# JAMES T. BORELLO & CO. X-17A-5/A (2022-11-23) — Broker-dealer annual report - Company: JAMES T. BORELLO & CO. - Form: X-17A-5/A - Filed: 2022-11-23 - Period: 2022-09-30 - Accession: 0000871185-22-000002 - CIK: 871185 - File #: 8-43398 - Type: Broker-dealer - Material weakness: No - Auditor: Bryan Morrissey - Auditor location: Norwell, ME - Contact: Daniel J. Borello - Phone: 847-426-0200 - Website: lnrhspc.conr - Signed by: Daniel J. Borello (VP) Original filing: https://www.sec.gov/Archives/edgar/data/871185/000087118522000002/Short_Report.pdf --- {0}------------------------------------------------ ### JAMES T. BORELLO & CO ## FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PURSUANTTO RULE l7a-5 SEPTEMBER30,2022 {1}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C.20549 > ANNUAT REPORTS FORM X-17A-5 PART III OMB APPROVAL OMB Number: 3235-OI2l Expires: Oct. 3f,2023 Estimated average burden hours per response: l2 SEC FILE NUMBER | ln
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LY | | | | \* Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public accountantmustbesupportedbyastatementoffactsandcircumstancesreliedonasthebasisoftheexemption. See17 CFR 240.17a-5(el(1)(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. {2}------------------------------------------------ #### OATH OR AFFIRMATION | | I. DANIEL J. BORELLO
, swear (or affirm) that, to the best of my knowledge and belief, the | |---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | ત્ત્વિત | financial report pertaining to the firm of JAMES T. BORELLO & CO.
, as of
2 022 , is true and correct. I further swear (or affirm) that neither the company nor any | | | partner, officer, director, of charters, as the case may de, has any proprietary interest in any account classified solely
OFFICIAL SEAL
as that of a customer.
JACLYN A. KIELTYKA
Notary Public - State of Illinois
Signature: | | | My Commission Expires 08/22/2026 | | | litle:
VICE PRESIDENT
Notary Public | | | | | | This filing** contains (check all applicable boxes): | | | (a) Statement of financial condition. | | | = (b) Notes to consolidated statement of financial condition. | | | {c} Statement of income (loss) or, if there is other comprehensive in the period(s) presented, a statement of | | | comprehensive income (as defined in § 210.1-02 of Regulation S-X). | | | [d) Statement of cash flows.
[ (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. | | | [ (f) Statement of changes in liabilities subordinated to claims of creditors. | | | [ (g) Notes to consolidated financial statements. | | | [ (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 740.18a-1, as applicable. | | | [i) Computation of tangible net worth under 17 CFR 240.18a-2. | | | [] [j] Computation for determination of customer requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. | | | 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. | | | [1) Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3. | | | (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. | | | [ (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR | | | 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable. | | | Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capible net | | | worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-2, 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. | | | □ (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. | | | Oath or affirmation in accordance with 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. | | | (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. | | | [s] Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. | | | (t) Independent public accountant's report based on an examination of the statement of financial condition. | | | [ (u) Independent public accountant's report based on an examination of the financial statements under 17 | | | CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. | | | (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 | | | CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. | | | w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 | | | CFR 240.18a-7, as applicable. | | | (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.17a-12, | - □ (y) Report describing any material inadequacies found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). - □ (z) Other: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18a-7(d)(2), as applicable. {3}------------------------------------------------ ## JAMES T. BORELLO & CO, # coNTENT\$ | M
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7 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) ## Report of Independenl Registered Public Accourtlirtg Finn To Shareholders of Jantes T. Borello & Co East Dundee, lL ### Opinion on the Finoncial Statenents We have audited the acconrpanying statement of condition of James T. Borello & Co. (the "Company") as trf Septenrber 30,2022, and the related notes (collectively refened to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Conrpany as of September 30, 2022, in conformity with accounting principles generally accepted in the United States of Anrerica. #### Basisfor Opinion 'l'hese financial statements arc the responsibility of the Conrpany's rnanagement. Our responsibility is to express an opinion on the Conrpany's firtancial statentents based on our audil. We are a public accounting I'irnt registercd rvith the Public Conrpany Accourrting Oversight Board (United States) (PCAOB) and are required to be independent witlt respect to the Cornpany in accordance rvith the U.S. f'ecleral securities laws nnd the applicable rules and regulations of the Securities and Exchange Commission ancl the PCAOB. We conducted our auclit in accordance rvith the stanclards of the PCAOB. Those standards lequire that rve plan nncl perfornt the audit to obtain reasonable assurance about rvhether the firrancial statenrents are free of tttaterial ntisstatentent, rvhether due to ernx or fraud. James T. Borello & Co is not required to have, nor \\:ele \ve engaged to pelfonn, an audit of its internal contlol over financial reporting. As part of our atrdit, \ve are requited to obtain an unclerstnrtcling of internal corrtlol rlver financill reporting but not for the puryose of exprc'ssittg an opiniort on the effectivencss of the entity's internal control over' financial reporting. Accoldingly, \\,c express no such opinion. Our attdit incluclecl perfornting procedurcs to assess the risks of nraterial nlisstatenlent of thc financial slatentents, rvhether due to en'or or li'aucl, and perforrning proccclures that respond to those risks. Such proceclttrcs included exatuining, on a test basis, evidence regarding lhe arnounts and rlisclosurcs in the linancial statenrents. Our auclit also incluclecl evaluating the accounting plinciples used ancl significant estinlates made by nlnnagement, as rvell as evaluating thc overall presentation ol the tinancial statements. We believe that our auclit provides a reasonable basis fbr our opiniru. Lr-//s,,4 e, I-MHS, P.C. We have servecl as Janres T. Ilorello & Co's auditor since 2022. Norrvell, Massachusctts Novenrber 14,2022 ![](_page_4_Picture_11.jpeg) 80Waslrington Street, Btrilcting S, Norwell, Massachusetts 02067 (781, 875-9111 FX (787) 878-3666 www.lnrhspc.conr {5}------------------------------------------------ # JAMES T. BORELLO & CO. # STATEMENT OF FINANCIAL CONDITION # SEPTEMBER 30, 2022 100 722 | ASSETS | | | | |--------|--|--|--| | | | | | | Cash | 2 | 100,122 | |-----------------------------------------------|----|-----------| | Commissions and concessions receivable | | 912,268 | | Furniture and equipment, at cost, net of | | 41,176 | | \$332,708 accumulated depreciation | | | | Automobile, at cost, net of | | 164,653 | | \$228,019 accumulated depreciation | | | | TOTAT ASSOCIALS | \$ | 1,298,830 | | LIABILITIES AND SHAREHOLDER'S EQUITY | | | | THE NETTITUTES | | | | Accrued expenses | \$ | 12,748 | | Commissions payable | | 60,990 | | Total Liabilities | | 73,739 | | SHAREHOLDER'S EQUITY | | | | Common stock, no par value | | | | authorized 10,000 shares; issued | | | | and outstanding 1,000 shares | | 1,000 | | Additional paid-in capital | | 160,379 | | Retained earnings | | 1,063,712 | | Total Shareholder's Equity | | 1,225,091 | | TOTAL LIABILITIES AND SHAREHOLDER'S
EQUITY | \$ | 1,298,830 | The accomying notes are an integral part of these financial statements. {6}------------------------------------------------ # JAMES T. BORELLO & CO. Notes to Financial Statements YEAR ENDED SEPTEMBER 30,2022 ### NOTE I - ORGANIZATION AND SIGNtrICANT ACCOUNTING POLICIES Organization - James T. Borello & Co. (the "Company") was incorporated in the state of Illinois on February 14, 1990. The Company is registered as a broker/dealer with the Securities and Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority (FINRA). The Company is also registered with the SE,C as an investment advisor. The Company's principal business activities are the sale of securities and providing investment advice. Basis of hesentation - The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). ### Revenue Recoqnition: Effective October 1, 2018, the Company adopted ASC'Ibpic 606, Reventte from Contracts with Cnstorners ("ASC Topic 606"). The new revenue recognition guidance requircs that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that retlects the considemtion to which the entity expects to be entitled in exchange for those goods or services. The guidance requires an entity to follow a five step model to (a) identify the contract(s) with a customer, (b) identify the perfolmance obligations in the contract, (c) determine the transaction plice, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation, In determining the transaction price, an entity may include variable considemtion only to the extent that it is probable that a significant reversal in (he amount of cumulative revenue recognized wonld not occru when the uncertainty associated with the vaLiable consideration is rcsolved. The Corlpany applied the modified retrospective method of adoption which rcsulted in no adjustnlent to retained earnings as of October 1,2018. The new rcver)ue recognition guidance does not apply to revenue associated with financial irtstruments, interest incorne and expense, leasirrg aud insurance contracts. Securities Tt'ansactions - Cornmission revenue and lelated expense arising fronr securities transactious are recolded on the trade date basis, which is the sarne business day as the transaction date. {7}------------------------------------------------ ## JAMES T. BORELLO & CO. Notes to Financial Statements YEAR ENDED SEPTEMBER 30,2022 #### NOTE I - ORGANIZATION AND SICNIFICANT ACCOUNTTNG POLICIES \_ (cONtiNUCd) Accounting and Tax Preparation Fees - The Company rccords revenue for accounting and tax preparation fees when the services are paid. Advisory Fees - Advisory fees are recognized based on the average daily balance of the previous quarter and are paid in anears. Allowance for Doubtful Accounts - The allowance for doubtfurl accounts is determined on a specific identification basis as a result of a case-by-case review of receivables. As of September 30, 2A22, there was no allowance fbr doubtful accounts recorded for commissions' receivable as the Company's management believes all amounts are fully collectible. Depreciation - Depreciation of furniture, equipttrent and autonobile is provided for using various accelerated and straight-line methods over ftve and seven year periods. Concentration of Risk - The Cornpany's cash is on deposit at one financial ilstitution ancl the balance at times rnay exceed the federally iusured limit. Due to the strong credit rating of this financial institution, the Company believes it is not exposed to any significant credit risk to cash. Estimates - The preparation of financial staternents in conformity with GAAP requircs managernent to make estirnfltes attd assumptions that affect the reported amolultsof assets andliabilitiesanddisclosureof contingentassets andliabilities at the date of the financial statements and the reportecl amounts of reventtes and expenses during the reporting period. Actual results could differ ftottt those estimates. #### NOTE2-INCOMETAXES The Cornpany has elected S Corporation stattls for ittcome tax ptlfposes. Income taies ure therefore the responsibility of the Company's sole shareholder. The Cornpany is subject to certain Illinois income taxes. The Company accounts for any potential interest or penalties rclated to possible fnture liabitities for unrecognized incorne tax berrefits as other expense. The Company is no longer subject to examination by tax authorities for federal, state or local incorne taxes for periods before 2018. {8}------------------------------------------------ ## JAMES T. BORELLO & CO. Notes to Financial Statements YEAR ENDED SEPTEMBER 30,2022 #### NOTE3-RETIREMENTPLAN The Company sponsors a 401(k) profit sharing plan fnr all employees that have attained the age of 2l and completed 1,000 hours of service during a l2-month period. The Company will make an annual Safe Harbor Non-elective 3Vo contribution that is 1007o vested imrnediately. All other discretionary profit sharing contributions made by the Company vest over a six-year period based on yeats of eligible service. Contributions to the plan fol the year ended September 30, 2022 were \$1 80,06 1.55. #### NOTE 4 - CASH BALANCE PENSION PLAN The Company sponsors a cash balance pension plan. The Plan is a noncontributory defined benefit plan and a tax-qualified retirement plan subject to the Employee Retircmetrt Income Security Act of 1974, as amended (ERISA). The Cornparty funds retirernent costs through a trust and complies with the applicable minimurn funding requircments specified by ERISA. Participants' accrued benefits vest 10070 after three years of eligible service and are based on accumulation account balances, which arc maintained for each individual. Participants receive an amual pay credit up to 807o of their cornpensation and a monthly intercst credit at a fixed rate of 5olo contpounded aruttrally. The Compauy expettsed \$140,845.92 of conlributions to the plan for the year ended Septernber 30,2022. ### NOTE 5 - NET CAPITAL REQUIREMENTS As a registered broker/dealer and member of FINRA, the Conrpany is subject to the Utlifonr Net Capital Rule, 15c3-1, which requires the mainteltance of Ininimum net capital and requires that the ratio of aggr€gate indebtedness to net capital, both as defined, shall not exceed lSO\Vo. At September 30,2022, the Company's net capital and requircd net capital were \$106,994 and \$25,000, respectively. The ratio of aggregate indebtedness to net capital was 697o. #### NOTE6-RELATEDPARTY During the yeal ended Septernber' 30,2022, the Cornpany paid \$78,000 in rent for occupancy of its prernises to an entity owned by the Colnpany's sole shareholder and other related parties. No written lease agreement exists between the Compalry and this entity. {9}------------------------------------------------ ## JAMES T. BORELLO.& CO, Notes to Financial Statements YEAR ENDED SEPTEMBER 30,2022 In addition, this sharehotder is a registered representative of the Company and is responsible for a significant portion of the Company's revenue. The shareholcler is not compensated based on a percentage of the revenue produced, but receives a salary and distributions #### NOTE 7 - CASH SEGREGATED UNDER FEDERAL AND OTHER REGI.JLATIONS The Company has a bank account designated as a Special Bank Account for the Exclusive Benefit of Customers pursuant to Rule l5c3-3 of the SEC. At September 30,2022, this special bank account had a zero balance. #### NOTE 8 - FURNITURE AND EQUIPMENT Fumiture and equipment at September 30, 2022 consists of: | A
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_ | ### NOTE 9 - RISK TO OPERATIONS The United States is presently in the midst of a natioual health emelgency related to a virus, commonly known as Novel Coronavirus (COVID-I9). The overall consequences of COVID -19 on a national, regional and local level are unknown, but it has the potential to result in a significant economic irnpact. The impact of this situation on the company and its futrre results and financial positiou ale not presently detenninable. {10}------------------------------------------------ # JAMES T. BORELLO & CO. Notes 0o Financial Statements YEAR ENDED SEPTEMBER 30, 2022 #### NOTE IO. COMMITMENTS AND CONTINGENCIES In the ordinary course of business, the Company is subject to inquiries from certain regulators. There are no pending regulatory inquiries to which the Company is a party for which management believes the ultimate outcome would have a material adversc effect on its financial position. The Company had no significant contingent liabilities.requiring disclosurc in the financial statements. ## NOTE 1 I - SUBSEQUENT EVENTS Management has evaluated subsequent that have occuned os of November 14, 2V2?-the date the financial statement\$ were available to be issued. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.