# JAMES T. BORELLO & CO. X-17A-5 (2024-11-29) — Broker-dealer annual report
- Company: JAMES T. BORELLO & CO.
- Form: X-17A-5
- Filed: 2024-11-29
- Period: 2024-09-30
- Accession: 0000871185-24-000001
- CIK: 871185
- File #: 8-43398
- Type: Broker-dealer
- Material weakness: No
- Auditor: LMHS, P.C. Certified Public Accountants and Advisors
- Auditor location: Norwell, ME
- Contact: Daniel J. Borello
- Phone: 847-426-0200
- Email: daniel@borellos.com
- Website: borellos.com
- Signed by: Daniel J. Borello (VP)
Original filing: https://www.sec.gov/Archives/edgar/data/871185/000087118524000001/Short.pdf
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#### UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
## ANNUAL REPORTS FORM X-17A-5 PART III
Expires: Oct. 31, 2023 Estimated average burden hours per response: 12
OMB Number: 3235-0123
OMB APPROVAL
SEC FILE NUMBER
FACING PAGE
Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934
filing for the period beginning 10/01/2023
MM/DD/YY
\_AND ENDING 09/30/2024 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 DUNDEF | ﺍﻟﻤﺴﺘﻘ | | 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 | (Name - if individual, state last, first, and middle name) | | |
| 80 Washington Street, Bldg S Norwell | | MA | 02061 |
| (Address) | (City) | (State) | (Zip Code) |
| 02/24/2009 | | 3373 | |
| (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 relied on as the basis of the exemption. See 17
CFR 240.17a-5(e)(1)(li), 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.
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#### OATH OR AFFIRMATION
| , swear (or affirm) that, to the best of my knowledge and belief, the
DANIEL J. BORELLO | | | | | | |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|--|--|
| financial report pertaining to the firm of JAMES T. BORELLO & CO.
as of | | | | | | |
| , 2024 , is true and correct. I further swear (or affirm) that neither the company nor any
al30
র বিষয়ক বিশ্বকাপ বিশ্ববিদ্যালয়ের সাথে সামনির সামনে পারে পারে পারে পারে পারে পারে পারে পারে পারে পারে পারে পারে পারে পারে পারে পারে পারে পারে পারে পারে পারে পারে পারে পারে পা | | | | | | |
| 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. | | | | | | |
| OFFICIAL SEAL
Signature: | | | | | | |
| JACLYN A. KIELTYKA | | | | | | |
| Notary Public - State of Illinois
litle: | | | | | | |
| My Commission Expires 08/22/2026
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] {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). | | | | | | |
| [ (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 240.18a-1, as applicable. | | | | | | |
| [ (i) Computation of tangible net worth under 17 CFR 240.18a-2. | | | | | | |
| [i] Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.1563-3. | | | | | | |
| [] {{) Gamputation 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. | | | | | | |
| [0] 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. | | | | | | |
| □ {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-1, 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. | | | | | | |
| [] {g) Oath or affirmation in accordance with 17 CFR 240.17a-12, or 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 hased 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, | | | | | | |
| as applicable.
[] {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). | | | | | | |
| [] (7) 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.
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#### JAMES T. BORELLO & CO.
## CONTENTS
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## Report of Independent Registered Public Accounting Fim,
'l'o the Sharelrolder Jarnes T. Borello & Co. East Dundee, Illinois
## Opinion on tlte Finonciol Statements
We have audited the accompanying statement of condition of James T. Borello & Co. (the "Company") as of September 30,2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all rnaterial respects, the financial position of the Cornpany as of September 30, 2024, in conformity with accounting principles generally accepted in the United States of America.
## Basisfor 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 tlre Company in accoldance 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 assulance 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 perfonn, 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 perfonning procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding tlre arnounts 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.
zs.rh{s,p.c
LMHS, P.C. We have served as James T. Borello & Co.'s auditor since2022. Norwel l, Massachusetts November 26,2024
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## JAMES T. BORELLO & CO.
## STATEMENT OF FINANCIAL CONDITION
## SEPTEMBER 30, 2024
#### ASSETS
| Cash | \$ | 293,639 |
|--------------------------------------------|----|-----------|
| Accounts receivable | | 1,166,125 |
| Property and equipment, at cost, net of | | 19,367 |
| \$356,136 accumulated depreciation | | |
| Automobile, at cost, net of | | 115,289 |
| \$45,579 accumulated depreciation | | |
| TOTAL ASSETS | \$ | |
| | | 1,594,420 |
| LIABILITIES AND SHAREHOLDER'S EQUITY | | |
| | | |
| LIABILITITS | | |
| Accrued expenses | \$ | 63 |
| Commissions payable and others | | 109,421 |
| | | |
| Total Liabilities | | 109,484 |
| | | |
| 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 | | 1,323,557 |
| | | |
| Total Shareholder's Equity | | 1,484,936 |
| | | |
| TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY | \$ | 1,594,420 |
The accompanying notes are an integral part of these financial statements.
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#### JAMES T. BORI]I,I,O & CO
#### NOTE I - ORCANIZATION AND SIGNIFICANT ACCOTJNTING POLICIES
Organization - Janres T. Borello & Co. (the "Company") was incorporated in tlre state of lllinois on February 14, 1990. The Cornpany 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 SEC as an investment advisor. The Company's principal business activities are investment advisory services. tax and accounting services, and other securities related business.
Basis of Presentation - The financial staternents have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America ("GAAP").
Cash and Cash Equivalents - The Cornpany considers all highly liquid debt instruments purchased with a rnaturity of three months or less to be cash equivalents.
Fair Value of Financial Instruments - The Company follows FASB guidance with respect to fair value measurements. This guidance provides a framework for measuring fair value under GAAP, for all financial assets and liabilities measured at fair value on a recurring basis.
#### Revenue Recognition
Etl-ective October 1,2018, the Cornpany adopted ASC Topic 606, Revenue.fronr Contracts wilh Custorzens' ("ASC Topic 606"). Thc ncw rcvcnuc recognition guidance requires that an entity recognize revenue to depict the transfer of prornised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires an entity to follow a five steps model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (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. ln determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with 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 revenue recognition guidance does not apply to revenue associated with financial instruments, interest incorne and expense, leasing and insurance contracts.
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#### JAMES T. BO RELLO & CO.
## NOTE I - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES - (conrinued)
Annuities - Commission revenue from annuity trails are paid monthly or quarterly. The Company believes the perforrnance obligation is cornpleted when the commission is paid. The consideration is variable based on market conditions.
Accounting and Tax Preparation Fees - The Company records revenue for accounting and tax preparation fees when the services are paid. Revenue is deerned earned when the services are completed and the fees are collected. The company believes the performance obligation is completed at the date of collection.
Advisory Fees - Advisory fees are recognized based on the average daily balance of the previous quarter and are paid in arrears. The Company believes the performance obligation for providing advisory services is satisfied over time because the customer is receiving and consuming the benefits as they are provided by the Company.
Interest Income - The Company earns interest over time, on cash balances being held in certain bank accounts. Revenue is recorded monthly as the interest is earned.
Other Commissions and Concessions - Commission revenue and related expense arising from securities transactions are recorded on the trade date basis, which is the same business day as the transaction date. The company believes the performance obligation is satisfied on the trade date.
Allowance for Doubtful Accounts - The allowance 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, 2024, there was no allowance for doubtful accounts recorded for commissions' receivable as the Company's management believes all amounts are fully collectible.
Depreciation - Depreciation of furniture, equipment and automobile is provided for using various accelerated and straight-line methods over five- and seven-years 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 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 statements in confonnity with GAAP 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 diffbr from those estimates.
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#### JAMES 1'. BORIll,l-O & CO.
#### NOTE2- INCOMETAXES
The Cornpany has elected S Corporation status tbr income tax purposes. Income taxes are therefore the responsibility of the Company's sole shareholder. 'l'he Cornpany is subject to ceftain Illinois income taxes. The Cornpany accounts for any potcntial interest or penalties related to possible futurc liabilities for unrecognized income tax benefits as other expense. The Cornpany is no lorrger subject to examination by tax authorities for federal, state or local income taxes for periods before 2020.
Income Tax Unceftainties - The Company follows the FASB guidance for how unceftain tax positiorrs should be recognized, measured, disclosed and presented in the financial statements. This requires the evaluation of tax positions taken or expected be taken in the course of preparing the Company's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained "when challenged" or "when examined" by the applicable tax authority. Tax positions not deemed to meet the more-likely-tlran-not threshold would be recorded as a tax expense and liability in the current year. Management has evaluated the Company's tax positions and concluded that the Company has taken no uncertain tax positions that require adiustrnent to the financial statements to comply with the provisions of this guidance as of December 31. 20XX. The Cornpany is not currently under audit by any tax jurisdiction.
#### NOTE 3 - RETIREMENT PI-AN
The Company sponsors a 401(k)-profit sharing plan for all employees that have attained the age of 2l and cornpleted 1,000 hours of service during a l2-rnonth period. The Conipany will make an annual Safe Harbor Non-elective 3%o contribution that is 100% vested immediately. All other discretionary profitsharing contributions made by the Cornpany vest over a six-year period based on years of eligible service. Contributions to the plan for the year ended Septernber 30,2024 were \$ I 96,499,
#### NOTE 4 - CASH BALANCE PENSION PLAN
The Cornpany sponsors a cash balance pension plan. The Plan is a noncontributory defined benefit plan and a tax-qualified retirement plan subject to the Employee Retirement Income Security Act of 1974, as amended (ERISA). The Company funds retirement costs through a trust and complies with the applicable minimum funding requirements specified by ERISA. Participants' accrued benefits vest 100% after three years of eligible service and are based on accumulation account balances. which are nraintained for each individual. Participants receive an annual pay credit up to 80% of their cornpensation and a monthly interest credit at a fixed rate of 5%o compounded annually. The Cornpany expensed \$150,000 of contributions to the plan for the year ended September 30.2024.
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#### JAlvlES T. BORELLO & CO.
#### NOTE 5 - NET CAPITAL REQUIREMENTS
As a registered broker/dealer and member of FINRA, the Company is subject to the Uniforrn Net Capital Rule, l5c3-1, which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 1500%. At September 30, 2024, the Company's net capital and required net capital were \$184,155 and \$25,000, respectively. The ratio of aggregate indebtedness to net capital was 59.5%o.
#### NOTE6-RELATEDPARTY
During the year ended Septernber 30,2024, the Company paid \$78,000 in rent for occupancy of its premises to an entity owned by the Company's sole shareholder and other related parties. No written lease agreement exists between the Company and this entity. The cornpany is considered a tenant-at-will. Management has considered ASC 842 and determined that it is not applicable to the Company.
In addition, this shareholder is a registered representative of the Company and is responsible for a significant portion of the Company's revenue. The shareholder is not compensated based on a percentage ofthe revenue produced, but receives a salary and distributions.
#### NOTE 7 - CASH SEGREGATED UNDER FEDERAL AND OTHER REGULATIONS
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 30,2024, this special bank account had azero balance.
#### NOTE 8 \_ PROPERTY AND EQUIPMENT, NET
Property and equipment at September 30, 2024 consists of:
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During the year ended September 30,2024, the Cornpany had depreciation expense of \$41,267, which was recorded irr other expenses orr the statement of operations.
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#### JAMES T. BORELLO & CO.
#### NOTE 9 - COMMITMENTS AND CONTINGENCIES
The Company had no significant contingent liabilities requiring disclosure in the financial statements.
#### NOTE IO \_ SUBSEQUENT EVENTS
Management has evaluated subsequent events that have occurred as of November 26,2024, the 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.