# PTR, INC. X-17A-5 (2023-07-26) — Broker-dealer annual report - Company: PTR, INC. - Form: X-17A-5 - Filed: 2023-07-26 - Period: 2023-04-30 - Accession: 0000834168-23-000007 - CIK: 834168 - File #: 8-39854 - Type: Broker-dealer - Material weakness: Yes - Auditor: Raines and Fischer LLP - Auditor location: New York, NY - Contact: Alan Krim - Phone: 5165261586 - Email: akrim@bayatconsulting.com - Website: bayatconsulting.com - Signed by: Leonard Kiotz (CCO) Original filing: https://www.sec.gov/Archives/edgar/data/834168/000083416823000007/ptrpublic2023.pdf --- {0}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ANNUAL REPORTS FORM X-17A-5 PART Ill FACING PAGE OMB APPROVAL OMB Number: 3235-0123 Expires: Oct. 31, 2023 Estimated average burden hours per response : 12 SEC FILE NUMBER 8-39854 Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 FILING FOR THE PERIOD BEGINNING 05/01/22 MM/DD/YY AND ENDING 04/30/23 MM/DD/YY A. REGISTRANT IDENTIFICATION NAME OF FIRM : PTR INC. ------------------------------------------------------------- TYPE OF REGISTRANT (check all applicable boxes): ~ Broker-dealer 0 Security-based swap dealer 0 Check here if respondent is also an OTC derivatives dealer 0 Major security-based swap participant ADDRESS OF PRINCIPAL PLACE OF BUSIN ESS : (Do not use a P.O. box no.) 601 HADDON AVE I STE 108 (No. and Street) COLLINGSWOOD NJ 08108 (City) (State) (Zip Code) PERSON TO CONTACT WITH REGARD TO THIS FILING ALAN KRIM 516-526-1586 akrim@bayatconsulting.com (Nam e) (Area Code- Telephone Number) (Email Address) B. ACCOUNTANT IDENTIFICATION INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing\* RAINES AND FISCHER LLP (Name- if individua l, state last, first, and middle name) 555 FIFTH AVE-STE 901 NEW YORK NY 10017 (Address) (City) (State) (Zip Code) NOV 5 2009 3760 l" of Regi>t"tioo with PCAOB)(if 'pplic.ble) FOR OFFICIAL USE ONLY \* Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-S(e)(l)(ii), if applicable. Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. {1}------------------------------------------------ ## OATH OR AFFIRMATION | I, Leonard Kiotz | swear (or affirm) that, to the best of my knowledge and belief, the | |------------------------------------------------------|--------------------------------------------------------------------------------------| | financia I report pertaining to the firm of PTR INC. | , as of | | 4/30 | 2~ 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_3.jpeg) | ''""''"'~ | tit) - | |--------------------------|--------| | T:o.l-. | /' | | Chief Compliance Officer | · | ## This filing\*\* contains {check all applicable boxes): - l!!l (a) Statement offinancial condition . - !!! (b) Notes to consolidated statement of financial condition. - 0 (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). - 0 (d) Statement of cash flows. - 0 (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - 0 (f) Statement of changes in liabilities subordinated to claims of creditors. - 0 (g) Notes to consolidated financial statements. - 0 (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable . - 0 (i) Computation of tangible net worth under 17 CFR 240.18a-2. - 0 (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - 0 (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. - 0 (I) Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3. - n (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - 0 (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. - 0 {o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3-1. 17 CFR 240.18a-L or 17 CFR 240.18a-2. as applicable. and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences exist. - 0 (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - iii {q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. - 0 (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - 0 (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - 0 (t) Independent public accountant's report based on an examination of the statement of financial condition. - 0 (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a-51 17 CFR 240.18a-7, or 17 CFR 2.40.17a-12, a:;; applicable. - 0 (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. - 0 (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. - 0 (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-le or 17 CFR 240.17a-12, as applicable. - 0 (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 Z40.17a-12(k). 0(z} Other:---------- - ------------ - - *\*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5{e}(3) or 17 CFR 240.18a-7(d)(2), as* applicable. {2}------------------------------------------------ # PTR, INC. FINANCIAL CONDITION WITH THE REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PURSUANT TO RULE 17A-5 OF THE SECURITIES EXCHANGE ACT OF 1934 APRIL 30, 2023 {3}------------------------------------------------ # PTR, INC. April 30, 2023 # CONTENTS | | Page No. | |---------------------------------------------------------|----------| | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | | | FINANCIAL STATEMENT: | | | STATEMENT OF FINANCIAL CONDITION | 2 | | NOTES TO FINANCIAL STATEMENTS | 3- 9 | {4}------------------------------------------------ 555 FIFTH AVENU E 9 TH FLOOR NEW YORK, NY 10017 **ll** # REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholder ofPTR, Inc.: We have reviewed management's statements, included in the accompanying Rule 15c3-3 Exemption Report pursuant to SEC Rule 17a-5, in which (1) PTR, Inc. ("the Company") identified the following provisions of 17 C.P.R. § 15c3-3(k) under which the Company claimed an exemption from 17 C.P.R. §240.15c3-3((k)(2)(ii)) (the "exemption provisions") and (2) the Company stated that it met the identified exemption provisions throughout the most recent fiscal year without exception. The Company's Management is responsible for compliance with the exemption provisions 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 the Company's compliance with the exemption provisions. 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 provisions set forth in paragraph (k)(2)(ii) of Rule 15c3-3 under the Securities Exchange Act of 1934. New York, New York July 26, 2023 {5}------------------------------------------------ # **PTR INC. Statement of Financial Condition April 30, 2023** | ASSETS | | |--------------------------------------------------------------------|---------------| | Cash and cash equivalents | \$
288,737 | | Accounts Recievable, Net of allowance for credit losses of \$4,981 | 573,912 | | Restricted Cash -
Clearing Deposit | 304,434 | | Federal Tax Refund Receivable | 238,576 | | Property and Equipment, Net of Accumulated Depreciation | 5,069 | | Other Assets | 13,004 | | TOTAL ASSETS | \$ 1,423,732 | | LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities: | | | Accounts payable and accrued expenses | \$
410,431 | | TOTAL LIABILITIES | 410,431 | | | | | Stockholder's Equity | | | Com on Stock, \$1 par value-
authorized 10,000 shares; | | | issued and outstanding 1 share | 1 | | Additional Paid in Capital | 14,999 | | Retained Earnings | 998,301 | | TOTAL STOCKHOLDER'S EQUITY | 1,013,301 | | TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY | \$ 1,423,732 | The accompanying notes are an integral part of this financial statement {6}------------------------------------------------ ### NOTE 1 -Organization and Nature of Business The Company is a broker-dealer registered with the Securities and Exchange Commission ("SEC") and is a member of the New York Stock Exchange MKT LLC ("NYSE MKT"), the International Securities Exchange ("ISE"), and NASDAQ OMX PHLX ("PHLX"). The Company is a Pennsylvania Corporation that provides brokerage services to its customers located throughout the United States. The Company is a wholly owned subsidiary of James Crompton, Inc. In connection with the Company's assessment of going concern considerations in accordance with ASU 2014-15, "Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern", as of April 30, 2023, management has determined that the Company has access to funds from James Crompton, Inc. that are sufficient to fund the working capital needs of the Company, at a minimum of one year from the date of issuance of these financial statements, should a capital contribution be necessary . ### NOTE 2- Summary of Significant Accounting Policies Use of Estimates- The preparation offinancial 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. Cash and Cash Equivalents -The Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents. The Company maintains cash balances at a financial institution. Both interest and non-interest bearing accounts with the same deposit01y institution will be insured by the Federal Deposit Insurance Corporation for a combined total of \$250,000.1n the normal course of business, the Company may have deposits that exceed the insured balance in its interest and noninterest bearing accounts. Restricted Cash- Restricted cash consists of contractually restricted account balances held at the Company's clearing broker. The Company accounts for restricted cash based upo n Accounting Standards Update ASU 2016-18. Accordingly, the cash balances in the accompanying Statement of Cash Flows include those amounts that are deemed to be restricted cash. The Company has not experienced .losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. Accounts Receivable- The Company accounts for estimated credit losses on financial assets measured at an ammtized cost basis and certain off-balance sheet credit exposures in accordance with FASB ASC 326-20, *Financial instruments- Credit Losses.* FASB ASC 326-20 requires the Company to estimate expected credit losses over the life of its financial assets and certain off-balance sheet exposures as of the reporting date based on relevant information about past events, current conditions, and reasonable and supportable forecasts. The Company records the estimate of expected credit losses as an allowance for credit losses. For financial assets measured at an amortized cost basis the allowance for credit losses is reported as a valuation account on the balance sheet that is deducted from the asset's am01tized cost basis. Changes in the allowance for credit losses are reported in Credit Loss expense. {7}------------------------------------------------ NOTE 2- Summary of Significant Accounting Policies (Continued) Accounts Receivable (Continued) The Company's receivables from broker-dealers and clearing organizations include amounts receivable from unsettled trades, including amounts related to futures and options on futures contracts executed on behalf of customers, amounts receivable for securities failed to deliver, accmed interest receivables and cash deposits. A portion of the Company's trades and contracts are cleared through a clearing organization and settled daily between the clearing organization and the Company. Because of this daily settlement, the amount of unsettled credit exposures is limited to the amount owed the Company for a very short period oftime. The Company continually reviews the credit quality of its counterparties. Property and Equipment- Property and equipment are recorded at cost. Depreciation is provided on the accelerated method. Maintenance and minor repairs are charged to operations when incurred . When assets are retired or sold, the related costs and accumu lated depreciation are removed from the accounts and the resulting gain or loss is reflected in current operations. The estimated useful lives for depreciation are: | Equipment | 5 Years | |-------------|---------| | Automobiles | 5 Years | Long-Lived Assets- As required by the *Property, Plant, and Equipment* Topic of the FASB Accounting Standards Codification No. 360 ("FASB ASC 360"), long-lived assets are required to be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverab le. When required, impairment losses on assets to be held and used are recognized based on the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of the carrying amount or fair value less the cost to sell. There was no impairment loss noted as of April 30, 2023 . Revenue Recognition -Contracts with Customers- Com missions and related clearing expenses are recorded on a trade-date basis as securities transactions occur. Interest income received from clearing broker relates to interest earned on the Company's deposit balance and is recorded monthly as reflected on the clearing broker statemen t. In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Codification 606, Revenue from Contracts with Customers ("ASC 606"). The new accounting standard, along with its related amendments, replaces the current rules-based GAAP governing revenue recognition with a principles-based approach. The core principle in the new guidance is that a company should recognize revenue in a manner that depicts the transfer of goods or services to customers in amounts that reflect the consideration the company expects to receive for those goods or services. The Company applies the following five steps in determining the amount of revenues to recognize: (i) identifY the contract; (ii) identity the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the performance obligation is satisfied. Each of these steps involves management's judgment and an analysis of the material terms and conditions of the contract. {8}------------------------------------------------ NOTE 2- Summary of Significant Accounting Policies (Continued) Revenue Recognition -Contracts with Customers (Continued)- The Company provides equity and option execution services on the floors of several stock and option exchanges on behalf of registered broker-dealers. The Company is paid a fee by the broker-dealers based on the number oftransactions executed and the number of stock shares or option contracts in each transaction. 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/from the customer. The Company invoices its clients monthly in arrears and accrues the fee revenue as commissions in the month in which the transactions were executed on a trade date basis. The Company also directs equity order flow to certain stock exchanges for which it eams rebate revenue. The Company does not maintain contracts with the exchanges delineating the rebate arrangement. Rebate revenue is recognized when the orders are executed by the exchange on a trade date basis. Disaggregation of revenue can be found on the Statement of Operations for the year ended April 30, 2023 by type of revenue stream. As of May I, 2022 and April 30, 2023, the Company recorded commissions receivable, net of allowance for credit losses, of \$252,168 and \$573,912, respectively. Payments are due upon receipt of invoice. Although total revenues may not be materially impacted by the new guidance, management notes changes to the disclosures based on the additional requirements prescribed by ASC 606. There were no contract assets or contract liabilities at May I, 2022 and April 30, 2023 . Lease Accounting Standard -In February 2016, the Financial Accounting Standards Board ("FASB") published Accounting Standards Update No. 2016-02, Leases ("ASC 842"), which requires substantially all leases (with the exception of leases with a term of one year or less) to be recorded on the balance sheet using a method referred to as the right-of-use ("ROU") asset approach . The standard introduced two lease accounting models, which result in a lease being classified as either a "finance" or "operating" lease on the basis of whether the lessee effectively obtains control of the underlying asset during the lease term. A lease would be classified as a finance lease if it meets one of five classification criteria, four of which are generally consistent with current lease accounting guidance. By default, a lease that does not meet the criteria to be classified as a finance lease will be deemed an operating lease. Regardless of classification, the initial measurement of both lease types will result in the balance sheet recognition of a ROU asset representing a company's right to use the underlying asset for a specified period of time and a corresponding lease liability. The lease liability is recognized at the present value of the future lease payments, and the ROU asset is equal to the lease liability adjusted for any prepaid rent, lease incentives provided by the lessor, and any indirect costs. The subsequent measurement of each type of lease varies. Leases classified as a finance lease will be accounted for using the effective interest method. Under this approach, a lessee amortizes the ROU asset (generally on a straight-line basis in a manner similar to depreciation) and the discount on the lease liability (as a component of interest expense). Leases classified as an operating lease will result in the recognition of a single lease expense amount that is recorded on a straight-line basis (or another systematic basis, if more appropriate). {9}------------------------------------------------ ### NOTE 2- Summary of Significant Accounting Policies (Continued) As a broker-dealer registered with the Securities and Exchange Commission ("SEC") and Financial Industry Regulatory Authority ("FINRA"), the Company is subject to SEC Rule 15C3-l , the Net Capital rule, under which the lease asset would be recorded as a non-allowable asset and the associated liability would be recorded as aggregate indebtedness, both of which could have a materially negative effect on Net Capital computed under SEC Rule 15c3-l. On May 31,2016, the Securities Industry and Financial Markets Association ("SIFMA") requested relief from the SEC from the net capital impact ofthe lease capitalization required under ASC842. On November 8, 2016, the SEC issued a "no action" letter permitting broker-dealers to add back to Net Capital the operating lease asset to the extent ofthe associated operating lease liability. If the value ofthe operating lease liability exceeds the value of the associated operating lease asset, the amount by which the liability's value exceeds the associated lease asset must be deducted for net capital purposes. The Company believes that the relief provided by the SEC "no action" letter will substantially negate the effect of the application of ASC 842 on the Company's Net Capital position. At April 30, 2023 the Company no longer maintained operating leases whose terms exceeded one year and the Company is therefore, not subject to the provisions of ASC 842. Fair Value of Financial Instruments -The carrying amounts for cash and cash equivalents, accounts receivable, deposits with clearing organizations, prepaid expenses, accounts payable and accrued expenses approximate their fair value because of their short-term maturity. Income Taxes -As required by the Income Taxes Topic of the F Ass Accounting Standards Codification No. 740 ("F ASB ASC 740"), deferred income tax assets and liabilities are determined based on differences between the financial reporting and income tax bases of assets and liabilities measured using enacted income tax rates and laws that are expected to be in effect when the differences reverse. Valuation allowances are provided on deferred tax assets for which it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company has evaluated the effects of the Income Taxes Topic ofF ASB Accounting Standards Codification No. 740 ("F ASB ASC 740") and has concluded that the Company recognizes tax benefits only to the extent that the Company believes iL is ··more lik.c;ly than not" that its tax posit ions will be sustained upon a taxing authorities examination. The Company is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The Company's management believes it is no longer subject to income tax examinations for years prior to 2019. #### NOTE 3 - Property and Equipment Property and equipment at April 30, 2023 were as follows: | Equipment | \$
18,986 | |--------------------------------|--------------| | Automobiles | 85 365 | | Total Property and Equipment | 104,351 | | Less: Accumulated Depreciation | 99,282 | | Net Property and Equipment | \$
5,069 | Depreciation expense for the year ended April 30, 2023 was \$13,800. {10}------------------------------------------------ # NOTE 4- Accounts Payable and Accrued Expenses Accounts payable and accrued expenses at April 30, 2023 were as follows: | Commissions Payable | \$
355,399 | |----------------------------|---------------| | Loan Payable to Broker | 20,000 | | Accounts Payable | 35,032 | | Total Accounts Payable and | | | Accrued Expenses | \$ 410.431 | ## NOTE 5- Income Taxes The Company is not a tax paying entity. Its operations are consolidated with its parent, James Crompton, Inc., which pays all taxes due. However, the Company's operations are substantially the entirety of the parent's tax filing and the Company has historically distributed to the parent the entire tax liability due. Similarly, the Company expects that any tax refund paid to the parent will be contributed to the Company. As such, the Company makes tax calculations and records all tax liabilities and all tax refunds as if it were the tax paying entity. Company's effective income tax rate is lower than what would be expected if the federal statutory rate were applied to income before income taxes primarily because the net effects of state income taxes and expenses deductible for tax purposes that are not deductible for fmancial reporting purposes. Under the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act"), corporations are permitted to carryback net operating losses up to five years. The Company expects it will utilize this provision ofthe CARES Act resulting in a federal income tax receivable of\$238,576 as of April 30, 2023. #### NOTE 6 -Related Party Transactions The Company distributes dividends to, and records certain intercompany transactions with, its parent company. At April 30, 2023, the Company did not maintain an intercompany balance. ### NOTE 7- Lease Commitments The Company leases office space in Collingswood, New Jersey under a non-cancelable operating lease with monthly minimum payments plus common operating expenses, which was renewed on January 31, 2023 and will expire on January 31, 2024. Rental expense for the Collingswood office for the year ended April 30, 2023 was \$9,517. {11}------------------------------------------------ ## NOTE 8- Retirement Benefits Substantially all regular full-time employees are eligible to participate in a Company sponsored 401k profit sharing plan. An employee may elect to contribute up to 100% of annual compensation subject to certain limits described in the plan document. A matching employer contribution may be made to the plan at the discretion of the Company. For the year ended April 30, 2023, the Company did not make a contribution to the Plan. ### NOTE 9- Concentrations of Credit Risk 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. ## NOTE 10- Net Capital Requirement The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (SEC Rule 15c3 -l), which requires the maintenance ofminimum net capital and requires the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. The minimum net capital requirement is defined as the greater of \$1 00,000 or 6 2/3% of the aggregate indebtedness. At April 30, 2023, the Company had net capital of \$402,412 which was \$302,412 in excess of its required net capital of \$100,000. The Company's aggregate indebtedness to net capital ratio was 1.0199 to 1. #### NOTE 11- Exempt Provisions ofRule 15c3-3 The Company operates under the provision of paragraph (k)(2)(ii) of Rule 15c3-3 of the Securities and Exchange Commission, and accordingly, is exempt from the remaining provisions of that rule. The Company is subject to the exemptive requirements of SEC Rule 15c3-3 and did not maintain possession or control any customer funds or securities at April 30, 2023 . ### NOTE 12- Off Balance Sheet Risk Pursuant to a clearance agreement, the Company introduces all of its securities transactions to a clearing broker on a fully disclosed basis. In accordance with the clearance agreement, the Company has agreed to indemnify the clearing broker for losses, if any, which the clearing broker may sustain from clearing securities transactions introduced by the Company. The Deposits with Clearing Organization collateralize the transactions cleared through the clearing broker. {12}------------------------------------------------ NOTE 13 - Financial instruments with Off-Balance-Sheet-Risk In the normal course of business, the Company's customer activities include the execution, settlement, and financing of various customer securities transactions. These activities may expose the Company to off-balance-sheet-risk in the event the customer or other broker is unable to fulfill its contracted obligations and the Company has to purchase or sell the fu1ancial instrument underlying the contract at a loss. ### NOTE 14- Commitments and Contingencies COVID-19 - 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 there is still uncertainty around the effects of this event, at this stage, we have not experienced any material adverse effect. ### NOTE 15- SubsequentEvents In accordance with the *Subsequent Events* Topic of the F ASB Accounting Standards Codification No. 855 ("F ASB ASC 855"), the Company has evaluated those events and transactions that occurred from May 1, 2023 through July 26, 2023, the date the financial statements were available to be issued . There were no other events that have been identified which require disclosure. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.