# J.A.K. SECURITIES, INC. X-17A-5/A (2021-06-09) — Broker-dealer annual report - Company: J.A.K. SECURITIES, INC. - Form: X-17A-5/A - Filed: 2021-06-09 - Period: 2020-12-31 - Accession: 0001091369-21-000004 - CIK: 1091369 - File #: 8-51943 - Material weakness: No - Auditor: Lerner & Sipkin - Auditor location: New York, NY - Contact: Alexis L. Fione - Phone: 6102469207 - Signed by: James A Kelly (President) Original filing: https://www.sec.gov/Archives/edgar/data/1091369/000109136921000004/public.pdf --- {0}------------------------------------------------ # J .A.K. Securities Corporation ## STATEMENT OF FINANCIAL CONDITION FOR THE YEAR ENDED DECEMBER 31) 2020 {1}------------------------------------------------ **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Wasbington,D.C. 20549** 0MB APPROVAL 0MB Number: 3235-0123 Expires: October 31, 2023 Estimated average burden hours oer resoonse ...... 12.00 > SEC FILE NUMBER 8-.5/? 3 #### **ANNUAL AUDITED REPORT FORM X-17A-5 PART Ill** **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 BEGINNING | 01/01/2020
AND ENDING | | 12/31/2020 | | |--------------------------------------------------------------------------------------------------------|----------------------------------------------------------|-------------------|--------------------------------|--| | | MM/DD/YY | | MM'./DD/YY | | | | A. REGISTRANT IDENTIFICATION | | | | | NAME oF BROKER-DEALER: J.A.K. Securities Inc. | | OFFICIAL USE ONLY | | | | ADDRESS OF PRINCIPAL PLACE OF BUSfNESS: (Do not use P.O. Box No.) | | | FIRM I.D. NO. | | | 20 Windward Ct. Collegeville, PA 19426 | | | | | | | (No. and Street) | | | | | (City) | (State) | | (Zip Code) | | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
James A. Kelly 267-252-3490 | | | | | | | | | (Area Code - Telephone Number) | | | | B. ACCOUNT ANT IDENTIFICATJON | | | | | INDEPENDENT PUBLTC ACCOUNTANT whose opin | ion is contain ed in this Report* | | | | | Lerner & Sipkin CPAs, LLC | | | | | | | (Nam~ - if /11divid11al, state last, first, middle name) | | | | | 420 Lexington Ave. 5uite 2160 | New York | NY | 10070 | | | (Address) | (City) | (State) | (Zip Code) | | | CHECK ONE: | | | | | | f v
lce1tified Public Accountant | | | | | | •
Public Accoun1ant | | | | | | DAccountanl not reside | nt in United States or any of its possessions. | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | | | | | | | | | | | | *""Claims.for exemption from the requirement that the annual report be covered by the opinion. of an independent public accountant must be supported by a statement ofjacts and circumstances relied on as the basisfhr the exemp1ion. See Section 240. l 7a-5(e)(2)* SEC 1410 (11 -05) **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.** {2}------------------------------------------------ #### **OATH OR AFFIRMATION** | ______________________ ,
my knowledge and belief the accompanying financial stntemenl and supporting schedules pertaining to the firm of
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J.A.K. Securities Inc. | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | as | | __
of December 31
__, are true and c.orrect. I further swear (or affirm) that
, 20_2_0 | | neither the company nor any partner, proprietor, principal officer or director has any pt·oprietary interest in any account
classified solely as that of a custom.er, except as follows: | | ~
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;
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_______ | | I
President
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Commonwealth of Penr11ylvania - Notary Seal
Notar§ Publi.c
NICOLE A HENDERSON • Notary Public
Montgomery County
This report** contains (check all applicable-boxes):
My Commission Expire~ Mar 22, 2023
El (a) Facing Page.
Commission tiumber 1345830
EJ (b) Statement of Financial Condition.
D (c) Statement ofincomc (Loss) or, if there is othcl' comprehensive income in the pcriod(s) presented, a Statement
of Comprehensive fncome (as defined in §210.1-02 of Regulation S-X).
§ {d) Statement of Changes in Financial Condition.
(e) Slatemenl 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 Capi1al.
(h) Computation for Determint1tio11 of Reserve Requirements Purs
uant to Rule 15c3-3.
(i) Information Relating to the Possession or Control Requirements Under Rule 15c3-3.
0 U) A Rcconcil iation, including appropriate explanation of the Computation of Net Capi Lal Under Rule I Sc]-
I and the
Computation for Determination oftbc Reserve Requirements Uno.er Exhibit A of Rule 15c3-3.
O (k) A Reconciliation between the audited and unaudited Statements of financial Condition with respect to methods of
consolidation. | {3}------------------------------------------------ ![](_page_3_Picture_0.jpeg) 420 Lcxlogron Avc.,Src~. 2160, NY. NY 10170 1'cl 212.571.0064/Fm: 212 571 0074 Jay Lerner, C.P.A. tlerner@fernc1•slpkln.co111 Josepl1 G. S!pkln, C.P,J\, Jslpktn@lcrncralpkln,com #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders of J.A.K. Securities, Inc. 20 Windward Court Collegeville, PA 19426 #### **Opiuioo on the Financial Statement** We have audited the accompanying statement of financial condition of J.A.K. Securities, Jnc, as of December 31, 2020, 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 J.A.K. Securities, Inc. as of December 31, 2020 in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** The financial statement is the responsibility of J.A.K. Securitjes, Inc. 's management. Our responsibility is to express an opinion on J.A.K. Securities, Inc.'s financial statement based on our audit. We are a public accounting finn registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to J.A.K. 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 st.a.ndards of 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 tha:t 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. -~-; *~ - lj/lillt* Lerner & Sipkin CPAs, LLP Ce1tified Public Accountants (NY) We have served as J.A.K. Securities, Inc.'s auditor since 2019. New York, NY March 29, 2021 {4}------------------------------------------------ #### **J.A.K Securities Incorporated Statement of Financial Condition December 31, 2020** #### **Assets** | Cash | \$ | 175,906 | |-------------------------------------------------------|----|---------| | Due from Clearing Firm | | 223,148 | | Accounts Receivable | | 151,970 | | Other Assets | | 1,645 | | Total Assets | \$ | 552,669 | | | | | | Liabilities & Stockholder's Equity | | | | Liabilities: | | | | Accounts Payable and Accn1ed Expenses | | 43,878 | | Loan PPP | | 106,817 | | Loans | | 76,000 | | Total Liabilities | | 226,695 | | Stockholder's Equity: | | | | Common stock,\$ 1 par value, 1,000 shares authorized, | | | | issued and outstanding | | 1,000 | | Additional Paid In Capital | | 256,500 | | Retained Earnings | | 68,475 | | Total Stockholder's Equity | | 325,975 | | Total Liabilities and Stockholder's Equity | \$ | 552,669 | {5}------------------------------------------------ #### **Note 1 Nature of Business** .J.A.K. Securities Inc. (The 'Company") is a PA Corporation, incorporated in May of 1999. The Company is a registered broker dealer with the Securities Exchange Commission (SEC) and is a 1nember of NASDAQ OMX PfilX (PHLX). The Company has been an SEC and PHLX member since August 1999. The Cmnpany engages in floor activity, solely to execute orders on behalf of its clients. The Company does not clear securities transactions or take possession or control of securities. ## **Note 2** ~ **Summary of Significant Accounting Policies** ### **a) Revenue Recognition** The Company principally earns commission by buying and selling securities for a diverse group of institutional investors. Securities transactions (and the recognition of related income and expenses) are recorded on a trade date basis. {6}------------------------------------------------ ### **b) Income Taxes** The Company has elected to be treated as an "S" Corporation under the provisions of the Internal Revenue Code and the Pennsylvania State tax regulations. Under the provisions the Company does not pay federal or state corporate income taxes on its taxable income. ## **c) Cash** The Co1npany maintains cash in bank accounts which, at tin1es, 1nay exceed federally insured lhnits or where no insurance is provided. The Company has not experienced any losses in such accounts and does not believe it is exposed to any significant credit risk on cash and cash equivalents. ## **d) Use of Estimates** Manage1nent uses estimates and assumptions in preparing financials. Those estimates and assumptions effect the reported amounts of assets and liabilities, and the rep011ed amounts of revenues and expenses. {7}------------------------------------------------ ## **Note 3 - 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 institutional and individual investors. The Con1pany introduces these transactions for clearance to another broker-dealer on a ful1y disclosed basis. The Company's exposure to credit risk associated with nonperformance of customers in fulfilling their contractual obligations pursuant to securities transactions can be directly impacted by volatile trading markets which n1ay impair the customer's ability to satisfy its obligations to the Company and the Co1npany's ability to liquidate the collateral at an am.ount equal to the original contracted amount. The agreement between the Company and its clearing broker provides that the Company is obligated to assume any exposure related to such non-performance by its customers. {8}------------------------------------------------ #### **Note 4 - Net Capital Requirements:** The Company is subject to and complies with the requirements for broker dealers under SEA rule 15c3-1 requiring the maintenance of a 1ninimum net capital and requires that the ratio of aggregate indebtedness to net capital shall not exceed 15 to 1. At December 31, 2020, the Company had a net capital of \$325,975 which was \$225,975 in excess of its required net capital of \$100,000. At December 31, 2020, the Company's ratio of aggregate indebtedness to net capital 85 .17%. #### **Note 5 - Related Party:** The Stockholder made a loan to the company in the amount of \$110,000. The loan is non-interest bearing and there is no maturity date. The loan balance at December 31, 2020 was \$76,000. #### **Note 6 - Loan** The Company received a loan from TD Bank NA in the amount of \$106,875 under the Paycheck Protection Program established by the Coronavirus Aid, Relief, and Econon1ic {9}------------------------------------------------ #### **Note 6 - Loan (cont.)** Security (CARES) Act. The loan is subject to a note dated April 20, 2020 and 1nay be forgiven to the extent proceeds of the loan is used for eligible expenditures such as payroll and other expenses described in the CARES Act. No determination has been made as to whether the Company will be eligible for forgiveness, in whole or in pati. The loan bears interest at a rate of 1 % and is payable in monthly installments of principal and interest over 24 months. Loan payments are deferred until SBA remits the borrower's loan forgiveness amount to the lender. If the loan is not forgiven pay1nents are deferred 10 months after the end of the covered period, September 28, 2020. #### **Note** 7 - **Subsequent Events** The Company performed an evaluation of events that occurred subsequent to December 31, 2020 and through March 29, 2021, the date of the filing of this report. There have been no n1aterial subsequent events that occurred during such period that would require disclosure in this repo1i or would be required to be recognized in the financial statements as ofDece1nber 31, 2020. {10}------------------------------------------------ #### **Note 7 - Subsequent Events (cont'd)** A coronavirus (COVID-19) was first reported in China. In January 2020, the World Health Organization declared it a Public Hea1th Emergency of International Concern. This contagious disease outbreak, which has continued to spread to additional countries, and any related adverse public health developments, could adversely affect the Company's customers, service providers and suppliers as a result of quarantines, facility closures, and travel and logistics restrictions in connection with the outbreak. More broadly, the outbreak could affect workforces, economies and financial markets globally, potentially leading to an economic downturn. The ultimate impact of the COVID-19 is uncertain. Managen1ent continues to monitor the outbreak, however, as of the date of these financial statem.ents the potential impact of such on the Company's business and operations cannot be reasonably estimated. The U.S. enacted the CARES Act which is an economic stimulus package to assist eligible small businesses to cover certain operational costs due to the adverse impact of COVID-19. In addition, the CARES Act included temporary tax law changes to provide additional relief to U.S. businesses and individual taxpayers. {11}------------------------------------------------ #### **Note 8 - The Allowance for Credit Losses** Effective January 1, 2020, The Company adopted ASC Topic 326, financial Instruments - Credit Losses ("ASC 326''). ASC 326 impacts the itnpaitment model for certain financial assets by requiring a current expected credit loss ("CECL") methodology to estimate expected credit losses over the entire life of the financial asset. Under the accounting update, the Company could determine there are no expected credit losses in certain circumstances ( e.g., based on the credit quality of the client). The Company identified fees and other receivables (including, but not li.tnited to, receivables related to securities transactions, and advisory fees) as impacted by the new guidance. ASC 326 specifies that the Company adopt the new guidance prospectively by means of a cumulative-effect adjustment to the opening n1ember's equity as of the December 31, 2019. Accordingly, the Company recognjzed no adjustment upon adoption. The allowance for credit losses is based on the Company's expectation of the collectability of fmancial instruments, including fees and other receivables utilizing the CECL framework. The Company considers factors such as historical experience, credit quality, age of balances and current and future econon1ic conditions that may afiect the Company's expectation of collectability in determining the allowance for credit losses. The Company's expectation is that the credit risk associated with the fees and other receivables is not {12}------------------------------------------------ significant accordingly, the Company has not provided an allowance for credit losses at December 31, 2020. 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