# INTERNATIONAL RESEARCH SECURITIES, INC. X-17A-5 (2021-03-01) — Broker-dealer annual report - Company: INTERNATIONAL RESEARCH SECURITIES, INC. - Form: X-17A-5 - Filed: 2021-03-01 - Period: 2020-12-31 - Accession: 0000814558-21-000001 - CIK: 814558 - File #: 8-37954 - Material weakness: No - Auditor: McBee & Co., PC - Auditor location: Dallas, TX - Contact: Michael Holland - Phone: 972-888-6034 - Website: mcbeeco.com - Signed by: Michael Holland (President) Original filing: https://www.sec.gov/Archives/edgar/data/814558/000081455821000001/irs2020audit.pdf --- {0}------------------------------------------------ | | UNITEDSTATES | | OMB APPROVAL | |-----------------------------------------|----------------------------------------------------------------------------------------------------|----------------------------------------------------------|------------------------------------------------| | | SECURITIESANDEXCHANGECOMMISSION | | Number:
0MB
3235-0123
October 31,2023 | | | Washington,
D.C.
20549 | | Expires:
Estimated average burden | | | ANNUAL
AUDITED | REPORT | hours per response
12.00 | | | X-17A-5
FORM | | | | | | | SEC FILE NUMBER | | | III
PART | | 8-37954 | | Information
Securities | FACING PAGE
Required
of
Brokers
and
Dealers
Exchange
Act
of
1934
and | Pursuant
to
Section
Rule
17a-5
Thereunder | of
17
the | | | 01/01/20 | AND ENDING 12/31/20 | | | REPORT FOR THE PERIOD BEGINNING | MM/DD/YY | | MM/DD/YY | | | A.
REGISTRANT
IDENTIFICATION | | | | NAME OF BROKER-DEALER: International | Research | Inc.
Securities, | | | | | | OFFICIAL USE ONLY | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: | (Do not use P.O. | Box No.) | FIRM I.D.
NO. | | Freeway,
3010
LBJ | 1200
Suite | | | | | (No.
and Street) | | | | Dallas | Texas | | 75234 | | (City) | (State) | | (Zip Code) | | Michael Holland | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT | | 972-888-6034 | | | | | (Area Code -Telephone
Number) | | | B.
ACCOUNTANT
IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report* | | | | Co.,
McBee
&
PC | | | | | | (Name -if
individual, state last, first, middle name ) | | | | 718
Paulus | Dallas | Texas | 75214 | | (Address) | (City) | (State) | (Zip Code) | | CHECK ONE: | | | | | 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 offacts 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 inthisform arenotrequired to respond** SEC 1410 **unlessthe formdisplays a currently validOMBcontrolnumber.** (11-05) {1}------------------------------------------------ #### **OATH OR AFFIRMATION** | financial statement and supporting schedules pertaining to the firm
of
Inc.
Securities,
International Research
,
,are
,
December
31
2020
true and correct.
I further swear (or
neither the company nor any partner, proprietor, principal
officer or director has any proprietary interest in
any account
except as follows:
Signature
President
Title
itg
MARIE S.
r
RAMIREZ
v£.?
,*e».
My Notary ID # 131094484
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'
'
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Expires April 19, 2021
This report ** contains (check all applicable boxes):
0
(a) Facing Page.
PI
(b) Statement
of Financial Condition.
p
(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).
1 (d)
Statement of Changes in Financial Condition.
(e) Statement of Changes in Stockholders'
Sole Proprietors'
Capital.
Equity or Partners' or
in Liabilities Subordinated to Claims of Creditors.
(f) Statement of Changes
~
(g) Computation
of Net Capital.
(h) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3.
£
3
Information Relating to the Possession or Control Requirements Under Rule 15C3-3.
0)
(j)
A Reconciliation, including appropriate
explanation of the Computation of Net Capital Under Rule 15c3-1
_J
and the
Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3.

(k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of
consolidation.
(l) An Oath or Affirmation.
§
(m) A copy of the SIPC Supplemental Report.
(n) A report describing any material inadequaciesfound to exist or found to have existed since the date of the previous audit. | I
1 Michael
Holland
> | ,
swear (or affirm) that, to
the best of | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------|------------------------------------------------| | | my knowledge and belief the accompanying | as | | | 0f | affirm) that | | | classified solely as that of a customer, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | **For conditions of confidential treatment of certain portions of this filing, see section 240.17a-5(e)(3). | | {2}------------------------------------------------ **Financial Statements With Supplemental Information Year Ended December 31, 2020** {3}------------------------------------------------ # CONTENTS | REPORT
OF
INDEPENDENT | 1 | | |---------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|-------| | FINANCIAL
STATEMENTS | | | | Statement
of
financial | condition | 2 | | Statement
of
operations | | 3 | | Statement
of
changes | stockholder's
equity
in | 4 | | Statement
of
cash
flows | | 5 | | Notes
to
financial | statements | | | Supporting
Schedules | | | | Schedule
I: | 15c3-l
Computation
of
Net
Capital
Under
Rule
of
Securities
and
Commission
the
Exchange | 11-12 | | II:
Schedule | Computation
for
Determination
of
Reserve
15c3-3
the
Requirements
Under
Rule
of
Securities
and
Exchange
Commission | 13 | | OF
REPORT
INDEPENDENT
MANAGEMENT'S
ON | REGISTERED
PUBLIC
ACCOUNTING
FIRM
EXEMPTION
REPORT | 14 | | BROKER-DEALER
ANNUAL | EXEMPTION
REPORT | 15 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) A Professional Corporation Certified Public Accountants ### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** # **To the Stockholder of International Research Securities, Inc.** #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of International Research Securities,Inc. as of December 31, 2020, the related statements of operations, changes in stockholder's 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 International Research Securities, Inc. as of December 31, 2020, 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 International Research Securities,Inc.'s management. Our responsibility is to express an opinion on International Research Securities, Inc.'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 International Research Securities, Inc. 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 that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. #### **Auditor's Report on Supplemental Information** The supplemental information contained in Schedule I, Computation of Net Capital Under Rule 15c3-lof the Securities and Exchange Commission and Schedule II, Computation for Determination of Reserve Requirements Under Rule 15c3-3 of the Securities and Exchange Commission has been subjected to audit procedures performed in conjunction with the audit of International Research Securities, Inc.'s financial statements. The supplemental information is the responsibility of International Research Securities,Inc.'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 17 C.F.R. §240.17a-5. In our opinion, the supplemental information contained in Schedule I, Computation of Net Capital Under Rule 15c3-lof the Securities and Exchange Commission and Schedule II, Computation for Determination of Reserve Requirements Under Rule 15c3-3 of the Securities and Exchange Commission is fairly stated,in all material respects,in relation to the financial statements as a whole. **McBee & Co., PC** We have served as International Research Securities,Inc.'s auditor since 2016. Dallas, Texas February 28, 2021 718 Paulus Avenue • Dallas,Texas 75214 • (ph) 214.823.3500 • www.mcbeeco.com Dallas|Keller/Southlake {5}------------------------------------------------ # **INTERNATIONAL RESEARCH SECURITIES, INC. STATEMENT OF FINANCIAL CONDITION AS OF DECEMBER 31, 2020** ## **ASSETS** | Cash
and
cash
equivalents | \$
57,497 | |---------------------------------------------------------------------|---------------| | Commissions
receivable | 27,263 | | Securities
owned
at
fair
value | 290,041 | | Other
assets | 7,513 | | TOTAL
ASSETS | \$
382,314 | | | | | STOCKHOLDER'S
LIABILITIES
AND
EQUITY | | | Liabilities | | | Accounts
payable | \$
12,168 | | payable
Commissions | 88,038 | | Loan
SBA
PPP | 55,947 | | Total
Current
Liabilities | 156,153 | | Stockholder's
Equity | | | 100,000
Stock,
shares
\$1.00
Common
authorized
of | | | value,
11,000
shares
issued
and
outstanding
par | 11,000 | | paid-in-capital
Additional | 49,462 | | earnings
Retained | 165,699 | | Stockholder's
Total
Equity | 226.161 | | TOTAL
STOCKHOLDER'S
LIABILITIES
AND
EQUITY | \$
382,314 | {6}------------------------------------------------ # **INTERNATIONAL RESEARCH SECURITIES, INC. STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2020** | Revenues | | |-----------------------------------------------------------------------|---------------| | Commission
income | \$
563,287 | | Total
Revenues | 563,287 | | Expenses | | | Compensation | 397,536 | | Regulatory
fees
and
expenses | 8,655 | | Occupancy | 40,315 | | Other
expenses | 133,561 | | Expenses
Total | 580,067 | | before
other
loss
for
taxes
Income
and
provision | (16,780) | | Dividend
income | 7,974 | | Unrealized
and
realized
gain
securities
owned
on | 69,574 | | before
taxes
Income
provision
for | 60,768 | | for
state
taxes
Provision
income | | | Net
Income
(Loss) | \$
60,768 | {7}------------------------------------------------ # **INTERNATIONAL RESEARCH SECURITIES, INC. STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY FOR THE YEAR ENDED DECEMBER 31, 2020** | | Common
Additional
Paid-in-Capital
Stock | | Retained
Earnings | | Total | | |-------------------------------------|--------------------------------------------------|----|----------------------|----|----------|---------------| | 31,
Balance,
December
2019 | \$11,000 | \$ | 49,462 | \$ | 124,931 | \$185,393 | | Capital
Contributions | | | | | | | | Distributions | | | | | (20,000) | (20,000) | | Income
Net | | | | | 60,768 | 60,768 | | 31,
December
2020
Balance, | \$11,000 | | \$49,462 | \$ | 165,699 | \$
226,161 | {8}------------------------------------------------ # **INTERNATIONAL RESEARCH SECURITIES, INC. STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2020** | CASH
FLOWS
PROVIDED
(USED)
BY
OPERATING
ACTIVITIES | | |--------------------------------------------------------------------------------|--------------| | Net
income | \$
60,768 | | Adjustments
to
reconcile
to
net
cash
provided
net
loss | | | operating
activities:
(used)
by | | | on
securities
owned
Unrealized
gain | (66,224) | | gains,
net,
securities
owned
Realized
on | (3,350) | | Changes
and
assets
liabilities
in | | | Increase
commission
receivable
in | (21,422) | | other
Decrease
assets
in | 1,485 | | Decrease
accounts
payable
in | (1,295) | | Decrease
payable
commissions
in | (89,885) | | (used)
cash
operating
activities
Net
provided
by | (119,923) | | FLOWS
FROM
CASH
INVESTING
ACTIVITIES | | | Proceeds
from
sales
of
securities
owned | 45,000 | | Purchases
of
securities
owned | (20,000) | | Dividends
re-invested
securities
owned
in | (7,974) | | Cash
net
cash
provided
activities
flow
by
investing | 17,026 | | CASH
FLOWS
FROM
FINANCING
ACTIVITIES | | | PPP
proceeds
SBA
Loan | 55,947 | | Distributions
to
stockholder | (20,000) | | net
cash
financing
activities
Cash
flow
provided
by | 35,947 | | (decrease)
Net
increase
cash
and
cash
equivalents
in | (66,950) | | and
cash
equivalents
at
of
year
Cash
beginning | 124,447 | | Cash
and
cash
equivalents
at
end
of
year | \$
57,497 | {9}------------------------------------------------ ### **NOTES TO FINANCIAL STATEMENTS** ## **DECEMBER 31, 2020** # **NOTE 1 -Summary of Significant Accounting Policies** ### **Nature of Operations and Basis of Presentation:** International Research Securities, Inc. (the "Company") is a broker-dealer in securities registered with the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority ("FINRA"). The Company is considered "Non-Covered Firm" exempt from 17 C.F.R. § 240.15c3-3 and is filing an Exemption Report relying on footnote 74 to SEC Release 34-70073, and as discussed in Q&A 8 of the related FAQ issued by the SEC staff. The Company limits its business activities exclusively to municipal securities broker, including 529 plans, mutual fund retailer-application way only and broker selling variable life insurance or annuities. The Company does not hold customer funds or securities. The Company's customers are located throughout the United States. The accounting and reporting policies of the Company conform to U.S. generally accepted accounting principles and to general practices within the securities industry. These financial statements were approved by management and available for issuance on February 28, 2021. Subsequent events have been evaluated through this date. ### **Cash and Cash Equivalents:** For purposes of reporting cash flows, the Company has defined cash equivalents as highly liquid investments, with original maturities of less than ninety days, which are not held for sale in the ordinary course of business. #### **Commissions Receivable:** Commissions receivable are generally collected in full in the month following their accrual. As such, management has not recorded an allowance for doubtful accounts on these receivables. Management records an allowance for bad debts based on a collectability review of specific accounts. Any receivables deemed uncollectible are written off against the allowance. ### **Revenue Recognition:** On May 28, 2014, the Financial Accounting Standards Board (FASB) issued a new accounting standard on revenue recognition, Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606). The core principle of the revised revenue recognition standard is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those good or services. {10}------------------------------------------------ ### **NOTES TO FINANCIAL STATEMENTS** ### **DECEMBER 31, 2020** # **NOTE 1 -Summary of Significant Accounting Policies (Continued)** #### **Revenue Recognition: (cont.)** To apply the proposed revenue recognition standard, ASU No. 2014-09 states that an entity should follow five steps: ( 1 ) Identify the contract(s) with a customer, (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 (or as) the entity satisfies a performance obligation. Revenue from contracts with customers is recognized when, or as, the Company satisfies its performance obligations by transferring promised goods or services to 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 at a point in time is recognized at the point in time that the Company determines the customer obtains control over the promised good or service. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for those promised goods or services. The Company earns revenue for selling unaffiliated mutual funds and fixed annuity 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 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 client holds their investment or annuity contract). The revenue will not be recognized until it is probable that a significant reversal will not occur. ### **Income Taxes:** The Company files as an "S" corporation for Federal income tax purposes. The Company's net income is taxed at the shareholder level rather than at the corporate level for Federal income tax purposes, and thus, no provision for Federal income taxes has been made in the accompanying financial statements. The Company is liable for income taxes in the State of Texas, subject to certain exemptions. 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's federal and state income tax returns are subject to examination over various statutes of limitations generally ranging from three to five years. {11}------------------------------------------------ # **NOTES TO FINANCIAL STATEMENTS** # **DECEMBER 31, 2020** # **NOTE 1 -Summary of Significant Accounting Policies (Continued)** ### **Use of Estimates:** The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. # **NOTE 2 - Net Capital Requirements** Pursuant to the net capital provisions of Rule 15c3-l of the Securities Exchange Act of 1934, the Company is required to maintain a minimum net capital, as defined under such provisions. Net capital and the related net capital ratio may fluctuate on a daily basis. At December 31, 2020, the Company had net capital of \$231,089 and net capital requirements of \$6,680. The Company's ratio of aggregate indebtedness to net capital was .43 to 1 . The Securities and Exchange Commission permits a ratio of no greater than 15 to 1 . Capital distributions to the stockholder can be made under a capital distribution policy approved by the Company's board of directors. Periodic distributions approved by the board of directors are made in order to enable the stockholder to pay federal income taxes on company profits, among other purposes. # **NOTE 3 -Exemption from Rule 15c3-3** The Company is considered "Non-Covered Firm" exempt from 17 C.F.R. § 240.15c3-3 and is filing an Exemption Report relying on footnote 74 to SEC Release 34-70073, and as discussed in Q&A 8 of the related FAQ issued by the SEC staff. The Company limits its business activities exclusively to municipal securities broker, including 529 plans, mutual fund retailer-application way only and broker selling variable life insurance or annuities. {12}------------------------------------------------ # **NOTES TO FINANCIAL STATEMENTS** ## **DECEMBER 31, 2020** ## **NOTE 4 — 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 other proceedings in the ordinary course of business. The ultimate outcome of any such future action against the Company could have adverse impact on the financial condition, results of operations, or cash flows of the Company. The Company had no commitments or contingencies that were required to be accrued or disclosed. # **NOTE 5 -Concentration of Credit Risk** The Company is engaged in brokerage activities in which it engages in investment activities with limited partnerships and limited liability companies throughout the United States. In the event the 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 counter-party. The Company's financial instruments that are subject to concentrations of credit risk primarily consist of cash. The Company places its cash with one high credit quality institution. At times,such cash may be in excess of the FDIC insurance limits. The Company believes that it is not exposed to any significant risk related to cash. # **NOTE 6 -Securities Owned** FASB ASC 820 defines fair value, establishes a framework for measuring fair value, and establishes a fair value hierarchy which prioritizes the inputs to valuation techniques. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Valuation techniques that are consistent with the market, income or cost approach, as specified by FASB ASC 820, are used to measure fair value. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: - Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. - 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 are unobservable inputs for the asset or liability and rely on management's own assumptions about the assumptions that market participants would use in pricing the asset or liability. For the year ended December 31, 2020, the application of valuation techniques applied to similar assets and liabilities has been consistent. The fair value of all securities owned are deemed to be Level 1 Investments at December 31, 2020. {13}------------------------------------------------ ### **NOTES TO FINANCIAL STATEMENTS** ### **DECEMBER 31, 2020** # **NOTE 7 -Liabilities Subordinated to Claims of General Creditors** During the year ended December 31, 2020, there were no subordinated liabilities to the claims of general creditors. Accordingly, a statement of changes in liabilities subordinated to claims of general creditors has not been included in these financial statements. # **NOTE 8 -Recently Issued Accounting Pronouncements** Recently issued accounting standards that have been issued or proposed by the Financial Accounting Standards Board ("FASB") or other standards-setting bodies are not expected to have a material impact on the Company's financial position or results of operations. The Company plans to adopt any new standards in line with prospective timelines. ## **NOTE 9 — Paycheck Protection Program established by the CARES Act** On May 6, 2020, the Company received loan proceeds of \$55,947 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 loan matures on May 5, 2022 and bears interest at a rate of 1.00% per annum, payable monthly commencing on May 5, 2021. 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. {14}------------------------------------------------ **Supplemental Information Pursuant to Rule 17a-5 of the Securities Exchange Act of 1934 as of** **December 31, 2020** {15}------------------------------------------------ ### **Schedule I** # **INTERNATIONAL RESEARCH SECURITIES, INC. Computation of Net Capital Under Rule 15c3-l of the Securities and Exchange Commission As of December 31, 2020** # **COMPUTATION OF NET CAPITAL** Total stockholder's equity qualified for net capital \$ 226,161 Deductions and/or charges Non-allowable assets: Other assets Other deductions or charges Net capital before haircuts on securities positions (34,776) 83,210 274,595 Haircuts on securities (computed, where applicable, pursuant pursuant to Rule 15c3-1(f)) (43,506) Net Capital \$ 231,089 **AGGREGATE INDEBTEDNESS** Items included in statement of financial condition: Acccounts payable Commissions payable \$ 12,168 88,038 Total aggregate indebtedness \$ 100,206 See accompanying report of independent registered public accounting firm. {16}------------------------------------------------ ### **Schedule I (continued)** # **INTERNATIONAL RESEARCH SECURITIES, INC. Computation of Net Capital Under Rule 15c3-l of the Securities and Exchange Commission As of December 31, 2020** ## **COMPUTATION OF BASIC NET CAPITAL REQUIREMENT** | capital
Minimum
net
required | | |----------------------------------------------------------------------------|----------------| | (6
2/3%
of
indebtedness)
aggregate | \$
6,680 | | dollar
Net
Capital
Requirement
of
Reporting
Minimum | | | Broker
or
Dealer | \$
5,000 | | Net
Capital
Requirement
Minimum | \$
6,680 | | Net
Capital
in Excess
of
Requirement
Minimum | \$
224,409 | | Net
Capital
Excess
of
Required
1000%
in
Minimum
at | \$
221,068 | | INDEBTEDNESS
TO
RATIO
OF
AGGREGATE
NET
CAPITAL | .43
to
1 | ## **RECONCILIATION WITH COMPANY'S COMPUTATION** No material differences existed between the audited computation of net capital pursuant to Rule 15c3-l as of December 31, 2020 and the corresponding unaudited filing of part ITA of the FOCUS Report/Form X-17a-5 filed by International Research Securities, Inc. See accompanying report of independent registered public accounting firm. {17}------------------------------------------------ ### **Schedule II** ### **INTERNATIONAL RESEARCH SECURITIES, INC. Computation for Determination of Reserve Requirements Under Rule 15c3-3 of the Securities and Exchange Commission As of December 31, 2020** ### **EXEMPTIVE PROVISIONS** The Company is considered "Non-Covered Finn" exempt from 17 C.F.R. § 240.15c3-3 and is filing an Exemption Report relying on footnote 74 to SEC Release 34-70073, and as discussed in Q&A 8 of the related FAQ issued by the SEC staff. The Company limits its business activities exclusively to municipal securities broker, including 529 plans, mutual fund retailer-application way only and broker selling variable life insurance or annuities. See accompanying report of independent registered public accounting firm. {18}------------------------------------------------ **Report of Independent Registered Public** **Accounting Firm on Management's** **Exemption Report** {19}------------------------------------------------ ![](_page_19_Picture_0.jpeg) A Professional Corporation Certified Public Acrounlants ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** # **To the Stockholder of International Research Securities, Inc.** We have reviewed management's statements, included in the accompanying Exemption Report, in which (1) International Research Securities, Inc. does not claim an exemption under paragraph (k) of 17 C.F.R. §240.15c3-3, and (2) International Research Securities, Inc. is filing the Exemption Report relying on Footnote 74 of the SEC Release No. 34-70073 as a Non-Covered Firm as it limits its business activities exclusively to municipal securities broker, including 529 plans, mutual fund retailer -application way only; and broker selling variable life insurance or annuities and International Research Securities,Inc. (1) did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers, (other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of Rule 15c2-4 and/or 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 International Research Securities, Inc.; (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, December 31, 2020, without exception. International Research Securities, Inc/s management is responsible for compliance with the Non-Covered Firm Provision and its statements. Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included inquiries and other required procedures to obtain evidence about International Research Securities,Inc/s compliance with the Non-Covered Firm Provision. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to management's statements referred to above for them to be fairly stated,in all material respects, based on the Non-Covered Firm Provision. **McBee & Co., PC** Dallas, Texas February 28, 2021 {20}------------------------------------------------ ![](_page_20_Picture_0.jpeg) ## **BROKER-DEALER ANNUAL EXEMPTION REPORT** ### **DECEMBER 31, 2020** International Research Securities, Inc. (the "Company") is a registered broker-dealer subject to Rule 17a-5 promulgated by the Securities and Exchange Commission (17 C.F.R. §240.17a-5, "Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R. §240.17a-5(d)(1) and (4). To the best of its knowledge and belief the Company states the following: (1) The Company is considered "Non-Covered Firm" exempt from 17 C.F.R. § 240.15c3-3, and is filing an Exemption Report relying on footnote 74 to SEC Release 34-70073, and as discussed in Q&A 8 of the related FAQ issued by the SEC staff. The Company limits its business activities exclusively to municipal securities broker, including 529 plans, mutual fund retailer-application way only and broker selling variable life insurance or annuities. (2) The Company (1) did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers, other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of Rule 15c2-4; (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. # **INTERNATIONAL RESEARCH SECURITIES, INC.** I, Michael Holland, swear (or affirm) that, to my best knowledge and belief, this Exemption Report\*e andxorrect. By: Michael Holland CEO CTOv\*- ^2021 3010 LBJ Suite 1200\* Dallas,TX \* 75234 \**p* 972-888-6030\* Member FINRA, SIPC Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.