# U.S. STERLING SECURITIES, INC. X-17A-5 (2023-02-24) — Broker-dealer annual report - Company: U.S. STERLING SECURITIES, INC. - Form: X-17A-5 - Filed: 2023-02-24 - Period: 2022-12-31 - Accession: 0000920807-23-000001 - CIK: 920807 - File #: 8-47052 - Type: Broker-dealer - Material weakness: No - Auditor: Depietto CPAs PC - Auditor location: Lake Success, NY - Contact: George Goldman - Phone: 631-360-2829 ext 223 - Website: depiettocpas.com - Signed by: HERBERT A. ORR (President/CEO) Original filing: https://www.sec.gov/Archives/edgar/data/920807/000092080723000001/USSIAnnualauditocr.pdf --- {0}------------------------------------------------ FINANCIAL STATEMENTS AND REPORT OF REGISTEREDPUBLIC ACCOUNTING FIRM YEAR ENDED DECEMBER 31. 2022 {1}------------------------------------------------ ## U.S. STERLING SECURITIES INC. **FINANCIAL** STATEMENTS # **DECEMBER** 31, 2022 ## **TABLE** OF CONTENTS | | Page | |-----------------------------------------------------------------------------------------|-------| | Facing page and Oath/Afflnnation | 1-4 | | Report of Independent Registered Public Accounting Finn | 5 | | Financial Statements: | | | Statement of Flnanclal Condition | 6 | | Statements of Operations | 7 | | Statements of Changes In Stockholders' Equity | 8 | | Statements of Cash Flows | 9 | | Notes to Financial Statements | 10-15 | | Supplementary lnfonnation: | | | Computation of Net Capital Pursuant to 15c3-1 | 16 | | Reconclllation of Computation of Net Capltal pursuant to 17a-&(d)4 | 17 | | Report of the Independent Registered Public Accounting Firm
For the Exemption Report | 18 | | Firm Exemption Report | 19 | | Independent Accountant's Agreed-Upon Procedures Report | 20 | {2}------------------------------------------------ ![](_page_2_Picture_0.jpeg) www.depiettocpas.com # **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Board of Directors and Shareholders of U.S. Sterling Securities Inc. ## **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of U.S. Sterling Securities Inc. as of December 31, 2022, the related statements of operations, changes in stockholders' equity, and cash flows for the year then ended, 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 U.S. Sterling Securities Inc. as of December 31, 2022, 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 U.S. Sterling Securities lnc.'s management. Our responsibility is to express an opinion on U.S. Sterling Securities lnc.'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 U.S. Sterling Securities 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. ## **Auditor's Report on Supplemental Information** The Schedule I, Computation of Net Capital Under SEC Rule 15c3-1 and Schedule 11, Reconciliation of Computation of Net Capital Pursuant to SEC Rule 17a-5d-4 have been subjected to audit procedures performed in conjunction with the audit of U.S. Sterling Securities lnc.'s financial statements. The supplemental information is the responsibility of U.S. Sterling Securities 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 presented in conformity with 17 C.F.R. §240.17a-5. In our opinion, the Schedule I, Computation of Net Capital Under SEC Rule 15c3- 1 and Schedule II, Reconciliation of Computation of Net Capital Pursuant to SEC Rule 17a-5d-4 is fairly stated, in all material respects, in relation to the financial statements as a whole. DePietto CPA PC Lake Success, New York February 24, 2023 We have served as U.S. Sterling Securities lnc.'s auditor since 2004. {3}------------------------------------------------ #### STATEMENT OF FINANCIAL CONDITION ### YEAR ENDED DECEMBER 31, 2022 #### ASSETS ### Current Assets: | Cash | \$149,164 | |---------------------------------------|-----------| | Receivable from clearing organization | 20,312 | | Deposits with clearing organization | 50,803 | | Security Deposits | 18.355 | | | \$238634 | #### LIABILITIES and STOCKHOLDERS' EQUITY ## Current Liabilities: Accounts Payable and Accrued Expenses Stockholders' Equity: Common Stock, \$1.00 par value, 100 shares authorized 10 shares issued and outstanding Additional paid in capital Retained Earnings Total Stockholders' Equity \$ 81.397 81.397 10 667,660 510.433) 157.237 \$ 238.634 {4}------------------------------------------------ #### STATEMENT OF OPERATIONS #### YEAR ENDED DECEMBER 31, 2022 #### Revenue: | Trading Income
Interest Income
Other Income
Total Revenue | \$ 519,499
941
660
521,101 | |-------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------| | Expenses | | | Professional Fees
Commissions Paid
Administrative Fees
Clearing Charges
Occupancy
Regulatory Fees
Insurance
Other Expenses | \$ 27,750
202,734
178,263
65,930
41,522
25,360
14,360
39.574 | | Total expenses | 595.493 | | Net Income (Loss) from operations | S( 74 392) | {5}------------------------------------------------ #### STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY #### YEAR ENDED DECEMBER 31, 2022 | | Common
Stock | Additional
Paid In Cagital | Retained
Eamin(I! | .§9Yi1l | |-----------------------------|-----------------|-------------------------------|----------------------|-------------| | Balance - January 1, 2022 | \$
10 | \$ 637,924 | \$ (436,041) | \$201,893 | | Additional Paid in Capital | | 29,736 | | 29,736 | | Net Income (Loss) | | | (7~.392) | \$ (74.392) | | Balance - December 31, 2022 | \$
10 | \$
667.660 | \$ (510.433) | \$157.237 | {6}------------------------------------------------ ### STATEMENT OF CASH FLOWS ### YEAR ENDED **DECEMBER** 31, 2022 Cash Flows from Operating Activities: | Net Income (Loss)
Adjustments to reconcile net income to
net cash flows provided by operating activities: | \$(74,392) | |-----------------------------------------------------------------------------------------------------------------|--------------------| | Receivable from clearing organization | 32,287 | | Deposits with clearing organization
Accounts payable and accrued expenses | (126)
!Jll! | | Net change in operating activities | \$ (33,215) | | Cash from Financing activities:
Capital contribution | | | Net cash provided by financing activities: | \$~ | | Net Increase in cash
Cash at beginning of year | (3,479)
152.643 | | Cash at end of year | \$149.164 | {7}------------------------------------------------ ## U.S. STERLING SECURITIES, INC. Notes to Financial Statements December 31, 2022 ## NOTE 1: Nature of Business Organization U.S. Sterling Securities Inc. (The Company) was Incorporated in the State of New York on March 10, 1992 when it commenced domestic USA market operations. The company **Is a** registered brokerdealer with current membership in the Financial Industry Regulatory Authority (FINRA) and Is duly registered as a broker-dealer with participating **NASAA** State administrators in 44 States. The company is designated a registered Municipal Broker by the Municipal Securities Rulemaklng **Board (MSRB)** and Is a current member of the (Securities Investor Protection Corporation (SIPC). All the Company's executable trades are cleared through its clearing broker. The company has permitted authority to conduct lnvesbnent Banking Services. The company may conduct institutional placements, corporate consulting, mergers and acquisition activities. The company has from time to time entered or maintained, selling agreements for non-executing securities transaction with federal or state **registered** or licensed Institutions, or other permitted entities. The company Is classified by Its Designated Regulatory Authority **(ORA)** FINRA, as an Institutional nonclearing introducing broker-dealer. NOTE 2: Summary of Significant Accounting Policies Basis of Presentation The financial statements have been **prepared** In conformity with accounting principles generally accepted In the United States. Use of Estimates The preparation of financial statements In conformity with accounting principles generally accepted in the United States requires management of the Company to make estimate and assumptions that affect the reported amounts of assets and labillties and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents All unrestricted highly liquid investments with Initial or remaining maturities of less than 90 days at the time of purchase are considered cash and cash equivalents. The Company's cash Is held by major financial Institutions. At times, such amount may exceed the Federal Deposit Insurance Corporation ("FDIC") limit On December 31, 2022, the Company's cash did not exceed the limit. On December 31, 2022, the Company did not have any cash equivalents. Receivables from Clearing Broker Receivables from the company's clearing broker on the statement of financial condition consist of commissions earned by the Company that are held with the clearing broker as follows: Receivable from clearing **broker** \$20,312 {8}------------------------------------------------ ## U.S. STERLING SECURITIES, INC. Notes to Financial Statements December 31, 2022 ## NOTE 2: Summary of Significant Accounting Policies (cont) ## Revenue and Expense Recognition Effective January 1, 2019, the Company adopted ASC Topic 606, Revenue from Contracts with Customers ("ASC 606" .) The revenue recognition guidance requires that an entity recognize revenue to depict the transfer of promised 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-step model to identify the contract(s) with (a) customer, (b) Identify the perfonnance obligations In the contract, (c) detennine the transaction price, (d) allocate the transaction price to the perfonnance obligations in the contract, (e) recognize revenue when (or as) the entity satisfies a perfonnance obligation. Significant Judgements - The recognition and measurement of revenue Is based on the assessment of Individual contract tenns. Significant judgement Is required to detennlne whether the perfonnance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple perfonnance obligations are Identified; when to recognize revenue based on the appropriate measure of the Company's progress under the contract; and whether constraints on variable consideration should be applied to uncertain future events. The Company earns commission revenue from effecting trades in U.S. equity that are listed on an exchange, or debt securities as may be offered federal or state institutions which are large qualified corporate issuers. Commissions and related clearing expenses are recorded on a trade date basis. In addition, the company conducts limited Investment Banking (1B) and earns placement and consulting fees In market operations to Institutions seeking corporate finance, business consulting services and mergers and acquisition services; revenue Is recognized on these transactions upon funding. ### Income Taxes Income taxes are accounted for under Accounting Standards Codification f'ASC") 740, Income Taxes, ("ASC 740"). Deferred assets and liabilities are recognized for the future tax consequences atbibutable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabllities are measured using enacted rates expected to apply to taxable Income In the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and llabllities of a change in tax rates is recognized income in the period that includes the enactment date. To the extent that it Is more likely than not that deferred tax assets will not be recognized, a valuation allowance would be established to offset their benefit. In accordance with ASC 740, the Company is required to disclose unrecognized tax benefits resulting from uncertain tax positions. ASC 740 defines the threshold for recognizing the benefits of tax return positions in the financial statements as "more-llkely-than-nof' to be sustained by the taxing authority and requires measurement of a tax position meeting the more-likely-than-not criterion, based on the largest benefit that is more than SO percent likely to be realized. The Company was not required to recognize any amounts from uncertain tax positions. {9}------------------------------------------------ ### NOTE 2: Summary of Significant Accounting Policies (cont) The Company Is included in the consolidated tax retum of U.S. Sterling capital Corp., the parent company. The Company does not use the separate retum method to allocate the consolidated amount of current and deferred tax expense among the group members. Generally, federal, state and local authorities may examine the Company's tax retums for three years from the date of filing; consequently, the years 2020 through 2022 are subject to examination by tax authorities. ### Fair Value of Financial Instruments The Company estimates that the fair value of financial instruments recognized on the statement of financial condition approximates their carrying value, as such financial instruments are short term In nature. Other assets and liabilities with short and intermediate-term maturities and defined settlement amounts, Including receivables, payables, and accrued expenses are reported at their contractual amounts, which approximate fair value. ### Allowance for Credit Losses Effective January 1, 2022 the Company adopted ASC Topic 326, Financial Instruments - Credit Losses("ASC 326") impacts the impartment model for certain financial assets measured as amortized cost by requiring a current expected credit loss ("CECL") methodology to estimate expected credit losses over the over the entire financial life of the financial asset, recorded at inception or purchase. Under the accounting update, the Company has the ability to determine there are no expected credit losses in certain circumstances. The allowance for credit losses is based upon on the Company's expectation of financial Instruments carried at amortized cost utilizing the CECL framework. The Company considers factors such as historical experience, credit quality, age of balances and current and future economic conditions that may affect the Company's expectation of the collectability in determining the allowances for credit losses. The Company's expectations are that the credit risk associated with receivables is not significant until they are 90 days past due on the contractual arrangement and expectation of collection in accordance with Industry standards. Management does not believe that an allowance Is required as of December 31, 2022. ### NOTE 3: Financial Instruments The Company's financial instruments are measured and reported on a fair value basis. The ASC defines fair value and establishes a framework for measuring fair value, as well as a fair value hierarchy based on inputs used to measure fair value. This hierarchy requires the Company to use observable market data when available, and to minimize the use of unobservable inputs when determining fair value. Fair Value Hierarchy Financial assets and liabilities are classified based on inputs used to establish fair value as follows: Level 1: Valuation inputs are unadjusted quoted market prices for identical assets or liabilities in active markets; {10}------------------------------------------------ ### U.S. STERLING SECURITIES, INC. Notes to Financial Statemen1s December31,2022 NOTE 3: Financial Instruments (cont) Level 2: Valuation inputs are quoted prices for Identical assets or liabilities In markets that are not active, quoted market prices for similar assets and llabllltles In active markets and other valuation techniques utilizing observable inputs directly or Indirectly related to the asset or liability being measured; Fair Value Hierarchy Financial assets and liabilities are classified based on inputs used to establish fair value as follows: Level 1: Valuation inputs are unadjusted quoted market prices for Identical assets or liabilities in active markets; Level 2: Valuation inputs are quoted prices for identical asse1s or liabilities in markets that are not active, quoted market prices for similar assets and liabilities in active markets and other valuation techniques utilizing observable Inputs directly or Indirectly related to the asset or liability being measured; Level 3: Valuation techniques utilize inputs that are unobservable and significant to the fair value measurement On December 31, 2022, the Company did not own any financial assets or liabilities other than cash and cash equivalents and other assets and liabilities with no inventory Issues of short and Intermediate tenn maturities and/or defined settlement amounts In the normal course of trade. The carrying amounts of cash and other assets and liabilities with stipulated earned **defined** settlement amounts are reported at their contractual amounts, which approximates fair value acceptable as an industry standard. NOTE 4: Deposit with Clearing Firm The Company maintains cash **deposited** with its clearing broker pursuant to a fully disclosed clearing agreement f'Clearing Agreement'') entered into on December 10, 1998 with additional amendments added through August 28, 2007, which Is meanttoassurethe Company's perfonnance, including but not limited to the Indemnification obligations specified in the Clearing Agreement. On December 31, 2022, the Company had \$50,803 deposited with Hilltop Securities. The deposit does not represent an ownership interest in Hilltop. ### NOTE 5: Concentration of Risk The Company maintains its cash with major financial Institutions, which at times may exceed the FDIC limit The Company has not experienced any losses in such accounts. The Company ls also exposed to credit risk as it relates to its securities business. The responsibility for processing customer activity rests with its clearing broker. The Company's clearing agreement provides that credit losses relating to unsecured debits or unsecured short positions of the Company's customers are charged back to the Company. In accordance with Industry practice, the clearing broker records customer transactions on a settlement date basis, which Is generally three business days after the trade date. The clearing broker is therefore exposed to the risk of loss on these transactions in the event of the customer's inability to meet the tenns of its contracts, in which case It may have to purchase or sell the underlying financial {11}------------------------------------------------ ### U.S. STERLING SECURITIES, INC. Notes to Financial Statements December 31, 2022 ## NOTE 5: Concentration of Risk (Cont) In accordance with industry practice, the clearing broker records customer transactions on a settlement date basis, which is generally three business days after the trade date. The clearing broker is therefore exposed to the risk of loss on these transactions in the event of the customer's inability to meet the terms of Its contracts, in which case it may have to purchase or sell the underlying financial instruments at prevailing market prices in order to satisfy its customer-related obligations. Any loss incurred by the clearing broker is charged back to the Company. For the period ended December 31, 2022, substantially all the Company's revenue was concentrated in one segment that carries business, market, and interest rate risk. Economic, social, and political conditions may adversely impact the Company's financial health and operations depending on extenuating circumstances **outside** of the Company's control. Considering these risks, the Company believes it is **properly prepared** to **operate with** these uncertainties and understands the risks associated with the business segment ### NOTE 6: Regulatory Requirements The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (Rule 15c3-1) which requires broker dealers to maintain minimum net capital. The ratio of aggregate indebtedness to net capital shall not exceed 15 to 1 for ongoing concerns. The Rule requires that the Company maintain "net capital" equal to the greater of \$50,000 or 2/3% of "aggregate indebtedness", as those terms are defined in the Rule. On December 31. 2022, the Company had a net capital of \$138,882 which was \$88,882 in excess of its required net capital of \$50,000. The Company's net capital ratio was 58.609%. Advances to affiliates, dividend payments and other withdrawals are subject to certain notification and other requirements of Rule 15c3-1 and other regulatory bodies. The Company is exempt from the provision of Rule 15c3-3 under the Securities Exchange Act of 1934 pursuant to Paragraph (k)(2)(11). As an introducing broker, the Company clears customer transactions on a fully disclosed basis and promptly transmits all customer funds and securities to the clearing broker. The clearing broker carries all the accounts of such customers and maintains and preserves such books and records. ### NOTE 7: Related Party Transaction The Company maintains an expense sharing agreement with U.S. Sterling Capital Corp, a related party, which provides professional and administrative staff, facilities, and services necessary or appropriate for the conduct of the Company's business operations. Prior to October 31, 2022, the Company reimbursed ESA expenses via cash payments to its parent company, USSC. On October 31, 2022, the Company, in agreement. with USSC, has entered into resolutions in which the parent company provides a capital contribution in the form of forgiveness of debt equal with the Company's ESA expense accruals through an agreed upon date. The capital contributions are treated as additional paid-in-capital on the balance sheet, and offsets the related party liability accrued for the expenditures related to the expense sharing arrangement For 2022, USSI had a total of \$175,704 in expenditures related to the ESA of which \$115,784 was paid in cash to the parent company and had debt forgiven in the amount of \$29,736 which was classified as a capital contribution according to the Company's resolution dated October 31, 2022. The Company's accrual balance for ESA expenditures incurred but not yet paid as of December 31, 2022, is \$30,185. {12}------------------------------------------------ ### U.S. STERLING SECURITIES, INC. Notes to Financial Statements December 31, 2022 ### NOTE 8: Leases On January 1, 2022, the Company adopted ASU 2016-02 "Leases" ("Topic 842"). Under Topic 842, leases are required to recognize a right of use asset and related liability on the balance sheet for rights and obligations arising from leases with durations greater than 12 months. Adoption of Topic 842 did not have any impact on the Company's financial statements as the company does not have any agreements that meet the definition of a lease. ### NOTE 9: Commitments As of December 31, 2022, the Company had no commitments or contingencies that required disclosure. ### NOTE 10: Subsequent Events In preparing the accompanying financial statements, the Company has reviewed events that have occurred after December 31, 2022, through the date of these financial statements on February 23, 2023. In accordance with the Company's offset of ESA expenses through capital contributions, the parent company, USSC, provided an equity contribution to the Company on January 2, 2023, through a forgiveness of debt for \$30,185 as per a company resolution. This amount offsets the accrual balance as of December 31, 2022, and no outstanding accruals or liabilities are open for ESA expenditures for the period ended 2022. {13}------------------------------------------------ # SUPPLEMENTARY INFORMATION {14}------------------------------------------------ ## U.S. STERLING SECURITIES, INC. COMPUTATION OF NET CAPITAL PURSUANT TO SEC RULE 15c3-1 December 31, 2022 ### Computation of Net Capital: | 1. | Total Ownership Equity | \$ 157,237 | |----|------------------------------------------------------------------------------------------------------|------------------| | 2. | Deductions and/or charges
Non-allowable assets:
Security deposit
Total non-allowable assets | 18,355
18.355 | | 3. | Tentative net capital | 138,882 | | 4. | Less: Haircuts | 0 | | 5. | Net Capital | \$ 138.882 | | | Computation of Basic Net Capital Requirement | | | 1. | Minimum Net Capital Required -
(6 2/3% Aggregate Indebtedness) | 5,426 | | 2. | Minimum Dollar Net Capital | 50,000 | | 3. | Net Capital Requirement | 50,000 | | 4. | Net Capital | 138.882 | | 5. | Excess Net Capital | \$ 88 882 | | 6. | Ratio: Aggregate indebtedness to net capital | 5861 to 1 | | | Computation of Aggregate Indebtedness | | | 7. | Total Uabilities | \$ 81,397 | | 8. | Non-Aggregate Indebtedness Liabilities | | | | | \$ 81.397 | {15}------------------------------------------------ ### U.S. STERLING SECURITIES, INC. RECONCILIATION OF COMPUTATION OF NET CAPITAL PURSUANT TO SEC RULE 17a-S(d)(4) For the Period Ended December 31, 2022 | | Orig. FIiing
X-17A-S
yssa FINOP | Per Cert.
Financial
BIPAd | Recon.
in Filing vs.
flMnclal | | |-----------------------------------------------------------------------------------------|---------------------------------------|---------------------------------|-------------------------------------|--| | NET CAPITAL | | | | | | Equity | \$
157,237 | \$ 157,237 | \$ | | | Deductions and /or charges
Non-allowable assets: | | | | | | Other assets | 18.355 | 18.355 | s
0 | | | Total non-allowable assets | 18.355 | 18.355 | s
0 | | | Tentative Net Capital | 138,882 | 138,882 | | | | Haircuts | 0 | 0 | s
0 | | | Net Capital (15c3-1) | \$ 138.882 | \$ 138 882 | \$
0 | | | AGGREGATE INDEBTEDNESS
Items included in statement of financial condition: | s 81.397 | s 81.397 | s
0 | | | Accounts payable | | | | | | Total indebtedness | \$ 81397 | \$ 81397 | \$
0 | | | COMPUTATION OF BASIC NET CAPITAL REQUIREMENT | | | | | | Minimum net capital requirement or greater
of 100,000 Minimum net capital 15c3-1 | I 60000 | s 50000 | s
0 | | | Excess net capital | s 88,882 | \$ 88.882 | \$
0 | | | Net capital less greater of 10% of minimum total
Indebtedness or 120% of minimum net | | | | | | capital requirement | \$ 78882 | \$ 78.882 | s
0 | | | Ratio: Aggregate indebtedness to net capital | 5861% | 58.61% | \$
0 | | Non-material difference due to rounding There are no material differences between the computation of Net Capital presented above and the computation of Net Capital in the company's unaudited for X17-a-S, Part IIA filing as of December 31,2022. {16}------------------------------------------------ ![](_page_16_Picture_0.jpeg) www.depiettocpas.com ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Board of Directors and Shareholders of U.S. Sterling Securities Inc. We have reviewed management's statements, included in the accompanying Exemption Report, in which (1) U.S. Sterling Securities Inc. identified the following provisions of 17 C.F.R. §15c3-3(k) under which U.S. Sterling Securities Inc. claimed an exemption from 17 C.F.R. §240.15c3-3: (2) (ii) (exemption provision) and (2) U.S. Sterling Securities Inc. stated that U.S. Sterling Securities Inc. met the identified exemption provisions throughout the most recent fiscal year without exception. U.S. Sterling Securities lnc.'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 U.S. Sterling Securities lnc.'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. DePietto CPA PC Lake Success, New York February 24, 2023 We have served as U.S. Sterling Securities lnc.'s auditor since 2004. {17}------------------------------------------------ ### U.S. Sterling Securities, Inc. 2022 Exemption Report Notice Pursuant to 15c3-3 Mr. Herbert Orr, CEO U.S. Sterling Securities, Inc. U.S. Sterling Securities, Inc., the finn, Is a duly registered broker-dealer. To the best of its knowledge and belief, has as met, afflnns and attests to the followlng lnfonnatlon, declaration and statements, pursuant to the annual report herein incorporated by reference, as true, accurate and factual, which Is the status of the firm at all times during most recent fiscal year ending December 31, 2022: (1) that the firm maintained at all times the exemption provisions In paragraph k2(11) Specifically the mechanism of the exemptlve provision, the functional appllcatlon of the regulation as applied In the this report to the operation of U.S. Sterling Securities Is a non-carrying broker-dealer who is claiming an exemption from Rule 15c3-3 and therefore Is required to file (I) an Exemption Report asserting that It Is exempt from the provisions of Rule 15c3-3 because It meets one or more of the conditions with respect to Its business activities under Rule 15c3-3(k) and (II). Specifically, the flnn has relied upon (the following Is the flnns attesting statement that Identifies the provisions In paragraph (k) of SEC Rule 15c3 -3, under which the report, firm relied): The flnn is an Introducing broker or dealer, clears all transactions with and for customers on a fully disclosed basis with Its clearing broker and the flnn promptly transmits all customer funds and securities to the clearing broker or dealer who carries all of the accounts of the firms customers and maintains and preserves such books and records pertaining thereto pursuant to the requirements of §§ 240.17a-3 and 240.17a-4 of applicable sections of 15c3, as are customarily made and kept by a clearing broker or dealer, of Rule 15c3-3 throughout the most recent fiscal year ending December 31, 2022 without any exception, actual or apparent; there are no exceptions noted for the flnn for fiscal year December 31, 2022. The finn further attests and represents In this exemption report It has met the Identified exemption provisions throughout the most recent fiscal year ending December 31, 2022 without exception; therefore, to the best of Its knowledge It has not Identified any exception during the during frame of this report. **Attested:** U.S. Sterling Securities, Inc I Herbert A Orr, CCO conflnn finn that, to my **best knowledge and** belief, this Compliance **Report** is true and correct Chief Compliance Officer Date 12/31/2022 {18}------------------------------------------------ ![](_page_18_Picture_0.jpeg) ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON APPL YING AGREED-UPON PROCEDURES** To the Board of Directors and Shareholders of U.S. Sterling Securities 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 on the accompanying General Assessment Reconciliation (Form SIPC-7) for the year ended December 31 , 2022. Management of U.S. Sterling Securities, Inc. (the Company) is responsible for its Form SIPC-7 and for its compliance with the applicable instructions on Form SIPC-7. Management of the Company has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of assisting you and SIPC in evaluating the Company's compliance with the applicable instructions on Form SIPC-7 for the year ended December 31, 2022. Additionally, SIPC has agreed to and acknowledged that the procedures performed are appropriate for their intended purpose. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes. 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 associated findings are as follows: - 1) Compared the listed assessment payments in Form SIPC-7 with respective cash disbursement records entries, noting no material differences; - 2) Compared the Total Revenue amounts reported on the Annual Audited Report Form X-17A-5 Part Ill for the year ended December 31, 2022 with the Total Revenue amount reported in Form SIPC-7 for the year ended December 31, 2022, noting no material differences; - 3) Compared any adjustments reported in Form SIPC-7 with supporting schedules and working papers, noting no material 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 material differences; and - 5) Compared the amount of any overpayment applied to the current assessment with the Form SIPC-7 on which it was originally computed, noting no material differences. We were engaged by the Company to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the AICPA and in accordance with the standards of the Public Company Accounting Oversight Board (United States). We were not engaged to and did not conduct an examination or a review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the Company's Form SIPC-7 and for its compliance with the applicable instructions on Form SIPC-7 for the year ended December 31 , 2022. 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. {19}------------------------------------------------ ![](_page_19_Picture_0.jpeg) 1981 Marcus Avenue, Suite C100 Lake Success, New York 11042 Phone: (516) 326-9200 **EM <§l§l 326-1 100**www.depiettocpas.com We are required to be independent of the Company and to meet our other ethical responsibilities in accordance **with** the relevant ethical requirements related to our agreed-upon procedures engagement. This report is intended solely for the information and use of the Company and SIPC and is not intended to be and should not be used by anyone other than these specified parties. DePietto CPA PC Lake Success, New York February 24, 2023 We have served as U.S. Sterling Securities lnc.'s auditor since 2004. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.