021 13. SUBSEQUENT EVENTS THE COMPANY EVALUATED THE EVENTS AND TRANSACTIONS SUBSEQUENT TO ITS JUNE 30, 2021 BALANCE SHEET DATE IN ACCORDANCE WITH FASB ASC 855-10-50 AND DETERMINED THAT THERE WERE NO SIGNIFICANT EVENTS TO REPORT THROUGH AUGUST 24, 2021 WHICH IS THE DATE THE COMPANY'S FINANCIAL STATEMENTS WERE AVAILABLE FOR ISSUE. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.