# RHODES SECURITIES, INC. X-17A-5 (2022-06-29) — Broker-dealer annual report - Company: RHODES SECURITIES, INC. - Form: X-17A-5 - Filed: 2022-06-29 - Period: 2022-04-30 - Accession: 0000812226-22-000003 - CIK: 812226 - File #: 8-37689 - Type: Broker-dealer - Material weakness: No - Auditor: Moss Adams LLP - Auditor location: Dallas, TX - Contact: Marilyn Zehntner - Phone: 817-334-0455 - Signed by: J. Gordon Rhodes (Chief Executive Officer) Original filing: https://www.sec.gov/Archives/edgar/data/812226/000081222622000003/rhodesamaudit22.pdf --- {0}------------------------------------------------ | | ED
ES
U
N
IT
ST
AT | | | | | | |-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------|----------------------------------------------------------------------------------|--|--|--| | SE
CU | B
Nu
OM
mb
:3
23
5-
01
23
er
Ex | | | | | | | | pir
es
Oc
t. 3
1,
20
23
Es
tim
d
e b
de
ate
n
av
er
ag
ur | | | | | | | | ho
s p
12
ur
res
po
ns
e:
er | | | | | | | | C F
ILE
ER
SE
NU
MB | | | | | | | | -5 | 8-
37
68
9 | | | | | | | T
P
A
R
I
I
I | | | | | | | | | | | | | | | n
d
In
fo
io
Re
ire
to
at
Pu
nt
rm
qu
rs
ua | G
E
C
FA
IN
PA
G
Ru
le
d
s
17
5
, 1
7a
-1
2,
18
a-
an | Se
7
de
r t
he
rit
a-
un
cu | ie
Ex
ch
ge
s
f 1
Ac
t o
93
4
an | | | | | NG
G
R
D
E
FI
LI
FO
PE
B
TH
RI
O
EG
IN
N
IN | /3
0/
04
22 | | | | | | | | G
D
A
N
EN
D
IN | YY
/D
D/
M
M | | | | | | | IS
NT
A
R
EG
TR
A
ID
EN
TI | N
FI
C
A
TI
O | | | | | | | | | | | | | | R
ho
de
Se
rit
ie
s
cu
E
N
A
M
O
F
FI
R
M
: | In
s,
c. | | | | | | | PE
F
TY
O
RE
G
IS
TR
NT
{
ch
k
pl
A
al
l a
ec
p
2
)
B
ke
de
al
Se
rit
ro
r-
er
cu
y-
Ch
k
he
re
If
de
als
an
nt
is
o
ec
re
sp
on | ic
ab
le
bo
s)
xe
:
ba
d
ap
de
al
se
sw
er
C
de
riv
ive
de
al
OT
at
s
er | b
M
aj
rit
o
r
se
cu
as
y- | ed
ap
ic
i
rt
nt
sw
pa
pa | | | | | SS
A
DD
RE
F
E
O
PR
IN
C
IP
A
L
PL
AC
O
F | : (
BU
SI
NE
SS
D
o
se
a
t u
no | .)
O
. b
P.
ox
no | | | | | | 30
6
W
St
t 7
th
, S
ui
10
00
et
te
es
re | | | | | | | | | (N
)
d
St
et
o.
an
re | | | | | | | th
Fo
W
rt
or | TX | | 76
10
2 | | | | | (C
)
ity | (5
)
ta
te | | (Z
ip
Co
de
) | | | | | TO
N
H
RD
PE
RS
O
C
O
NT
A
CT
W
IT
RE
G
A | TO
NG
IS
TH
FI
LI | | | | | | | J.
G
do
n
R
ho
de
s
or | 81
7-
33
4-
04
55 | @
gr | om
i2
rs
.c | | | | | (N
e)
am | (A
a
Co
de
Te
le
ph
e
Nu
re
on
- | be
r)
(E
ai
m
m | l A
dd
)
re
ss | | | | | | B.
C
C
A
O
U
NT
A
NT
ID
EN
TI | N
FI
C
A
TI
O | | | | | | | | | | | | | | IC
IN
D
EP
EN
D
EN
T
PU
A
C
C
BL
O
U
NT
A | h
NT
nt
e
rt
s
e
os
w
co
re
po
ar | ai
d
th
i
in
fil
in
*'
s
g'
ne | | | | | | P
A
da
M
LL
s
s
os
m | | | | | | | | (N
am
e- | In
di
vi
du
al
if
las
fir
te
t,
st
ta
, s | nd
e)
id
dl
e
,a
m
na
m | | | | | | 14
55
5
D
al
la
, S
Pa
rk
ui
s
te
30
0
w
ay | D
al
la
s | TX | 75
25
4 | | | | | (A
)
dd
re
ss | (C
)
ity | (S
ta | )
(Z
ip
Co
de
)
te | | | | | 10
/1
6/
20
03 | | | 65
9 | | | | | (D
n
of
ith
(lf
e
Re
gi
st
tio
PC
B)
pl
ica
at
AO
ra
w
ap | )
ble | OB
(P
CA
Re
gi | tio
n
st
Nu
be
If
pl
ica
bl
e)
ra
m
ap
r, | | | | | | R
E
FO
L
O
FF
IC
IA
US | LY
O
N | | | | | | | | | | | | | | m
C
fo
*
lai
n
fro
th
ms
pt
io
e
ire
r e
xe
m
re
qu
m | he
ha
t t
be
t t
al
rts
en
an
nu
re
po | d
by
th
e
rts
co
ve
re
re
po | of
an
ind
de
bl
nt
ic
ep
en
pu | | | | | | | | | | | | accountant must be supportedby ^a statement of facts and circumstances relied on as the basis of the exemption See ¹⁷ CFR 240.17a-⁵(e)(l)(ll),If applicable. **Persons who are torespond to the collectionof information containedinthis form are notrequired to respond unless the form displays ^a currently valid OMB control number.** {1}------------------------------------------------ #### **OATH OR AFFIRMATION** **J. Gordon Rhodes I,** **, swear (or affirm) that, to the best of my knowledge and belief, the Rhodes Securities, Inc.** **financial report pertaining to the firm of April 30** *,* **as of** *^j ²* **⁰²² . is true and correct. ^I further swear (or affirm) that neither the company nor any** **partner,officer,director, or equivalent person, as the case may be, has any proprietary Interest in any account classified solely as that of ^a customer.** ![](_page_1_Picture_5.jpeg) **Sign Title:** **Chief Executive Officer** **Notary Public** ## **This filing\*\* contains (check all applicable boxes):** - **29 (a) Statement of financial condition.** - **(b) Notes to consolidated statement of financial condition.** - **29 (c) Statement of income (loss) or,if there is other comprehensive income in the period(s) presented, ^a statement of comprehensive income (as defined in § 210.1-⁰² of Regulation ^S-X).** - **12 (d) Statement of cash flows.** - **¹² (e) Statement of changes in stockholders' or partners' or sole proprietor'^s equity.** - **(f) Statement of changes in liabilities subordinated to claims of creditors.** - **12 (g) Notes to consolidated financial statements.** - **IS (h) Computation of net capital under ¹⁷ CFR 240.15c3-lor ¹⁷ CFR 240.1Ba-l, as applicable.** - **(i) Computation of tangible net worth under ¹⁷ CFR 240.18a-2.** - **[2 0) 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.** - **(2 (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.** - **²⁹ (o) Reconciliations,including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under ¹⁷ CFR 240.15c3-l, ¹⁷ CFR 240.18a-l, or ¹⁷ CFR 240.18a-2, as applicable, and the reserve requirements under ¹⁷ CFR ²⁴Q.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.** - **¹² (q) Oath or affirmation In accordance with ¹⁷ CFR 240.17^a-5, 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.** - **²⁹ (s) Exemption report in accordance with ¹⁷ CFR 240.17a-⁵ or ¹⁷ CFR 240.18a-7, as applicable.** - **(t) Independent public accountant'^s report based on an examination of the statement of financial condition.** - **¹² (u) Independent public accountant'^s report based on an examination of the financial report or financial statements under ¹⁷ CFR 240.17^a-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.** - **(³ (w) Independent public accountant'^s report based on ^a review of the exemption report under ¹⁷ CFR 240.17a-⁵ or ¹⁷ CFR 240.18a-7,as applicable.** - **(x) Supplemental reports on applying agreed-upon procedures, in accordance with ¹⁷ CFR 240.15c3-le or ¹⁷ CFR 240.17a-12, as applicable.** - **(y) Report describing any material inadequacies found to exist or found to have existed since the date of the previous audit, or ^a statement that no material inadequacies exist, under ¹⁷ CFR 240.17a-12(k).** - **(^z ) Other:** *^\*\*To request confidential treatment of certain portions of this filing, see ¹⁷ CFR 240.17a-S(e)(3) or ¹⁷ CFR 240.18a-7(d)(2), as applicable.* {2}------------------------------------------------ ## **RHODES SECURITIES, INC. Contents** | M
T
D
G
C
F
T
R
E
P
O
R
O
I
N
D
E
P
E
N
D
E
N
R
E
G
IS
T
E
R
E
P
U
B
L
I
A
C
C
O
F
U
N
T
I
N
I
R | | | | | | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------|--|--|--|--| | L
S
FI
N
A
N
C
IA
S
A
T
T
E
M
E
N
T | | | | | | | S
f
i
i
al
f
nd
i
ti
on
ta
te
t o
m
en
na
nc
co | 2 | | | | | | S
f
i
ta
te
t o
e
m
en
nc
om | 3 | | | | | | S
f
ch
in
k
h
ol
d
s'
i
y
ta
te
t o
s
st
t
m
en
an
ge
oc
er
e
qu | 4 | | | | | | S
f
sh
fl
ta
te
t o
s
m
en
ca
ow | 5 | | | | | | N
to
th
f
i
i
al
ot
e
es
st
at
ts
na
nc
em
en | 6
1
1
- | | | | | | S
pl
l
i
nf
i
on
to
R
ul
ta
at
17
5
e
nt
up
em
en
or
m
pu
rs
ua
a- | 12 | | | | | | M
T
D
C
G
T
F
R
E
P
O
R
O
I
N
D
E
P
E
N
D
E
N
R
E
G
I
S
T
E
R
E
P
U
B
L
I
A
C
C
O
U
N
T
I
N
F
I
R | 13 | | | | | | on
E
i
pt
rt
xe
m
re
po | | | | | | | | | | | | | {3}------------------------------------------------ ![](_page_3_Picture_0.jpeg) # **Report of Independent Registered Public Accounting Firm** **The Board of Directors Rhodes Securities, Inc.** ### *Opinion on the Financial Statements* **We have audited the accompanying statement of financial condition of Rhodes Securities, Inc. (the Company) as of April ³⁰, ²⁰²², the related statements of income, changes in stockholders' equity, and cash flows for the year then ended, and the related notes (collectively referred to as the** *financial statements).* **In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of April ³⁰, ²⁰²², 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.** #### *Basisfor 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 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 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 to 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.** ## *Opinion on the Supplemental Information* **The information in Schedule ^I has been subjected to audit procedures performed in conjunction with the audit of the Company'^s financial statements. The information in Schedule ^I is the responsibility of the Company'^s management. Our audit procedures include determining whether the information in Schedule ^I 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 Schedule ^I. In forming our opinion on the information in Schedule I, we evaluated whether the information in Schedule ^I, including its form and content is presented in conformity with ¹⁷ C.F.R. §240.17a-5. In our opinion, the information in Schedule ^I is fairly stated in all material respects in relation to the financial statements as ^a whole.** *^U-P* **Dallas, Texas June 28, 2022** **We have served as the Company'^s auditor since 2017.** {4}------------------------------------------------ # **RHODES SECURITIES, INC. Statement of Financial Condition April 30, 2022** #### **ASSETS** | C
h
as
C
i
i
i
b
l
e
om
m
ss
s
re
on
ce
va
C
l
ri
d
si
g
t
ea
n
e
po
R
ei
b
l
d
ad
l
ed
rti
at
ec
va
es
es
an
va
nc
re
pa
es
-
P
i
d
ex
pe
ns
es
re
pa
O
ti
l
ri
gh
g
t
of
se
e
t
pe
ra
n
ea
us
as
se
-
P
i
d
f
ed
al
i
ta
e
re
pa
er
nc
om
x
D
ef
d
ta
t
er
re
x
as
se
P
d
rt
i
of
t
ul
ed
y
t c
t
et
at
ro
pe
an
e
qu
pm
en
, a
os
, n
ac
cu
m
d
i
i
d
ti
ti
\$
at
of
1
9
1
,8
on
4
1
e
on
pr
ec
an
am
or
za | \$
2
1
4
,4
2
7
4
7
3
,1
4
6
,0
0
0
7
5
54
3
73
,2
58
1
0
,7
1
5
4
,9
1
5
1
4
,3
9
4
6
,5
0
7 | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | S
S
T
O
TA
L
A
E
T
S | \$
8
72
,9
0
5 | | D
S
L
I
A
B
I
L
I
T
I
E
A
N
S
T
C
Y
O
K
H
O
L
D
E
R
S'
E
Q
U
IT | | | | | | L
i
ab
i
l
i
i
t
es
:
A
b
l
nt
d
d
l
i
ab
i
l
i
i
e
t
cc
ou
s
pa
ya
an
ac
cr
ue
es
O
ti
•l
i
ab
i
l
i
l
se
t
g
pe
ra
n
ea
y
S
i
b
l
ta
te
e
ta
e
nc
om
s
xe | \$
4
7
6
,3
2
2
1
7
,9
1
2 | | pa
ya | ,1
1
0
57 | | T
al
L
i
ab
i
l
i
i
ot
t
es | 5
0
4
.3
9
1 | | S
k
h
ol
d
i
t
s'
t
oc
e
qu
er
y:
C
k
st
al
, 1
0
,0
0
0
,0
0
0
h
i
d
on
o
sh
t
om
m
oc
, n
pa
r v
ue
es
ar
au
or
ze
, | | | 9
9
,0
0
0
sh
i
d
d
9
0
sh
,0
0
0
nd
i
ts
ta
ar
es
ss
ue
an
es
ar
ou
n
g.
A
d
d
i
ti
al
i
d-
i
pi
l
ta
n
on
ca | 2
1
,0
0
0 | | pa
R
ai
d
et
in
gs
ne
ea
rn | 1
2
8
,1
0
0
2
9
5
,8
1
5 | | T
k
,9
,0
0
0
sh
st
at
y
st
re
as
ur
es
oc
ar
co | (
76
,4
0
1
) | | S
T
al
k
h
ol
d
E
i
ot
t
s'
t
oc
er
y
qu | 3
6
8
,5
1
4 | | T
L
S
D
O
T
A
L
I
A
B
I
L
I
T
I
E
A
N
S
T
O
C
K
H
O
S'
Q
Y
L
D
E
R
E
U
I
T | \$
8
7
2
,9
0
5 | See notes to financial statements, {5}------------------------------------------------ # RHODES SECURITIES,INC, Statement of Income For the Year Ended April 30, 2022 | R
ev
en
ue
s | | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------| | S
i
ti
i
i
es
s
ec
ur
co
m
m
ss
on | \$
9
3
8
,8
1
8 | | D
i
ri
b
i
f
st
ut
on
s
ee | 1
,3
2
9
,1
1
3 | | I
t i
nt
e
er
es
nc
om | 64
,4
6
2 | | M
gi
i
n
nt
t
ar
er
es | ,3
4
4
6
5 | | R
ei
b
d
m
ur
se
ex
pe
ns
es | ,0
4
84
5
7 | | O
th
er | 9
6
,7
4
6 | | T
al
R
ot
ue
ev
en | 3
,3
3
9
,5
5
7 | | E
pe
ns
es
x | | | C
i
i
d
l
ed
at
gi
ed
ti
st
st
ta
om
m
s
an
re
s
ss
on
co
s-
re
er
re
pr
es
en
ve | 1
,2
4
4
,4
8
1 | | C
i
d
l
ed
of
f
d
at
at
i
pl
on
st
om
pe
ns
re
es
an
co
s-
ce
rs
an
em
o
ye | 9
4
7
,3
1
7 | | C
l
ri
ch
g
s
ea
n
ar
ge | 6
9
,9
4
0 | | C
i
ti
om
m
un
ca
on
s | 11
8
,4
2
3 | | E
d
eb
d
b
ad
t
rro
rs
s
an | 2
3
,1
1
6 | | I
nt
t
e
er
es
ex
pe
ns | 8
3
7 | | O
d
i
t
st
cc
pa
nc
y
u
an
e
qu
pm
en
s
co | 2
9
5
,6
1
7 | | P
f
si
al
f
ro
s
es
on
ee | 1
0
8
,9
7
9 | | P
i
al
ot
st
ro
m
on
s
co | 3
0
,5
9
0 | | B
E
e
us
on
x
pe
ns | 1
32
,0
0
0 | | O
th
er | 2
9
7
8
,7
7 | | T
al
E
ot
es
x
pe
ns | 3
,2
6
9
,1
1
4 | | N
i
b
ef
i
et
e
e
e
ta
nc
om
or
nc
om
s
xe | 70
,4
4
3 | | P
vi
si
f
(
b
ef
i
)
i
t
ta
on
e
ro
or
en
nc
om
xe
s | 4
2
,0
74 | | N
I
et
e
nc
om | \$
2
8
,3
6
9 | See notes to financial statements. {6}------------------------------------------------ ## **RHODES SECURITIES, INC. Statement of Changes in Stockholders' Equity For the Year Ended April 30, 2022** | | C
on
om
m
St
k
oc
S
h
ar
es | C | on
om
m
S
ck
to | A | d
d
i
ti
al
on
Pa
id
-in
C
ita
l
ap | R
ai
d
et
ne
Ea
in
rn
gs | Tr
ea
y
su
r
S
ck
to
S
h
ar
es | T | re
y
as
ur
S
ck
to | T
al
ot | |-----------------------------------------------------------------------------|-----------------------------------------------------------|----|--------------------------------|----|-------------------------------------------------------------------------|--------------------------------------------------|-----------------------------------------------------------------|----|--------------------------------------|-----------------------------------| | B
al
at
an
ce
s
A
i
l
30
, 2
02
1
pr | 9
0
,0
0
0 | \$ | 21
,0
0
0 | \$ | 12
8
,1
00 | \$
26
,4
46
7 | 9
,0
00 | \$ | (7
)
6
,4
01 | \$
34
0
,1
4
5 | | C
pi
l
ta
C
tri
bu
tio
n
a
on | | | | | | | | | | | | N
i
et
e
nc
om | | | | | | 2
8
,3
6
9 | | | | 28
,3
69 | | B
al
at
an
ce
s
A
il
30
, 2
02
2
pr | 90
,0
00 | \$ | 21
,0
00 | \$ | 12
8
,1
00 | \$
29
5
,8
15 | 9
,0
00 | \$ | (7
6
,4
01
) | \$
3
6
8
.5
1
4 | See notes to financial statements. {7}------------------------------------------------ # RHODES SECURITIES,INC. Statement of Cash Flows For the Year Ended April 30, 2022 | m
C
f
h
l
f
ti
ti
vi
ti
g
as
ow
s
ro
o
pe
ra
n
ac
es | | | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----|------------------------------------| | N
i
et
e
nc
om | \$ | 2
8
,3
6
9 | | A
d
j
tm
i
l
t i
ts
to
e
to
t
us
e
en
re
co
nc
nc
ne
om
ne | | | | C
h
i
ed
ti
ti
vi
ti
n
g
as
us
o
pe
ra
n
ac
es
: | | | | D
i
i
at
d
ti
ti
on
e
pr
ec
on
an
am
or
za | | 2
,0
6
5 | | D
ef
d
b
ef
i
ta
t
x
er
re
en | | 1
0
,9
1
5 | | C
h
i
ti
d
l
i
ab
i
n
l
i
ti
g
ts
an
ge
s
o
pe
ra
an
n
as
se
es
: | | | | D
i
i
i
i
b
l
e
n
e
ec
re
as
co
m
m
ss
s
on
re
ce
va | | 6
,2
9
1 | | I
i
ad
e
n
nc
re
as
va
nc
es | | (
4
)
7
7 | | D
i
ti
ri
gh
l
t
of
e
n
g
se
ec
re
as
e
t
o
pe
ra
n
ea
us
as
se
- | | 76
,9
2
1 | | D
i
ti
l
- l
i
ab
i
l
i
e
n
g
t
ec
re
se
as
o
pe
ra
n
ea
y | | (
6
9
2
4
)
,7 | | I
i
i
d
e
n
nc
re
as
pr
e
pa
ex
pe
ns
es | | (
7
1
,6
6
)
7 | | I
i
d
b
l
d
l
i
ab
i
l
i
ti
e
n
ts
e
nc
re
as
an
ac
co
un
pa
ya
ac
cr
ue
es | | 3
,6
5
6 | | I
i
i
b
l
e
st
at
n
e
e
ta
e
nc
re
as
nc
om
s
pa
xe
ya | | 3
0 | | N
i
d
ed
et
sh
b
tin
ti
vi
ti
g
ca
pr
ov
y
es
o
pe
ra
ac | | (
1
3
,6
2
1
) | | N
i
et
i
sh
e
n
nc
re
as
ca | | (
1
3
,6
2
1
) | | C
b
gi
h
i
of
at
g
as
e
nn
n
ye
ar | | 2
2
8
,0
4
8 | | C
h
d
of
at
as
en
ye
ar | \$ | 2
1
4
,4
2
7 | | ow
S
pl
D
i
l
l
of
ta
C
h
F
l
I
nf
i
p
at
u
em
en
sc
os
ur
es
on
as
or
m
C
h
i
d
d
i
th
f
g
e
as
pa
ur
n
ye
ar
o
r | | | | I
f
ed
al
e
ta
nc
om
s
xe
er
-
t
at
e
-s | S | 5
,2
8
1
4
,9
71 | | I
nt
t
er
es | \$ | 87
3 | See notes to financial statements. {8}------------------------------------------------ ## Note 1- Nature of Business and Summary of Significant Accounting Policies ## Nature of Business: Rhodes Securities, Inc. (Company) was organized in ¹⁹⁸⁷ as ^a Texas corporation. The Company is registered with the Securities and Exchange Commission (SEC) as ^a broker-dealerin securities, and is ^a member of the Financial Industry Regulatory Authority (FINRA) and Securities Investor Protection Corporation (SIPC). The Company operates under the exemption provisions of SEC Rule ¹⁵c3-3(k)(2)(ii) of the Securities Exchange Act of ¹⁹³⁴, and accordingly, is exempt from the remaining provisions of that Rule. The Company does not hold customer funds or securities and clears all transactions on behalf of customers on ^a fully disclosed basis through ^a clearing broker-dealer. The clearing broker-dealer carries the accounts of the customers and maintains and preserves all related books and records as are customarily kept by ^a clearing broker-dealer. The Company operates as an independent full service broker-dealer in securities with its main office located in Ft. Worth, Texas. The Company supports registered representatives located throughout the United States whose customers are primarily individuals. Significant Accounting Policies: #### Leases The ROU asset represents our right to use the underlying asset for the lease term and the lease liability represents our obligation to make lease payments arising from the lease. Any future operating lease ROU asses and liabilities will be recognized at commencement date based on the present value of lease payments over the lease term. Our operating lease did not provide an implicit rate, we used our annual estimated incremental borrowing rate of 4.00% at May ¹, ²⁰¹⁹, based on the estimated rate of interest for collateralized borrowing over ^a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. ## Brokerage Commissions 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 agreed upon and the risks and rewards of ownership have been transferred to the customer. {9}------------------------------------------------ ## Distribution Fees - Mutual Funds and Annuity Products The Company earns revenue for selling mutual funds and variable annuities products. The performance obligation is satisfied at the time of each individual sale. ^A portion of the revenue is based on ^a fixed rate applied, as ^a percentage,to amounts invested at the time of sale. The remaining revenue is recognized over the time the client owns the investment or holds the contract and is generally earned based on ^a fixed rate applied, as ^a percentage, to the net asset value of the fund, or the value of the annuity contract. The ongoing revenue is not recognized at the time of sale because it is variably constrained due to factors outside the Company'^s control including market volatility and client behavior (such as how long clients hold their investment or annuity contract). The revenue will not be recognized until it is probable that ^a significant reversal will not occur. ### Use of Estimates The preparation of financial statements in conformity with ^U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of the 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. ### Fair Value of Financial Instruments Substantially all of the Company'^s financial asset and liability amounts reported in the statement of financial condition are short term in nature and approximate fair value. ## Property and Equipment Property and equipment are recorded at cost less accumulated depreciation and amortization. Depreciation and amortization are provided for using the straight-line method over the estimated useful lives of ⁴ to ⁷ years. ### Contract Balances The Company'^s timing of revenue recognition may differ from the timing of customer payments. When there is an unconditional right to payment, according to the terms of the contract, the Company records ^a receivable. For receivables with unsatisfied performance obligations, the Company records deferred revenue until the performance obligations are satisfied. Receivables with no outstanding performance obligations are recognized as revenue upon issuance of the related invoice. The Company takes into consideration the composition of the receivables, current economic conditions, the estimated net realizable value of the underlying collateral, historical loss experience, delinquency, and bankrupt accounts when determining management'^s estimate of probable credit losses and the adequacy of the allowance for credit losses.Any receivables deemed uncollectible are written off against the allowance. The Company had receivables related to contracts from customers of \$479,⁴³⁷ and \$473,¹⁴⁶ at April ³⁰, ²⁰²¹ and at April ³⁰, ²⁰²², respectively. Receivables from broker-dealers and clearing organizations are generally collected in full in the month following their accrual. As such, management has not recorded an allowance for credit losses on these receivables. The Company had no deferred revenue related to unrecognized engagement fees where the performance obligations have not yet been satisfied at April ³⁰, ²⁰²¹ and at April ³⁰,2022,respectively. {10}------------------------------------------------ ## Note 1 - Nature of Business and Summary of Significant Accounting Policies,continued ### Income Taxes Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to differences between the basis of assets and liabilities for financial and income tax reporting. Deferred tax assets and liabilities represent future tax return benefits and consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Tax benefits associated with uncertain tax positions are recognized in the period in which one of the following conditions is satisfied: (1) the more likely than not recognition threshold is satisfied; (2) the position is ultimately settled through negotiation or litigation;or (3) the statute of limitations for the taxing authority to examine and challenge foe position has expired. Tax benefits associated with an uncertain tax position are derecognized in the period in which foe more likely than not recognition threshold is no longer satisfied. Any potential interest and penalty associated with ^a tax contingency, should one arise, would be included as ^a component of income tax expense in the period in which the assessment arises. The Company is subject to state income taxes. On December ¹⁸, 2019, Financial Accounting Standards Board (FASB) issues Accounting Standard Update (ASU) No. ²⁰¹⁹-12,Simplifying the Accounting for Income Taxes to reduce the cost and complexity in accounting for income taxes in Topic ⁷⁴⁰. Prospective adoption is required in foe first quarter of fiscal ²⁰²³ with early adoption permitted, including adoption in an interim period. The Company is currently evaluating the impact this update will have on its financial statements and the timing of adoption. ### Note 2 - Net Capital Requirements The Company is subject to the SEC Uniform Net Capital Rule (SEC Rule ¹⁵c3-1), which requires foe maintenance of minimum net capital and requires that foe ratio of aggregate indebtedness to net capital, both as defined, shall not exceed ¹⁵ to ¹. Rule ¹⁵c3-¹ also provides that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed ¹⁰ to ¹. At April ³⁰,2022, foe Company had net capital of \$264,371, which was \$214,³⁷¹ inexcess of its required net capital of \$50,000. The Company'^s net capital ratio was 1.87 to ¹. ### Note 3 - Transactions with Clearing Broker-Dealer The Company has an agreement with ^a clearing broker-dealer to provide clearing, execution and other related securities services. Clearing charges are incurred at ^a fixed rate multiplied by foe number of tickets traded by foe Company. The agreement requires the Company to maintain ^a minimum of \$75,⁰⁰⁰ in ^a deposit account with the clearing broker-dealer. {11}------------------------------------------------ ### Note 4 - Property and Equipment Property and equipment consists of the following: | F
ni
tu
re
ur | \$ | 7
7
,0
4
8 | |--------------------------------------------------------------------------------------------------------------------------------------------|----|-----------------------------------| | E
i
t
qu
pm
en | | 9
1
,8
4
8 | | L
h
ol
d
i
ts
ea
se
m
pr
ov
em
en | | 2
9
.4
2
5 | | | | 1
9
8
,3
4
8 | | L
ul
d
i
ed
i
d
ti
at
at
ti
es
s
on
ac
cu
m
e
pr
ec
on
an
am
or
za | | (
1
91
,8
4
1
1 | | | £ | 8.
50
7 | Depreciation and amortization expense totaled \$2,⁰⁶⁵ for the year and is reflected in the accompanying statement of income as occupancy and equipment costs. #### Note 5 - Income Taxes The provision for income taxes consists of the following: | C
f
ed
al
i
nt
ta
e
ur
re
er
nc
om
ex
pe
e
x
ns | \$ | 2
5
,0
2
8 | |-----------------------------------------------------------------------------------------------------------------------|----|------------------------| | D
ef
d
i
ef
(
b
i
)
ta
t
e
er
re
nc
om
ex
pe
ns
e
x
en | | 1
0
,9
1
5 | | C
i
nt
st
at
e
ta
e
e
ur
re
nc
om
ex
x
pe
ns | | 6
.1
3
1 | | T
al
i
(
b
ef
i
)
ot
ta
t
e
e
nc
om
ex
pe
ns
en
x | £ | 42
.0
74 | The Company'^s current federal income tax expense differs from the expected income tax expense from applying statutory rates to net income (toss) before income taxes because of permanent differences related to nondeductible expenses and state taxes. Deferred income tax assets,liabilities: | N
d
et
i
t
t
pr
op
er
y
an
e
qu
pm
en | \$ | 1
4
,3
9
4 | |---------------------------------------------------------------------------------|----|------------------------| | N
d
ef
d
et
ta
t
er
re
x
as
se | £ | 14
39
4 | #### Note 6 - Defined Contribution Plan The Company has ^a qualified 401(k) profit sharing plan which covers all employees meeting certain eligibility requirements. Eligible employees may make elective contributions not to exceed statutory limits and the Company may make discretionary matching and profit sharing contributions. Employee contributions vest immediately and Company contributions are on ^a 6 year vesting schedule. The Company made discretionary matching contributions of \$72,⁴²⁷ and incurred administrative fees totaling \$3,525 for the year ended April ³⁰, ²⁰²². {12}------------------------------------------------ ## Note 7 - Off-Balance-Sheet Risk and Concentration of Credit Risk As discussed in Note ¹, the Company'^s customers' securities transactions are introduced on ^a fully disclosed basis with its clearing broker-dealer. The clearing broker-dealer carries the accounts of the customers of the Company and is responsible for execution, collection and payment of funds, and receipt and delivery of securities relative to customer transactions. Off-balance-sheet risk exists with respect to these transactions due to the possibility that customers may be unable to fulfill their contractual commitments wherein the clearing broker-dealer may charge any losses incurred to the Company. The Company seeks to minimize this risk through procedures designed to monitor the credit worthiness of its customers and that customer transactions are executed properly by the clearing broker-dealer. The Company has commissions receivable and ^a clearing deposit due from and held by its clearing broker-dealer of \$473,¹⁴⁵ and \$75,000, respectively, totaling \$548,145, which represents approximately ⁶⁰% of the Company'^s total assets. ## Note 8 - Commitments and Contingencies ## Commitments The Company leases office facilities in Fort Worth, TX under ^a noncancelable operating lease expiring in May ²⁰²². The lease requires the Company to pay its pro rata share of certain operating expenses in excess of ^a specified amount. Future minimum lease commitments follow for each of the years ending April ³⁰; | 2
0
2
3 | \$
1
0
1
.7
5 | |----------------------------------------------------------------------------------------------|------------------------------| | | \$
1
0
,7
1
5 | | P
l
: P
nt
l
ad
j
tm
ue
t
re
se
us
va
us
en | 7
,1
9
7 | | O
l
ti
l
i
ab
i
l
i
t
g
pe
ra
n
ea
se
y
- | \$
1?
17
.9 | Lease expense for the year relating to office facilities was \$102,467. ## Note 9 - Related Party Transactions The Company and Rhodes Investment Advisors, Inc. {RIA), ^a related party registered investment advisor and insurance sales company, are under common control, and the existence of that control creates operating results and financial position significantly different than if the companies were autonomous. The Company earned and reported \$581,⁷⁸⁴ in variable annuity commissions received by RIA during the year through dual licensed registered representatives with RIA. {13}------------------------------------------------ ### Note 9 - Related Party Transactions, continued Investment advisory fees received by the Company during the year from its clearing broker-dealer, totaling approximately \$3.4 million, were earned and reported as revenue of RIA. The Company has ^a Services Agreement (Agreement) with RIA, effective July ²⁰⁰⁷. The Agreement is for ^a one year term, automatically renews on ^a year to year basis unless terminated by either party on ³⁰ days notice prior to expiration of an annual term. Under the Agreement, the Company is to provide office facilities, personal property and support services. The Company invoices RIA monthly for the expenses allocated and support services provided. The amounts invoiced and billed were not consummated on terms equivalent to arms length transactions and fluctuate on ^a monthly basis. The total amount billed to RIA under this Agreement were approximately \$342,⁰⁰⁰ for the year ended April 30, ²⁰²² and have been reported as expense reimbursements or reductions of various expenses in the statement of income. The Company is the common paymaster for RIA'^s registered representatives. The Company generally settles the amounts due to or from RIA monthly and at April ³⁰, ²⁰²² no money was due to the Company from RIA. ### Note 10 -Subsequent Events In March, ²⁰²⁰, the World Health Organization declared the outbreak of ^a novel coronavirus (COVID-19) as ^a pandemic, which continues to spread globally. While the disruption is currently expected to be temporary, there is uncertainty around the duration. Therefore, the effects upon our business, results of operations, cash flows and financial position cannot be reasonably estimated at this time. On May ⁴, ²⁰²², the Company entered into one operating lease relating to the main office which begins on June ¹. ²⁰²² and expires on May ³¹, ²⁰²⁹. According to the terms of the lease agreement, space was offered on an "as-is" basis withno option to renew or extend beyond the end of thelease term. Management has evaluated the Company'^s events and transactions that occurred subsequent to April ³⁰, ²⁰²², through June ²⁴, 2022, the date the financials were available to be issued, and determined that no additional financial statement recognition or disclosure is necessary. {14}------------------------------------------------ ## **Schedule I** # **RHODES SECURITIES, INC. Supplemental Information Pursuant to Rule 17a-5 As of April 30, 2022** # **Computation of Net Capital** | T
al
ot
k
h
ol
d
s'
i
st
t
al
if
i
ed
f
pi
l
t c
ta
oc
er
e
qu
y
qu
or
ne
a | | \$ | 3
6
8
,5
1
4 | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------|----------|-----------------------------------| | D
ed
i
t
d
/
ch
uc
on
s
an
or
ar
s
ge | | | | | N
l
l
ab
l
e
ts
on
-a
ow
as
se
: | | | | | C
i
i
i
b
l
e
om
m
ss
on
s
re
ce
va | \$
4
2
,5
6 | | | | R
el
ed
i
b
at
rt
l
pa
y
es
re
ce
va | 54
3 | | | | D
ef
d
ta
t
er
re
x
as
se | 1
4
,3
9
4 | | | | P
i
d
es
re
pa
ex
pe
ns | 7
3
,2
58 | | | | P
f
i
d
ed
al
i
ta
re
pa
er
e
nc
om
x | 4
,9
1
5 | | | | P
d
rt
i
t
y
et
ro
pe
an
e
qu
pm
en
,n | 6
,5
0
7 | | (
1
04
,1
4
3
) | | N
pi
l
et
ta
ca | | \$ | 2
6
4
,3
7
1 | | A
I
te
nd
eb
ed
t
g
gr
e
ga
ss
ne | | | | | A
b
l
d
d
l
i
ab
i
l
i
i
nt
e
t
cc
ou
s
pa
ya
an
ac
cr
ue
es | | \$ | 4
4
3
,1
0
9 | | I
t
b
l
e
e
nt
nc
om
ax
es
pa
ya
cu
rre
- | | | 50
,5
6
7 | | T
al
i
nd
eb
ot
ed
te
t
a
g
gr
e
ga
ne
ss | | \$ | 4
9
3
,6
6
7 | | C
i
t
on
of
B
i
N
C
at
et
pi
a!
R
i
c
t
om
t
pu
as
a
e
qu
re
m
en | | | | | um
M
i
ni
pi
al
i
d
(
t
f
\$
t c
50
,0
0
0
m
te
ne
a
re
qu
re
gr
ea
r o
or | | | | | %
/
of
6
2
3
i
nd
eb
ed
t
)
te
a
g
gr
e
ga
ne
ss | | \$ | 5
0
,0
0
0 | | um
N
pi
l
i
et
ta
of
i
ni
n
i
t
ca
ex
ce
ss
m
m
re
qu
re
m
en | | \$ | 2
1
4
,3
7
1 | | R
i
of
at
i
nd
eb
ed
t
o
te
pi
l
to
t c
ta
a
g
gr
e
ga
ne
ss
ne
a | | 1.
87 | to
1 | | | | | | **Reconciliation of Computation of Net Capital** The above computation does not differ from the computation of net capital under Rule ¹⁵c3-¹ as of April 30, ²⁰²² as filed by Rhodes Securities, Inc. on form ^X-17-A-5. Accordingly, no reconciliation is necessary. {15}------------------------------------------------ ![](_page_15_Picture_0.jpeg) # **Report of Independent Registered Public Accounting Firm** **The Board of Directors Rhodes Securities, Inc.** **We have reviewed management'^s statements, included in the accompanying Rhodes Securities, Inc '^s Exemption Report (the exemption report), in which'** - **¹) Rhodes Securities, Inc. states Rhodes Securities,. Inc. claims an exemption under paragraph (k)(2)(ii) of ¹⁷ ^C.F.R. §²⁴⁰ ¹⁵c3-3 (the exemption provisions);** - **²) Rhodes Securities, Inc states Rhodes Securities, Inc. met the identified exemption provisions throughout the most recent fiscal year without exception; and** - **³) Rhodes Securities, Inc. states Rhodes Securities, Inc, is also filing the exemption report relying on Footnote ⁷⁴ of the SEC Release No, ³⁴-⁷⁰⁰⁷³ adopting amendments to ¹⁷ ^C.F.R. §240.17a-5 (Footnote 74) because, throughout the most recent fiscal year, without exception:** - **• Rhodes Securities, Inc. limits its other business activities contemplated by Footnote ⁷⁴ to (1) effecting securities transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to Rhodes Securities, Inc.; and** - **• Rhodes Securities, Inc. (1) did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers, other than funds received and promptly transmitted for effecting transactions via subscriptions on ^a subscription way basis where the funds are payable to the issuer or its agent and not to the Rhodes Securities, Inc.; (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts (as defined in Rule ¹⁵c3-3).** **Rhodes Securities, Inc.'s management is responsible for compliance with the exemption provisions and the provisions of Footnote ⁷⁴ 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 Rhodes Securities, Inc.'^s compliance with the exemption provisions and the provisions of Footnote ⁷⁴. ^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 exemption provisions set forth in paragraph (k)(2)(ii) of ¹⁷ ^C.F.R. §240.15c3-³ and the provisions of Footnote 74 of SEC Release No. ³⁴-70073.** **Dallas, Texas June 28, 2022** {16}------------------------------------------------ ![](_page_16_Picture_0.jpeg) endurance. itringth. usmn # **Rhodes Securities, Inc'^s Exemption Report** Rhodes Securities, Inc. (the "Company") is ^a registered broker-dealersubject to Rule ¹⁷a-⁵ promulgated by the Securities and Exchange Commission (17C.F.R. §240.17^a-5, "Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by ¹⁷ ^C.F.R. §240.17^a-5(d)(l) and (4). To the best of its knowledge and belief, the Company statesthe following: - (1) The Company claimed an exemption from ¹⁷ ^C.F.R.§240.15c3-³ under the following provisions of ¹⁷ ^C.F.R. §240.15c3-3(k):(2)(ii). - (2) The Company met the identified exemption provisions in ¹⁷ ^C.F.R.§240.15c3-3(k) throughout the most recent fiscal year without exception. - (3) The Company is also filing this Exemption Report because the Company'^s other business activities contemplated by Footnote ⁷⁴⁴ of the SEC Release No. ³⁴-⁷⁰⁰⁷³ adopting amendments to ¹⁷ ^C.F.R.§240.17a-⁵ are limited to effecting securities transactions via subscriptions on ^a subscription way basis where the funds are payable to the issuer or its agent and not to the Company, and the Company (1) did not directly or indirectly receive, hold, or otherwise owe funds or securitiesfor or to customers, (other than funds received and promptly transmitted for effecting transactions via subscriptions on ^a subscription way basis where the funds are payable to the issuer or its agent and not to the Company); (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts(as defined in Rule ¹⁵c3-3) throughout the most recent fiscal year without exception. Rhodes Securities, Inc. ^I, Gordon Rhodes,swear (or affirm) that, to my best knowledge and belief, this exemption report is true and correct. By: Title: CEO 06/17/2022 ¹ ori Worih Club IhitMmg « Sum\* ¹⁰⁰⁰ ³⁰⁶ West ⁷ih Stnrt \* Tort Worth, Tocas ⁷⁶¹⁰²- ⁴⁹⁰⁵ ph 817 334.0455 \* tt ⁸⁰(¹ 33b 0455 . tx 817 334 1)063 \vu \^x rhcxlessi turnit^s com Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.