# GBM INTERNATIONAL, INC. X-17A-5 (2021-03-01) — Broker-dealer annual report - Company: GBM INTERNATIONAL, INC. - Form: X-17A-5 - Filed: 2021-03-01 - Period: 2020-12-31 - Accession: 0000876453-21-000001 - CIK: 876453 - File #: 8-43882 - Material weakness: No - Auditor: EEPB, LLC - Auditor location: Houston, TX - Contact: Jose Macouzet - Phone: 281-745-9100 - Email: seaton@gbms.com - Website: gbms.com - Signed by: Jose Macouzet (President/Chief Compliance Officer) Original filing: https://www.sec.gov/Archives/edgar/data/876453/000087645321000001/0148audit.pdf --- {0}------------------------------------------------ UNITEDSTATES SECURITIES ANDEXCHANGE COMMISSION Washington, D.C. 20549 ANNUAL AUDITED REPORT FORM X-17A-5 PART III OMB APPROVAL OMB Number 3235-0123 Expires: October 31, 2023 Estimated average burden hours per response .. . . . . 12.00 | SEC FILE NUMBER | |-----------------| | 8-43882 | FACING PAGE Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder | REPORT FOR THE PERIOD BEGINNING 01/01/2020 | | | AND ENDING 12/31/2020 | | |------------------------------------------------------------------------------------------|---------------------------------------------------------|------------|--------------------------------------------------|--| | | MM/DD/YY | MM/DD/YY | | | | | A. REGISTRANT IDENTIFICA TION | | | | | NAME OF BROKER-DEALER: GBM International, Inc. | | | OFFICIAL USE ONLY | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS (Do not use P.O. Box No.) | | | FIRM LD. NO. | | | 2700 Post Oak Blvd., Suite 1110 | | | | | | | (No. and Street) | | | | | Houston | Texas | 77056 | | | | (City) | (State) | (Zin Code) | | | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
Jase Macouzet | | | (281) 745-9100
(Arca Cade - Telephone Number) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report" | | | | | | EEPB. P.C. | | | | | | | (Norme - of indevidual, state last, first, middly name) | | | | | 2950 North Loop West Freeway, Suite 1200 Houston | | Texas | 77092 | | | (Address) | (City) | (Stake) | 12in Code) | | | CHECK ONE: | | | | | | Certified Public Accountant | | | | | | Public Accountant | | | | | | | | | | | | Accountant not resident in United States or any of its possessions. | | | | | | | FOR OFFICIAL USE ONLY | | | | \*Claims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a stationent of facts and circumstunces relied on as the basis for the exemption. See Section 240.170-5(c) 21 > Potential 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 valld OMB control number. SEC 1410 (11-05) {1}------------------------------------------------ ### OATH OR AFFIRMATION | JOSE Macouzet | | swear (or affirm) that, to the best of | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------|--------------------------------------------------------------| | my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of
GBM International, Inc. | | | | of December 31 | | 20 20 are true and correct. I further swear (or affirm) that | | neither the company nor any partner, principil officer or director has any proprietary interest in any account | | | | classified selely as that of a customer, except as tollows; | | | | | | | | | | | | GARDENIA ORQUIDEA SALAS | | | | Notary Public, State of Texas | Signature | | | Comm. Expires 03-11-2022 | President/Chief Compliance Officer | | | Notery ID 129742787 | Title | | | | | | | | | | | blary Public | | | | his report ** contains (check all applicable boxes): | | | | (a) Facing Page | | | | (b) Statement of Financial Condition. | | | | (c) Statement of Income (Loss) of, 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 Changes in Financial Condition. | | | | (c) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital. | | | | (f) Statement of Changes in Liabilities Subordinated to Claims of Creditors, | | | | (g) Computation of Not Capital. | | | | (h) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3. | | | | (1) Information Relating to the Possession or Control Requirements Under Rule 15c3-3. | | | | () A Reconciliation, including appropriate axplenation of the Computation of Net Capital Under Rule 15c7-1 and the | | | | Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3. | | | | (k) A Reconciliation between the audited and unaidited Statements of Financial Condition with respect to methods of
consolidation. | | | | (I) An Oath or Affirmation. | | | | (m) A copy of the SIPC Supplemental Report. | | | | (n) A report describing any material inadequacies found to exist of found to have existed size of the previous audit. | | | | | | | \*\* For conditions of confidential treatment of certain portions of this filing, see section 240,17a-5(e)(3). {2}------------------------------------------------ # GBM International, Inc. (A WHOLLY-OWNED SUBSIDIARY OF PORTFOLIO INVESTMENTS, INC.) FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION December 31, 2020 {3}------------------------------------------------ # CONTENTS | | PAGE
NUMBER | |---------------------------------------------------------|----------------| | INDEPENDENT AUDITORS' REPORT | | | FINANCIAL STATEMENTS | | | STATEMENT OF FINANCIAL CONDITION | | | STATEMENT OF INCOME | | | STATEMENT OF CHANGES IN SUBORDINATED BORROWINGS | | | STATEMENT OF STOCKHOLDER'S EQUITY | | | STATEMENT OF CASH FLOWS | | | NOTES TO FINANCIAL STATEMENTS | | | SUPPLEMENTAL INFORMATION | | | COMPUTATION OF NET CAPITAL | | | GBM INTERNATIONAL, INC EXEMPTION REPORT | | | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | | | INDEPENDENT AUDITOR'S REPORT ON APPI YING AGREFED-UPON | | | PROCEDURES RFI ATED TO AN ENTITY'S SIPC ASSESSMENT | | | RECONCILIATION | | | GENERAL ASSESSMENT RECONCILIATION | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) ### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of GBM International, Inc. ### Opinion on the Financial Statements We have audited the accompanying statement of financial condition of GBM International, Inc. as of December 31, 2020, the related statements of income, changes in stockholders equity, changes in subordinated borrowings, and cash flows for the year then ended, and the related notes and supplemental information (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of GBM International, Inc. as of December 31, 2020, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. ### Basis for Opinion These financial statements are the responsibility of GBM International, Inc.s management. Our responsibility is to express an opinion on GBM International, Inc.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 GBM International, Inc. 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. 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. ### Auditors Report on Supplemental Information The computation of net capital has been subjected to audit procedures performed in conjunction with the audit of GBM International, Inc.s financial statements. The supplemental information is the responsibility of GBM International, Inc.s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is {5}------------------------------------------------ presented in conformity with 17 C.F.R. §240.17a-5. In our opinion, the computation of net capital is fairly stated, in all material respects, in relation to the financial statements as a whole. We have served as GBM international, Inc.s auditor since 2007. Houston, TX February 26, 2021 {6}------------------------------------------------ ### GBM INTERNATIONAL, INC. ### STATEMENT OF FINANCIAL CONDITION ### DECEMBER 31, 2020 ## ASSETS ### CURRENT ASSETS | ക | 10,652,617
407,285
46.300
207,018
118,606 | |---|-------------------------------------------------------| | | 11,431,826 | | | 8,183
3,376 | | ક | 11,443,385 | | | | | | | | ક | 1,074,671
368,703
4,804 | | | 1,448,178 | | | | | | 9,995,207 | | | 9,995,207 | | | \$ 11,443,385 | | | | The accompanying notes are an integral part of these financial statements. {7}------------------------------------------------ ### GBM INTERNATIONAL, INC. ### STATEMENT OF INCOME ### FOR THE YEAR ENDED DECEMBER 31, 2020 ### REVENUE | Comission income
Interest and dividends
Other income, including trading losses | \$ 10,172,199
82,803
(148,492) | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------| | TOTAL REVENUE | 10,106,510 | | EXPENSES | | | Employee compensation and benefits
Clearing, execution and commission fees
Research and terminal usage fees
General and administrative
Professional fees
Interest expense
Depreciation expense | 2,120,484
2,091,760
170.445
606,506
277,194
28,171
5,317 | | TOTAL EXPENSES | 5,299,877 | | INCOME BEFORE INCOME TAXES | 4,806,633 | | PROVISION FOR INCOME TAXES | (1,013,726) | | NET INCOME | 3,792,907 | The accompanying notes are an integral part of these financial statements. {8}------------------------------------------------ # GBM INTERNATIONAL, INC. STATEMENT OF CHANGES IN SUBORDINATED BORROWINGS FOR THE YEAR ENDED DECEMBER 31, 2020 | BALANCE AT DECEMBER 31, 2019 | ea | | |----------------------------------|----|--| | Proceeds from subordinated notes | | | | Payment of subordinated notes | | | | BALANCE AT DECEMBER 31, 2020 | S | | The accompanying notes are an integral part of these financial statements. {9}------------------------------------------------ # GBM INTERNATIONAL, INC. STATEMENT OF STOCKHOLDER'S EQUITY FOR THE YEAR ENDED DECEMBER 31, 2020 | | Shares | | Additional
Paid-In
Capital | | Retained
Earnings | | Total | |-------------------------------------------------------------|--------|----|----------------------------------|---|-------------------------------------|---|---------------------------------------| | BALANCE AT DECEMBER 31, 2019
Distributions
Net income | 725 | ಕೆ | 1,516,333
(1,516,333) | દ | 7.135.967
(933,667)
3,792,907 | ക | 8,652,300
(2,450,000)
3,792,907 | | BALANCE AT DECEMBER 31, 2020 | 725 - | કે | | | - \$ 9,995,207 | | \$ 9.995.207 | The accompanying notes are an integral part of these financial statements. {10}------------------------------------------------ ### GBM INTERNATIONAL, INC. ### STATEMENT OF CASH FLOWS ### FOR THE YEAR ENDED DECEMBER 31, 2020 FLOWE EDOM ODEDATING ACTIVITIES | บลงการ ( บินเจ ริรับเพิ่ม บิ๊ก ตัวละ โปรัช สงค์ ( ) ( ) ( ) ) ( ) ) ( ) ) ( ) ) ) ( ) ) ) ( ) ) ( ) ) ) ( ) ) ( ) ) ) ( ) ) ( ) ) ( ) ) ( ) ( ) ) ( ) ) ( ) ( ) ) ( ) ( ) ( )
Net income | ಲ್ಲಿ | 3,792,907 | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------|-------------| | | | | | Adjustments to reconcile net income | | | | to cash provided by operating activities: | | | | Depreciation | | 5,317 | | Deferred income taxes | | (71,972) | | Changes in operating assets and liabilities | | | | Deposits held by clearing brokers, restricted | | (820) | | Securities owned at market value | | 1,400,717 | | Receivable from employees | | (19,500) | | Receivable from affiliates | | 236,699 | | Other assets | | (61,108) | | Deferred tax asset | | (8,183) | | Accounts payable and accrued liabilities | | 549,172 | | State Tax Liablity | | 4.804 | | Accrued income taxes payable to affiliate | | 563,909 | | NET CASH PROVIDED BY | | | | OPERATING ACTIVITIES | | 6,391,942 | | CASH FLOWS FROM INVESTING ACTIVITIES | | | | Purchase of Property and Equipment | | (2,617) | | NET CASH USED IN | | | | INVESTING ACTIVITIES | | (2,617) | | | | | | CASH FLOWS FROM FINANCING ACTIVITIES
Distribution | | (2,450,000) | | NET CASH USED IN | | | | FINANCING ACTIVITIES | | (2,450,000) | | | | | | NET INCREASE IN CASH AND | | | | CASH EQUIVALENTS | | 3,939,325 | | CASH AND CASH EQUIVALENTS, beginning of year | | 6,713,292 | | CASH AND CASH EQUIVALENTS, end of year | ಿ | 10,652,617 | | SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | | | | Interest Paid | ક્તિ | 28,171 | | | | | The accompanying notes are an integral part of these financial statements. {11}------------------------------------------------ # GBM INTERNATIONAL, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2020 # NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES # Organization GBM INTERNATIONAL, INC. ("International" or the "Company") was incorporated for the purpose of serving as an introducing broker-dealer to its customers and conduct certain investment banking activities. International is a wholly-owned subsidiary of Portfolio Investments, Inc. ("PI"), which is a wholly-owned subsidiary of Corporativo GBM S.A.B. de C.V. ("GBM Mexico"). International is registered with the Securities and Exchange Commission as a broker-dealer under the Securities Exchange Act of 1934 and is a member of the Financial Industry Regulatory Authority ("FINRA"). International is also registered with the Commodity Futures Trading Commission as an introducing broker and is a member of the National Futures Association. International executes securities trades for customers as a principal and agent, futures trades as agent, and trades securities for its own account. All customer securities and futures transactions are cleared on a fully disclosed basis through unaffiliated broker-dealers. Accordingly, International does not carry customer accounts and does not receive, deliver or hold cash or securities in connection with such transactions. ## Cash and cash equivalents For the purposes of the statement of cash flows, International considers cash and highly liquid investments with original maturities of three months or less when purchased to be cash and cash equivalents. ## Deposits held by clearing brokers During the year ended December 31, 2020, International maintained Securities Clearing Agreements with Pershing LLC ("Pershing") and Apex Clearing Corporation, Inc. ("APEX"). Pursuant to the terms of each Agreement, International is required to maintain a certain level of cash or eligible securities on deposit at each clearing firm. At December 31, 2020, International was required to have cash deposits of \$150,000 at Pershing. Should Pershing suffer a loss due to a failure of a customer of International to complete a transaction, International is required to indemnify the applicable clearing firm to the extent of any such loss. At December 31, 2020 there were no such amounts owed to either clearing firm nor did International incur any such loss during the year ended December 31, 2020. International maintained a similar Agreement with R.J. O'Brien ("RJO") to provide clearing services for International's futures trading activities. The amount of the cash deposit maintained by International at RJO at December 31, 2020 was \$10,000. International is required to indemnify RJO to the extent of any loss incurred by RJO due to a failure of a customer of International to complete a transaction. {12}------------------------------------------------ ## NOTE 1: At December 31, 2020 there were no such amounts owed to RJO nor did International incur any such loss during the year ended December 31, 2020. At December 31, 2020, International maintained cash of \$158,398, \$237,887 and \$10,000 in the clearing deposit account of Pershing, APEX and RJO respectively. ## Receivable from nonaffiliated brokers and dealers Receivables from brokers, dealers, and clearing organizations may include amounts receivable for securities failed to deliver, certain deposits for securities borrowed, amounts receivable from clearing organizations relating to open transactions, goodfaith and margin deposits, and commissions receivable. ## Securities transactions Securities owned and securities sold, not yet purchased are valued at market value. Unrealized gain or loss from marking securities owned and securities sold, not yet purchased to market value is included in income under other income. Securities transactions and related income and expense are recorded on the trade date. Realized gains and losses from sales of securities and derivatives are computed using the first-in, first-out method. ## Property and equipment Property and equipment is stated at cost, less accumulated depreciation. Depreciation is provided using accelerated methods over estimated useful lives of the related assets ranging from 5-7 years. Leasehold improvements are depreciated over the remaining useful life of the lease. Maintenance and repairs are charged to operations as incurred. ## Income taxes International's revenue and expenses are included in the consolidated Federal income tax return filed by Pl. International's tax calculations are made as if International prepared a separate income tax return. Additionally, International may record a tax benefit, if such benefit can be utilized by Pl in its consolidated return. International is also subject to certain state income taxes. International uses the liability method of accounting for income taxes that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in International's financial statements or would have been recognized in PI's consolidated tax return. {13}------------------------------------------------ ## NOTE 1: In estimating future tax consequences, all expected future events are considered other than enactment of changes in the tax law or rates. International provides a valuation allowance, if necessary, to reduce deferred tax assets to amounts that are likely to be realized. International's deferred tax asset represents the tax effects of taxable temporary differences in the book and tax reporting. The taxable temporary differences consist of unrealized gains (losses) on securities, depreciation methods and lives, and accounting treatment of leases. International is subject to the Texas Gross Margin Tax. The Texas Gross Margin Tax generally is calculated as one percent of gross margin, as defined, and was \$2,710 for the year ended December 31, 2020. ### Foreign currency transactions As an agent, in the normal course of business, International enters into securities transactions which are denominated in foreign currencies, primarily the Mexican peso. Realized and unrealized foreign currency gains and losses on such transactions are recorded in the period and are included in the caption other income. There was no net material realized and unrealized foreign currency losses recorded in 2020. For the purposes of reporting cash flows, International has determined that the effect of exchange rate changes on foreign currency transactions is immaterial. ## Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of support and revenues and expenses during the reporting period. Actual results could differ from those estimates. ### Risks and uncertainties Securities owned and securities sold, not yet purchased which are recorded at fair value have exposure to market risk, including the volatility of securities markets. Significant changes in the prices of securities owned could have a significant impact on International's results of operations for any particular year. {14}------------------------------------------------ #### NOTF 2: REVENUE RECOGNITION Revenues are recognized when control of the promised services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Revenues are analyzed to determine whether the Company is the principal (i.e., reports revenues on a gross basis) or agent (i.e., reports revenues on a net basis) in the contract. Principal or agent designations depend primarily on the control an entity has over the product or service before control is transferred to a customer. The indicators of which party exercises control include primary responsibility over performance obligations, inventory risk before the good or service is transferred and discretion in establishing the price. ### Commission Revenue Commission revenue - represents revenue sharing for their clients' purchases and sales of GBM Mexico funds, as well as purchases of other investment products. The Company views the selling, distribution and marketing, or any combination thereof, of investment products to such clients as a single performance obligation to the product sponsors. The Company is the principal for commission revenue, as it is responsible for the execution of the clients' purchases and sales, and maintains relationships with the product sponsors. GBM Mexico assists the Company in performing its obligations. Accordingly, total commission revenues are reported on a gross basis. The following table presents our total commission revenue disaggregated by investment product category: | | Twelve Months Ended
December 31, 2020 | | | | |---------------------|------------------------------------------|------------|--|--| | Other commissions | \$ | 682,144 | | | | Options | | 3,334,089 | | | | Equities | | 5,025,126 | | | | Fixed income | | 788,956 | | | | Commodities | | 1,500 | | | | 12b-1 fees | | 340,384 | | | | Commissions revenue | \$ | 10,172,199 | | | {15}------------------------------------------------ ## NOTE 2: REVENUE RECOGNITION (Continued) The Company generates two types of commission revenue: sales-based commission revenue that is recognized at the point of sale on the trade date and trailing commission revenue that is recognized over time as earned. Sales-based commission revenue varies by investment product and is based on a percentage of an investment product's current market value at the time of purchase. Trailing commission revenue is generally based on a percentage of the current market value of clients' investment holdings in trail-eligible assets, and is recognized over the period during which services, such as on-going support, are performed. As trailing commission revenue is based on the market value of clients' investment holdings, this variable consideration is constrained until the market value is determinable. The following table presents our sales-based and trailing commission revenues disaggregated by product category: | | Twelve Months Ended | | | |---------------------------|---------------------|--|--| | | December 31, 2020 | | | | | | | | | Sales based | | | | | Other commissions | \$
682,144 | | | | Options | 3,334,089 | | | | Equities | 5,025,126 | | | | Fixed Income | 788,956 | | | | Commodities | 1,500 | | | | Total sales-based revenue | \$
9,831,815 | | | | Trailing | | | | | 12b-1 fees | | | | | Total trailing revenue | \$
340,384 | | | | Total Commission revenue | 340,384 | | | | | \$
10,172,199 | | | Other income is generated by interest income from margin accounts, non-purpose loan accounts, firm account revenue, annual fees charged to customers and gains and losses on firm investments. {16}------------------------------------------------ ## NOTE 3: Occasionally, International enters into securities transactions in Mexico which are cleared by GBM Mexico, an affiliated securities dealer domiciled in and regulated by the Comisión Nacional Bancaria y de Valores ("CNBV"). However, there were no such transactions entered into during 2020. Additionally, International executes orders, either as principal or agent, on behalf of GBM Mexico and earns prime brokerage fees from GBM Mexico. Commission, dealer income, and prime brokerage fees earned from GBM Mexico during the year ended December 31, 2020 was \$1,792,058. Commissions and fees receivable from GBM Mexico at December 31, 2020 was \$180,554. GBM Mexico also charges International for overhead costs. During the year ended December 31, 2020, International paid for accounting and administrative services to GBM Mexico of \$108,000, under the terms of the administrative services agreement. Furthermore, International from time to time may enter into transactions with affiliates in the normal course of business which are recorded as receivable from or payable to affiliates. As of December 31, 2020, there was a \$368,703 payable to PI, the majority of which arose as result of tax consequences of being a subsidiary of a consolidated qroup that files a consolidated federal income tax return. From time-to-time advances are made to employees by International. At December 31, 2020, a total of \$46,300 of employee receivables remained outstanding. #### NOTE 4: NET CAPITAL REQUIREMENTS International is subject to the Securities and Exchange Commission Uniform Net Capital Rule (SEC rule 15c3-1), which requires the maintenance of minimum net capital of \$100,000 (including subordinated indebtedness) and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. International is also subject to the Commodity Futures Trading Commission's minimum financial requirements (Regulation 1.17). At December 31, 2020, International had net capital, as defined, of \$9,596,695 which was \$9,496,695 in excess of the required minimum net capital of \$100,000. International's ratio of aggregate indebtedness was 0.15 to 1.0 at December 31, 2020. International is currently in compliance with these requirements. Rule 15c3-1 also provides that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to 1. International is exempt from the provisions of SEC Rule 15c3-3 under paragraph (k)(2)(ii), as described in Supplemental Schedule I. {17}------------------------------------------------ ## NOTE 5: PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of the following at December 31, 2020: | | Estimated
Useful Life | | |--------------------------------|--------------------------|-----------| | Office Equipment | 5 Years | \$ 92.632 | | Vehicles | 5 Years | 20,441 | | Leasehold Improvements | Lease term | 85,813 | | Subtotal: | | 198.886 | | Less: Accumulated Depreciation | | (195,510) | | Property and Equipment, net | | \$ 3,376 | #### INCOME TAXES NOTE 6: As of December 31, 2020, the Company's provision for income taxes was as follows: | Federal Provision (Benefit) | | | |----------------------------------|-------|-----------| | Current | સ્ત્ર | 1,095,975 | | Deferred | | (84,959) | | | | 1,011,016 | | State Provision | | | | Current | | 2,710 | | Total Provision for Income Taxes | ക | 1,013,726 | Deferred income taxes reflect the net effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax reporting purposes. The temporary differences consist of depreciation methods and lives, adjustment for audit fees, and unrealized gains on securities. The Company did not have unrecognized tax benefits as of December 31, 2020 and does not expect this to change significantly over the next twelve months. The Company will recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. As of December 31, 2020, the Company has not accrued interest or penalties related to uncertain tax positions. The Company's U.S. federal and state income tax returns are open to audit under the statute of limitations for the years ending December 31, 2017 and beyond. {18}------------------------------------------------ ## NOTE 7: ### Operating Lease The Company recognizes a ROU asset and a corresponding lease liability based on the present value of the future lease payments over the lease term at the commencement date. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. For determining the present value of lease payments, we use the discount rate implicit in the lease when readily determinable. As most of the Company's leases do not provide an implicit rate, we use an incremental borrowing rate in determining the present value of lease payments that approximates the rate of interest we would have to pay to borrow on a collateralized basis over a similar term. The ROU measurement was calculated using the fixed scheduled rent payments up to the maturity date of December 2020. The agreement does contain variable rent payments composed of common area maintenance ("CAM"), insurance and utilities. The Company did not elect the practical expedient in ASU 2018-16 and therefore, was able to separate CAM fees as non-lease component. CAM fees are adjusted annually based on the company's pro-rata share of the lessor's expenses to maintain the building. Because the adjustment is not based on an index or market rate, the Company did not include the CAM expenses in its ROU calculation. The lease agreement does not contain any material residual value guarantees, renewal options or material restrictive covenants. The Company determines if an agreement is a lease at inception. A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment (an identified asset) for a period of time in exchange for consideration. The Company did not recognize ROU assets and lease liabilities for short-term leases and instead records them in a manner similar to operating leases under ASC 840, Leases, lease accounting guidelines. A short-term lease is one with a maximum lease term of 12 months or less and does not include a purchase option or renewal option the lessee is reasonably certain to exercise. The Company has a sixty-four-month lease for office space located in Houston, TX. The Company executed a lease renewal of its office space which it will recognize in the financial statements on the commencement date of the lease on January 1, 2021. {19}------------------------------------------------ ## NOTE 7: ### Lease Expense The following table presents the lease expenses as of December 31, 2020: | Operating lease expense | S | 69.768 | | |--------------------------|---|--------|--| | Short-term lease expense | | | | | Total lease expense | S | 69.768 | | ### Other Information The following table presents supplemental cash flow information and the weighted average rate and term for the operating lease: Cash paid for amounts included in measurement of the lease liability: | Operating cash flows from the operating lease | \$69.768 | |------------------------------------------------------------------|----------| | ROU asset obtained in exchange for the operating lease liability | \$0 | | Weighted-average remaining lease term (years) | O | | Weighted-average discount rate | 1 5% | ## Maturities The maturity of the lease liability on an undiscounted cash flow basis and a reconciliation to the operating lease liability recognized on the statement of financial condition as of December 31, 2020: | 2021 | 21,318 | |---------------------------------------|-----------| | 2022 | 64.439 | | 2023 | 65,892 | | 2024 | 67,346 | | 2025 | 68.799 | | Thereafter | 46.512 | | Total lease payments | 334,306 | | Less: amount to be recognized in 2021 | (334.306) | | Present value of the lease liability | | {20}------------------------------------------------ # NOTE 7: COMMITMENTS AND CONTINGENCIES (Continued) | Current portion of lease obligation | \$0 | |-------------------------------------|-----| | Long-term lease obligation | 0 | | Total operating lease liability | \$0 | ## Security Transactions International executes securities and futures transactions on behalf of its customers. If either the customer or the counterparty fails to perform, International may be required to discharge the obligation of the nonperforming party. In such circumstances, International may sustain a loss if the market value of the security or futures contract is different from the contract value of the transaction. International does not expect nonperformance by customers or counterparties. International clears all of its securities transactions through clearing brokers on a fully disclosed basis. Pursuant to the terms of the agreements between International and the clearing brokers, the clearing brokers have the right to charge International for losses that result from a counterparty's failure to fulfill its contractual obligations. As the right to charge International has no maximum amount and applies to all trades executed through the clearing broker. International believes there is no maximum amount assignable to this right. As of December 31, 2020, International has no recorded liabilities with regard to the right. During 2020, International did not pay the clearing brokers any amounts related to these guarantees. International's policy is to monitor its market exposure, customer risk, and counterparty risk through the use of a variety of credit exposure reporting and control procedures, including marking-tomarket securities and any related collateral as well as requiring adjustments of collateral levels as necessary. In addition, International has a policy of reviewing, as considered necessary, the credit standing of each counterparty and customer with which it conducts business. ## Other During the normal course of business, International enters into contracts that contain a variety of representation and warranties and which provide general indemnifications. International's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against International that have not yet occurred. However, based on experience, International expects the risk of loss to be remote. {21}------------------------------------------------ ## NOTE 7: ## Loss Contingency International has accrued approximately \$25,000 for contingent losses that International's management has determined to be probable and the amounts are estimable. #### NOTE 8: CONCENTRATIONS A portion of International's trading activities, as an agent; involve securities of companies domiciled in Mexico and South America. Consequently, the ability of International to maintain appropriate levels of trading activity in Mexican and South American securities and the value of such securities outstanding is impacted by economic and business conditions in Mexico and South America. For the year ended December 31, 2020, revenue from one customer represented more than 10% of International's commission. The concentration risk is mitigated through International's client's risk procedures. #### NOTE 9: 401(K) PLAN The Company maintains a 401(k) plan for employees. The 401(k) Plan does not require a mandatory employer contribution but does provide for a discretionary employer contribution. Employer contributions were \$23,313 for the year ended December 31, 2020. ## NOTE 10: SUBSEQUENT EVENTS Subsequent events were evaluated through February 26, 2021 which is the date the financial statements were available to be issued, and noted no significant subsequent events. {22}------------------------------------------------ # SUPPLEMENTAL # INFORMATION {23}------------------------------------------------ ### GBM INTERNATIONAL, INC. ### SUPPLEMENTAL SCHEDULE I ### COMPUTATION OF NET CAPITAL UNDER RULE 15C3-1 OF THE SECURITIES AND EXCHANGE COMMISSION ### DECEMBER 31, 2020 | Net capital: | | | |-----------------------------------------------------------|-------|-----------| | Total stockholder's equity | e | 9,995,207 | | Reductions and charges: | | | | Nonallowable assets: | | | | Property and equipment, net | | 3,376 | | Receivables from non-affiliates, affiliates and employees | | 273,417 | | Other assets | | 118.606 | | Total nonallowable assets and charges, net | | 395,399 | | Net capital before haircuts on security positions | | 9,599,808 | | Haircuts on security positions | | 3,113 | | Net capital | | 9,596,695 | | Aggregate indebtedness | | 1,448,178 | | Percent of aggregate indebtedness to net capital | | 15% | | Computation of basic net capital requirement | | | | Minimum net capital requirement (greater of 6 2/3% of | | | | aggregate indebtedness or \$100,000) | સ્ત્ર | 100,000 | | Excess net capital | ಿ | 9,496,695 | ### STATEMENT PURSUANT TO PARAGRAPH (d)(4) OF RULE 17a-5 Reconciliation of net capital to unaudited FOCUS There is a difference of \$773,759 between the computation of net capital under net capital SEC Rule 15c3-1 and the corresponding unaudited FOCUS part IIA. | Net capital per unaudited schedule | ಕೆ | 8,822,936 | |-------------------------------------------|----|-----------| | Adjustments: | | | | Final tax and revenue accrual adjustments | | 776,820 | | Haircut on securities | | (3,061) | | | | | | Net capital per audited schedule | ക | 9,596,695 | ### STATEMENT OF OMITTED SUPPLEMENTAL DATA The Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3 and the Information Relating to Possession or Control Requirements Under Rule 15c3-3 have been omitted because GBM International, Inc. is exempt from the requirements of Rule 15c3-3 under condition (k)(2)(ii). The conditions of the exemption were being complied with as of December 31, 2020 and no facts came to our attention to indicate that the exemption had not been complied with during the fiscal year ended December 31, 2020. {24}------------------------------------------------ # GBMINTERNATIONAL January 5, 2021 ### Exemption Report ### GBM International Inc.'s Assertions On behalf of GBM International, Inc., I attest that to the best of my knowledge: - 1. GBM International, Inc. claimed an exemption from SEC Rule 15c3-3 under the provisions of section (k)(2)(ii) throughout the year ending December 31st, 2020; - 2. GBM International, Inc. met the identified exemption provision in SEC Rule 15c3-3 (k)(2)(ii) throughout the year ending December 31st, 2020 without exception. Jose Macouzet President and C {25}------------------------------------------------ ![](_page_25_Picture_0.jpeg) ### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors of GBM International, Inc. We have reviewed management's statements, included in the accompanying Exemption Report, in which (1) GBM International, Inc. identified the following provisions of 17 C.F.R. §15c3-3(k) under which GBM International, Inc. claimed an exemption from 17 C.F.R. §240.15c3-3: (k)(2)(ii) (exemption provisions) and (2) GBM International, Inc. stated that GBM International, Inc. met the identified exemption provisions throughout the most recent fiscal year without exception. GBM International, Inc.'s management is responsible for compliance with the exemption provisions and its statements. Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included inquiries and other required procedures to obtain evidence about GBM International, Inc.'s compliance with the exemption provisions. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to management's statements referred to above for them to be fairly stated, in all material respects, based on the provisions set forth in paragraph (k)(2)(ii) of Rule 15c3-3 under the Securities Exchange Act of 1934. Houston, TX February 26, 2021 {26}------------------------------------------------ ![](_page_26_Picture_0.jpeg) ### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON APPLYING AGREED-UPON PROCEDURES Board of Directors of GBM International, Inc. We have performed the procedures included in Rule 17a-5(e)(4) under the Securities Exchange Act of 1934 and in the Securities Investor Protection Corporation (SIPC) Series 600 Rules, which are enumerated below and were agreed to by GBM International, Inc. and the SIPC, solely to assist you and SIPC in evaluating GBM International, Inc.'s compliance with the applicable instructions of the General Assessment Reconciliation (Form SIPC-7) for the year ended December 31, 2020. GBM International, Inc.'s management is responsible for its Form SIPC-7 and for its compliance with those requirements. This agreed-upon procedures engagement was conducted in accordance with standards established by the Public Company Accounting Oversight Board (United States) and in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we 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 we performed, and our findings are as follows: - 1) Compared the listed assessment payments in Form SIPC-7 with respective cash disbursement records entries, noting no differences. - 2) Compared the Total Revenue amounts reported on the Annual Audited Report Form X-17A-5 Part III for the year ended December 31, 2020 with the Total Revenue amount reported in Form SIPC-7 for the year ended December 31, 2020, noting no differences. - 3) Compared any adjustments reported in Form SIPC-7 with supporting schedules and working papers, noting no differences. - 4) Recalculated the arithmetical accuracy of the calculations reflected in Form SIPC-7 and in the related schedules and working papers supporting the adjustments, noting no differences; and We were not engaged to and did not conduct an examination or review, the objective of which would be the expression of an opinion or conclusion, respectively, on GBM International, Inc.'s compliance with the applicable instructions of the Form SIPC-7 for the year ended December 31, 2020. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures; other matters might have come to our attention that would have been reported to you. This report is intended solely for the information and use of GBM International, Inc. and the SIPC and is not intended to be and should not be used by anyone other than these specified parties. Houston, TX February 26, 2021 {27}------------------------------------------------ | SIPC-7 | | |----------------|--| | (36-REV 12/18) | | ### SECURITIES INVESTOR PROTECTION CORPORATION P.O. Box 92185 Washington, D.C. 20090-2185 202-371-8300 General Assessment Reconciliation ![](_page_27_Picture_2.jpeg) Note: If any of the information shown on the 56,660 For the fiscal year ended 12-31-2020 ### (Read carefully the instructions in your Working Copy before completing this Form) TO BE FILED BY ALL SIPC MEMBERS WITH FISCAL YEAR ENDINGS 1. Name of Member, address, Designated Examining Authority, 1934 Act registration no. and month in which liscal year ends for purposes of the audit requirement of SEC Rule 17a-5: mailing label requires correction, please e-mail any corrections to form@sipc.org and so GBM International Inc indicate on the form filed. 2700 Post Oak Blvd, Suite 1110 Houston, Texas 77056 Name and telephone number of person to contact respecting this form. Kristy Johnson (281) 367-0380 \$ 11,809 2. A. General Assessment (item 2e from page 2) ( 5,149 B. Less payment made with SIPC-6 filed (exclude interest) 7-27-2020 Date Paid C. Less prior overpayment applied 6,660 D. Assessment balance due or (overpayment) E. Interest computed on late payment (see instruction E) for\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ F. Total assessment balance and interest due (or overpayment carried forward) Check mailed to P.O. Box [ Funds Wired D AcH \_ 6,660 Total (must be same as Flabove) H. Overpayment carried forward 3. Subsidiaries (S) and predecessors (P) included in this form (give name and 1934 Act registration number): | The SIPC member submitting this form and the
person by whom it is executed represent thereby
that all information contained herein is true, correct | GBM International Inc | |-----------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------| | and complete. | (Name of Corporation. Pagenership or other organizagemen | | Dated the _ day of februan 2021 2021 Designated Principal | (Aulhorized Signature) | | for a period of not less than 6 years, the latest 2 years in an easily accessible place. | (Title)
This form and the assessment payment is due 60 days after the end of the Working Copy of this form | કા | | TPosimarked Postmarked Coalculations | Received | Reviewed | | |--|---------------------------------------|----------|-----------------|--------------| | | | | Documentation _ | Forward Copy | | | | | | | | | | | | | {28}------------------------------------------------ ### DETERMINATION OF "SIPC NET OPERATING REVENUES" AND GENERAL ASSESSMENT | | AND GENERAL ASSESSMENI | Amounts for the fiscal period
beginning 01/01/2020
and ending 12/31/2020 | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------|--------------------------------------------------------------------------------| | Item No. | | Eliminate cents | | 2a. Total revenue (FOCUS Line 12/Part IIA Line 9, Code 4030) | | \$ 10,398,533 | | 2b. Additions:
(1) Total revenues from the securities business of subsidiaries (except foreign subsidiaries) and
predecessors not included above. | | | | (2) Net loss from principal transactions in securities in trading accounts. | | | | (3) Net loss from principal transactions in commodities in trading accounts. | | | | (4) Interest and dividend expense deducted in determining item 2a. | | | | (5) Nel loss from management of or participation in the underwriting or distribution of securities. | | | | (6) Expenses other than advertising, printing, registration fees and legal fees deducted in determining nel
profit from management of or participation in underwriting or distribution of securities. | | | | (7) Net loss from securities in investment accounts. | | 425,496 | | Total additions | | 425,496 | | 2c. Deductions:
(1) Revenues from the distribution of shares of a registered open end investment company of unit
investment trust, from the sale of variable annuilies, from the business of insurance, from investment
advisory services rendered to registered investment companies or insurance company separate | | 633,690 | | accounts, and from transactions in security futures products. | | 1,500 | | (2) Revenues from commodity transactions. | | | | (3) Commissions, floor brokerage and clearance paid to other SIPC members in connection with
securities transactions. | | 2,074,545 | | (4) Reimbursements for postage in connection with proxy solicitation. | | | | (5) Net gain from securities in investment accounts. | | 213,381 | | (6) 100% of commissions and markups earned from transactions in (i) certificales of deposit and
(ii) Treasury bills, bankers acceptances or commercial paper that mature nine months or less
from issuance date. | | | | (7) Direct expenses of printing advertising and legal fees incurred in connection with other revenue
related to the securities business (revenue defined by Section 16(9)(L) of the Act). | | | | (8) Other revenue not related either directly or indirectly to the securities business.
(See Instruction C): | | | | (Deductions in excess of \$100,000 require documentation) | | | | (9) (i) Total interest and dividend expense (FOCUS Line 22/PART IIA Line 13, | | | | Code 4075 plus line 2b(4) above) but not in excess
of total interest and dividend income. | 28,171 | | | (ii) 40% of margin interest earned on customers securities
accounts (40% of FOCUS line 5, Code 3960). | | | | Enter the greater of line (i) or (ii) | | 28,171 | | Total deductions | | 2,951,287 | | 2d. SIPC Net Operating Revenues | | 7,872,742 | | 2e. General Assessment @ . 0015 | | 11,809 | | | | (to page 1, line 2.A.) | {29}------------------------------------------------ ### Kristy Johnson | Samantha Eaton | |-----------------------------------| | Friday, February 5, 2021 12:15 PM | | Gardenia Salas; Kristy Johnson | | External: RE: GBM - SIPC 7 | | | Payment processed, fed reference 20210205F2QCZ60C001801 Thanks, Samantha Eaton GBM International, Inc. Phone 281 745 91 00 Phone calling from Mexico 53 51 62 04 Fax 281 745 91 91 # GBMINTERNATIONAL Unless otherwise indicated, this message is intential use of the designated recipied (s) named above. If you are not the intended recipient of this message you are hereby notified that any review, distribution or copying of this message is strictly prohibited. This communication is for information purposes only and should not be regarded as an offer to buy any financial product or service, an official conficial statement of the entity sending this message. Email transmission cannot be guaranteed to be secure or error-free. Therefore, we do not represent that this information is courate and it should not be relied upon as such. All information is subject to change without notice. From: Gardenia Salas Sent: Friday, February 5, 2021 10:40 AM To: Kristy Johnson Cc: Samantha Eaton Subject: RE: GBM - SIPC 7 Hello Kristy, Attached is the signed SIPC 7. Wire is being setup and should go out today. Will let you know. Thank you Gardenia Salas GBM International Inc. Tel: 281-745-9100 Fax: 281-745-9191 GBMINTERNATIONAL Unless otherwise indicated, this message is intential use of the designated recipient(s) named above. If you are not the intended recipient of this message you are hereby notified that any review, distribution or copying of this message is strictly prohibited. This communication is for information purposes only and should not be regarded as an offer to buy any financial product or service, an official confirmation, or as an official statement of the entity sending this message. Email transmission cannot be guaranteed to be secure or error-free. Therefore, we do not represent that this information is courate and it should not be relied upon as such. All information is subject to change without notice. From: Kristy Johnson Sent: Friday, January 29, 2021 2:35 PM To: Gardenia Salas {30}------------------------------------------------ | AMENDED | | | | | |-----------------------|--|--|--|--| | SIPC-7 (36-REV 12/18) | | | | | | | | | | | # SECURITIES INVESTOR PROTECTION CORPORATION P.C. P.O. Box 92185 Washington, D.C. 20090-2185 202-371-8300 - 202-371-8300 General Assessment Reconciliation ![](_page_30_Picture_2.jpeg) For the fiscal year ended 12-31-2020 (Read carefully the instructions in your Working Copy before completing this Form) TO BE FILED BY ALL SIPC MEMBERS WITH FISCAL YEAR ENDINGS 1. Name of Member, address, Designated Examining Authority, 1934 Act registration no. and month in which liscal year ends for purposes of the audit requirement of SEC Rule 17a-5: | | GBM International Inc
2700 Post Oak Blvd, Suite 1110
Houston, Texas 77056 | | Note: If any of the information shown on the
mailing label requires correction, please e-mail
any corrections to form@sipc.org and so
indicate on the form filed.
Name and telephone number of person to
contact respecting this form. | |---------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | | Kristy Johnson (281) 367-0380 | | | 2. A. General Assessment (item 2e from page 2) | | \$ 11,780 | | | B. Less payment made with SIPC-6 filed (exclude interest)
7-27-2020 | | 5,149 | | | Date Paid | | | | | C. Less prior overpayment applied | | | | | D. Assessment balance due or (overpayment) | | 6,631 | | | E. Interest computed on late payment (see instruction E) for days at 20% per annum | | | | | F. Total assessment balance and interest due (or overpayment carried forward) | | \$ 6,631 | | | G. PAYMENT: V the box
Check mailed to P.O. Box Funds Wired V
Total (must be same as F above) | Less: | 6,600 paid on 2/5/2021 | | | 3. Subsidiaries (S) and predecessors (P) included in this form (give name and 1934 Act registration number): | | | | | The SIPC member submitting this form and the
person by whom it is executed represent thereby
that all information contained herein is true, correct
and complete. | GBM International Inc | (Name of Corporation, Partnership ar other organization | | | | Designated Principal | (Authorized Signature) | | | This form and the assessment payment is due 60 days after the end of the Working Copy of this form
for a period of not less than 6 years, the latest 2 years in an easily accessible place. | | (Title) | | | Dates: | | | | SIPC REVIEWER | Reviewed
Received
Postmarked | | | | | Documentation _
Calculations _ | | Forward Copy | | | Exceptions: | | | | | | | | | | Disposition of exceptions: | | | {31}------------------------------------------------ # DETERMINATION OF "SIPC NET OPERATING REVENUES" FON OF SIP O NET OF ERATING REVENDES Annualis for the fiscal period A | | | beginning 01/01/20120)
and ending 12/31/2020 | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------|-------------------------------------------------| | Item No. | | Eliminate cents
10,106,509 | | 2a. Total revenue (FOCUS Line 12/Part IIA Line 9, Code 4030) | | | | 2b. Additions:
(1) Total revenues from the securities business of subsidiaries (except foreign subsidiaries) and
predecessors not included above. | | | | (2) Net loss from principal transactions in securities in trading accounts. | | | | (3) Net loss from principal transactions in commodities in trading accounts. | | | | (4) Interest and dividend expense deducted in determining item 2a. | | | | (5) Net loss from management of or participation in the underwriting or distribution of securities. | | | | (6) Expenses other than advertising, printing, registration lees and legal fees deducted in determining nel
profit from management of or participation in underwriting or distribution of securities. | | | | (7) Net loss from securities in investment accounts. | 404,553 | | | Total additions | | 404,553 | | 2c. Deductions: | | | | (1) Revenues from the distribution of shares of a registered open end investment company or unit
investment trust, from the sale of variable annuities, from the business of insurance, from investment
advisory services rendered to registered investment companies or insurance company separate
accounts, and from transactions in security futures products. | | 340,384 | | (2) Revenues from commodity transactions. | | 1,500 | | (3) Commissions, floor brokerage and clearance paid to other SIPC members in connection with
securities transactions. | | 2,074,545 | | (4) Reimbursements for postage in connection with proxy solicitation. | | | | (5) Net gain from securities in investment accounts. | | 213,381 | | (6) 100% of commissions and markups earned from transactions in (i) certificates of deposit and
(ii) Treasury bills, bankers acceptances or commercial paper that mature nine months or less
from issuance date. | | | | (7) Direct expenses of printing advertising and legal fees incurred in connection with other revenue
related to the securities business (revenue defined by Section 16(9)(L) of the Act). | | | | (8) Other revenue not related either directly or indirectly to the securities business.
(See Instruction C): | | | | (Deductions in excess of \$100,000 require documentation) | | | | (9) (i) Total interest and dividend expense (FOCUS Line 22/PART IIA Line 13,
Code 4075 plus line 2b(4) above) but not in excess
of total interest and dividend income. | 28,171 | | | (ii) 40% of margin interest earned on customers securities
accounts (40% of FOCUS line 5, Code 3960). | | | | Enter the greater of line (i) or (ii) | | 28,171 | | Total deductions | | 2,657,981 | | 2d. SIPC Net Operating Revenues | 7,853,081 | | | 2e. General Assessment @ . 0015 | | 11,780 | | | | (to page 1, line 2.A.) | Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.