# J. ALDEN ASSOCIATES, INC. X-17A-5 (2023-03-01) — Broker-dealer annual report - Company: J. ALDEN ASSOCIATES, INC. - Form: X-17A-5 - Filed: 2023-03-01 - Period: 2022-12-31 - Accession: 0001005400-23-000003 - CIK: 1005400 - File #: 8-48938 - Type: Broker-dealer - Material weakness: No - Auditor: Romeo & Chiaverelli, LLC - Auditor location: Bala Cynwyd, PA - Contact: Carol Ann Kinzer - Phone: 678-525-0992 - Signed by: Lee Calfo (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1005400/000100540023000003/jalden2022financials.pdf --- {0}------------------------------------------------ **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** 0MB APPROVAL 0MB Number: 3235-0123 Expires: Oct. 31, 2023 Estimated average burden hours per response: 12 # **ANNUAL REPORTS FORM X-17 A-5 PART** Ill SEC FILE NUMBER **8-48938** **FACING PAGE Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934** FILING FOR THE PERIOD BEGINNING \_O\_l\_/O\_l\_/\_20\_2\_2 \_\_\_ AND ENDING \_\_ 1\_2/\_3\_1\_/2\_0\_2\_2 \_\_ \_ MM/DD/YY MM/DD/YY **A. REGISTRANT IDENTIFICATION** NAME OF FIRM: \_\_ J\_.\_A\_ld\_e\_n\_A\_ss\_o\_c\_ia\_t\_e\_s,\_l\_n\_c\_. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_ TYPE OF REGISTRANT (check all applicable boxes): CZ Broker-dealer Security-based swap dealer D Check here if respondent is also an OTC derivatives dealer D Major security-based swap participant ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) 37 West Avenue, Suite 301 (No. and Street) Wayne PA (City) (State) PERSON TO CONTACT WITH REGARD TO THIS FILING Carol Ann Kinzer 678-525-0992 (Name) (Area Code -Telephone Number) **B. ACCOUNTANT IDENTIFICATION** (Email Address) INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing\* Romeo & Chiaverelli, LLC (Name - if individual, state last, first, and middle name) One Bala Avenue, Suite 234 (Address) 9/01/2009 Bala Cynwyd (City) PA (State) 3721 19087 (Zip Code) 19004 (Zip Code) **rte of ReglstcaUoo with PCAOB )(;f applicable] FOR OFFICIAL USE ONLY {PCAOB ReglstcaUoo Norn bee,** If **applicable]** I \* Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-5(e)(l)(ii), if applicable. **Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid 0MB control number.** {1}------------------------------------------------ #### **OATH OR AFFIRMATION** | Le
C
al
fo
I,
e | , s
w | (o
af
fir
)
th
at
, t
ea
r
r
m
o | th
be
f
st
e
o | kn
le
d
nd
b
el
ie
f,
th
m
y
ow
ge
a | e | |-------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------|-------------------------------|-------------------------------------------------------------------------------------|----| | fin
ci
al
in
rt
rta
an
re
po
pe | J.
A
ld
A
in
he
f
irm
f
to
t
en
g
o | ia
I
te
ss
oc
s,
nc | | as | of | | D
be
r 3
1
ec
em | 02
2
2
, i
nd
tr
s
ue
a
c | I f
r (
th
ct
or
re
ur
er
s
w
ea
or | ffi
) t
ha
a
rm | ei
th
th
t n
er
e
co
m
pa
ny
n
or
a | ny | | ffi
di
rtn
ct
pa
er
, o
ce
r,
re
or | iv
al
th
t p
, o
r e
qu
en
er
so
n,
a
s
e
ca
se | b
h
ie
ta
m
ay
e,
as
a
ny
p
ro
pr | in
te
st
ry
re | in
la
ifi
ed
ol
el
nt
a
ny
a
cc
ou
c
ss
s | y | | ha
f a
t
t o
to
as
c
us
m
er | | | | | | | | Co
alt
h
of
Pe
lva
nia
No
Se
tar
mm
on
we
nn
sy
•
y
CA
RO
L B
LE
ND
ER
No
Pu
bli
tar
c
•
y | al | | | | | | Co
alt
h
of
Pe
lva
nia
No
Se
al
tar
mm
on
we
nn
sy
•
y
CA
RO
L B
LE
ND
ER
No
Pu
bli
tar
•
y
c
Bu
ck
s C
nty
ou
My
C
mi
ion
E
ire
s M
i.y
2
2,
20
25
om
ss
xp | | | |---------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--| | (
C
'
1
v
;
_ | '"
'"
,~ | | | | | | | | | Si
at
gn | ur
e
: | | |----------------|--------------|--| | Ti
tle
: | C
EO | | | N
ot
ar | Pu
~ | bl
ic | |---------------|---------|----------| #### **This filing\*\* contains (check all applicable boxes):** - [j( (a) Statement of financial condition. - D (b) Notes to consolidated statement of financial condition. - (c) Statement of income (loss) or, if there is other comprehensive income in the period(s) presented, a statement of comprehensive income (as defined in§ 210.1-02 of Regulation S-X). - (d) Statement of cash flows. - 0( (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - D (f) Statement of changes in liabilities subordinated to claims of creditors. - rn (g) Notes to consolidated financial statements. - [j( (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. - D (i) Computation of tangible net worth under 17 CFR 240.18a-2 . - D (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - D (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable. - D (I) Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3. - (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - D (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable. - (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-1, or 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences exist. - D (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - QI: (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. - D (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - [S (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - D (t) Independent public accountant's report based on an examination of the statement of financial condition. - D (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. - D (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - [X (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - D (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-1e or 17 CFR 240.17a-12, as applicable. - D (y) Report describing any material inadequacies found to exist or found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). - D (z) Other:---------------------------------- ----- - *\*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e}(3) or 17 CFR 240.18a-7(d}(2}, as applicable.* {2}------------------------------------------------ Financial Statements for the Year Ended December 31, 2022 and Report of Independent Registered Public Accounting Firm {3}------------------------------------------------ Financial Statements for the Year Ended December 31, 2022 and Report of Independent Registered Public Accounting Firm #### **Table of Contents** | Report of Independent Registered Public Accounting Firm………………… | 1 - 2 | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------| | Financial Statements: | | | Statement of Financial Condition……………………………………… | 3 | | Statement of Operations………………………………………………… | 4 | | Statement of Changes in Stockholders' Equity ……………………… | 5 | | Statement of Cash Flows……………………………………………… | 6 | | Notes to Financial Statements………………………………………… | 7 - 13 | | Supplemental Information: | | | Schedule I - Computation of Net Capital……………………………… | 14 | | Schedule II - Computation for Determination of Reserve
Requirements under Rule 15c3-3 of the Securities
Exchange Commission…………………………………………………… | 15 | | Schedule III - Information Relating to the Possession or Control
Requirements under Rule 15c3-3 of the Securities
Exchange Commission…………………………………………………… | 15 | | Report of Independent Registered Public Accounting Firm on
Management's Exemption……………………………………………………… | 16 | | Management's Report on Exemption ………………………………………… | 17 | {4}------------------------------------------------ ### **ROMEO & CHIAVERELLI, LLC CERTIFIED PUBLIC ACCOUNTANTS ONE BALA AVENUE SUITE 234 BALA CYNWYD, PA 19004** ### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Board of Directors of J. Alden Associates, Inc. #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of J Alden Associates, lnc.(the "Company"), as of December 31, 2022, and 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 the Company as of December 31, 2022, and the results of its operations and its cash flows for the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. 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 supplemental information, the Computation of Net Capital under Rule 15c3-1 of the Securities and Exchange Commission and the Computation for Determination of Reserve Requirements and Information Relating to Possession or Control Requirements Under Rule 15c3-3 of the Securities and Exchange Commission OR contained in schedules I and II,has been subjected to audit procedures performed in conjunction with the audit of the Company's financial statements. The supplemental information is the responsibility of the Company's management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other {5}------------------------------------------------ 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 supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole. We have served as the Company's auditor since 2017. February 28, 2023 Bala Cynwyd, PA 19004 {6}------------------------------------------------ #### **Statement of Financial Condition December 31, 2022** #### **Assets** | Cash | \$
130,334 | |-------------------------------------------------------------|-----------------| | Deposit with Clearing Broker-Dealer | 25,182 | | Commissions Receivable | 604,329 | | Right of Use Lease Asset, Net | 165,150 | | Prepaid Expenses | 185,141 | | Furniture and Equipment, Net | | | of Accumulated Depreciation of \$83,793 | 10,068 | | Security Deposits | 2,500 | | Total Assets | \$
1,122,704 | | | | | | | | Liabilities and Stockholders' Equity | | | | | | Liabilities: | | | Loan Payable | \$
102,416 | | Accounts Payable and Accrued Expenses | 544,621 | | Lease Liabilities | 181,650 | | Total Liabilities | 828,687 | | Stockholders' Equity: | | | Common Stock. Class A, no par value, 500 shares authorized, | | | 10 shares issued and outstanding | \$
- | | Common Stock. Class B, no par value, 500 shares authorized, | | | 90 shares issued and outstanding | - | | Additional Paid-in Capital | 260,391 | | Retained earnings | 33,626 | | Total Stockholders' Equity | 294,017 | | | | ### **Total Liabilities and Stockholders' Equity** \$ 1,122,704 {7}------------------------------------------------ #### **Statement of Operations For the Year Ended December 31, 2022** | Revenues: | | |------------------------------------|------------------| | Private Placement Fees | \$
10,613,703 | | Commissions | 7,341,235 | | Mutual Fund Fees | 156,305 | | Other Income | 242,627 | | Total Revenues | 18,353,870 | | | | | Expenses: | | | Commissions | 17,120,677 | | Employee Compensation and Benefits | 669,154 | | Technology and Communications | 71,621 | | Occupancy | 67,966 | | Clearance Fees | 45,143 | | Other Operating Expenses | 294,497 | | Total Expenses | 18,269,058 | | | | | Net Income | \$
84,812 | {8}------------------------------------------------ ## **Statement of Changes in Stockholders' Equity For the Year Ended December 31, 2022** | | Common Stock | | | | | | | | | |----------------------|--------------|---------|--------|---------|----|--------|----------------------------------|----------------------|---------------| | | | Class A | | Class B | | | | | | | | Shares | | Amount | Shares | | Amount | Additional
Paid-in
Capital | Retained
Earnings | Total | | Balance, January 1 | 10 | | -\$ | 90 | \$ | - | \$
190,391 | \$
(51,186) | \$
139,205 | | Net income | | | | | | | | 84,812 | 84,812 | | Contributions | | | | | | | 70,000 | | 70,000 | | Balance, December 31 | 10 | \$ | - | 90 | \$ | - | \$
260,391 | \$
33,626 | \$
294,017 | {9}------------------------------------------------ #### **Statement of Cash Flows For the Year Ended December 31, 2022** | Cash Flows from Operating Activities: | | |----------------------------------------------------------------------------------|---------------| | Net Income | \$
84,812 | | Adjustments to Reconcile Net Income to Net Cash Used in
Operating Activities: | | | Depreciation
(Increase) Decrease in Assets: | 5,034 | | Deposit with Clearing Broker-Dealer | (10) | | Commissions Receivable | (402,695) | | Right of Use Lease Asset, Net | 47,100 | | Prepaid Expenses | (100,437) | | Security Deposits | - | | Increase (Decrease) in Liabilities: | | | Accounts Payable and Accrued Expenses | 264,186 | | Lease Liabilities | (44,850) | | Net Cash Used in Operating Activities | (146,860) | | Cash Flows from Financing Activities: | | | Loan Proceeds, net | 53,139 | | Contributions | 70,000 | | Net Cash Provided by Financing Activities | 123,139 | | Net Decrease in Cash | (23,721) | | Cash at Beginning of Year | 154,055 | | Cash at End of Year | \$
130,334 | | | | | Supplemental Cash Flows Disclosures: | | | Interest Paid: | \$
3,059 | {10}------------------------------------------------ ### **1. Organization and nature of business** J. Alden Associates, Inc. (the "Company") was incorporated on November 3, 1995. The Company is a broker-dealer registered with the Securities and Exchange Commission (SEC) and a member of the Financial Industry Regulatory Authority, Inc. (FINRA) effective June 1, 1996. The Company provides securities brokerage services and sells insurance and annuity products. ## **2. Significant accounting policies** ### 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. ### Deposit with Clearing Broker-Dealer: The Company clears customer transactions through another broker-dealer ("clearing broker") on a fully disclosed basis pursuant to a clearing agreement. In accordance with this agreement, the Company is required to maintain a deposit with the clearing broker. The deposit is refundable if, and when, the Company ceases doing business with the clearing broker. ### Commissions receivable: Commissions receivable includes receivables from the clearing broker-dealer for commissions on trading activities (net of clearing related expenses), and selling and distribution commissions from investment funds, and insurance companies. The Company evaluates commissions receivable for credit losses based the Company's collection experience, credit worthiness, and current economic trends. Based on management's review of commissions receivable, no allowance for credit losses is considered necessary. #### Furniture and equipment: Furniture and equipment are stated at cost. Expenditures for maintenance and repairs are charged against operations. Renewals and betterments that materially extend the life of the assets are capitalized. {11}------------------------------------------------ #### **2. Significant accounting policies (continued)** Depreciation is provided on a straight-line basis, over the estimated useful lives of the related assets. The estimated useful lives of the depreciable assets are as follows: | Furniture | 7 Years | |--------------------|---------| | Computer Equipment | 3 Years | | Office Equipment | 5 Years | When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any gains or losses are included in operations. ### Revenue from contracts with customers: The Company recognizes revenue in accordance with FASB Accounting Standards Codification 606, "Revenue from Contracts with Customers" (ASC 606). Under ASC 606 revenue is recognized upon satisfaction of performance obligations by transferring control over goods or service to a customer. The recognition and measurement of revenue is based on the assessment of individual contract terms. Significant judgment is required to determine whether performance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance 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 due to uncertain future events. The Company buys and sells securities on behalf of its customers. Each time a customer enters into a buy or sell transaction, the Company charges a commission. Commissions and related clearing expenses are recorded on the trade date (the date that the Company fills the trade order by finding and contracting with a counterparty and confirms the trade with the customer). The Company believes that the performance obligation is satisfied on the trade date because that is when the underlying financial instrument or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership have been transferred to/from the customer. The Company has entered into contracts with mutual funds or their selling agents and others under which the Company receives selling and distribution commissions resulting from the sale of certain investment products to its customers, including the sale of certain classes of mutual fund shares and variable annuities. The Company has also entered into a contract with its clearing broker-dealer under which the Company receives a share of selling and distribution fees received by the clearing broker-dealer under contracts entered into by the clearing broker-dealer with mutual funds and/or their selling agents. Selling and distribution commissions are paid up front based on a fixed percentage of the share price, the price of the investment product sold, or the value of specified transactions and are recognized at a point in {12}------------------------------------------------ ### **2. Significant accounting policies (continued)** time on the trade or sale date. The Company believes that the performance obligation is satisfied on the trade date because that is when the underlying financial instrument or purchaser is identified, the pricing for the transaction is agreed upon, and the risks and rewards of ownership have been transferred to/from the customer. A receivable is recognized if the commission is paid to the Company on a date subsequent to the trade date. Under contracts entered into with mutual funds or their selling agents and others, the Company also receives selling and distribution commissions that are paid over time based on a fixed percentage of the average daily balance of the customer's investment in a fund (12b-1 fees). The Company also has entered into a contract with its clearing broker-dealer under which the Company receives a share of 12b-1 fees received by the clearing broker-dealer under contracts entered into by the clearing broker-dealer. The Company believes the performance obligation is satisfied over time and recognizes revenue associated with 12b-1 fees over the period to which such fees relate. The Company may arrange for the private placement of securities with investors on an agency basis. The Company believes that its performance obligation is satisfied upon the sale of securities to investors and as such this is fulfilled on the closing date of the transaction. #### Leases: The Company recognizes and measures its leases in accordance with FASB ASC 842, Leases. The Company determines if an arrangement is a lease, or contains a lease, at inception of a contract and when the terms of an existing contract are changed. The Company recognizes a lease liability and a right of use (ROU) asset at the commencement date of the lease. The lease liability is initially and subsequently recognized based on the present value of its future lease payments. Variable payments are included in the future lease payments when those variable payments depend on an index or a rate. The discount rate is the implicit rate if it is readily determinable or otherwise the Company uses its incremental borrowing rate. The implicit rates of our leases are not readily determinable and accordingly, we use our incremental borrowing rate based on the information available at the commencement date for all leases. The Company's incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms and in a similar economic environment. The ROU asset is subsequently measured throughout the lease term at the amount of the remeasured lease liability (i.e., present value of the remaining lease payments), plus unamortized initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received, and any impairment recognized. Lease cost for lease payments is recognized on a straight-line basis over the lease term. {13}------------------------------------------------ ### **2. Significant accounting policies (continued)** The Company has elected, for all underlying classes of assets, to not recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less at lease commencement, and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. The Company recognizes lease cost associated with short-term leases on a straight-line basis over the lease term. #### Income taxes: The Company has elected to be treated as a small business corporation pursuant the Internal Revenue Code, and the Pennsylvania State Revenue Code. Under those provisions, the Company does not pay federal or state income taxes on its taxable income. Instead, the stockholders are liable for individual federal and state income taxes on their share of the Company's taxable income. The federal, state and local tax returns of the Company for 2019 through 2021 are subject to examination by the taxing authorities, generally for three years after they were filed. #### **3. Furniture and Equipment** Furniture, equipment and the related accumulated depreciation at December 31, 2022 consists of the following: | Furniture | \$ 77,461 | |--------------------------------|-----------| | Computer Equipment | 10,493 | | Office Equipment | 5,907 | | Total | 93,861 | | Less: Accumulated Depreciation | (83,793) | | Net Furniture Equipment | \$ 10,068 | Depreciation expense for the year ended December 31, 2022 was \$5,034. #### **4. Operating Lease** The Company has an obligation under an operating lease for office space with an initial non-cancelable term in excess of one year. The lease commenced April 2021 with an initial terms of 68 months expiring December 2026. The Company has the option to renew the lease for two consecutive periods of three years each. Because the Company is not reasonably certain to exercise the renewal option, the optional periods are not included in determining the lease term, and associated payments under the renewal option are excluded from lease payments. The Company uses its incremental borrowing rate of 5% for purposes of calculating lease expense. {14}------------------------------------------------ #### **4. Operating Lease (continued)** The components of lease costs for the year ended December 31, 2022 are as follows: | Operating lease costs | \$ 48,938 | |-----------------------|-----------| | Variable lease costs | - | | Total lease costs | \$ 48,938 | Maturities of lease liabilities under the operating lease is as follows: | Year ending December 31: | | | |-----------------------------------|------|------------| | | 2023 | \$ 45,000 | | | 2024 | 48,000 | | | 2025 | 49,500 | | | 2026 | 51,000 | | Total undiscounted lease payments | | \$ 193,500 | | Less imputed interest | | (13,500) | | Total operating lease liability | | \$ 180,000 | #### **5. Pension Plan** The Company has established a cash or deferred arrangement simplified employee pension plan (SEP). The plan covers those employees who have attained the age of twenty-one (21) years and have provided service to the Company in one of the preceding five (5) years. Contributions are at the discretion of Management. For the year ended December 31, 2022, the Company contributed \$17,816 to the plan. #### **6. Financial Instruments with Off-Balance Sheet Credit Risk** As a securities broker, the Company is engaged in buying and selling securities for a diverse group of individuals and other entities. The Company introduces all customer transactions in securities traded on U.S. securities markets to another firm on a fully disclosed basis. The agreement between the Company and its clearing broker provides that the Company is obligated to assume any exposure related to nonperformance by customers or counter parties. The Company monitors clearance and settlement of all customer transactions on a daily basis. The Company's exposure to credit risk associated with the non-performance of customers and counter parties in fulfilling their contractual obligations pursuant to these securities transactions can be directly {15}------------------------------------------------ ### **6. Financial Instruments with Off-Balance Sheet Credit Risk (continued)** impacted by volatile trading markets which may impair the customer's or counter party's ability to satisfy their obligations to the Company. In the event of non-performance, the Company may be required to purchase or sell financial instruments at unfavorable market prices resulting in a loss to the Company. The Company does not anticipate non-performance by customers and counter parties in the above situations. ## **7. Net Capital Requirements** The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (SEC Rule 15c3-1), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1 (and the rule of the applicable exchange also provides that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to 1). At December 31, 2022, the Company had net capital of (\$92,217), which was \$136,453 less than its required net capital of \$44,236. The Company's ratio of aggregate indebtedness to net capital was (7.20) to 1 at December 31, 2022. The Net Capital deficiency was remedied in the First Quarter of 2023 and before the issuance of this report. ### **8. Commitments and Contingencies** There are no commitments or contingencies that require recognition in the accompanying financial statements or disclosure in the notes thereto, except the lease commitment as disclosed in Note 4. ### **9. Concentrations** The Company maintains cash accounts at several financial institutions. Cash balances at each financial institution in excess of \$250,000 exceed the insurable limit as allowed by FDIC. At times, cash balances may exceed insurable amounts. ### **10. Loan Payable** The company has an unsecured loan payable with a balance of \$102,416 as of December 31, 2022. The loan's interest rate is 6.50%, and is payable in monthly installments, maturing July 16, 2023. Interest expense for the year ended December 31, 2022 was \$278. {16}------------------------------------------------ ### **11. Subsequent Events** The Company has evaluated subsequent events for potential recognition and disclosure from the statement of financial condition date through February 28, 2023, which represents the date these financials statements were issued, and has not identified any subsequent events that required adjustment to, or disclosure in these financial statements. {17}------------------------------------------------ ### **Schedule I Computation Of Net Capital Under Rule 15c3-1 of the Securities Exchange Commission December 31, 2022** | Total Stockholders' Equity Qualified for Net Capital | \$
294,017 | |------------------------------------------------------------------------------------------------------------------|-----------------| | Deductions and/or Charges: | | | Non-Allowable Assets: | | | Accounts receivable, non-allowable | 188,525 | | Prepaid Expenses | 185,141 | | Furniture and Equipment, Net | 10,068 | | Security Deposits | 2,500 | | Net Capital | \$
(92,217) | | Aggregate Indebtedness: | | | Loan Payable | \$
102,416 | | Accounts Payable and Accrued Expenses | 544,621 | | Lease liability in excess of right-of-use asset | 16,500 | | Total Aggregate Indebtedness | \$
663,537 | | Computation of Basic Net Capital Requirement:
Minimum Net Capital Required, the Greater of 6 2/3% of | | | Total Aggregate Indebtedness or \$5,000 | 44,236 | | Net Capital Deficiency | \$
(136,453) | | Excess Net Capital on the Greater of 10% of Aggregate
Indebtedness or 120% of Minimum Net Capital Requirement | \$
(158,571) | | Percentage of Aggregate Indebtedness to Net Capital | (719.54%) | ### **Reconciliation with the Company's Computation of Net Capital (included in Part IIA of Form X-17a-5 as of December 31, 2022)** | Net capital, as reported in the Company's Part IIA (unaudited)
FOCUS report | \$
(118,207) | |--------------------------------------------------------------------------------|-----------------| | Audit adjustment:
Decrease in Employee Compensation and Benefits (expense) | 25,990 | | Net Capital as reported in the preceding calculation | \$
(92,217) | {18}------------------------------------------------ **Schedules II & III December 31, 2022** ### **Schedule II** ### **Computation for Determination of Reserve Requirements under Rule 15c3-3 of the Securities Exchange Commission** The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934 pursuant to paragraph (k)(2)(ii) of the rule. #### **Schedule III** ### **Information Relating to the Possession or Control Requirements under Rule 15c3-3 of the Securities Exchange Commission** The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934 pursuant to paragraph (k)(2)(ii) of the rule. {19}------------------------------------------------ ### **ROMEO & CHIA VERELLI LLC ONE BALA A VENUE SUITE 234 BALA CYNWYD, PA 19004** ### **Report of Independent Registered Public Accounting Firm Exemption Report Review** To the Board of Directors: J. Alden Associates, Inc. We have reviewed management's statements, included in the accompanying Exemption Report, on which J. Alden Associates, Inc. identified the following provisions of 17 C.F.R. ~ 15c3-3(k) under which J. Alden Associates, Inc. claimed an exemption from 17 C.F.R. ~240.15c3-3 :(2)(ii). SEC Rule 15c3-3(k)(2)(ii) and Footnote 74 of SEC Release 34-70073 and J. Alden Associates, Inc. stated that J. Alden Associates, Inc. met the identified exemption provisions throughout the most recent fiscal year without exception. J. Alden Associates, 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 J. Alden Associates, 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 c<,t £ 4 and Footnote 74 of SEC Release 34-70073. ~ Q *-:d:;c1- e-* Romeo & Chiaverelli, LLC Bala Cynwyd, PA February 28, 2023 {20}------------------------------------------------ ![](_page_20_Picture_0.jpeg) # EXEMPTION REPORT Firm Assertions We confirm to the best of our knowledge and belief that: - 1. J. Alden Associates, Inc. claimed an exemption from SEC Rule 15c3-3 under the provisions in paragraph (k)(2)(ii) throughout the calendar year January 1, 2022 to December 31, 2022. - 2. J. Alden Associates, Inc. met the identified exemption provisions in SEC Rule 15c3 (k)(2)(ii) throughout the calendar year January 1, 2022 to December 31, 2022 without exemption. Sign:\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_Date: February 28, 2023 Officer:\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Lee Calfo, CEO Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.