# KIPPSDESANTO & COMPANY X-17A-5 (2024-02-21) — Broker-dealer annual report
- Company: KIPPSDESANTO & COMPANY
- Form: X-17A-5
- Filed: 2024-02-21
- Period: 2023-12-31
- Accession: 0001067122-24-000002
- CIK: 1067122
- File #: 8-51183
- Type: Broker-dealer
- Material weakness: No
- Auditor: Keiter
- Auditor location: Glen Allen, VA
- Contact: Gabrielle Halprin
- Phone: 5045337377
- Email: halprin@cap1talone.com
- Website: cap1talone.com
- Signed by: Gabrielle Halprin (Chief Financial Operations Officer)
Original filing: https://www.sec.gov/Archives/edgar/data/1067122/000106712224000002/KDCPUBLICFS2023.pdf
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**UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549**
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| ANNUAL REPORTS |
|----------------|
| FORM X-17 A-5 |
| PART Ill |
| SEC FILE NUMBER | |
|-----------------|--|
| 8-51183 | |
**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 **\_\_\_ 0\_1\_/0\_1\_/\_2\_3\_AND** ENDING **\_\_ 1\_2\_/\_3\_1\_/2\_3 \_\_** MM/DD/VY MM/DD/VY **A. REGISTRANT IDENTIFICATION** NAME oF FIRM: \_K\_ip\_p\_s\_D\_e~S\_a\_n\_t\_o\_&\_C\_o\_m\_p~a~n\_y \_\_ ~---~---- TYPE OF REGISTRANT (check all applicable boxes): ~ Broker-dealer □ Security-based swap dealer □ Check here 1f respondent 1s also an OTC denvat1ves dealer D Major security-based swap participant ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) 1675 Capital One Dr., Suite 1200 (No and Street) McLean VA 22102 (City) (State) (Zip Code) PERSON TO CONTACT WITH REGARD TO THIS FILING Gabrielle Halprin ( 504) 533-73 77 gabnelle halprin@cap1talone.com (Name) (Area Code -Telephone Number) (Email Address)
**8. ACCOUNTANT IDENTIFICATION**
INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing\*
# Keiter
| (Name - tf md1v1dua!, state last, f1rst, and rrnddle name) | | | | |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------|---------|--------------------------------------------|--|
| 4401 Dominion Blvd | Glen Allen | VA | 23060 | |
| (Address) | (City) | (State) | (Zip Code) | |
| 10/22/2003 | | 80 | | |
| (Date of Reg1strat1on with PCAOB){if applicable) | | | (PCAOB Registration Number, if applicable) | |
| | FOR OFFICIAL USE ONLY | | | |
| | | | | |
| * Claims for exemption from the requtrement that the annual reports be covered by the reports of an independent pubhc
accountant must be supported by a statement of facts and circumstances rehed on as the basis of the exemption See 17 | | | | |
CFR 240.17a-S(e){1)(11), 1f 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.
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#### **OATH OR AFFIRMATION**
I, Gabrielle Halprin , swear (or affirm) that, to the best of my knowledge and belief, the financial report pertaining to the firm of KippsDeSanto & Company , as of
December 31 2~ is true and correct. I further swear (or affirm) that neither the company nor any partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely as that of a customer.
Title: Chief F '
# This flllng\*\* **contains (check all applicable boxes):**
- iii (a) Statement of financial condition.
- iii (b) Notes to consolidated statement offinancial 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.
- □ (e) Statement of changes in stockholders' or partners' or sole proprietor's equity.
- 0 (f) Statement of changes in liabilities subordinated to claims of creditors.
- □ (g) Notes to consolidated financial statements.
- □ (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable.
- 0 (i) Computation of tangible net worth under 17 CFR 240.18a-2.
- □ (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3.
- □ (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.
- □ (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-l, 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.
- 0 (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition.
- iii (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.
- □ (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- 0 (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- iii (t) Independent public accountant's report based on an examination of the statement offinancial condition.
- □ (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a-S, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable.
- □ (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- □ (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- □ (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-le or 17 CFR 240.17a-12, as applicable.
- □ (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). □ (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.
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(A Wholly Owned Subsidiary of Capital One, N.A.)
FINANCIAL REPORT
Year Ended December 31, 2023 With Report of Independent Registered Public Accounting Firm
SEC ID 8 - 51183
Filed pursuant to Rule l 7a-5(e)(3) as a PUBLIC DOCUMENT.
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(A Wholly Owned Subsidiary of Capital One, N.A.)
# **Table of Contents**
| Report oflndependent Registered Public Accounting Firm . | |
|------------------------------------------------------------------------|--------|
| Financial Statement: | |
| Statement of Financial Condition .
Notes to Financial Statement . | 2
3 |
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#### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
To the Board of Directors of KippsDeSanto & Company
#### **Opinion on the Financial Statement**
We have audited the accompanying statement of financial condition of KippsDeSanto & Company (the "Company") as of December 31, 2023, \_and the related notes (collectively referred to as the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of December 31 , 2023 in conformity with accounting principles generally accepted in the United States of Americ\_a.
#### **Basis for Opinion**
This 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 statement. 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 2019.
Glen Allen, Virginia February 15, 2024
> ) **Certified Public Accountants** & **Consultants** 4401 Dominion Boulevard Glen Allen, VA 23060 T:804.747.0000 F:804.747.3632
www.keitercpa.com
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(A Wholly Owned Subs1d1ary of Capital One, N.A.)
Statement of Financial Condition December 3 I, 2023
| Assets: | |
|--------------------------------------------------------------------------------------------------|------------|
| \$
Cash | 43,010,328 |
| Accounts receivable
. | 8,589 |
| Other receivables
| 13,672 |
| Deferred tax asset .
. | 1,484,249 |
| Total assets .
\$ | 44,516,838 |
| Liabilities: | |
| Accrued expenses .
.
.
\$ | 101,606 |
| Accrued compensation expenses . | 5,535,202 |
| Deferred revenue
. .
. | 150,000 |
| Due to affiliates . | 7,173,149 |
| Total liabilities . | 12,959,957 |
| Stockholder's equity: | |
| Common stock, no par value; 2,000,000 shares authorized; 1,363,153
issued and outstanding
| |
| Additional paid-in capital .
| 7,207,138 |
| Retained earnings . | 24,349,743 |
| Total stockholder's equity . | 31,556,881 |
| Total liabilities and stockholder's equity
\$ | 44,516,838 |
See accompanying Notes to Financial Statement.
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(A Wholly Owned Subsidiary of Capital One, N.A.)
# Notes to Financial Statement
# **Note 1-0rganization**
KippsDeSanto & Company (the "Company") is a wholly owned subsidiary of Capital One, National Assoc1at1on ("CONA''). The Company is primarily engaged in investment banking and advisory services. The Company's customers are located throughout the United States. Investment banking services are occasionally provided to companies outside of the United States. The Company 1s registered with the Securities and Exchange Commission as a broker-dealer and is a member of the Financial Industry Regulatory Authority, Inc ("FINRA")
# **Note 2--Summary of Significant Accounting Policies**
## **Basis of Accounting**
The financial statement of the Company 1s prepared in accordance with U.S. generally accepted accountmg principles ("U.S. GAAP").
## **Use of Estimates**
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. While management makes its best judgment, actual results could differ from those estimates.
## **Cash on Deposit with Parent Company**
The Company considers all highly liquid investments with a stated maturity of three months or less when purchased to be cash eqmvalents. Cash includes amounts held at CONA, its parent company, totaling \$6,230,472 at December 31, 2023 CONA is a major financial institution and is insured up to \$250,000 by the Federal Deposit Insurance Corp01ation.
### **Accounts Receivable**
Accounts receivable are non-interest-beating uncollateralized obligations receivable in accordance with the terms ag1eed upon with each client. The Company follows ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): *Measurement of Cred1t Losses on Fmanczal Instruments* This gmdance requires use of the current expected credit loss model that is based on expected losses (net of expected recoveries), rather than incurred losses, to determine the Company's allowance for credit losses on financial assets measured at amortized cost, certain net investments in leases and certain off-balance sheet arrangements
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(A Wholly Owned Subsidiary of Capital One, N A )
# Notes to Financial Statement ( continued)
The Company has no material historical credit losses There ate no current indications of nonreceipt from counterparties. The Company projects no probability of future losses related to these balances. Management has determined that these receivables have mm1mal credit risk and, therefore, no allowance was deemed necessaiy as of December 31, 2023.
# **Income Taxes**
The Company 1s included in Capital One Financial Corp's ("Capital One") consolidated federal income tax return, but files separate state income tax returns. Capital One allocates federal income tax expense to the Company using a separate return basis. The Company is reimbursed by Capital One for federal income tax losses, if applicable. Amounts owed to 01 due from Capital One for federal income taxes are reported as a component of due to or from affiliates in the accompanying statement of financial condition. Taxes payable amounts included in due to affiliates totaled \$5,672,579 at December 31, 2023, of which a portion relates to years prior to 2023
Deferred tax assets and liabilities are based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.
The Company has evaluated the effect of accounting guidance surrounding uncertain mcome tax positions and concluded that the Company has no significant financial statement exposure to unce11ain income tax positions as of December 31, 2023.
## **Note 3-Related Party Transactions**
Various administrative expenses are paid on behalf of the Company by CONA, under a Master Services Agreement between the Company, CONA and various affiliates. These administrative expenses are reimbm sed by the Company to CONA on a monthly basis. As of December 31, 2023, the Company has reimbursements payable of \$ I ,500,570 included in due to affiliates in the accompanying statement of financial condition. In addition, the Company pays a management fee to CONA based on an internally calculated allocation of overhead cost.
The Company sponsors an incentive plan for qualified employees A p0111011 of individual employee's incentive compensation may be awarded in the form of restricted share units (the "Units") of Capital One and 1s payable to employees accmding to a vesting schedule. The expense associated with the vesting of the Units is reimbursed by the Company to Capital One on a quarterly basis.
The Company has an agreement with Capital One Securities, Inc. ("COS") and TnpleTree, LLC ("TT"), affiliated broker-dealers, whereby associates of each broker-dealer may provide various administrative services to the other affiliates The Company reimburses the affiliated broker-
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(A Wholly Owned Subsidiary of Capital One, N.A.)
# Notes to Financial Statement ( continued)
dealers for the services it receives on a monthly basis, net of any amounts due to the Company for services provided.
The Company currently occupies office space leased by Capital One, the expense for which is allocated as patt of the Master Se1vices Agreement. Management has reviewed the Master Services Agreement and concluded that this contract does not contain any leases under the scope of ASU 2016- 02 - Leases (Topic 842).
# **Note 4-Commitments and Contingencies**
From time to time, the Company is involved in litigation that it considers to be incidental to its business. The Company is not presently involved 111 any legal p10ceedings which management expects individually or in the aggregate to have a material adverse effect on its financial condition or results of operations.
The Company has contracts with its vendors for vanous services. Minimum commitments under these contracts as of December 31, 2023 amounts to \$8,900 for 2024.
# **Note 5-Concentration**
Approximately 45% of total accounts receivable are due from two clients as of December 31, 2023.
# **Note 6-Net Capital**
The Company 1s subject to the Securities and Exchange Commission Uniform Net Capital Rule l 5c3- l, which requi1 es 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. At December 31, 2023, the Company had net capital of \$27,019,900 which was \$26,155,902 in excess of the required minimum net capital of \$863,998. The Company's net capital 1atio was 0.48 to 1.
The Company has no obligation under Rule l 5c3-3 to prepare the Computation for Determination of Reserve Requirements Pursuant to Rule l 5c3-3.
## **Note 7-Subsequent Events**
In accordance with U S GAAP, the Company evaluates subsequent events that have occurred after the statement of financial condition date but before the financial statement is issued. There are two types of subsequent events: (1) recognized, or those that provide additional evidence about conditions that existed at the date of the statement of financial condition, mcluding estimates inherent in the process of preparing financial statements, and (2) nonrecognized, or those that provide evidence about conditions that did not exist at the date of the statement of financial
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(A Wholly Owned Subsidiary of Capital One, N.A.)
#### Notes to Financial Statement ( continued)
condition but arose after that date The Company evaluated subsequent events through February 15, 2024, the date the financial statement was issued.
Based on the evaluation, the Company did not identify any recognized or nonrecognized subsequent events that would have required adjustment to the financial statement.
Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.