# THOMPSON DAVIS & CO., INC. X-17A-5 (2020-02-28) — Broker-dealer annual report - Company: THOMPSON DAVIS & CO., INC. - Form: X-17A-5 - Filed: 2020-02-28 - Period: 2019-12-31 - Accession: 0001017284-20-000001 - CIK: 1017284 - File #: 8-49386 - Material weakness: No - Auditor: Keiter - Auditor location: Glen Allen, VA - Contact: J. Elaine Altizer - Phone: 8046446381 - Website: keitercpa.com - Signed by: J. Elaine Altizer (CFO/Secretary/Treasurer) Original filing: https://www.sec.gov/Archives/edgar/data/1017284/000101728420000001/publicwfacingpgs1.pdf --- {0}------------------------------------------------ **UNITEDSTATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** # **ANNUAL AUDITED REPORT FORM X-17A-5 PART Ill** | 0MB APPROVAL | |-------------------------------| | 3235-0123
0MB Number: | | August 31 , 2020 | | Estimated average burden | | hours per response
. 12.00 | | | | | SEC FILE NUMBER | |---------|-----------------| | B-49386 | | **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 BEGINN ING | ------
----
01/01/2019
- | AND ENDING | -----------
12/31/2019 | | | | |----------------------------------------------------------------------------------------------|-------------------------------------------------------------|------------|--------------------------------|--|--|--| | M M/DD/YY
M M/DD/YY
A. REGISTRANT IDENTIFICATION | | | | | | | | NAME OF BROKER-DEALER: | Thompson Davis & Co., Inc. | | OFFICIAL USE ONLY | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | FIRM I.D. NO. | | | | | 9030 Stony Point Parkway, Suite 100 | | | | | | | | | (No. and Street) | | | | | | | Richmond | VA | | 23235 | | | | | (City) | (State) | | (Zip Code) | | | | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
J. Elaine Altizer | | | 804-644-6381 | | | | | | | | (Arca Code - Telephone Number) | | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report *
Keiter | | | | | | | | | (Name - if i11dirid11al. state last. first. middle 11a111e) | | | | | | | 4401 Dominion Blvd. | Glen Allen | VA | 23060 | | | | | (Address) | (City) | (State) | (Zip Code) | | | | | CHECK ONE:
I
✓
certified Public Accountant | | | | | | | | Public Accountant | | | | | | | | Accountant not resident in United States or any of its possessions. | | | | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | *\*Claims for exemption ji-0 111 the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement of f acts and circumstances relied on as the basis for the exemption. See Section 2./0. I 7a-5(e)(2)* > **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 valid 0MB control number.** {1}------------------------------------------------ #### **OATH OR AFFIRMATION** # I, J. Elaine Altizer , swear (or affirm) that, to the best of my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of Thompson Davis & Co., Inc. --------------------------------------------, as of December 31 20 19 are true and correct. I further swear (or affirm) that neither the company nor any partner, proprietor, principal offi cer or director has any proprietary interest in any account classified solely as that of a customer, except as follows: certain joint accounts, custodian accounts, trusteed IRA accounts of shareholders or similar types of accounts which are classified as customer accounts in accordance with Rule 15c3-3(a)(1) of the Securities and Exchange Act of 1934 ............ , ' ,, | Securities and Exchange Act of 1934 ,
'
,, | | |---------------------------------------------------|--| | | | - - - Statement of Income (Loss) or, if there is other comprehensive income in the period(s) presented, a Statement of Comprehensive Income (as defined in §2 10.1-02 of Regulation S-X). - **8** (d) Statement of Changes in Financial Condition. - (e) 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 Net Capital. - (h) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3. - (i) Information Relating to the Possession or Control Requirements Under Rule I 5c3-3. - □ U) A Reconciliation, including appropriate explanation of the Computation ofNet Capital Under Rule I 5c3-1 and the Computation for Determination of the Reserve Requirements Under Exh ibit A of Rule I 5c3-3. - □ (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of consolidation. - 0 (I) An Oath or Affirmation. - D (111 ) A copy of the SIPC Supplemental Report. - **D** (n) A report describing any material inadequacies found to exist or fou nd to have existed since the date oft he previous audit. \*\* *For conditions of confldential treatment of certain portions of this fl ling, see section 2-10. 17a-5(e)(3).* {2}------------------------------------------------ Statement of Financial Condition December 31 , 2019 SEC ID 8-49386 Filed pursuant to Rule 17a-5(e)(3) as a PUBLIC DOCUMENT. {3}------------------------------------------------ #### Table of Contents ## Report of Independent Registered Public Accounting Firm on the Financial Statement 1 Financial Statement: Statement of Financial Condition Notes to Financial Statement 2 3 {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** Board of Directors and Stockholders Thompson Davis & Co., Inc. Richmond, Virginia #### **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of Thompson Davis & Co., Inc. (the "Company"), as of December 31 , 2019, and the related notes (collectively referred to as the "financial statement"). In our opinion, the statement of financial condition presents fairly, in all material respects, the financial position of the Company as of December 31 , 2019 in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** The financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statement 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 statement is 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 statement, 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 statement. We believe that our audit provides a reasonable basis for our opinion. We have served as the Company's auditor since 2004. February 14, 2020 Glen Allen, Virginia ) Certified Public ![](_page_4_Picture_11.jpeg) 4 401 Dominion Boulevard Glen Allen, VA 23060 Tel: 804.747.0000 Fax: 804.747.3632 www.keitercpa.com {5}------------------------------------------------ #### Statement of Financial Condition December 31, 2019 #### Assets | Cash
Receivables from clearing broker
Other receivables
Property and equipment -
net
Right to use asset -
net
Other assets | \$
39,197
808,386
163,346
64,745
604,764
65,117 | |-------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------| | Total assets | \$ 1,745,555 | | Liabilities and Stockholders' Equity | | | Liabilities:
Accounts payable
Accrued liabilities
Lease obligation | \$
34,356
84,954
604,929 | | Total liabilities | 724,239 | | Stockholders' Equity:
Common stock, no par value, authorized 10,000 shares,
issued and outstanding 1,000 shares
Retained earnings | 817,908
203,408 | | Total stockholders' equity | 1,021,316 | | Total liabilities and stockholders' equity | \$ 1,745,555 | See accompanying notes to the financial statement. {6}------------------------------------------------ #### Notes to Financial Statement #### **1. Summary of Significant Accounting Policies:** **Nature of Business:** Thompson Davis & Co., Inc. (the "Company") was incorporated in the State of New York and is headquartered in Richmond, Virginia. The Company provides financial services to both retail and institutional clients nationwide. As a brokerdealer and registered investment advisor, the Company is subject to regulations of the Securities and Exchange Commission (the "SEC") and the Financial Industry Regulatory Authority (the "FINRA"). The Company is an Introducing Broker and forwards all transactions to a Clearing Broker on a fully disclosed basis. **Basis of Presentation:** The accompanying financial statement has been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States ("GAAP") as determined by the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC"). The financial statement has been prepared on a consistent basis with that of the preceding period. **Risks and Uncertainties:** Financial instruments which potentially expose the Company to concentrations of credit risk consist primarily of cash and other financial instruments (See Note 5). The Company maintains its cash balances in financial institutions insured by the Federal Deposit Insurance Corporation up to \$250,000. The Company regularly has funds in excess of \$250,000. **Use of Estimates:** The preparation of financial statements in conformity with generally accepted accounting principles 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 statement. Actual results could differ from those estimates. **Cash and Cash Equivalents:** The Company considers all highly liquid investments with a remaining maturity of three months or less at the time of purchase to be cash equivalents. **Securities Owned:** Securities transactions are recorded in the accounts on a trade date basis. **Receivables from Clearing Broker:** The Company clears all of its proprietary and customer transactions through another broker-dealer on a fully disclosed basis. Based on the terms and conditions of the Company's agreement with its clearing broker, the amount receivable from the clearing broker represents cash on hand with the clearing broker plus commission receivables and less amounts payable for transaction costs on unsettled securities trades. **Property and Equipment:** Property and equipment is stated at cost. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives ranging from 3 to 7 years. {7}------------------------------------------------ #### Notes to Financial Statement, Continued #### **1. Summary of Significant Accounting Policies, Continued** **Income Taxes:** The Company has elected to be an S-Corporation. In lieu of corporate income taxes, the stockholders of an S-Corporation are taxed on their proportionate share of the Company's taxable income. Accordingly, no provision for income taxes has been included within the financial statement. **Income Tax Uncertainties:** The Company follows FASB guidance for how uncertain tax positions should be recognized, measured, disclosed and presented in the financial statements. This requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained "when challenged" or "when examined" by the applicable tax authority. Tax positions not deemed to meet the morelikely-then-not threshold would be recorded as a tax expense and liability in the current year. Management evaluated the company's tax positions and concluded that the Company had taken no uncertain tax positions that require adjustment to the financial statements to comply with the provisions of this guidance. The Company is currently not under audit by any tax jurisdiction. **Leases:** In February 2016, the FASB issued ASU 2016-02 - Leases (Topic 842). The update requires that all leasing activity with initial terms in excess of twelve months be recognized on the statement of financial condition with a right to use asset and a lease liability. The standard requires entities to classify leases as either a finance or an operating lease based upon the contractual terms. Lessees record a right to use asset with a corresponding liability based on the net present value of rental payments. The Company adopted the standard as of January 1, 2019. The adoption of Topic 842 resulted in the recording of a right of use asset and corresponding liability on the Company's statement of financial condition. See Note 3. **Subsequent Events:** Management has evaluated subsequent events through February 14, 2020, the date the financial statements were issued, and has determined that there are no subsequent events to be reported in the accompanying financial statements. #### **2. Related Parties:** The Company performs investment advisory services and management consulting services for Seven Hills Capital Partners, LP ("Seven Hills"), the General Partner of which is Seven Hills Capital Management, LLC ("Seven Hills Management''). Certain stockholders of the Company are also partners in Seven Hills Management. The Company has receivables of \$3,724 due from Seven Hills for accrued management fees as of December 31, 2019. The receivable is included in other receivables on the statement of financial condition. The Company has certain employees that hold positions of Seven Hills Capital Partners LP in their trust accounts and individual selfdirected retirement accounts. As of December 31, 2019, these positions totaled \$822,327. {8}------------------------------------------------ #### Notes to Financial Statement, Continued #### **3. Leases:** The Company leases office space under an operating agreement with a remaining lease term of 7 years. In accordance with ASU-2016-02, an operating right of use asset and operating lease liability were recorded on December 13, 2019, at the time the lease became effective based on the present value of future lease payments using a discount rate of 3.84%, the Company's weighted average estimated incremental borrowing rate. Cash paid for amounts included in the measurement of the operating lease liability was \$4,603 for the year ended December 31, 2019. Minimum future payments under noncancellable operating leases at December 31, 2019 for the next five years are as follows: | Year Ending December 31 | | |------------------------------------|---------------| | | | | 2020 | \$
90,132 | | 2021 | 92,836 | | 2022 | 95,621 | | 2023 | 98,490 | | 2024 | 101,444 | | Thereafter | 212,110 | | | 690,633 | | Implied interest on lease payments | (85,704) | | Total lease obligation | \$
604,929 | #### **4. Employee Retirement Plan:** The Company has an employee retirement plan under Section 401 (k) of the Internal Revenue Code. The plan provides for salary reduction contributions by eligible participants, subject to certain limitations with a discretionary Company contribution. The Company elected to make a contribution to the plan for 2019 in the amount of \$45,025 which is recorded as a component of accrued liabilities as of December 31 , 2019. #### **5. Financial Instruments with Off-Balance Sheet Risk:** As a securities broker, the Company is engaged in buying and selling securities as agent for a diverse group of domestic corporations, institutional investors, individuals and as principal for its own account. The Company introduces these transactions for clearance to another firm on a fully disclosed basis. {9}------------------------------------------------ #### Notes to Financial Statement, Continued ### **5. Financial Instruments with Off-Balance Sheet Risk, Continued** The agreement between the Company and its clearing broker provides that the Company is obligated to assume any exposure related to nonperformance by its customers. If any transactions do not settle, the Company may incur a loss if the market value of the security is different from the contract value of the transaction. The Company monitors its customer activity by reviewing information it receives from its clearing broker on a daily basis, requiring customers to deposit additional collateral, or to reduce positions when necessary. The Company does not anticipate nonperformance by customers or counterparties in these situations. The Company's policy is to monitor its market exposure and counterparty risk and to review, as necessary, the credit standing of each counterparty and customer with which it conducts business. #### **6. Property and Equipment:** Property and equipment at year-end consisted of: | Furniture and equipment | \$
150,518 | |------------------------------------------------|---------------| | Leasehold improvements | 36,816 | | | 187,334 | | Less accumulated depreciation and amortization | (122,589) | | Net property and equipment | \$
64,745 | #### **7. Guarantees:** As required or permitted under its Articles of Incorporation, the Company has certain obligations to indemnify its current officers and directors for certain events or occurrences while the officer or director is, or was serving, at the Company's request in such capacities. The maximum liability under these obligations is unlimited; however, the Company's insurance policies serve to limit its exposure. #### **8. Regulatory Requirements:** The Company is subject to the SEC's Uniform Net Capital Rule (Rule 15c3-1 ), which requires the maintenance of minimum net capital and the ratio of aggregate indebtedness to net capital, of not more than 15 to 1. At December 31, 2019, the Company had net capital of \$728,102, which was \$478,102 in excess of required minimum net capital of \$250,000. The Company's net capital ratio was 0.16 to 1. The Company does not carry the accounts of its customers and accordingly is exempt under Rule 15c3-3(k)(2)(ii) from preparing the Computation for Determination of Reserve Requirements pursuant to Rule 15c3-3. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.