# L.O. THOMAS & CO. INC. X-17A-5 (2020-02-25) — Broker-dealer annual report

- Company: L.O. THOMAS & CO. INC.
- Form: X-17A-5
- Filed: 2020-02-25
- Period: 2019-12-31
- Accession: 0000846416-20-000001
- CIK: 846416
- File #: 8-40875
- Material weakness: No
- Auditor: MICHAEL T. REMUS
- Auditor location: HAMILTON SQUARE, NJ
- Contact: JOHN W RISLEY
- Phone: 6099274044
- Signed by: JOHN W RISLEY JR (PRESIDENT)

Original filing: https://www.sec.gov/Archives/edgar/data/846416/000084641620000001/2019AUDIT3.pdf

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ll\'ITEDS.TATES SECCRlTIES A~'D EXCHANGE COM:'.\1.ISSI 0~' Wr1shiugtoo, D.C. 20549

OMO APPROV/\1 OMU t~umlJer: 3235-0123 [xpires: August 31, 2020 l:~timatc<l ,l\lcrage burden hours er res onse ... .. . 12.00

# **ANNUAL AUDITED REPORT FORM X-17 A-5 PART Ill**

| 8-40875      |    |
|--------------|----|
| SE.C FILE N~ | R_ |

FACING PAGE Information Required of Brokers and Deak rs Pursuant to Section 17 of th<' Securities Exchange Act of 1934 and Rule 17a-S Thereunder

| REPORT FOR THE PERIOD BEGDJ::-.;ING 01 /Q 1/2019<br>NA1-IE OF BROKER-DEALER: LO. Thomas & Co., Inc.<br>ADDRESS OF PRJNCIPAL PLACE Of 1JUSI:t\/l::S\$: (Do 1101 0\$¢ P.O. Box No.)<br>2106 New Road -<br>Suite A6<br>Linwood<br>NAJ\fi' A'\D lTLLl'liONE NC.MHF.R or PERSO?\' TO CO>-."TACT l\' REGARD TO THIS REPORT<br>JCliO W l<U;, .Jr. I ii:·, J~:\li (;CO. S-'1?-~21.r,:~ | A. REGISTRANT IDENTIFICATION<br>{Yo. and S11e;;1J<br>NJ<br>(State) | AND ENDING 12/31/2019<br>08821 | -----------<br>:\1\! DIYYY<br>OFFICIAL_USE_ON_LY<br>FIRM LD. NO. |
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|                                                                                                                                                                                                                                                                                                                                                                                | B. ACCOUNTA~T IDENTIFlCA TION                                      |                                |                                                                  |
| l~DEPENDENT PVBLIC ACCOUNTANT whose opiuio11 is coutnined in this Report*<br>Michael T. Remus CPA                                                                                                                                                                                                                                                                              |                                                                    |                                |                                                                  |
| PO Box 2555                                                                                                                                                                                                                                                                                                                                                                    | Hamilton Square                                                    | NJ                             | 08690                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                | (Ci1,·}                                                            |                                | (Zip Codt>)                                                      |
| CH.ECK ONF.:<br>✓ jcertifi~cl P11blic Accouman1<br>B<br>P11i>lK Auom1tanr<br>Accotrnrnm 11Dt rt~idc-nt in Uuii~d Stares or ,rny .:if ils possessions.                                                                                                                                                                                                                          |                                                                    |                                |                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                | FOR OFFICIAL USE ONLY                                              |                                |                                                                  |

*''Cloil!lifiJr* n·c•111prio11\_(rom *!he* J'<'(JII/J'f'l!li!m riuu *the* mn11wi rq101·f *be cou'red* b\_1· 1/Je *opinion* of rm indepe11di!Jlf *public* ru:n111111m11 1w11t *or* wpponed !1y ci stmr:.11,cllf *vf(aei,\ mid ciro1m1towc,* rdii'd 011 *as t!w basil for* riw e.Ye111prio11. *See Section* ]-JO. l .~o-5/eiCi

> Potential person5 who ore to respond to lhe collection of informatJon contained in this form are not required to respond unless the form dis plays a currently vn lid 0MB control number.

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#### **OATH OR AFFIR:\IATION**

I, John W Risfey , swear ( or affirm) that, to ih~ best nf my knowledge and bdic:-.f ih.: o1.::rnmpa11yi11g i1Hi1ncial srntement and supportinF ,,cbedufes pertaining to (ht firm of \_l\_.o\_. T\_\_ho\_m\_ -i\_s\_&\_C\_o\_.\_· \_lri\_c\_. --------- - ------- ------- ------------, ,1S of December 31 . '.!O 19 , ;11,:- 1rnc rn~d correct. I f1.1dher sWtilr (01' affirm) 1hal nr:it her tbe comp,wy uor ,my parmei, proprieror. prin~ipa I o fficrr or dirrctor has flllY proprietary intcr(•:-1 in ,iny <1ccnitJH d.issifi,:d sokly i:lS that of a ci1s10mer, cxccpt .1s foilows: **-A-G-e~-OA·~S--- - -**

*~ A* 

PresidenVCCO

Title

Thi~ repon ''\* contains (check ,ill applicable box,sl: 0 (a) r:i,•iug Jlaie. ·

- 
- (ti) Sta\C/11(:llt of Financial Cone it ion.
- · ((l St;-1k.nkJ1l oflncome (Loss).
- (d·1 Starcmeut of Changes **in** FitHmckd Condition. ;
- (~) Srntement of Chaugc~ in St,xkholdecs' Eq uicy or P,rnuers' or Sole Pro pr ictors· c~µital.
- 
- (gl Comp11/ation of Ni.:( CupitaL
- ih,l Cornputatk,n for Dttermia;ition cifRt'serw Ri::quir,1u..-11ts Pursuant k1 Rnle l5c3-J.
- \i) foformutk,n Rd~ling to the Possession or Co111rnl Rl'qt1ircmcars Under Rnk l5c3-3.
- i (fl .Staterne-nt of C!i,rngc; i11 Litibilitics Subor<liisaiecl to Clnims ot Ci editors. 0 <..i) A Reconci lin1io11, intluding itppropriali: ,•xpll:Wilti,,n of 1J1c C'omputario11 of Net Cipit11l Uudei· Rule- 15c3 -1 ;-,ud the Compt11a!io11 for Detennin.a~ion of llw R~·s-:rw Rt(Jllirc1nencs llndt"r Exhibit A of R\\lt' 15d-l.
- 0 (k) A R<':conciliati(ln between the audited ,Htd unn11di11:d Srntemeurs of Financial Condition with rtsp('r( to methods of e:011soli.datio11.
- .; (l) A11 Oath or Affirmation.
- § (rn) A copy of 1he SIPC Supplemental Rep on.
	- (n) A report desrrilJing ~ny 111Mnit1l i11.ideq1rnr ies fouJlC1 ro exisr 01 fo11nd to haw l'Xistccd since- th<:' dare of the prtvio11s ,mdit.

'"'" For comiif iom a( co11lidN1ffai 1rtmme11t of a1wh/ po1·ri()m *cl* 1 hi.1 *filing.* ice i ,tctio!I ]./0. J ~a-5 (e) (:Ii

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#### **FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION**

For the Year Ended

December 31, 2019

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# **MlCHAEL T. REMUS**  ~~ P«&k *rl~t-a«t*

P.O. Box 2555 Hamilton Square, NJ 08690 Tel: 609-540-J 751 Fax: 609-570-5526

#### Report oflndcpendcnt Registered Public Accounting Firm

To: The Board of Directors and Stockholder of **L.O. Thomas** & **Co., lnc.** 

#### **Opinion on the Financial Statements**

I have audited the accompanying statement of financial condition ofL.O. Thomas & Co., Inc. as of December 31 , 2019, and the related statements of opera ti on s, changes in stockholder cq u i ty and cash flows for the year then ended, that are filed pursuant to Rule l 7a-5 under t11e Securities Exchange Act of 1934 and the related notes [and schedules] (collectively referred to as the financial statements). In my opinion, the financial statements present fairly, in all material respects, the finandal position ofL.O. Thomas & Co., Inc. as of December 31, 2019 and its results of operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of Amet-ica.

#### **Basis for Opinion**

These financial statements arc the responsibility of LO. Thomas & Co., Inc. 's management. My responsibiliiy is to express an opinion on LO. Thomas & Co., Inc. 's financial statements. based on rnyaudil. lam a public accounting fir111 registered with lhc Public Compai\y Accounting Oversight Board (United States) (PCAOB) and I am required to be indcpcndent with respect to LO, Thomas & C,o .. lnc. .in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

l conducted my audit in accordance with the standards of the PCAOB. Those standards require that l plan and pcrfom1 the audit to obtain reasonable assurance about whether the fiminci.il statements arc free of material missta1cmcnt, whether due to error or fraud. My audit included perfonning procedures to assess the risks or material misstatement of the financial statements, whelher due to error or fraud, an<l pcrfonning procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statcmcnls. My audit also included evaluating the acrnunling principles used and significant estimates made by management, as well as evaluating !he overall presentation of the financlal statements. I believe that my audit provides a reasonable basis for my opinion.

#### **Supplemental Information**

The Schedule **L** Computation of Net Capital Under SEC Ru le l 5c3-l, Schedule n, Com put al ion for Identification of Reserve Requirements Under SEC Ruic l5c3-3 *(exemption)* and Schedule **m,**  Jnfonnatiou Relating to Possession or Control Requirements Under SEC Rule 15c3-3 *(exemption)*  has been subjected to au<lit procedures performed **in** conjunction wilh the audit of L.O. Thomas & Co., Inc. 's financial statements.

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The supplcmcnta I information is the responsibility ofL.O. Thomas & Co., Inc. 's management. My audit procedures i11cluded determining whether the supplemental information reconciles to the financial siatcmenls or the underlying accounting and other records, as applicable, and perfonning procedures to test the completeness and accuracy of the info11nation presented in the supplemental information. In forming my opinion on the supplemental information, l evaluated whether the supplemental infonnation, including its form and content, is presented in conformity with 17 C.F.R. §240. l 7a-5. In my opinion, the Schedule I, Computation of Net Capital Under SEC Rule l5c3-l, Schedule II, Computation for Jdcntification of Reserve R.equircments Under SEC Ruic l 5c3-3 *(exemption)* and Schedule HI, Information Relating lo Possession or Control Requirements Under SEC Rule 15c3-3 *(exemption)* is fairly staled, in all material re.-;pects. in relation to the financial statements as a whole.

l have served as LO. Thomas & Co., Inc. auditor since 2016.

Michael T. Remus, CPA Hamilton Square, New Jersey February 10, 2020

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# **L.O. Thomas** & **Co., Inc.**  STATEMEN"T OF FINANCIAL CONDITION December 31, 2019

#### **ASSETS**

| Assets                                            |    |        |
|---------------------------------------------------|----|--------|
| Cash                                              | s  | 17,546 |
| Commissions receivable                            |    | 32,383 |
| Prepaid expenses                                  |    | 15,497 |
| Fixed assets. office equipment net of accumulated |    | 239    |
| depreciation of \$24,894                          |    |        |
| Total Assets                                      | \$ | 65,665 |
|                                                   |    |        |

#### **LIABILITIES** & **STOCKHOLDER EQUITY**

| Liabilities                                |   |        |
|--------------------------------------------|---|--------|
| Current Liabilities                        |   |        |
| Accounts payable & accrued expenses        | s | 2.350  |
| Commissions payable                        |   | 24,816 |
| Income tax payable                         |   | 1,900  |
| Total Liabilities                          |   | 29,066 |
| Stockholder Equitv                         |   |        |
| C01m11on Stock. no par value, 1.000 shares |   | 30.000 |
| authorized 100 issued and outstanding      |   |        |
| Additional paid-in-capital                 |   | 5,900  |
| Retained earnings                          |   | 699    |
| Total Stockholder Equity                   |   | 36,599 |
| TOTAL LIABILITIES & STOCKHOLDER EQUITY     | s | 65,665 |

"See accompanying notes to financial statements,"

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Statement of Operations For tl1e Year Ended December 3 1, 2019

#### REVENUES

| Commissions, net of clearing fees | \$        | 178,276   |  |
|-----------------------------------|-----------|-----------|--|
| Mutual fund and l 2b-1 fees       |           | 686,234   |  |
| Other revenue                     |           | 417,085   |  |
| Interest income                   |           | 1         |  |
| Total Revenues                    | 1,281,596 |           |  |
| EXPENSES                          |           |           |  |
| Commissions                       |           | 1,009,107 |  |
| Occupancy                         |           | 31,044    |  |
| Compensation and benefits         |           | 42,810    |  |
| Regulatmy fees                    |           | 25,297    |  |
| Legal and professional            |           | 19,467    |  |
| Technology and communication      |           | 13. 716   |  |
| General and administrative        |           | 27,845    |  |
| Travel and entertainment          |           | 6,400     |  |
| Depreciation                      |           | 80        |  |
| Total Expenses                    |           | lJ 75,766 |  |
| Income before income tax          |           | 105,830   |  |
| Income tax                        |           | 1,747     |  |
| Net Income                        | \$        | 104,083   |  |

11See accompanying notes to financial statements."

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#### LO. **Thomas** & Co., Inc. Slatement of Change~ m Stockholder Equity Year Ended December 31, 2019

|                                    | Common Stock     |              | Additional<br>Paid-in |       | Retained<br>Eaminits |           | Total<br>Stockholder<br>Equity |           |
|------------------------------------|------------------|--------------|-----------------------|-------|----------------------|-----------|--------------------------------|-----------|
|                                    | Shares<br>Amowit |              | Capital               |       |                      |           |                                |           |
| Balance, December 31, 201S         | 100              | s 30,000     | s                     | 5,900 | s                    | S,966     | s                              | 44866     |
| Net Income                         |                  |              |                       |       |                      | 1()4,083  |                                | 104_083   |
| Distribution;; paid to shareholder |                  |              |                       |       |                      | {112,350) |                                | (112,350) |
| B~lance, Decembt>r 31, 2019        | 100              | 30.000<br>s: | s                     | 5.9DO | \$                   | 699       | s                              | 36.599    |

"See aceompanying notes to financial ,ta~menl\$."

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#### **L.O. Thomas** & **Co., Inr.**  Statement of Cash Flows For the Year Ended December 31, 2019

#### **CASH FLOWS FROM OPERATL'\"G ACTIVITIES**

| Net income                                                                                                                                            | s      | 104,083                            |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|
| Adjustments to Reconcile Ner iucome to Net<br>Cash Provided By Operating Activities:                                                                  |        |                                    |
| Depreciation ExpeJ1se                                                                                                                                 |        | 80                                 |
| (Increase) Decrease ill:                                                                                                                              |        |                                    |
| Commissions receivable<br>Prepaid expenses                                                                                                            |        | (14,408)<br>(3,640)                |
| Increase (DecJ"ease) in:<br>Accom1ts payable aud accrued expenses<br>Commissioos payable<br>Income tax payable.                                       |        | ( 11841)<br>16,638<br>{1,525)      |
| Net cash provided by Operating Activities                                                                                                             |        | 89.3 87                            |
| Cash Flows From luvesting Activities                                                                                                                  |        |                                    |
| Cash Flows From Fimmdag Ac.tivities<br>Distribution paid to shareholder<br>Net cash used iuFiuancing Activities<br>Net cash decrec1se for tile period |        | p 12,350)<br>(112,350)<br>(21.963) |
| Cash at be-ginning of period<br>Cash at end of period                                                                                                 | \$     | 40.509<br>17,546                   |
| Supplemental Disclosure of Cash Flow Information:<br>Inre-rest paid<br>Taxes Paid                                                                     | s<br>s | 2.300                              |

"See accompanying notes to financial statements."

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#### **L.O. Thomas** & **Co., Inc.**  Notes To Financial Statements December 31, 2019

#### **Note 1- Organization and Nature of Busiues,~**

LO. Thomas & Co., Inc. (the Company) is a broker-dealer registered with the Securities and Exchange Commission (''SEC') and is a member of the Financial Industry Regulato1y Authority (" FINRA") and the Securities Investor Protection Corporation ("SIPC"). The transactions are disclosed on a fully disclosed basis with other broker-dealers. Accordingly, the Company claims exemption from the requirements of Rule 15c3-3 under Section (k)(2)(ii) oftlie rule.

The Company is registered and conducts business form their office located in Linwood, New Jersey, and is registered to conduct business in other states. The Company's primary source of revenue is providing brokerage sen1ices to customers, who are predominately small and middle-market business and individuals.

#### **Note 2** - **Summary of Significant Accounting Policies**

*(a) Basis of Presentation* 

The financial statements and accompanying notes are prepared in accordance with accom1ting principles generally accepted in the United States of America (11U.S. GAAP'') unless otherwise disclosed.

# *(b) Use of Esti111ates*

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates arrd assumptions that affect the reported amounts of assets and Jia:bi.lities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue ru1d expenses during the reporting period, Actual results could differ from those estimates. Significant estimates in the accompanymg financial statements include a 100% allowance on a loan receivable.

# (c) Stareme11t *of Cash Flows*

For purposes of the statement of cash flows the Company has defined cash equivalents as highly liquid investments, with original maturities of less than three months, that are not held for sale in the ordinaiy com-se of business. The company has adopted the indirect method of presenting the statement of cash flows in accordance with current authoritative pronouncements, There were no cash equivalents at December 3 L 2019. Cash is held at a major financial institution and is insured by the Federal Deposit Insurance Corporation.

#### *(d) Commissions*

The conunission based revenue is recorded on a settlement date basis. Securities transactions, underlying the commissions. are also recorded on a settlement date basis.

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#### **LO. Thomas** & **Co., Inc.**  Notes To Financial Statements December 3L 2019

#### **(d)** ColJ/111issim1s

In accordance with FASB ASC Topic 606 revenue is required to be recognized as services are rendered and the c01iu-acts identified perfonnance obligations have been satisfied. There ,vere no unsatisfied peifonnance obligations at December 31, 2019. This new standard did not impact the company's financial statements.

#### *(ej Office Eq11ip111eJJT*

Office equipment is stated at cost. Significant additions or improvements extending asset lives are capitalized: no1mal maiI1te11ance and repair cost are expensed as incml ·ed. Depreciation has been computed using the straight-line methods for financial statement re.porting and various accelerated method allmvable for income tax pnrposes. The cost and related accumubted depreciation of propel ly and equipment retired or disposed of are removed from t11e accounts and the resHlting gains or losses are reflecied in income.

#### (/) Co1J1r11issions receivable

Commissions receivable have been adjusted for all known uncollectib1e accounts.. An allowance for dou btfnl accounts is not provided since, in the opinion of management all amounts recorded on the books are deemed collectible.

## (g} Acco1mfs *Payable*

Accounts payable consist of all operating liabilities that can be matched to the period the goods or services were incuned.

#### rlo *Income Taxes*

TI1e Company elected to he taxed for Federal and Ne,,., Jersey state income tax purposes as an S Corporation. Under this stmcture, tlle shareholder is liable for any Federal or State income tax due. Therefore, no provision or liability for federal or state income t<1xes has been included in the finm1c,ial statements.

The Company's tax returns and the amount of income or loss allocable to the shareholder are snbject lo examination by federal and state taxing authorities. In the e\'ent of an examination of the Company's tax return, the tax liability of the shareholder could be changed if an adjustment in the Company's income or loss is ultimately detennined by the taxing authorities.

Ce1iain transactions may be subject to accom1ting: methods for federal and state income tax purposes which differ from the accounting methods used in preparing the financial statements. Accordingly. the net income or loss of the shareholder and the resulting b11lances in the shareholders' capital account reported for federal and state income tax purposes may differ from the balances reported for those same items in these firnmci,11 statements.

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#### **L.O. Thomas** & **Co., Inc.**  Notes To Financial Statements December 31, 2019

(h} *l11ca111e Taxes* - co111i1111ed

The Company recognizes and mensures its unrecognized tax benefits in ace-ordance 1vith ASC Topic 740, Income Taxes. Under that guidance the Company assesses the likelihood, based on their technical merit that tax positions will be sust<1ined upon examination based on the facts, circumstances and information available at the end of the financial reporting period. The measurement of unrecognized tax benefits is adjusted when new information is available, or 1vhen an event occurs that require a change.

i\fanagement lrns determined that the Company lrns no uncertain tax positions that would require financial statement recognition at December 31, 2019. This dete l rnination will always be subject to ongoing evaluation as facts and circumstances may require. The Company remains subject to U.S. federal and state income tax audits for all years subsequent to 2015.

In addition. no income tax related penalties or interest lrnve been recorded for the year ended December 31, 2019.

(iJ *Fair Value Hierarchy* 

FASB ASC 820 defines fair value. establishes a framework for measuring fair value1 and establisfres 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 dnte, A fair value measurement assumes tlll'lt the transaction to sell the asset or transfer the liability occurs in the principal market for the asset OJ 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 f ASB ASC 820, are used to measure fair value.

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into tl1ree broad levels:

- *Level 1.* Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
- *Level 2.* Inputs other than quoted prices included in level l that are observable for the assets or liability either directly or indirectly.
- *Level 3.* Inputs are unobservable for the assets or liability.

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security. the liquidity of markets. and other characteristics particular to the security. To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the dete lmination of fair value requires more judgment. Accordingly, the degree of judgment exercised in detenuining the fair value is greatest for instmments categorized in level 3.

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#### **LO. Thomns** & **Co., Inc.**  Notes To Financial Statements December 31, 2019

#### *(i) Fair Value Hierarchv* - *continued*

The inputs used to measme fair value may fall into different levels of the fair value hierarchy. In such cases, for discloslU'e purposes, the level in the fair value hierarchy ·within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement i.L1 its entirety.

For further discussion of fair value, see "Note 5 Fair Value"

## (j) *Advertising mid Afarketing*

Advertising and marketing costs in the ammmt of \$1,070 are expensed as inct1ned,

*(k) General a11d Ad111i11istrntive Expenses* 

General and administrative costs are expensed as incmwd.

#### **Note 3** - **Net Capital Requirements**

The Company is subject to the SEC Uniform Net Capital Rule (SEC Rule 15c3-l), which requires the maintenance of mininnun net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1 (and the mle of the "applicable" exchange also provides that equity capital may not be withdra\vn or cash dividends paid if the resulting net capital ratio wouJd exceed 10 to 1). At December 31, 2019, the Compm1y had net capita] of \$19,509, which was \$14,509 in excess of its required minimum net capital of \$5,000. The Company's net c,1pital ratio was 1.4899 to 1.

Advances to affiliates, contributions, distributions and other withdrawals are subject to ce11ain notification and other requirements of Rule l 5c3-l and other regnlat01y rules. The Company is exempt from the provisions of Rule 15c3-3 m1der tlle Securities Exchange Act of 1934. The Company relies ou its SEC Rule l 5c3-3(k)(2)(ii) exemption.

#### **Note 4** - **Concentrations**

#### Concentration of Cash

The Company maintains its cash at one financial institution in amounts that at times may exceed federally insured limits. The Company has not experienced any losses in such accounts through December 31, :2019. As of December 31, 2019, there were no cash balances held in any accounts that were not fully insured.

#### Concentration of Clearing Broker

The Company nses one clearing broker for all clearing services. At December 31, 2019 commission receivable of \$5.930 w<1s due iiom this broker.

The Company received revenue from three fimds resulting in revenues exceeding ten percent or the Companies total revenues.

{13}------------------------------------------------

L.O. Thomas & Co., Inc. Notes To Financial Statements December 31. 2019

#### **Note 5- Fair Value**

Cash. Jeceivables. accounts payable and other current liabilities are reflected in the financial statements at carrying value which approximates fair value because of the shorHerm maturity of these instrnments.

#### **Note 6** - **Commitments anrl Contingencies**

Pursum1t to Securities and Exchange Connnission Rule 15c3-l(e)(2) the Company nrny not authorize distributions to its members if such distributions cause the Company's net capital to fall below 120% of the Company's minimum net capital requirement. As of December 31, 2019, the Company was not in violation of this requirement.

The Company had no lease or equipment rental commitments, no underwriting commitments, no contingent liabilities. and had not been named as a defendant in any lawsuit at December 31, 2019 or during the year then ended except as discussed below.

From time to time the Company and its stockholders ase the subject of litigation1 inquiries from Regulatory Agencies and arbitration claims. On May 18, 2016 a customer filed an arbitration claim against the Company, its chief compliance officer and prima1y principle and against the customers' account representative seeking certain specified dnrnages. No wrong doing :1gainst the Company or its chief compliance officer has been alleged in the complaint. In December of this year the Company prevailed, and the complaint \Vas dismissed by the comi.

#### **Note 7** - **Related Party Tl'ansactions**

The Company leases office space from its sole stockholder under a mo11th to month operating lease. The lease requires monthly payments of \$2,400 with the lease to continue at the same rate on a year-to-year basis. The Comp,my made lease payments of \$18,800 to the stockholder during the yeaL It is anticipated that in the normal course of business, leases that expire ,,till be renewed or replaced with similar leases.

In addition, the Company paid the stockholder a sala1y in the amount of \$42,810 and reimbmsed the stockholder for various travel and overhead expenses.

#### **Note 8** - **Anti-Money Laundering Policies and Procedul'es**

The Company is required to implement policies and procedures relating to anti-money laundering, compliance, suspicious activities, and currency transaction repo1ting and due diligence on customers who open accounts ,vith the Company. At December 31. 2019 the Company had implemented such policies and procedures.

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LO. Thomas & Co., Inc. Notes To Financial Statements December 3L 2019

#### Note 9 - Exemption from **Rule** 15c3-3

The Company is exempt from the Securities and Exchange Commission Rule 15c3 :And1 therefore, is not required to maintain a "Special Reserve Bank Account for tlie Exclusive Benefit of Customers".

#### **Note 10** - **Subsequent Events**

The Company has evaluated subsequent events occurring after the statement of financial condition date through the date of Febrnary 10, 2020 which is the date the financial statements \Vere available to be issued. Based on this evaluation. the Company has determined that no subsequent events have occurred which require disclosure in or adjustment to the financial statements.

{15}------------------------------------------------

Supplementary Information

Pursuant to Rule 17a-5 of the

Securities Exchange Act of 1934

As of December 31, 2019

{16}------------------------------------------------

# **MICHAELT. REMUS**  *~'P«i&A~t*

P.O. Box 2555 Hamilton Square, NJ 08690 **Tel:** 609-540-1751 **Fax:** 609-570-5526

# REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTfNG FIRM

To: The Board of Directors and Stockholder of **L.O. Thomas** & **Co., Inc.** 

I have reviewed managcmcnes statements, included in the accompanying Exemption Report, in which (1) L.O. Thomas & Co., Inc. identified the foliowing provisions of 17 C.F.R. § 15c3-3(k) under which LO. Thomas & Co., Inc. claimed an exemption from 17 C.F.R. §240. l 5c3-3: undcr-k(2)(ii), (the Hcxcmption provisions") and (2) LO. Thomas & Co., Inc. stated that LO. Thomas & Co., Inc. met the identified exemption provisions throughout the most recent fiscal year without exception. LO. Thomas & *Co.?* Inc. management is responsible for compliance with the exemption provisions and its statements.

My review was conducted in accordance with the standards of the Public Company Accounting 0 vcrs i ght Board (Uni tcd Stat cs) and, accordingly, inc I udcd inq ui rics and other rcqu ired procedures to obtain evidence about L.O. Thomas & Co., Inc. compliance with the exemption provisions. A review is substantially less in scope than an examination, the objective of which jg the expression of an opinion on managcmcnfs statements. Accordingly, I do not express such an opinion.

Based on my review, I am 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 respccts1 based on the provisions set forth in paragraph (k)(2)(ii) of Ruic 15c3-3 under the Securities Exchange Act of 1934.

~ 7. *'R~* 

Michael T. Remus; CPA Hamilton Square, New Jersey February 10, 2020

{17}------------------------------------------------

#### **L.O. Thomas** & **Co.,** Inc. CO.MPUTA TION OF NET CAPITAL Year Ended December 31. 2019

#### **Schedule** I

#### **COMPUTATION OF NET CAPITAL Ur-iDER RULE 15c3-1 OF THE SECURITIES A.:.'\-U EXCHAJ'IIGE COMMJSSION**

| Total ownership equity from Statement of Financial Condition<br>Deduct 0\"1-1lership equity not allo,vable for Net Capital |                                                   |    | 36.599<br>0 |
|----------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------|----|-------------|
| Total ownership equity qualified for net capital                                                                           | Total Credits                                     |    | 36.599      |
| Add:                                                                                                                       |                                                   |    |             |
| Liabilities subordinated to claims of general creditors allowable<br>In computation of net capital                         |                                                   |    | 0           |
| Other (deductions) or allowable liabilities                                                                                |                                                   |    | 0           |
|                                                                                                                            | Total Debits                                      |    | 0           |
| Total capital and allowable subordinated liabilities                                                                       |                                                   |    | 36,599      |
| De.ductions and/or charges:                                                                                                |                                                   |    |             |
| Total non-allo\Ovable assets from Statement of Financial Condition                                                         |                                                   |    | (17,090)    |
| Net Capital before haircuts on securities positions                                                                        |                                                   |    | 19,509      |
| Haircuts on securities (oomputed, where applicable, pursuant to 13c301(f):                                                 |                                                   |    | 0           |
| Net Capital                                                                                                                |                                                   | \$ | 19,509      |
| CAPITAL REQL'IRE::,,,iENTS                                                                                                 |                                                   |    |             |
| 6 2/3 % of aggregate indebtedness                                                                                          |                                                   |    | 1.938       |
| Minimum capital requirement                                                                                                |                                                   |    | 5,000       |
| Net capital in excess of requireme11ts                                                                                     |                                                   | s  | 14,509      |
|                                                                                                                            | Ratio of Aggregate Indebtedness to<br>Net Capital |    | 1.4899 to l |
| Reconciliation with Company's Computation (included in<br>Part II ofFonn X-17A-5 as of December 31, 2019)                  |                                                   |    |             |
| Net Capital, as re-ported in Company's Part II unaudited Focus Report                                                      |                                                   | \$ | 19,509      |
| Net Capital, per above                                                                                                     |                                                   |    | 19,509      |
| Difference                                                                                                                 |                                                   | s  |             |
|                                                                                                                            |                                                   |    |             |

TI1ere are no material differences between the net capital reflected in the above computation and the net capital reflected in the Company's FOCUS Report as of December 31, 2019.

{18}------------------------------------------------

# SCHEDULE U COMPUTATION FOR DETERMINATION OF RESERVE REQUIREMENTS UNDER RULE I 5c3-3 (EXEMPTION)

# YEAR ENDED December 31, 2019

Pursuant to Rule 17a-5(d) (4) of the audited computations of Net Capital pursuant to Rule 15c 3-1 and computation for Determination of Reserve requirements pursuant to Rule 15c 3-3 submitted by LO. Thomas & Co., Inc., in my opinion no material differences exist which would materially effect the reserve requirements pursuant to Ruic 15c 3-3 or its claim for exemption.

{19}------------------------------------------------

# SCHEDULE III INFORMATION RELATING TO POSSESSION OR CONTROL REQUIREMENTS (EXEMPTION)

## PURSUANT TO RULE 15c 3-3 of the Securities and Exchange Commission

#### As of December 31, 2019

## **"EXEMPT UNDER 15c3-3(k)(2)(ii)**

Pursuant to rule 15c 3-3 relating to possession or control requirements, L.O. Thomas & Co., Inc. has not engaged in the clearing or trading of any securities and did not hold customer fonds or securities during the year ended December 31, 20 I 9 and therefore is claiming exemption to this schedule pursuant to paragraph (k)(2)(ii) of SEC Rule 15c3-3. The firm's minimum net capital requirement pursuant to paragraph (a)(2)(v1) of SEC Rule I 5c3-l will be \$5,000.

{20}------------------------------------------------

#### L.O. Thomas & Co., Jue.

#### Exemption Report pursuant to SEC Rule l 7a-S For the Year Ended December 31, 2019

#### STATEMENT OF EXEMP'IlON FROM SEC RULE l 5c3-3

L.O. Thomas & Co., Inc. (the ucompany'~ is a registered broker-dealer subject to Rule 17a-5 promulgated by the Securities and Exchange Commission ( 17 C. F.R 5240.17a-5, "Reports to be made by certain brokers and dealers"). Th is Exemption Report was prepared as required by 1 7 C. F.R. *5* 240.17 a-5( d XI) and ( 4). To the best ofits knowledge and belief, the Company states the following:

- (1) The Company claimed an exemption from 1 7 C.F.R. 5240.15c3-3 under the following provisions of 17 C.F.R 5240.15c3-3(k)(2)(ii).
- (2) TI1e Company met the identified exemption provisions in 17 C.F.R. §240.15 c3-3(k)(2)(ii) throughout the most recent fiscal period without exception.

L.0. Thomas & Co., Inc.

I, J oh11 W. Risley, swear ( or affinn) that, torn y best knowledge and bcl icf, this Exemption Report is true and correct.

By:

Title: CEO

{21}------------------------------------------------

SJPCREPORT

December 31, 2019

{22}------------------------------------------------

#### **MICHAELT. REMUS**

# *~'PJ&A~*

P.O. Box 2555 Hamilton Square, NJ 08690 **Tel:** 609-540-1751 **Fax:** 609-570-5526

Report oflndepcndcni Registered Public Accounting Fi1m on Applying Agreed-upon Procedures

L.O. Thomas & Co., Inc.

In accordance with Rule l7a-5(e)(4) under the Securities Exchange Act of 1934 and with the SIPC Series 600 Rules, I have performed the procedures enumerated below, which were agreed to by LO. Thomas & Co., Inc. and and the Securities Investor Protection Corporation (SIPC) with respect to the accompanying General Assessment Reconciliation (Form SIPC-7) ofL.O. Thomas & Co., Inc. for the year ended December 31, 2019 , solely to assist you and SIPC in evaluating L.O. Thomas & Co., Inc.' s compliance with the app 1 icab 1 e instructions of the General Assessment Reconciliation (Form SIPC-7). L.O. Thomas & Co., Inc. management is responsible for the firms compliance with those requirements. This agreed-upon procedures engagement was conducted **in** accordance with attestation standards established by the Public Company Accounting Oversight Board (United States). The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, I make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures I performed and my findings are as follows:

- 1. Compared listed assessment payments on SIPC-7 with respective cash disbursements journals, noting no differences;
- 2.. Compared the amounts reported on the audited Form X-17 A-5 for the year ended December 31, 2019, as applicable, with the amounts reported in Fann SIPC-7 for the year ended December 3 **l,** 2019, noting no differences;
- 3. Compared any adjustments reported in Porm SlPC-7 with supporting schedules and working papers, noting no differences, and
- 4. Proved the arithmetical accuracy of the calculations reflected in Form SIPC-7 and in the related schedules and working papers suppmting the adjustments, noting no differences.

I was not engaged to, and did not conduct an examination, the objective of which would be the expression of an opinion on compliance. Accordingly, l do not express such an opinion. Had I performed additional procedures, other matters might have come to my attention that would have been reporied to you.

This report is intended solely for the infonnation and use of the specified parties listed above and is not intended to be and should not be used by anyone other than these specified parties.

Michael T. Remus, CPA Hamilton Square, New Jersey February 10 , 2020

{23}------------------------------------------------

#### L.O. Thomas & Co., Inc. **SlPC General Assessment Reconciliation December 31, 2019**

General Assessment Calculation

| Total Revenue               | 1,281,596<br>\$ |
|-----------------------------|-----------------|
| Deductions                  | (1,203,695)     |
| SIPC Net Operating Revenues | 77,901          |
| Rate                        | 0.0015          |
| General Assessment Due      | 117             |
| Less Payments: SIPC 6       | (64)            |
| Plus: Interest              |                 |
| Remaining Assessment Due    | 53              |
| Paid with SIPC 7            | (53)            |
| Balance Due                 | (O)<br>\$       |

There is no material difference between the SIPC-7 and this reconciliation.

See Independent Accountants' Report.


Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.