# JAMES T. BORELLO & CO. X-17A-5 (2023-11-16) — Broker-dealer annual report - Company: JAMES T. BORELLO & CO. - Form: X-17A-5 - Filed: 2023-11-16 - Period: 2023-09-30 - Accession: 0000871185-23-000001 - CIK: 871185 - File #: 8-43398 - Type: Broker-dealer - Material weakness: No - Auditor: LMHS, P.C. Certified Public Accountants and Advisors - Auditor location: Norwell, MA - Contact: Daniel J Borello - Phone: 8474260200 - Email: daniel@borellos.com - Website: borellos.com - Signed by: Daniel J Borello (VP) Original filing: https://www.sec.gov/Archives/edgar/data/871185/000087118523000001/Short.pdf --- {0}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 A | NNUAL REPORTS | | |---------------|--| | FORM X-17A-5 | | | PART III | | | OMB APPROVAL | | |---------------------------|--| | OM8 Number: 3235-0123 | | | Expires: Oct. 31, 2023 | | | Estimated average burden | | | hours per response:
12 | | SEC FILE NUMBER | Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 193
FILING FOR THE PERIOD BEGINNING 10/01/2022 AND ENDING 09/30/2023 | FACING PAGE | | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------|------------| | | MM/DD/YY | MM/DD/YY | | | A. REGISTRANT IDENTIFICATION | | | NAME OF FIRM: JAMES T. BORELLO & CO. | | | | TYPE OF REGISTRANT (check all applicable boxes):
@ Broker-dealer __ Security-based swap dealer __ _ Major security-based swap participant
Check here if respondent is also an OTC derivatives dealer | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | 151 DUNDEE AVENUE | | | | | (No. and Street) | | | FAST DUNDEE | | 60118 | | (City) | (State) | (Zip Code) | | | | | PERSON TO CONTACT WITH REGARD TO THIS FILING DANIEL J. BORELLO 847-426-0200 DANIEL@BORELLOS.COM (Name) (Area Code - Telephone Number) (Email Address) B. ACCOUNTANT IDENTIFICATION INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing\* # LMHS, P.C. Certified Public Accountants and Advisors | 80 Washington Street, Bldg S Norwell | | MA | 02061 | |--------------------------------------------------|-----------------------|-----------------|--------------------------------------------| | (Address)
02/24/2009 | (City) | (State)
3373 | (Zip Code) | | (Date of Registration with PCAOB)(if applicable) | | | (PCAOB Registration Number, If applicable) | | | FOR OFFICIAL USE ONLY | | | \* Claims for exemption from the requirement that the annual reports of an Independent public accountant must be supported by a statement of facts and circumstances relled on as the basis of the exemption. See 17 CFR 240.17a-5(e)(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. {1}------------------------------------------------ #### OAITI OR AFFIRMATION partner, offlcer, dlrector, or equivalent person, as the case may be, has any proprletary lnterest in any account classlfied solely as that of a OFFICIALSEAL JACLYN A, KIELTYKA Notary Public My Commbslon - Stats of llllnols Explres 081221P026 Tltle: VICE PRESIDENT # Thls flllngrr contalns lcheck all appllcable boxesl: El (a) Statement of flnanclal condltlon. - - El (b) Notes to consolidated statement of financlal condltlon. - tr (c) Statement of lncome (loss) or, lf there ls other comprehensive lncome ln the perlod(s) presented, a statement of comprehenslve lncome (as deflned ln g 210.1-02 of Regulatlon S-X). tr (d) Statement of cash flows. - - O (e) Statement of changes ln stockholders' or partners' or sole proprletor's equlty. - tr (0 Statement of changes ln llabllitles subordinated to clalms of credltors. - n (gl Notes to consolidated financlal stat€ments. - - - - tr (h) Computatlon of net capltal under 17CFR 240.15c3-1 or 17 CFR 240,78a-1, as appllcable. D(l) Computatlon of tangible net worth under 17 CFR 240.18a-2. D(f ) Computation for determination of customer reserve requlrements pursuant to Exhlblt A to 17 CFR 240.15c3.3, D(k) Computatlon for determlnatlon of securlty-based swap reserve requlrements pursuant to Exhlblt B to 17 CFR 240.15c3-3 or - - Exhlblt A to 17 CFR 240.18a-4, as applicable- D(l) Computatlon for Determlnatlon of PAB Requlrements under Exhiblt A to g 240.15c3-3. D(m) Information relatlng to possesslon or control requlrements for customers under 17 CFR 24O.XSc3-3. - D (n) lnformation relating to possession or control requlrements for securlty.based swap customers under 17 CFR 240.15c3-3(p)(2) or !7 CFR 240.18a-4, as appllcable. - tr (o) Reconclllations, lncludlng approprlate explanatlons, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3-1, 17 CFR 240,18a-1, or 17 CFR 24O.Lga-2, as appllcablg and the reserve requirernents under 17 CFR 240.15c3-3 or 17 CFR 24O.78a-4, as appllcable, lf material diflerences exlst, or a statement that no material differences exlst. - - [ (p) Summary of flnanclal data for subsldlarles not consolldated ln the statement of flnanclal condttion. D(q) Oath or affirmation in accordance wlth 17 CFR 240.17a-5, 17 CFR 240,t7a-72,or 17 CFR 24O.18a-7, as apptlcable. D(r) Compliance report in accordance with 17 CFR 240,17a-5 or 17 CFR 24O.tBa-7, as applicable. D(s) Exemptlon report ln accordance wlth 17 CFR 240.17a-5 or 17 CFR 24O.L8a-7, as appllcable. E(t) lndependent publlc accountant's report based on an examlnatlon of the statement of flnanclal conditlon. - - - - tr (u) lndependent public accountant's report based on an examlnation of the flnanclal report or flnanclal statements under 17 - CFR 240.17a-5, 17 cFR 240.18a-7, or 17 CFR?4O.77a-12, as appllcable. tr (v) lndependent publlc accountant's report based on an examinatlon of certaln statements ln the compllance report under 17 CFR 240.17a-5 or 17 CFR 240,l8a-7, as appllcable, - tr (w) lndependent publlc accountant's report based on a review of the exemption report under tl CFR24O.L7a-S ot 77 CfR 240.18a-7, as applicable. - tr (x) Supplemental reports on applylng agreed-upon procedures, ln accordance with 17 CFR 240.15c3-1e or 17 CFR 240.17a-12, as appllcable. - tr (y) Report describlng any materlal lnadequacles found to exlst or found to have existed since the date of the prevlous audit, or astatement that no materlal lnadequacles exist, under 17 CfR 240.17a.12(kl, E(zlother: - \*\*To request confldentlol treotment ol certoln portlons of thls fillng, see 77 CFR 240.17o-5(e)(3) or 17 CFR 240,78o-7(d)(2), os oppllcoble. {2}------------------------------------------------ ## CONTENTS | F
I
R
M
C
P
U
B
LI
IN
D
E
P
E
N
D
E
N
T
R
E
G
IS
T
E
R
E
D
A
C
C
O
T
.J
N
T
IN
G
O
F
R
E
P
O
R
T | I | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------| | S
T
A
T
E
M
E
N
T
S
F
IN
A
N
C
I.A
L
S
T
A
]
E
M
E
N
T
F
IN
A
N
C
T
A
L
C
O
N
D
IT
IO
N
O
F | 2 | | S
S
T
O
F
IN
A
N
C
T
A
L
T
A
T
E
M
E
N
T
N
O
T
E
S | 3-
6 | {3}------------------------------------------------ ![](_page_3_Picture_0.jpeg) Report of Independent Registered Public Accounting Firm To Shareholder of James T. Borello & Co. East Dundee, Illinois ## Opinion on the Financial Statements We have audited the accompanying statement of condition of James T. Borello & Co. (the "Company") as of September 30, 2023, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2023, in conformity with accounting principles generally accepted in the United States of America. ## Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. James T. Borello & Co. is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. LMHS P.C. LMHS, P.C. We have served as James T. Borello & Co.'s auditor since 2022. Norwell. Massachusetts November 14, 2023 ![](_page_3_Picture_11.jpeg) 80 Washington Street, Building S, Norwell, Massachusetts 02061 (781) 878-9111 FX (781) 878-3666 www.lmhspc.com {4}------------------------------------------------ # STATEMENT OF FINANCIAL CONDITION # SEPTEMBER 30, 2023 ### ASSETS | Cash | 2 | 248, 050 | |------------------------------------------|----|-----------| | Commissions and concessions receivable | | 932,340 | | Furniture and equipment, at cost, net of | | 28,461 | | \$347,043 accumulated depreciation | | | | Automobile, at cost, net of | | 147,463 | | \$13,406 accumulated depreciation | | | | | | | | TOTAL ASSETS | \$ | 1,356,920 | | | | | | LIABILITIES AND SHAREHOLDER'S EQUITY | | | | | | | | LIABTITLES | | | | Accrued expenses | S | | | Commissions payable | | 80,112 | | | | | | Total Liabilities | | 80,112 | | | | | | 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 | | 1,115,428 | | | | | | | | | TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY \$ 1,356,920 Total Shareholder's Equity 1,276,807 The accompanying notes are an integral part of these financial statements. {5}------------------------------------------------ ## NOTE I - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Organization - Jarnes T. Borello & Co. (the "Company") was incorporated in thc state of lllinois on February 14, 1990. The Cornpany is registered as a broker/dealer lvith the Securities and Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority (FINRA). The Conrpany is also registered with the SEC as an investment advisor. The Company's principal business activities are the sale of securities and providing investrnent advice. Basis of Presentation - The financial statements have been prepared in conformity rvith accounting principles generally accepted in the United States of Arnerica ("GAAP"). #### Revenue RecosnitiQn: Eftbctive October l, 2018, the Company adopted ASC Topic 606, Reventrc from Contracts tvith Customers ("ASC Topic 606"). The nelv revenue recognition guidance requires that an entity recognize revenue to depict the transfer of prornised goods or services to cr.rstomers in an amount that reflects the consideration to lvhich 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) lvith a cnstomer, (b) identifu the perfonnance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the perforrnance obligations in the contract, and (e) recognize revenue rvhen (or as) the entity satisfies a performance obligation. In detennining the transaction price, an entity rnay include variable consideration only to the extent that it is probable that a significant reversal in the arnount of cumulative rEvenue recognized lvould not occur lvhen the unceftainty associated rvith the variable consideration is resolved. The Company applied the modified retrospective method of adoption which resulted in no adjustment to retained earnings as of October 1,2018. The new rcvenue lecognition guidance does not apply to revenue associated lvith financial instrurnents, interest income and expense, leasing and insurance contracts. Seor.rrities Transactions - Commission revenue and related expense arising from securities lransactions are recorded on the trade date basis, rvhich is the salne business day as the transaction date. {6}------------------------------------------------ # NOTE I - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICES - (contirued) Accounting and Tax Preparation Fees - The Cornpany records revenue for accounting and tax preparation fees lvhen the services are paid. Advisory Fees - Advisory fees are recognized based on the average daily balance ofthe previous quarter and are paid in arrears. Allorvance for Doubtfirl Accounts - The allorvance for doubtful accounts is detennined on a specific identification basis as a result of a case-by-case review of receivables. As of September 30,2023, there \vas no allowance for doubtful accounts recorded for commissions' receivable as the Company's management believes all amonnts are fully collectible. Depreciation - Depreciation of furniture, equipment and automobile is provided for using various accelerated and straight-line methods over five and seven year periods. Concentration of Risk - The Company's cash is on deposit at one financial institution and the balance at times may exceed the federally insured lirnit. Due to the strong credit rating of this financial institution, the Cornpany believes it is not exposed to any significant credit risk to cash. Estimates - The preparation of financial statements in conforrnity lvith GAAP requircs management to rnake 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 statemenls and the reported amounts of revenues and expenses during the repoming period. Actual results could differ from those estimates. ### NOTE2.INCOMETAXES The Cornpany has elected S Corporation status for incorne tax purposes, Income taxes are therefore the responsibility of the Company's sole shareholder. The Conrpany is subject to certain Illinois income taxes. The Cornpany accounts for any potential interest or penalties related to possible fuhtre liabilities for unrecognized income tax benefits as other expense. The Cornpany is no longer subject to exarnination by tax authorities for federal, state or local income taxes for periods before 2019. {7}------------------------------------------------ #### NOTE 3 . RETIREMENT PLAN The company sponsors a 401(k) profit sharing plan for all employees that have attained the age of 2l and completed 1,000 hours of service during a l2-month period. 'I'he company will make an annual Safe Harbor Non-elective 3Yo contribution that is 100% vested irnmediately. All other discretionary profit sharing contributions made by the Company vest over a six-year period based on years of eligible service. contributions to the plan for the year ended September 30,2023 rvere \$I61,385. #### 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 retirernent plan subject to the Employee Retirement Income Security Act of 1974, as amended (ERISA). The Company funds retirement costs through a tnrst and complies with the applicable Ininimum funding requirements specified by ERISA. Participants' accrued benefits vest 100% after three years of eligible service and are based on accumulation account balances, lvhich arE maintained for each individual. Participants receive an annual pay credit up to 80% of their compensation and a monthly interest credit at a fixed rate of 5olo compounded annttally. The Conrpany expensed \$l15,018 of contributions to the plan for the year ended September 30,2A23. ### NOTE 5 - NET CAPITAL REQUIREMENTS As a registered broker/dealer and member of FINRA, the Company is subject to the Uniform Net Capital Rule, 15c3-1, rvhich requires the rnaintenance of minilnum net capital and requircs that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed I500%. At September 30, 2023, the Company's rret capital and required net capital lverc \$168,544 and \$25,000, respectively. The ratio of aggregate indebtedness to net capitalwas 487o. ### NOTE6-RELATEDPARTY During the year ended September 30,2023, the Company paid \$78,000 in rent for occupancy of its prenrises to an entity orvned by the Company's sole shareholder and other rclated parties. No nritten lease agreement exists betrveen the Company and this entity. In addition, this shareholder is a registered representative of the company and is responsible for a significant portion of the Company's revenue. The shaleholder is not contpensated based on a percentage of the t'evenue produced, but receives a salary and distributions, {8}------------------------------------------------ ## NOTE 7 . CASH SEGREGATED T,JNDER FEDERAL AND OTHER REGULATIONS The Cornpany has a bank account designated as a Special Bank Account for the Exclusive Benefit of Customers pursuant to Rule l5o3-3 of the SEC. At September 30,2023,this special bank account had a zero balance. ## NOTE 8 - FURNITI.JRE AND EQUtrMENT Furniture and equipment at September 30, 2023 consists ot | A
b
i
l
t
o
m
o
e
u | \$ | 16
0
,8
69 | |---------------------------------------------------------------------------------------|----|-----------------------------| | f
t
r
r
e
s
&
x
u
Fu
itu
m
re | | l
l
,l
9
0
2 | | O
IIi
i
t
ce
e
qu
pm
en | | 18
4.
40
1 | | T
al
ot | | 53
6
,3
72 | | Le
ul
ed
d
ci
io
at
at
ss
: a
n
cc
um
ep
re | ( | 36
0.
44
9
) | | N
et | s | 17
5.
92
3 | ### NOTE 9 - COMMITMENTS AND CONTINGENCIES The Cornpany had no significant contingent liabilities requiring disclosure in the financial statements. ## NOTE l0 - SUBSbQUENT EVENTS Management has evaluated subsequent that have occurred as of Novcmber 14, 2023,hhe date the financial statements were available to be issued. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.