# PENROD FINANCIAL SERVICES, INC. X-17A-5 (2022-04-13) — Broker-dealer annual report - Company: PENROD FINANCIAL SERVICES, INC. - Form: X-17A-5 - Filed: 2022-04-13 - Period: 2021-12-31 - Accession: 0001096906-22-000833 - CIK: 837078 - File #: 8-40088 - Type: Broker-dealer - Material weakness: No - Auditor: Michael T. Patterson, CPA Holt & Patterson, LLC - Auditor location: Chesterfield, MO - Contact: Tamara L. Haslar - Phone: 417-334-3455 - Signed by: Donald R. Penrod (President, Chief Compliance Officer) Original filing: https://www.sec.gov/Archives/edgar/data/837078/000109690622000833/public.pdf --- {0}------------------------------------------------ **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** # **ANNUAL REPORTS FORM X-17A-S PART** Ill 0MB APPROVAL 0MB Number: 3235-0123 Expires: Oct. 31, 2023 Estimated average burden hours per response: 12 | SEC FILE NUMBER | |-----------------| | 8-40088 | | | FACING PAGE | | | | | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|-----------------------------------------|-------------------------------------------------|--|--| | Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934
AND ENDING 12/31/2021
FILING FOR THE PERIOD BEGINNING O 1/01/2021 | | | | | | | | MM/DD/VY | | MM/DD/VY | | | | | A. REGISTRANT IDENTIFICATION | | | | | | NAME OF FIRM: Penrod Financial Services, Inc DBA Penrod Financial Group | | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
0 Broker-dealer
D Check here if respondent is also an OTC derivatives dealer | □ Security-based swap dealer | D Major security-based swap participant | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | | 574 State Hwy 248, PO Box 220 | | | | | | | | ( No. and Street) | | | | | | Branson | MO | | 65615 | | | | (City) | (State) | | | | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | Tamara L. Haslar | 417 -334-3455 | | | | | | (Name) | (Area Code -Telephone Number) | (Email Address) | | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | | | Michael T. Patterson, CPA | | Holt & Patterson, LLC | | | | | | (Name - if individual, state last, first, and middle name) | | | | | | 260 Chesterfield Industrial Blvd Chesterfield | | MO | 63005 | | | | (Address)
02/24/2009 | (City) | (State)
3372 | (Zip Code) | | | | rte
of Reg;suaUoo w;th PCAOB)(;f applicable( | | | I
(PCAOB Reg;su,uoo Norn be,, ;f applicable) | | | | | FOR OFFICIAL USE ONLY | | | | | \* 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** I, Donald. R. Penrod swear (or affirm) that, to the best of my knowledge and belief, the financial report pertaining to the firm of Penrod Financial Services, Inc dba Penod Financial Group as of **12/31** 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. ~-~ Notary Public #### **This filing\*\* contains (check all applicable boxes):** - ~ (a) Statement offinancial condition. - □ (b) Notes to consolidated statement offinancial condition. , -...... Title: President, Chief Compliance Officer TAMARA L. HASLAR Notary Public - Notary Seal State of Missouri Commissioned for Christian County My Commission Expires: March 27, 2023 Commission Number: 16497389 - ~ (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. - D (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 240.1Sc3-1 or 17 CFR 240.18a-l, 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. - D (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. - 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. - ~ (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. - 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). □ (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}------------------------------------------------ # PENROD FINANCIAL SERVICES, INC AUDITED FINANCIAL STATEMENTS For The Year Ended December 31, 2021 {3}------------------------------------------------ # **Table of Contents** | | Page | |----------------------------------------------------------------------------------|------| | Independent Auditors' Repo1t | | | Financial Statements | | | Statement of Financial Condition | 2 | | Statement of Income | 3 | | Statement of Changes in Stockholder's Equity | 4 | | Statement of Cash Flows | 5 | | Notes to the Financial Statements | 6-9 | | Supplementary Information Pursuant to SEC Rule l 7a-5 | | | Statement of SIPC Annual General Assessment and Payment | 10 | | Computation of Net Capital | 11 | | Computation of Capital Requirement | 12 | | Computatation for Determiniation of Reserve Requirement persuant to Rule l 5c3-3 | 13 | | Information relating to the possession or control requirement under Rule 15c3-3 | 14 | | Exemption Rep01t | | | | 15 | | Independent Accounts' Review Rep01t | 16 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) ### Opinion on the Financial Statements We have audited the accompanying statement of financial condition of Penrod Financial Services, Inc. as of December 31, 2021, the related statements of income, changes In stockholder's equity, and cash flows for the year then ended, and the related notes and schedules (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, In all material respects, the financial position of Penrod Financial Services, Inc. as of December 31, 2021 and the results of its operations and Its cash flows for the year then ended in conformity with accounting principles generally accepted In the United States of America. #### **Basis for** Opinion These financial statements are the responsibility of Penrod Financial Services, lnc.'s management. Our responsibility Is to express an opinion on Penrod Financial Services, lnc.'s 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 Penrod Financial Services, 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 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 located on pages 10-14 has been subjected to audit procedures performed In conjunction with the audit of Penrod Financial Services, lnc.'s financial statements. The supplemental Information Is the responsibility of Penrod Financial Services, lnc.'s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other 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 located on pages 10-14 is fairly stated, in all material respects, in relation to the financial statements as a whole. ~ *~ll.J\_.:\_\_* Holt & Patterson, LLC We have served as Penrod Financial Services, lnc.'s auditor since 2009. Chesterfield, MO March 24, 2022 760 CHES1ERF l£lD IIIDUSTRIAI 81YD. ( HlSIERFIEID , MO 63 005 PHONE 636/530•1040 fAX 636 / 530· 1101 {5}------------------------------------------------ ### **PENROD FINANCIAL SERVICES** STATEMENT OF FINANCIAL CONDITION December 31, 2021 | | 2021 | | | |---------------------------------------------------------------------------------------------|--------------|--|--| | ASSETS | | | | | CURRENT ASSETS | | | | | Cash | \$
9,375 | | | | Deposits with Clearing Organization | 20,000 | | | | Investment -
Money Fund | 6,313 | | | | Accounts Receivable | 4,796 | | | | Prepaid Expenses | 3,010 | | | | TOT AL CURRENT ASSETS | 43,494 | | | | TOT AL ASSETS | \$
43,494 | | | | | | | | | LIABILITIES AND STOCKHOLDER'S EQUITY | | | | | CURRENT LIABILITIES | | | | | Commissions Payable | \$
2,364 | | | | Due to Related Party | \$
3,202 | | | | TOT AL CURRENT LIABILITIES | 5,566 | | | | TOT AL LIABILITIES | 5,566 | | | | STOCKHOLDERS'S EQUITY | | | | | Common Stock, \$1 par value, 30,000 shares authorized,
500 shares issued and outstanding | 500 | | | | Additional Paid-in Capital | 15,560 | | | | Retained Earnings | 116,479 | | | | Distributions | (94,611) | | | | TOT AL STOCKHOLDER'S EQUITY | 37,928 | | | | TOT AL LIABILITIES AND | | | | | STOCKHOLDER'S EQUITY | \$
43,494 | | | {6}------------------------------------------------ ### **PENROD FINANCIAL SERVICE INC** ST A TEMENT OF INCOME For the Year Ended December 3 **1,** 2021 | | | 202
1 | % | |--------|-------------------------------------|---------------|-----------| | INCOME | | | | | | Commission and Fee Income | \$
280,006 | 99.99 | | | Interest/Other Income | 15 | 0.01 | | | TOT AL INCOME | 280,021 | 100.00 | | | OPERA TING EXPENSES | | | | | Advertising | | | | | Bank Charges | 90 | 0.03 | | | Clearing Charges and Exchange Fees | 9,935 | 3.55 | | | Commissions Paid to Outside Brokers | 50,444 | 18.0 I | | | Dues and Subscriptions | 6,800 | 2.43 | | | Fidelity Bond | 842 | 0.30 | | | Legal and Professional Fees | 25,499 | 9.
11 | | | Office Expense | 15,652 | 5.59 | | | Postage and Delivery | 2,944 | 1.05 | | | Printing | 474 | 0.17 | | | Regulatory Fees and Expenses | 7,232 | 2.58 | | | Rent Expense | 10,716 | 3.83 | | | Salaries | 43,056 | 15.38 | | | Utilities | 7,957 | 2.84 | | | TOT AL OPERA TING EXPENSES | 181,641 | 64.87 | | | NET INCOME (LOSS) | \$
98,380 | 35.
13 | See Accompanying Notes and Independent Auditors' Report {7}------------------------------------------------ ### **PENROD FINANCIAL SERVICES INC** ST A TEMENT OF CHANGES TN STOCKHOLDER'S EQUITY For the Year Ended December 3 **1,** 2021 | | Common
Stock | | Additional
Paid-in
Capital | | Retained
Earnings | | Total | | |------------------------------------|-----------------|-----|----------------------------------|--------|----------------------|--------------|-------|----------| | BALANCE, BEGINNING OF YEAR | \$ | 500 | \$ | 15,560 | \$ | 18,099 | \$ | 34,159 | | Net Income | | | | | | 98,380 | | 98,380 | | Less: Distributions to Stockholder | | | | | | (94,6
11) | | (94,611) | | BALANCE, END OF YEAR | \$ | 500 | \$ | 15,560 | \$ | 2
1,868 | \$ | 37,928 | See Accompanying Notes and Independent Auditors' Report {8}------------------------------------------------ STATEMENT OF CASH FLOWS For the Year Ended December 31, 202 1 | | 2021 | |------------------------------------------------------|--------------| | CASH FLOWS FROM OPERATING ACTIVITIES: | | | Net Income | \$
98,380 | | Adjustments to reconcile net income to net | | | cash provided by (used in) operating activities: | | | Decrease (Increase) in Accounts Receivable | (3,544) | | Decrease (Increase) in Prepaid Expenses | (854) | | Increase (Decrease) in Accounts Payable | 1,034 | | Total Adjustments | (3,364) | | NET CASH PROVIDED BY (USED IN) OPERA TING ACTIVITIBS | 95,016 | | CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | | | CASH FLOWS FROM FINANCING ACTIVITIES: | | | Distributions to Stockholder | (94,611) | | NET CASH USED IN FINANCING ACTIVITIES | (94,611) | | NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 405 | | CASH AND CASH EQUIVALENTS, beginning of year | 35,283 | | CASH AND CASH EQUIVALENTS, end of year | \$
35,688 | | | | | Supplemental Disclosure | \$0.00 | | Interest Paid
Taxes Paid | \$0.00 | | Cash and cash Equivalents breakdown: | | | \$
9,375
Cash | | | 20,000
Clearing Deposit | | | Investment -
Money Fund
6,313 | | | Total
\$ 35,688 | | See Accompanying Notes and Independent Auditors' Report {9}------------------------------------------------ **Notes to the Financial Statements** For the Year Ended December 3 1, 2021 ### **NOTE 1** - **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** This summary of significant policies is presented to assist in understanding the Company's financial statements. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements. ### **Business Activity** Penrod Financial Services, Inc. (the Company) is a registered broker/dealer company. The Company is a member of the Financial Industry Regulatory Authority (FINRA). The FINRA, which operates subject to Securities and Exchange oversight, is the largest non-government regulatory for a ll securities firms doing business in the United States. Penrod Agency, Inc is a licensed insurance agency for the purpose of offering variable insurance products in states where it is properly licensed. ### **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 ce1tain repo1ted amounts and disclosures. Accordingly, actual results could differ from those estimates. ### **Net Cash and Cash Equivalents** At times during 2021 the Company's cash and cash equivalents could have exceeded the federally insured limits. The Company is at risk for amounts in excess of this limit. To date the Company has not incurred any losses on deposits in excess of federally insured limits. For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. ### **Commissions Receivables** The Company considers commissions receivable to be fu lly collectible; accordingly, no allowance for doubtful accounts is required. If amounts become uncollectible, they will be charged to operations when the determination is made. ### **Securities Transactions** Customers' securities and commodities transactions are repo1ted on a trade date basis with related commission income and expenses rep01ted on a trade date basis. ### **Revenue** Revenue from Contract with Customers Standard (ASU 2014-09) core principle is that an entity should recognize revenue when it transfers a promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. {10}------------------------------------------------ ### **Notes to the Financial Statements** For the Year Ended December 3 1, 2021 ASU 2014-09 prescribes a five-step process to accomplish this core principle, including: - Identification of the contract with the customer - Identification of the performance obligation(s) under the contract, - Determination of transaction price, - Allocation of the transaction price to the identified performance obligation(s), and - Recognition of revenue as (or when) an entity satisfies the identified performance obligations(s). The Company recognizes revenues upon completion of transactions as it satisfies the performance obligation identified in accordance with this standard. The Company did not have any open contracts or deferred revenue as of December 31, 2021. ### **NOTE 1** - **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)** ### **Income Taxes** The Company implemented FASB Accounting Standards Codification 740-10. Included in this is a requirement under Accounting for Unce1tainty in Income Taxes that realization of an unce1tain income tax position must be "more likely than not" (i.e. greater than 50% likelihood of receiving a benefit or expense) before it should be recognized in the financial statements as the amount most likely to be realized assuming a review by the authorities having all relevant information and applying current conventions. The code section also clarifies the financial statement classification of potential tax-related penalties and interest and sets fo1th new disclosures regarding unrecognized tax benefits or expenses. The Company assessed its federal and state tax positions. It was determined there were no unce1tainties or possible related effects that need to be recorded as of or for the year ended December 31, 2021. The federal and state income tax returns for the Corporation for 20 18, 2019, 2020 and 2021 are subject to examination by respective taxing authorities generally for three years after they are filed. The Company's policy for repo1ting interest and penalties related to income taxes is to expense as they are incurred. The Company feels there is a more likely than not chance that all tax positions will be fully recognized; therefore, no provision for potential interest or penalties on these tax positions have been made. The total penalties and interest the Company paid for 2021 was \$-0-. The Company has elected S corporation status for federal income tax and Missouri franchise tax repmting purposes. As an S corporation, substantially all income tax liability flows through to the shareholders with the exception of various state corporate level taxes. Accordingly, the financial statements do not include a provision for federal income taxes. Should the Company conve1t to a C corporation status for federal and state income tax purposes, deferred tax balances, as ca lculated on the date of the conversion, would be recorded as a reduction in shareholder's equity. {11}------------------------------------------------ # **Notes to the Financial Statements** For the Year Ended December 31, 2021 ### **NOTE 2** - **CASH AND SECURITIES SEGREGEATED UNDER FEDERAL AND OTHER REGULATIONS** No cash has been segregated in a special reserve bank account for the benefit of customers under Rule 15c3-3 of the Securities and Exchange Commission. The company does not hold any customer funds; accordingly, no reserve account is required. ### **NOTE 3 -RELATED PARTY TRANSACTIONS** The sole stockholder of Pemod Financial Services, Inc. is also the sole stockholder of Penrod Agency, Inc., dba Penrod Financial Group, an insurance agency. Penrod Financial Services, Inc. reimburses Penrod Agency, Inc. for their pro rata share of overhead expenses, which includes rent, utilities, office supplies, phone, postage, cleaning, printing and other operating expenses. The allocation percentage used for the year ended December 31, 202 1 was 94%. At December 31, 2021, Penrod Financial Services, Inc. owed Penrod Agency, Inc. \$3,302. ### **NOTE 4** - **ADVERTISING COST** Non-direct-response adve1tising costs are expensed in the year incurred. This amount at December 31, 2021 totaled \$0. Company did not incur any direct-response advertising cost during the year. ### **NOTE 5 -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 IO to I). At December 31, 2021, the Company had net capital of \$34,438, which was \$29,438 in excess of its required net capital of \$5,000. ### **NOTE 6 -EXEMPTIVE PROVISION UNDER RULE 15c3-3** An exemption from Rule 15c3-3 per paragraph (k)(2)(ii) is claimed as the broker-dealer does not hold customer funds or securities. All accounts are on a fully disclosed basis. Therefore, the schedules of"Computation for Determination of Reserve Requirements under Rule 15c3- 3" and "Information Relating to Possession or Control Requirements Under Rules I 5c3-3" are not applicable. ### **NOTE 7-FAIR VALUE MEASUREMENT** The Company's financial instruments consist principally of cash and cash equivalents, short- and longterm marketable securities, long-term debt, hedge fund investments, and derivative contracts. The fair value of a financial instrument is the amount that would be received in an asset sale or paid to transfer a liability in an orderly transaction between unaffiliated market patticipants. Assets and liabilities measured at fair value are categorized based on whether the inputs are observable in the market and the {12}------------------------------------------------ # **Notes to the Financial Statements** For the Year Ended December 3 I, 2021 degree that the inputs are observable. The categorization of financial instruments within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels (with Level 3 being the lowest) defined as follows: *Level 1:* Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access. *Level 2:* Observable inputs other than prices included in Level **1,** such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated with observable market data. *Level 3:* Unobservable inputs that are supp01ied by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes cetiain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs. The fair value of all of the Company's cash equivalents and marketable securities was determined based on "Level I" inputs. There have been no changes in Level **1,** Level 2, and Level 3 and no changes in valuation techniques for these assets or liabilities for the period ended December 31, 2021. ### **NOTE 8 - COMMITMENTS AND CONTINGENCIES** The Company has no commitments or contingencies to repo1i for years ending December 31, 2021. ### **NOTE 9 - DATE OF MANAGEMENT'S REVIEW** In accordance with the Statement of Accounting Standards No. 165, *Subsequent Events,* the date through which subsequent events were evaluated was March 24, 2022, the date the Management Representation Letter was signed. No further activity has occurred that would require disclosure. {13}------------------------------------------------ ### ST A TEMENT OF SIPC ANNUAL GENERAL ASSESSMENT AND PAYMENTS For the Year Ended December 31, 2021 Required Payment Per SIPC Instructions \$ Schedule of Payments Made: 3 Date Amount January 23, 2022 \$ 3 The above required payment represents the SIPC annual assessment for 2021. The liability reduces an overpayment related to the 20 IO fi I ing. At this time, an Independent Accountants' Repo1t on Applying Agreed-Upon Procedures has not been included in this audit. Gross receipts for 2021 did not exceed the \$500,000 reporting limit. {14}------------------------------------------------ ### **PENROD FINANCIAL SERVICES INC** COMPUTATION OF NET CAP IT AL For the Year Ended December 3 I , 2021 #### **NET CAPITAL COMPUTATION:** | Stockholder's Equity | \$
37,928 | |----------------------------------------------------------|--------------| | Deductions and/or charges | | | ity Qualified for Net Capital
Total Stockholder's Equ | 37,928 | | Deductions and/or charges: | | | Interest on Clearing | | | Commissions Receivable | 354 | | Prepaid Expenses | 3,010 | | Total deductions and/or charges | 3,364 | | Net Capital before haircuts on securities positions | 34,564 | | Haircuts on securities | | | Money Market Mutual Fund | 126 | | Total haircuts | 126 | | NET CAPITAL | | | | \$
34,438 | \*Haircuts are deductions from the net capital of certain percentages of the market of securities and commodity futures contracts that are long and sh01t in capital and proprietary accounts of a broker-dealer and in the accounts of partners. These deductions are solely for the purpose of computing net capital and are not entered on the books. There are no material differences between the Net Capital calculation compared to the broker-dealer's unaudited Part **11.** {15}------------------------------------------------ ### COMPUTATION OF CAPITAL REQUIREMENT For the Year Ended December 3 1, 2021 | Minimum Net Capital Required (6 2/3% of Aggregate Indebtedness) | \$
371 | |-----------------------------------------------------------------|--------------| | Minimum Dollar Net Capital Required | 5,000 | | Net Capital Requirement (Greater of the Above) | 5,000 | | Excess Net Capital | \$
29,438 | | Percentage of Aggregate Indebtedness to Net Capital | 16.16% | #### **RECONCILIATION WITH COMPANY'S COMPUTATION** Net capital, as reported in Company's Pait II (Unaudited) | FOCUS Repo1t | \$
34,438 | |-----------------------|--------------| | Net audit adjustments | | | | \$
34,438 | {16}------------------------------------------------ Computatation for Determiniation of Reserve Requirement persuant to Rule l Sc3-3 For the Year Ended December 3 I, 2021 The company has claimed an exemption to Rule l Sc3-3 per paragraph (k)(2)(ii) and therefore no Computation for Determination of Reserve Requirements under that rule have been provided. {17}------------------------------------------------ Information relating to the possession or control requirement under Rule 15c3-3 For the Year Ended December 31, 2021 The company has claimed an exemption to Rule 15c3-3 per paragraph (k)(2)(ii) and therefon no information relating to the possession or conrol requirements under that rule have been provided. {18}------------------------------------------------ # **Penrod Financial Group** **December 31, 2021** ## **EXEMPTION REPORT** SEC Rule 17a5(d)(4) This is to certify that, to the best of my knowledge and belief: Penrod Financial Services, Inc, is a registered broker-dealer subject to Rule 17a -5 promulgated by the Securities and Exchange Commission (17 C.F. R. section 240. 17a -5, "Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R Section 240.17a .. S( d)(I) and (4). To the best of its knowledge and belief Penrod Financial Services, Inc states the following: Penrod Financial Services, Inc claimed an exemption under provision 17 C.F. R. section 240. 15c3- 3 (1<)(2)(ii) as the company is a non -carrying broker-dealer which promptly transmits all funds and delivers all securities received in connection with its activities as a broker-dealer, and does not otherwise hold funds or securities for, or owe money or securities to customers. Penrod Financial Services, Inc claimed an exemption as a Non-Covered Firm for its direct subscriptionway sale of mutual funds and variable annuities. Penrod Financial Service, Inc (1) did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers, other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of Rule 15c2-4; (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts (as defined in Rule 15c3-3). Penrod Financial Services, Inc met the identified provisions throughout the most recent fiscal year without exceptions. ~u~ R. Penrod Donald President, Chief Compliance Officer **OUR LOGO:** " B LACK AND WHITE" IS SYMBOLIC OF FORTHRIGHTNESS. THE DOUBLE LINE SIGNIFIES THE " B OTTOM LINE." **OUR CREDO:** "SHOW ME IN BLACK AND WHITE. GIVE ME THE BOTTOM LINE." **574 State Hwy. 248, Suite 5 • P.O. Box 220 • Branson, MO 65615 • (417) 334-3455** i5 Securities offered through Penrod Financial Services Member FINRA/SIPC {19}------------------------------------------------ ![](_page_19_Picture_0.jpeg) To the Board of Directors and Shareholders of Penrod Financial Services, Inc. We have reviewed management's statements, included in the accompanying Exemption Report, In which (1) Penrod Financial Services, Inc. identified the following provisions of 17 C.F .R. §15c3-3(k) under which Penrod Financial Services, Inc. claimed an exemption from 17 C.F.R. §240.15c3-3: (2)(11) and the Non-Covered Firm provision and (2) Penrod Financial Services, Inc. stated that Penrod Financial Services, Inc. met the Identified exemption provisions throughout the most recent fiscal year ended December 31 , 2021 without exception. Penrod Financial Services, lnc.'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 Penrod Financial Services, lnc.'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)(11) of Rule 15c3-3 under the Securities Exchange Act of 1934 and the Non-Covered Firm Provision. Holt & Patterson, LLC Chesterfield, MO March 24, 2022 260 CHESHRFIHD INDUSTRIAi BLVD. CHESTERFIELD, MO 63005 PHONE 636/530-1040 FAX 636/530· 110 I Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.