# YORK STOCKBROKERS, INC. X-17A-5 (2020-08-14) — Broker-dealer annual report - Company: YORK STOCKBROKERS, INC. - Form: X-17A-5 - Filed: 2020-08-14 - Period: 2020-06-30 - Accession: 0001098137-20-000001 - CIK: 1098137 - File #: 8-52139 - Material weakness: No - Auditor: Morey,Nee,Buck & Oswald LLC - Auditor location: Bethlehem, PA - Contact: Ken George - Phone: 6033805435 - Signed by: Jean Bensadoun (President) Original filing: https://www.sec.gov/Archives/edgar/data/1098137/000109813720000001/jun20_audit_york4.pdf --- {0}------------------------------------------------ | UNITIIDST/t
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In our opinion, the #### Basis for Opinion These financial statements are the responsibility of York Stockbrokers, Inc. express an opinion on York Stockbrokers, Inc. accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to York Stockbrokers, 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. '• management. Our reapol')llibility iB ·tx3 's fina111Cial statements based on our audit. we are a public 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. #### AudliOr'• **bport on** Supplemental Information The Schedule of Computation of Net Capital for Brokers and Dealers Pursuant to Rule 15c3-1 has been subjected to audit procedures performed in conjunction with the audit of York Stockbrokers, Inc. statements. The supplemental information is the responsibility of York Stockbrokers, Inc. 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 Schedule of Computation of Net Capital for Brokers and Dealers Pursuant to Rule 15c3-1 is fairly stated, in all material respects, in relation to the financial statements as a whole. 's financial '9 management Our We have served as York Stockbrokers, Inc. 2018. 'a auditor since Bethlehem, PA August 7, 2020 1120 N. Bethlehem Pike -882-1000 2571 Baglyos Circle Phone: 610-882-1000 -393-0549 430 W. 24th Street -741-5117 • Suite 107 • PO Bax 459 • **Spring·** MoU&e, PA 19477• Phone: 610 • Suite B20 • Bethlet,.m, PA 18020 • 27 E. High street A &ite A .. Somerville, NJ 08878 " Phone: 908 ·• Suite 1A • Naw York. NY 10011• Pllorje: 212 {5}------------------------------------------------ #### STATEMENT OF FINANCIAL CONDITION #### June 30, 2020 #### Assets {6}------------------------------------------------ #### STATEMENT OF OPERATIONS For the Year Ended June 30, 2020 #### Revenue | Consulting income | \$
2,072,566 | | |-------------------------------------------|-----------------|--| | Commission income | 300,647 | | | Other income | 56 | | | Total revenue | 2,373,269 | | | Expenses | | | | Commissions to registered representatives | 1,873,319 | | | General and administrative | 85,863 | | | Professional fees | 68,890 | | | Salaries and related taxes | 343,447 | | | Regulatory fees | 9,864 | | | Depreciation | 2,303 | | | Insurance | 2,651 | | | Clearing and floor brokerage fees | 8,636 | | | Travel and entertainment | 12,350 | | | Total expenses | 2,407,323 | | | Loss before provision for income taxes | (34,054) | | | Corporate taxes - deferred | (8,719) | | | Corporate taxes - current | 4,655 | | | Total income taxes (benefit) | (4,064) | | | Net loss | \$
(29,990) | | {7}------------------------------------------------ # STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY # For the Year Ended June 30, 2020 | | Number of | Common Stock | Additional | Accumulated | | | |-------------------|-----------|--------------|-----------------|-------------------|---------------|--| | | Shares | Amount | Paid-In Capital | Deficit | Total | | | Beginning balance | 1,000 | \$
1,000 | \$
1,442,831 | \$
(1,204,685) | 239,146
\$ | | | Net loss | | | | (29,990) | (29,990) | | | Ending balance | 1,000 | \$
1,000 | \$ 1,442,831 | \$
(1,234,675) | 209,156
\$ | | {8}------------------------------------------------ #### STATEMENT OF CASH FLOWS #### For the Year Ended June 30, 2020 #### Cash flows from operatingactivities: | Net loss | \$
(29,990) | | |----------------------------------------------|----------------|--| | Cash flows from operating activities | | | | Adjustments to reconcile net loss: | | | | Depreciation | 2,303 | | | Decrease (increase) in: | | | | Receivable from brokers and dealers | 16,035 | | | Accounts receivable | 31,094 | | | Prepaid expense | (9,085) | | | Deferred tax asset | (8,719) | | | (Decrease) increase in: | | | | Accounts payable and accrued expenses | (30,955) | | | Net cash used in operating activities | (29,317) | | | Net decrease in cash | (29,317) | | | Cash and cash equivalents, beginning of year | 151,781 | | | Cash and cash equivalents, end ofyear | \$
122,464 | | | Supplemental disclosure: | | | | Cash paid during the year for: | | | | Taxes | \$
4,655 | | {9}------------------------------------------------ # NOTES TO FINANCIAL STATEMENTS For the Year Ended June 30, 2020 # 1. Organization York Stockbrokers, Inc. ("YSI" or the "Company") is a Delaware corporation that was formed on June 17, 1999. YSI is a 100% owned subsidiary of International Asset Allocation Management, LLC. Effective June 15, 2000, the Company commenced operations as a brokerdealer registered with the Securities and Exchange Commission (the "SEC") and became a member of FINRA (formerly NASD). The Company is currently engaged in various types of businesses, such as selling corporate debt securities, corporate equity securities, over-the-counter stocks and government securities. The Company also buys and sells foreign currencies to settle trades at the request of clients and distributes private placements. The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934 in that the Company's activities are limited to those set forth in the conditions for exemption appearing in Paragraph (k)(2)(i) and (k)(2)(ii) of that rule. #### 2. Significant Accounting Policies #### Cash and Cash Equivalents Cash and cash equivalents include highly liquid instruments with a maturity of three months or less. #### Fixed Assets Fixed assets are stated at cost and are depreciated using the straight-line method over their estimated useful lives. Fixed assets at June 30, 2020 consist of the following: | Computer equipment | \$
6,518 | |--------------------------------|-------------| | Furniture and fixtures | 9,273 | | | | | | 15,791 | | | | | Less: accumulated depreciation | (13,224) | | | | | | \$
2,567 | {10}------------------------------------------------ #### NOTES TO FINANCIAL STATEMENTS For the Year Ended June 30, 2020 #### Revenue and Expense Recognition On July 1, 2018, the Company adopted ASU 2014-09 and all related amendments ("ASC 606") and applied its provisions to all uncompleted contracts using the modified retrospective method. There was no change to beginning retained earnings from the effect of initially applying ASC 606. Revenue from contracts with customers includes commission income, administrative customer fees and consulting fees from introduction services. The recognition and measurement of revenue is based on the assessment of individual contract terms. Significant judgment is required to determine whether performance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance obligations are identified; when to recognize revenue based on the appropriate measure of the Company's progress under the contract; and whether constraints on variable consideration should be applied due to uncertain future events. The Company buys and sells securities on behalf of its customers. Each time a customer enters into a buy or sell transaction, the Company charges a commission. Commissions and related clearing expenses are recorded on the trade date. The Company believes that the performance obligation is satisfied on the trade date because that is 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. The Company provides administrative services on a daily basis and collects a monthly customer fee. The Company believes the performance obligation for providing administrative services is satisfied over time because the customers is receiving and consuming the benefit as they are provided by the Company. Fee arrangements are based on a percentage applied to the customer's assets under management. Administrative customer fees are received monthly and recognized as earned. The Company receives consulting fees for introducing customers to investment funds. Revenue for introduction services is generally recognized at the point in time that performance under the arrangement is completed. However, for certain introductions, revenue is recognized over time in which the performance obligations are simultaneously provided by the Company and consumed by the customer. {11}------------------------------------------------ #### NOTES TO FINANCIAL STATEMENTS For the Year Ended June 30, 2020 # Revenue and Expense Recognition (continued) Disaggregated Revenue from Contracts with Customers The following table represents revenue by major source. | Revenue from contracts with customers | | |---------------------------------------------|--------------| | Consulting fees from introduction services | \$ 2,072,566 | | Administrative customer fees | 163,101 | | Commission income | 137,546 | | Total Revenue from contracts with customers | \$ 2,373,213 | # Fair Value of Financial Instruments In accordance with accounting principles generally accepted in the United States, the Company adopted the standard related to fair value measurements and disclosures. The standard defines fair value and establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in activemarkets for identical assets or liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). As of June 30, 2020, the Company had no security positions. #### Income Taxes Income taxes are accounted for in accordance with FASB ASC 740: Income Taxes. As required under this standard, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of assets and liabilities and the respective tax basis amounts. Deferred tax assets and liabilities are measured under tax rates that are expected to apply to taxable income in the years in which these differences are expected to be settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period of the tax change. #### Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from these estimates. {12}------------------------------------------------ #### NOTES TO FINANCIAL STATEMENTS For the Year Ended June 30, 2020 #### Accounts Receivable The determination of the amount of uncollectible accounts is based on the length of time each receivable has been outstanding, and a reasonable assessment of the capacity of the debtor to pay the receivable. The allowance for uncollectable amounts reflects the amount of loss that can be reasonable estimated by management. As of June 30, 2020, the Company has not recorded an allowance for any potential non-collection. Accounts receivables at June 30, 2020 and 2019 were \$380,573 and \$411,668, respectively. ### 3. Financial Instruments with Off-Balance Sheet Risk and Concentration of Credit Risk As a securities broker/dealer, the Company engaged in various brokerage activities on an agency basis. As a non-clearing broker, the Company has their own, and customers' transactions cleared through other broker dealers pursuant to fully disclosed clearance agreements. Nonperformance by its customers in fulfilling their contractual obligation pursuant to securities transactions with the clearing brokers may expose the Company to risk and potentialloss. Substantially all of the Company's cash is held at clearing brokers and other financial institutions. Recognizing the concentration of credit risk that this implies, the Company utilizes clearing brokers that are highly capitalized. ### 4. Net Capital Requirements The Company is subject to the Uniform Net Capital Rule under the Securities Exchange Act of 1934. The rule 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. The net capital and aggregate indebtedness change from day to day, but as of June 30, 2020 the company had net capital of \$102,642, which was \$77,965 in excess of SEC required net capital of \$24,677. ### 5. Commitments and Contingencies The Company rents office space on a month-to-month basis. The lease may be terminated by the Company upon a three-month written notice. The monthly lease payment is \$3,550. Management represents that the Company does not have any legal liabilities or outstanding legal claims that are required to be accrued or disclosed. {13}------------------------------------------------ #### NOTES TO FINANCIAL STATEMENTS For the Year Ended June 30, 2020 # 6. Income Taxes At June 30, 2020, the Company's deferred tax asset of \$45,711 was the result of federal net operating loss carry forwards of \$133,206. The net operating loss deductions will expire in various years through June 30, 2040 and the Company is limited to taking a \$6,451 deduction each year for \$103,216 of the carryforwards. Management has determined that no valuation allowance is necessary for the deferred tax asset as of June 30, 2020. In accordance with US GAAP, the Company has adopted the provisions of FASB ASC 740: Income Taxes. The Company has assessed its income tax positions and has recorded tax benefits based upon management's evaluation of the facts, circumstances, and information available at the reporting dates. No uncertainties exist that will materially affect management's evaluations at June 30, 2020. The fiscal tax years of 2017, 2018 and 2019 remain subject to examination by federal and state taxing authorities. # 7. Liabilities Subordinated to General Creditors The Company has no liabilities subordinated to general creditors. #### 8. Concentrations For the year ended June 30, 2020, approximately 98% of the consulting income was earned from four customers, and 89% of the accounts receivable balance was from three customers. # 9. Subsequent Events The Company has evaluated subsequent events through August 7, 2020, the date which the financial statements were available to be issued. {14}------------------------------------------------ SUPPLEMENTARY INFORMATION {15}------------------------------------------------ ### SCHEDULE OF COMPUTATION OF NET CAPITAL FOR BROKERS AND DEALERS PURSUANT TO RULE 15c3-1 For the Year Ended June 30, 2020 | Stockholders' equity | \$
209,156 | |---------------------------------------------------------------------------------------------------------|---------------| | Less: non-allowable assets: | | | Accounts
receivable | 37,120 | | Fixed assets, net | 2,567 | | Security deposits | 3,000 | | Deferred tax asset | 45,711 | | Prepaid expense | 18,116 | | Total non-allowable assets | 106,514 | | Net capital before haircut on securities positions | 102,642 | | Haircut | - | | Net capital | 102,642 | | Computation of basic net capital requirement: | | | Minimum net capital requirement (greater of | | | 6
% of aggregate indebtedness or \$5,000)
½ | 24,677 | | Capital in excess of minimum requirement | \$
77,965 | | Aggregate indebtedness | \$
370,161 | | Ratio of aggregate indebtedness to net capital | 3.61 : 1 | | Reconciliation with Company's computation (included in Part IIA of Form X-17A-5
as of June 30, 2020) | | | Net capital, as reported in Company's Part IIA | | | Focus report (as amended) | \$
102,642 | | | | | | -0- | | Net capital, per June 30, 2020 audited report, as filed | \$
102,642 | {16}------------------------------------------------ ![](_page_16_Picture_0.jpeg) REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholder of York Stockbrokers, Inc. We have reviewed management's statements, included in the accompanying Exemption Report Pursuant to SEC Rule 17a-5, in which (1) York Stockbrokers, Inc. identified the following provisions of 17 C.F.R. §15c3-3(k) under which York Stockbrokers, Inc. claimed an exemption from 17 C.F.R. §240.15c3-3: (k)(2)(i) and (k)(2)(ii) (exemption provisions) and (2) York Stockbrokers, Inc. stated that York Stockbrokers, Inc. met the identified exemption provisions throughout the most recent fiscal year without exception. York Stockbrokers, Inc. management is responsible for compliance with the exemption provisions and its statements. 's 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 York Stockbrokers, Inc. examination, the objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opinion. 's compliance wittt the exemption provisions. A revieW is substantially iess in scope than an 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)(i) and (k)(2)(ii) of Rule 15c3-3 under the Securities Exchange Act of 1934. Bethlehem, PA August 7, 2020 > 1120 N. Bethlehem Pike -882-1000 2571 Baglyos Circle -882-1000 -393-0549 430 W. 24th Street -741-5117 • Suite 107 • PO Box 459 • Spring House, PA 19477• Phone: 610 • Suite B20 • Bethlehem, PA 18020 • Phone: 610 27 E. High **street,., &its** A .. Somerville. NJ 08878 • Phone: 908 • Suite 1A • New Yolk. NY 10011• Phar:1e: 212 {17}------------------------------------------------ #### EXEMPTION REPORT PURSUANT TO SEC RULE l 7a-S #### JUNE 30, 2020 YOlk. Stockbrokers, Inc. is a broker-dealer ~ect to Rule 17a-S promulgated by the Securities and Exchange Commission. This. Exemptiol' Report was prepan:d as required by 17 C.F .R. 240.17a-S(d)( 1) and (4). To the best of its knowledge and belief, the Company states the following: York. Stockbrokers, Inc. operates pursuant to paragraph (k)(2)(i} and (k.)(2)(ii) of SEC Rule I Sc3-3 under which the Company claims an exemption from SEC Rule 1Sc3-3. The Company has met the identified exemption provisions throughout the most recent fiscal year without exception. I, Jean Bcnsadoun, affirm that. to my best knowledae and belief. this Exemption Report is true and com:ct. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.