# SCF SECURITIES, INC. X-17A-5 (2022-03-28) — Broker-dealer annual report - Company: SCF SECURITIES, INC. - Form: X-17A-5 - Filed: 2022-03-28 - Period: 2021-12-31 - Accession: 0001085538-22-000004 - CIK: 1085538 - File #: 8-51760 - Type: Broker-dealer - Material weakness: No - Auditor: Citrin Cooperman & Company, LLP - Auditor location: New York, NY - Contact: Layne Meadows - Phone: 559-456-6108 - Email: imeadows@scfinc.com - Website: scfinc.com - Signed by: Layne Meadows (Chief Financial Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1085538/000108553822000004/SCFS_Public_SEC_2021A.pdf --- {0}------------------------------------------------ SCF SECURITIES, INC. REPORT PURSUANT TO RULE 17a-5(d) DECEMBER 31, 2021 This report in accordance with Rule 17a-5€(3) under the Securities Exchange Act of 1934. PUBLIC DOCUMENT {1}------------------------------------------------ | | Washington, D.C. 20549 | | Estimated average burden
hours per response: 12 | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|------------------------------------------|----------------------------------------------------| | | ANNUAL REPORTS | | SEC FILL NUMBER | | | FORM X-17A-5 | | 8-51760 | | | PART III | | | | Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 | FACING PAGE | | | | FILING FOR THE PERIOD BEGINNING 01/01/21 | | AND ENDING 12/31/21 | | | | MM/DD/YY | | MM/DD/YY | | | A. REGISTRANT IDENTIFICATION | | | | NAME OF FIRM: SCF Securities, Inc. | | | | | TYPE OF REGISTRANT (check all applicable boxes):
@ Broker-dealer - D Security-based swap dealer
Check here if respondent is also an OTC derivatives dealer
ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | LI Major security-based swap participant | | | 155 E. Shaw Ave., Suite #102 | | | | | | (No. and Street) | | | | Fresno | CA | | 93710 | | (City) | (State) | | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | Layne Meadows | 559-456-6108 | | Imeadows@scfinc.com | | (Name) | (Area Code - Telephone Number) | (Email Address) | | | | B. ACCOUNTANT IDENTIFICATION | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
Citrin Cooperman & Company, LLP | | | | | | (Name - if individual, state last, first, and middle name) | | | | 529 Fifth Avenue | New York | NY | 10017 | | (Address) | (City) | (State)
2468 | (Zip Code) | | 11/02/2005 | | | | | (Date of Registration with PCAOB)(if applicable) | | | (PCAOB Registration Number, 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 OMB control number. {2}------------------------------------------------ #### OATH OR AFFIRMATION | Layne Meadows | | , swear (or affirm) that, to the best of my knowledge and belief, the | |---------------|--|--------------------------------------------------------------------------------------------| | | | financial report pertaining to the firm of SCF Securities, Inc.
10 56 | | | | , 2021 , 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. Signature: Title: Chief Financial Officer Sel orformed Notary Public #### This filing \*\* contains (check all applicable boxes): - (a) Statement of financial condition. - (b) Notes to consolidated statement of financial condition. - □ (c) Statement of income (loss) or, if there is other comprehensive in the period(s) presented, a statement of comprehensive income (as defined in § 210.1-02 of Regulation S-X). - O (d) Statement of cash flows. - [ (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - [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, - [ (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. - [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. - □ (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - (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. - [ (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - (t) Independent public accountant's report based on an examination of the statement of financial condition. - □ (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. - □ (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 240.15c3-1e 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 240.170-5(e)/3) or 17 CFR 240.180-7(d)/(2), as applicable. {3}------------------------------------------------ # CALIFORNIA JURAT WITH AFFIANT STATEMENT GOVERNMENT CODE & 8202 16年にはなかったりましたが、そんなので、そしてもらいましたのですが、このことになるところです。 このことではなくて、そのことではないでしたとことでした。 このことではなく、 See Attached Document (Notary to cross out lines 1-6 below) [ See Statement Below (Lines 1-6 to be completed only by document signer(s], not Notary) Signature of Document Signer No. 1 Signature of Document Signer No. 2 (if any) A notary public or other officer completing this certificate verifies only the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California Subscribed and sworn to (or affirmed) before me County of ne me on this \_ \_ day of \_ Marron Date eg os . Year bv (1) \_\_\_ Laynt Meciolows = Meciolows = 1) = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------BARBARA MARIE LIPPIE Notary Public - California Fresno County Commission # 2319007 Comm. Expires Feb 9, 2024 proved to me on the basis of satisfactory evidence to be the person(s) who appeared before me. Signature Donhino Mon June Jap Signature of Notary Public Seal Place Notary Seal Above OPTIONAL Though this section is optional, completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document. Description of Attached Document Title or Type of Document: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Document Date: Number of Pages: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Signer(s) Other Than Named Above: AUSTRACTATACACCACCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC ©2014 National Notary Association · www.NationalNotary.org · 1-800-US NOTARY (1-800-876-6827) · Item #5910 {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) # **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Stockholder SCF Securities, Inc. # **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of SCF Securities, Inc. as of December 31, 2021, 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 SCF Securities, Inc. as of December 31, 2021, in conformity with accounting principles generally accepted in the United States of America. # **Basis for Opinion** This financial statement is the responsibility of SCF Securities, Inc.'s management. Our responsibility is to express an opinion on SCF Securities, Inc.'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 SCF 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 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 SCF Securities, Inc.'s auditor since 2022. New York, New York March 26, 2022 {5}------------------------------------------------ # SCF SECURITIES, INC. STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2021 #### ASSETS | Cash and cash equivalents | ക | 939,244 | |------------------------------|---|--------------| | Commissions receivable | | 1,322,023 | | Clearing deposit with broker | | 50.000 | | Other receivables | | 97.284 | | Right-of-use assets | | 162.993 | | Due from Affiliates | | 530.384 | | Other assets | | 148.925 | | TOTAL ASSETS | | \$ 3,250,853 | # LIABILITIES AND STOCKHOLDER'S EQUITY | LIABILITIES | | | |-----------------------------------------------------------------------------------------------------|-------|--------------------| | Accounts payable and accrued expenses
Lease liability | ಕ್ಕಾ | 609.606
162,993 | | Commissions payable | | 1,219,787 | | TOTAL LIABILITIES | | 1,992,386 | | STOCKHOLDER'S EQUITY | | | | Common stock, \$0.01 par value, 1,000,000 shares authorized,
2,000 shares issued and outstanding | | 560 | | Additional paid-in capital | | 238.037 | | Retained earnings | | 1,019,870 | | TOTAL STOCKHOLDER'S EQUITY | | 1,258,467 | | TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY | સ્ત્ર | 3.250.853 | The accompanying notes are an integral part of the financial statement. {6}------------------------------------------------ #### SCF SECURITIES, INC. NOTES TO FINANCIAL STATEMENT DECEMBER 31, 2021 NOTE 1. ORGANIZATION AND NATURE OF BUSINESS SCF Securities, Inc. (the "Company"), is a registered broker-dealer with the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"). The Company is a wholly owned subsidiary of SCF Holdings, Inc. ("Holdings"). All shares of Holdings were acquired by AWS 9, Inc. on April 1, 2021, and AWS 9, Inc. is wholly owned by the Company's ultimate parent, Atria Wealth Solutions, Inc. ("AWSI"). The Company's principal office is located in Fresno, California. The Company has registered representatives located throughout the United States, and the Company provides broker-dealer services for independent registered representatives as an introducing broker-dealer, clearing customer transactions through another broker-dealer on a fully disclosed basis. # NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES # Cash and cash equivalents Cash equivalents consist of highly liquid investments with original maturities of less than ninety days that are not held for sale in the ordinary course of business. #### Basis of presentation and use of estimates The preparation of the financial statement in conformity with accounting principles generally accepted in the United States of America ("US GAAP") 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, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. # Revenue recognition The Company records commissions for the sale of insurance, mutual funds, variable annuity products and other securities as such commissions are earned. Refer to Note 3, Revenue from Contracts with Customers, for additional disaggregation of revenue in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 606. #### Securities transactions All securities transactions for the Company's customers are executed and cleared by other broker-dealers. Commissions are recorded on the trade date. The Company believes that the performance obligation is satisfied on the trade date 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. # Current Expected Credit Losses ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) introduced a credit loss methodology, Current Expected Credit Losses ("CECL"), which requires earlier recognition of credit losses, while also providing additional transparency about credit risk. The CECL methodology utilizes a lifetime "expected credit loss" measurement objective for the recognition of credit losses for loans, held-to-maturity securities and other receivables at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. The methodology replaced the multiple existing impairment methods in current US GAAP, which generally required that a loss be incurred before it is recognized. {7}------------------------------------------------ # **SCF SECURITIES, INC. NOTES TO FINANCIAL STATEMENT DECEMBER 31, 2021 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** )RUILQDQFLDODVVHWVPHDVXUHGDWDPRUWL]HGFRVWHJFDVKDQGFDVKHTXLYDOHQWVDQG UHFHLYDEOHV IURP FOLHQWV WKH &RPSDQ\ KDV FRQFOXGHG WKDW WKHUH DUH GH PLQLPXV H[SHFWHGFUHGLWORVVHVEDVHGRQWKHQDWXUHDQGFRQWUDFWXDOOLIHRUH[SHFWHGOLIHRIWKH ILQDQFLDODVVHWVDQGLPPDWHULDOKLVWRULFDQGH[SHFWHGORVVHV # &RPPLVVLRQVDQGRWKHUUHFHLYDEOHV &RPPLVVLRQVDQGRWKHUUHFHLYDEOHVDUHVWDWHGDWWKHDPRXQWVWKH&RPSDQ\H[SHFWV WR FROOHFW 7KH &RPSDQ\ FRQVLGHUV DFFRXQWV UHFHLYDEOH WR EH IXOO\ FROOHFWLEOH 7KH GHWHUPLQDWLRQ RI WKH DPRXQW RI FUHGLW ORVVHV LV EDVHG RQ WKH HVWLPDWHG FUHGLW ZRUWKLQHVV RI WKH FRXQWHUSDUW\ DQG WKH OHQJWK RI WLPH D UHFHLYDEOH KDV EHHQ RXWVWDQGLQJ 2WKHU IDFWRUV DUH FRQVLGHUHG E\ PDQDJHPHQW EDVHG RQ UHOHYDQW LQIRUPDWLRQ DERXW SDVW HYHQWV FXUUHQW FRQGLWLRQV DQG UHDVRQDEOH VXSSRUWDEOH IRUHFDVWVDVGHHPHGQHFHVVDU\RQDWUDQVDFWLRQE\WUDQVDFWLRQEDVLV7KH&RPSDQ\ FRQWLQXDOO\PRQLWRUVWKHVHHVWLPDWHVRYHUWKHOLIHRIWKHUHFHLYDEOH7KHDOORZDQFHIRU XQFROOHFWLEOHDFFRXQWVUHIOHFWVWKHDPRXQWRIORVVWKDWFDQEHUHDVRQDEO\HVWLPDWHG E\PDQDJHPHQW1RDOORZDQFHIRUFUHGLWORVVHVZHUHUHFRUGHGDVRI'HFHPEHU 7KH &RPSDQ\ KDG UHFHLYDEOHV UHODWHG WR UHYHQXHV IURP FRQWUDFWV ZLWK FXVWRPHUVRIDW'HFHPEHUDQGDW'HFHPEHU 7KH&RPSDQ\KDGQROLDELOLWLHVUHODWHGWRFRQWUDFWVZLWKFXVWRPHUVDW'HFHPEHU DQG'HFHPEHUUHVSHFWLYHO\ # 5LJKWRIXVHDVVHWVDQGOHDVHOLDELOLWLHV 7KH&RPSDQ\UHFRJQL]HVLWVOHDVHVLQDFFRUGDQFHZLWK\$6&7RSLF*Leases* \$6& 7KH JXLGDQFH LQFUHDVHV WUDQVSDUHQF\ DQG FRPSDUDELOLW\ E\ UHTXLULQJ WKH UHFRJQLWLRQ RI ULJKWRIXVH ³528´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¶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{8}------------------------------------------------ # **SCF SECURITIES, INC. NOTES TO FINANCIAL STATEMENT DECEMBER 31, 2021 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** #### ,QFRPHWD[HV 7KH&RPSDQ\DFFRXQWVIRULQFRPHWD[HVXQGHUWKHDVVHWDQGOLDELOLW\PHWKRG8QGHU WKLVPHWKRGGHIHUUHGWD[DVVHWVDQGOLDELOLWLHVDUHGHWHUPLQHGEDVHGRQWKHGLIIHUHQFH EHWZHHQWKHILQDQFLDOVWDWHPHQWDQGWD[EDVHVRIDVVHWVDQGOLDELOLWLHVXVLQJHQDFWHG WD[UDWHVLQHIIHFWIRUWKH\HDULQZKLFKWKHGLIIHUHQFHDUHH[SHFWHGWRDIIHFWWD[DEOH LQFRPH9DOXDWLRQDOORZDQFHVDUHHVWDEOLVKHGZKHQQHFHVVDU\WRUHGXFHGHIHUUHG WD[DVVHWVWRWKHDPRXQWVWKDWDUHPRUHOLNHO\WKDQWREHUHDOL]HG 7KH&RPSDQ\UHFRJQL]HVWKHHIIHFWRILQFRPHWD[SRVLWLRQVRQO\LIWKRVHSRVLWLRQVDUH PRUH OLNHO\ WKDQ QRW RI EHLQJ VXVWDLQHG 5HFRJQL]HG LQFRPH WD[ SRVLWLRQV DUH PHDVXUHG DW WKH ODUJHVW DPRXQW WKDW LV JUHDWHU WKDQ OLNHO\ RI EHLQJ UHDOL]HG &KDQJHVLQUHFRJQLWLRQRUPHDVXUHPHQWDUHUHIOHFWHGLQWKHSHULRGLQZKLFKWKHFKDQJH LQMXGJHPHQWRFFXUV # **NOTE 3. REVENUE FROM CONTRACTS WITH CUSTOMERS** 7KH&RPSDQ\KDVILYHSULPDU\UHYHQXHVWUHDPVL VHFXULWLHVFRPPLVVLRQVLL PXWXDO IXQGOLIHLQVXUDQFHDQGYDULDEOHDQQXLW\GLVWULEXWLRQIHHVLLL FRPPLVVLRQRQWKHVDOH RI DOWHUQDWLYH LQYHVWPHQWV DQG SULYDWH SODFHPHQWV LY GXH GLOLJHQFH DQGPDUNHWLQJ UHDOORZDQFHDQGY UHLPEXUVHGH[SHQVHVDQGRWKHULQFRPH,QVRPHFLUFXPVWDQFHV VLJQLILFDQW MXGJPHQW LV QHHGHG WR GHWHUPLQH WKH WLPLQJ DQG PHDVXUH RI SURJUHVV DSSURSULDWHIRUUHYHQXHUHFRJQLWLRQXQGHUDVSHFLILFFRQWUDFW 7KHUHFRJQLWLRQDQGPHDVXUHPHQWRIUHYHQXHLVEDVHGRQWKHDVVHVVPHQWRILQGLYLGXDO FRQWUDFW WHUPV 6LJQLILFDQW MXGJPHQW LV UHTXLUHG WR GHWHUPLQH ZKHWKHU SHUIRUPDQFH REOLJDWLRQVDUHVDWLVILHGDWDSRLQWLQWLPHRURYHUWLPHKRZWRDOORFDWHWUDQVDFWLRQSULFHV ZKHUH PXOWLSOH SHUIRUPDQFH REOLJDWLRQV DUH LGHQWLILHG ZKHQ WR UHFRJQL]H UHYHQXH EDVHGRQWKHDSSURSULDWHPHDVXUHRIWKH&RPSDQ\¶VSURJUHVVXQGHUWKHFRQWUDFWDQG ZKHWKHUFRQVWUDLQWVRQYDULDEOHFRQVLGHUDWLRQVKRXOGEHDSSOLHGGXHWRXQFHUWDLQIXWXUH HYHQWV 6HFXULWLHVFRPPLVVLRQVGXHGLOLJHQFHDQGPDUNHWLQJDQG UHLPEXUVHGH[SHQVHVDUH JHQHUDOO\UHFRJQL]HGDWDSRLQWLQWLPHXSRQWKHGHOLYHU\RIFRQWUDFWHGVHUYLFHVEDVHG RQDSUHGHILQHGFRQWUDFWXDODPRXQWRURQWKHWUDGHGDWHIRUUHWDLOEURNHUDJHVHUYLFHV EDVHGRQSUHYDLOLQJPDUNHWSULFHVDQGLQWHUQDODQGUHJXODWRU\JXLGHOLQHV\$OOVHFXULWLHV WUDQVDFWLRQVIRUWKH&RPSDQ\¶VFXVWRPHUVDUHH[HFXWHGDQGFOHDUHGE\RWKHUEURNHU GHDOHUV7KH&RPSDQ\HDUQVUHYHQXHIRUVHOOLQJDIILOLDWHGDQGXQDIILOLDWHGPXWXDOIXQGV IL[HGDQGYDULDEOHDQQXLWLHVDQGLQVXUDQFHSURGXFWV&RPPLVVLRQVDUHUHFRUGHGRQWKH WUDGHGDWH7KH&RPSDQ\EHOLHYHVWKDWWKHSHUIRUPDQFHREOLJDWLRQLVVDWLVILHGRQWKH WUDGH GDWH ZKHQ WKH XQGHUO\LQJ ILQDQFLDO LQVWUXPHQW RU SXUFKDVHU LV LGHQWLILHG WKH SULFLQJLVDJUHHGXSRQDQGWKHULVNVDQGUHZDUGVRIRZQHUVKLSKDYHEHHQWUDQVIHUUHG WRIURPWKHFXVWRPHU {9}------------------------------------------------ # SCF SECURITIES, INC. NOTES TO FINANCIAL STATEMENT DECEMBER 31, 2021 NOTE 3. The Company enters into arrangements with mutual funds, insurance and annuity sponsors, or other pooled investment vehicles (funds) to distribute shares to investors. The Company may receive distribution fees paid by the fund up front, over time, upon the investor's exit from the fund (that is, a contingent deferred sales charge), or as a combination thereof. The Company believes that its performance obligation is the sale of securities to investors and as such this is fulfilled on the trade date. Any fixed amounts are recognized on the trade date and variable amounts are recognized to the extent it is probable that a significant revenue reversal will not occur once the uncertainty is resolved. For variable amounts, as the uncertainty is dependent on the value of the shares at future points in time as well as the length of time the investor remains in the fund, both of which are highly susceptible to factors outside the Company's influence, the Company does not believe that it can overcome this constraint until the market value of the fund and the investor activities are known, which are usually monthly or quarterly. Distribution fees recognized in the current period are primarily related to performance obligations that have been satisfied in prior periods. The economic conditions which affect the Company's operations are related to overall trends in the economy and its impact on securities markets. #### NOTE 4. CONCENTRATIONS OF CREDIT RISK The Company is engaged in various trading and brokerage activities in which counterparties primarily include broker-dealers and other financial institutions. In the event counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty or issuer of the instrument. It is the Company's policy to review, as necessary, the credit standing of each counterparty. Asset balances that potentially subject the Company to concentrations of credit risk consist principally of cash accounts in financial institutions that periodically exceed federally insured limits. At December 31, 2021, the amount in cash accounts exceeding federally insured limits was approximately \$689,244. #### NOTE 5. AGREEMENT WITH CLEARING BROKER AND 15c3-3 EXEMPTION The Company, under Securities and Exchange Act ("Act") Rule 15c3-3(k)(2)(ii), is exempt from the reserve and possession or control requirements of Rule 15c3-3 of the Securities and Exchange Commission. The Company does not carry or clear customer accounts. Accordingly, all customer transactions are executed and cleared on behalf of the Company by its clearing broker on a fully disclosed basis. The Company's agreement with its clearing broker provides that as clearing broker, that firm will make and keep such records of the transactions effected and cleared in the customer accounts as are customarily made and kept by a clearing broker pursuant to the requirements of Rules 17a-3 and 17a-4 of the Act. The clearing broker also performs all services customarily incidental thereto, including the preparation and distribution of customers' confirmations and statements and maintenance margin requirements under the Act and the rules of the Self-Regulatory Organizations of which the Company is a member. The clearing agreement requires the Company to maintain a deposit of \$50,000 with the clearing broker. Such amount bears interest at current market rates. {10}------------------------------------------------ # **SCF SECURITIES, INC. NOTES TO FINANCIAL STATEMENT DECEMBER 31, 2021 NOTE 5. AGREEMENT WITH CLEARING BROKER AND 15c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¶VFRQFOXVLRQVUHJDUGLQJWKLVSROLF\PD\EHVXEMHFWWRUHYLHZV DQGDGMXVWPHQWVDWDODWHUGDWHEDVHGRQIDFWRUVLQFOXGLQJEXWQRWOLPLWHGWRRQJRLQJ DQDO\VHVRIDQGFKDQJHVWRWD[ODZVUHJXODWLRQVDQGLQWHUSUHWDWLRQVWKHUHRI {11}------------------------------------------------ #### SCF SECURITIES, INC. NOTES TO FINANCIAL STATEMENT DECEMBER 31, 2021 NOTE 6. NOTE INCOME TAXES (CONTINUED) The current and deferred portions of the income tax expense as determined in accordance with FASB ASC 740 for the year ended December 31, 2021 are as follows: | Current: | | | | |----------------------------|--------------------------|----|---------| | Federal | | ಕಾ | 26,064 | | State | | | 9.929 | | | Total current provision | | 35,993 | | Deferred: | | | | | Federal | | | 115.138 | | State | | | 43.862 | | | Total deferred provision | | 159.000 | | | | | | | Total income tax provision | | ਉ. | 194 993 | The recognition of deferred income taxes reflects the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Management has analyzed the Company's recorded tax benefits and concluded that each material position satisfied the required recognition and measurement threshold for inclusion within the financial statement. Consequently, the Company has not recorded any reserve for any uncertain tax positions and does not believe that a significant change will occur within the coming year as to any uncertain tax positions. To the extent that a deferred tax asset is determined to be less than more likely than not to be realized, a valuation allowance is recorded. Management has determined that a valuation allowance is not required for any of its deferred tax assets. In the event the Company is charged interest or penalties related to income tax matters, the Company would record such interest as income tax expense and would record such penalties as other expenses. No such charges have been incurred by the Company for 2021. At December 31, 2021, the Company had no uncertain tax positions. # NOTE 7. # Leases The Company has one operating lease for the main office which expires on December 31, 2022. According to the terms of the lease agreement, space was offered on an "asis" basis with no option to renew or extend beyond the end of the lease term. The lease includes no incentives. Future minimum lease payments are as follows: # Year Ending December 31 | 2022 | \$169.543 | |------------------------------|-----------| | Less: Present Value Discount | 6.550 | | Operating lease - liability | \$162.993 | Weighted-average remaining lease (in years): 1 Weighted-average discount rate: 5% {12}------------------------------------------------ # **SCF SECURITIES, INC. NOTES TO FINANCIAL STATEMENT DECEMBER 31, 2021 NOTE 7. 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