# J.K. FINANCIAL SERVICES, INC. X-17A-5 (2023-04-14) — Broker-dealer annual report - Company: J.K. FINANCIAL SERVICES, INC. - Form: X-17A-5 - Filed: 2023-04-14 - Period: 2022-12-31 - Accession: 0001100950-23-000002 - CIK: 1100950 - File #: 8-52214 - Type: Broker-dealer - Material weakness: Yes - Auditor: Tuttle & Bond PLLC - Auditor location: Fredericksburg, TX - Contact: Joe Zheng - Phone: 7147041818 - Email: jkrinanciar@gmair.com - Website: gmair.com - Signed by: Joe Zheng (President) Original filing: https://www.sec.gov/Archives/edgar/data/1100950/000110095023000002/JKFSANNUALREPORT.PDF --- {0}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C.20549 ANNUAL REPORTS FORM X-17A-5 PART III | OMB Number: 3235-0723 | | | |--------------------------|--|--| | Expires: Oct. 3!,2023 | | | | Estimated average burden | | | | nours per response: 12 | | | | | | | ## SEC FILE NUMBER 8-52214 FACING PAGE fnformation Required Pursuant to Rules L7a-5,17a-L2, and 18a-7 under the securities Exchange Act of 1934 FTLTNG FoR rHE pERroD BEGTNNTNG 0110112022 AND ENDING 1213112022 MM/DD/YY MM/DD/YY A. REGISTRANT IDENTIFICATION ## NAMEoFFTRv: J K Financial Services Inc TYPE OF REGISTRANT (check all applicable boxes): E Broker-dealer ! security-based swap dealer ! valor security-based swap participant ! Check here if respondent is also an OTC derivatives dealer ADDRESS oF PRINctPAL PLACE oF BUS|NESS: (Do not use a p.o, box no,) ### 149 Cross Rail Ln, Ste . 102 | | (No. and Street) | | | | |----------------------------------------------|-----------------------------------------------------------------------------------------------------------|---------|-----------------------|--| | Norco | CA | | 92860 | | | (city) | (State) | | (zip Code) | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | Joe Zheng | 714-704-1818 | | jkrinanciar@gmair.com | | | (Name) | | | | | | | | | | | | | B. ACCOUNTANT IDENTIFICAT]ON
INDEPENDENT PUBLtc AccoUNTANT whose reports are contained in this filing* | | | | | Tuttle & Bond, PLLC | | | | | | 2954 Goehmann Lane | (Name - if individual, state last, first, and middle name) | | | | | (Address) | Fredericksburg TX
(c ty) | (state) | 78624
(zip code) | | | | | 6543 | | | s Claims for exemption from the requirement that th accountantmustbesupportedbyastatementoffactsandcircumstancesreliedonasthebasisoftheexemption. seelT CFR 240,1.7a-5(e)(:.)(ii), if appticabte. 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. {1}------------------------------------------------ #### OATH OR AFFIRMATION l, Joe Zheng f11^ary1al report pertaining to the firm of JK financial Services inc. swear (or affirm) that, to the best of my knowledge and belief, the 12t31 as of tztr | )022 uzz . 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. President Notary Public #### This filing\*\* contains (check all applicable boxes): - E (a) Statement of financial condition, - - ! (b) Notes to consolidated statement of financial condition. E(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 g 210.1\_02 of Regulation S\_X). E(d) Statement of cash flows. - - E (e) statement of changes in stockholders' or partners, or sole proprietor,s equity, - n(f) statement of changes in liabilities subordinated to claims of creditors. E(g) Notes to consolidated financial statements, - - - - - E(h) computation of net capital under 17 cFR 240,15c3-1 or 17 cFR 24o.t8a-r,as applicable. ! (i) Computation of tangible net worth under 17 CFR 240.1ga\_2. E(j) computation for determination of customer reserve requirements pursuant to Exhibit A to j.7 cFR 240,15c3-3. ! (k) computation for determination of security-based swap reserve requ irements pursuant to Exhibit B to 17 cFR 240,15c3-3 or Exhibit A to 17 CFR 240.t8a-4, as applicable. - - - - ! (l) computation for Determination of pAB Requirements under Exhibit A to s 240,15c3-3. E(m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. n(n) Information relating to possession or control requirements for security-based swap customers under 17 cFR 240.15c3-3(p)(21 or t7 CFR 240.18a-4, as applicabte, E(o) Reconciliations, including appropriate explanations, of the FocUS Report with computation of net capital or tangible net worth under t7 cFR 240'!5c3-t, t7 cFR 240'18a- !, or !7 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 materi rl differences exist, or a statement that no material differences exist. - - n(p) summary of financial data for subsidiaries not consolidated in the statement of financial condition. E(q) oath or affirmation in accordance with 17 cFR 240.17a-5, 17 cFR 240.t7a-r2,or 17 cFR z4o.r8a-7,as applicable. tr (r) compliance report in accordance with 17 cFR 240.17a-5 or 17 CFR 24o.tga-7,as applicable. - - = - - (s) Exemption report in accordance with 17 cFR 240.17a-5 or 17 CFR 24o.1,8a-7,as applicable. ! (t) Independent public accountant's report based on an examination of the statement of financial condition. E(u) Independent pu blic a ccou ntant's report based on an examination of the fina ncia I report or fina ncia I statements u nder j.7 - CFR 240.17a-5, 17 CFR 240.!8a-7, or 17 CFR 24O.I7a-IZ, as applicable. ! (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR24O.77a-5 or 17 CFR 24O.I8a-7, as applicable. E(w) lndependentpublicaccountant'sreportbasedonareviewoftheexemptionreportunderlT cFR24o.L7a-sor17 - CFR 240.18a-7, as applicable. - El (x) supplemental reports on applying agreed-upon procedures, in accordance with 17 cFR 240.15c3-1e or 17 CFR24O.t7a-12, as applicable, - EF (v) Report describing any material inadequacies found to exist or found to have existed since the date ofthe previous audit, or astatement that no materiar inadequacies exist, under 17 cFRz4o.tTa-12(k), ! (z) Other: - r4To request confidential treatment of certoin portions of this fiting, see 77 cFR 240.17a-5(e)(3) or 17 CFR 240.18o-7(d)(2), os applicable. {2}------------------------------------------------ #### CALIFORNIA JURAT WITH AFFIANT STATEMENT #### GOVERNMENT CODE & 8202 AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA □ 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) 3 1) Signature of Document Signer No. 1 Signature of Document Signer No. 2 (ji 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 JOUVI // on this by Year Date Month Pin or (1) = COMM. #2293310 (and (2) \_ 5 OTARY PUBLIC - CALIFORNIA Name(s) of Signer(s) RIVERSIDE COUNTY COMM. EXPIRES JUNE 15, 202 proved to me on the basis of satisfactory evidence to be the person(s) who appeared before me. Signature Place Notary Seal and/or Stamp Above Signature of Notary Public -- 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: ISO MARKET SERVICE COLLECTION CONSECTION CONSECTION CONSECTION CONSULTER CONTENT OF CONSULTION OF CONSULTION OF CONSULTION OF CONSULTION OF CONSULTION OF CONSULTION OF CONSUL ©2019 National Notary Association M1304-08 (09/19) {3}------------------------------------------------ J.K. Financial Services, Inc. Financial Statements and Supplemental Schedules Required by the U.S. Securities and Exchange Commission Including Independent Auditor,s Report Thereon December 3L,2022 {4}------------------------------------------------ #### J.l(. Financial Services, Inc, Table of Contents To the Audited Financial Statements For the year Ended December 3t, 2OZ2 ### Contents | Statement of Operations ,,,,,,.,,.,. | | |-------------------------------------------------------------------|---------| | | ,.,,. 7 | | Statement of Changes in Ownership Equity | | | | ., 9 | | | | | | | | | | | Computation of Net Capital Requirement,,,,,.,,, | , 16 | | Computation of Aggregate Indebtedness, | 16 | | Computation of Reconciliation of Net Capital | ,, 16 | | | | | Statement Related to Uniform Net Capital Ru1e,,, | ,,,. 17 | | Statement Related to Exemptive provision (possession and Control) | ,,., 17 | | Statement Related to Material Inadequacies,,, | ,,L7 | | Statement Related to SlpC Reconciliation .,,,, | ,, 17 | | Supplementary Auditor,s Report on Exemption Letter | , 1g | | Supplementary Customer protection Exemption letter.,.,, | ,,20 | | Supplementary Auditor's Agreed Upon procedures Report. | ,, z j. | | Supplementary Agreed Upon procedures Report SlpC Reconciliation, | ., 23 | | | | {5}------------------------------------------------ J.K. Financial Services, Inc. Independent Auditor's Opinion For the Year-ended December 31, 2022 {6}------------------------------------------------ ![](_page_6_Picture_0.jpeg) #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To Member of J.K. Financial Services, Inc. #### Opinion on The Financial Statements tion of J.K, Financial Services, Inc. (the "Company,,) as of ber's equity and cash flows for the year then ended, including . In our opinion, the financial statements present fairly, in ai ber 31, 2022, and the results of its operations and its cash flows enerally accepted in the United States of America. #### Basis for Opinion the ting the We conducted our audit of plan and perform the audit t whether due to error or frau over financial reporting, As but not for the purpose of Accordingly, we express no such opinion. our audit included performing procedures to assess the risks of material misstatement of the frnancial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence and di tatements' Our audit also included evaluating the accounting principles used es mad as, evaluating the overall presentation of the financial statemenis. WL believe a reaso #### Report on Supplementarv Information The accompanying information contained in the supplementary Information s in conjunction with the audit of the company's financial statement. The company's management. our audit procedures included determining whether statements or the underlying accounting and other records, as applicable, and performing procedures to and accuracy of the information presented in the supplemental information. In forming orr. opirrion on the sup we evaluated whether the supplemental information, including its form and content, is presented in conformity the Securities Exchange Act of 1934 and, if applicable, under Regulation 1.10 under the commodity Exchange Act. In our opinion, the information contained in the supplementary Information section is fairly stated, in all material iespects, in relation to the financial statements as a whole. t April13,2023 We have served as the Echelon Capital LLC,s auditor since 2019. ![](_page_6_Picture_14.jpeg) (::ir S \*q\*,1, ii it ll J.n \$N'ren t,1' t.z&&h&:t \*lE?s {7}------------------------------------------------ J.K. Financial Services, Inc. Financial Statements For the year ended December 31, 2022 {8}------------------------------------------------ ### J.K. Financial Services, Inc. Statement of Financial Condition For the year ended December 31, 2022 | | | Dec 31, 22 | |----------------------------|----|------------| | ASSETS | | | | Current Assets | | | | Checking/Savings | ಳಿ | 159,066 | | Accounts Receivable | | 29,053 | | Clearing Deposit Acct | | 50,679 | | Total Current Assets | \$ | 238,798 | | Fixed Assets | | | | Furniture and Fixtures | | 41,751 | | Leasehold Improvements | | 82,824 | | Office Equipment | | 147,331 | | Accumulated Depreciation | | (213,000) | | Total Fixed Assets (net) | \$ | 58,906 | | TOTAL ASSETS | es | 297,704 | | LIABILITIES & EQUITY | | | | Liabilities (All current) | | | | Accounts Payable | | 34,117 | | Total Liabilities | \$ | 34,117 | | Equity | | | | Capital Stock | | 115,000 | | Distribution | | (452,452) | | Retained Earnings | | 653,805 | | Net Income | | (52,766) | | Total Equity | ક | 263,587 | | TOTAL LIABILITIES & EQUITY | \$ | 297,704 | The accompanying notes are an integral part of these financial statements. {9}------------------------------------------------ ### J.K. Financial Services, Inc. Statement of Operations For the year ended December 31, 2022 | | | Jan - Dec 22 | |----------------------------------|----|--------------| | Ordinary Income/Expense | | | | Income | | | | Clearing Commission & Fees | \$ | 134,418 | | Mutual Fund Commission & Fees | | 168,696 | | Insurance-related Commission | | 213,435 | | Total Income | \$ | 516,548 | | Expenses | | | | Retirement plan contributions | | 105,760 | | Payroll expenses | | 86,330 | | Commission expense | | 188,705 | | Depreciation expense | | 25,652 | | Licenses and permits | | 7,319 | | Professional fees | | 48,614 | | Rent | | 27,000 | | Recruiting | | 6,000 | | Office expenses | | 8,378 | | Compliance costs | | 4,900 | | Atuomobile expenses | | 12,241 | | Taxes - state and local | | 853 | | Travel and meals expense | | 33,527 | | Other general and administrative | | 14,885 | | Total Expense | | 570,164 | | Net ordinary loss | \$ | (53,616) | | Other Income/Expense | | | | Interest Income | | 850 | | Total Other Income | \$ | 850 | | Net Loss | કે | (52,766) | The accompanying notes are an integral part of these financial statements. {10}------------------------------------------------ #### J.K, Financial Services, Inc. Statement of Cash Flow For the year ended December 3L, 2022 | Cash flows from operating activities: | Dec3L,22 | |----------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------| | Net Income | s (s2,755) | | Adjustments to Reconcilenetincometo netcash provided by
(used by) operating activities: | | | Depreciation
Accounts receivable
Accounts payable
Increase in Clearing Deposit
Net Cash used by operating activities | 25,652
6,299
(75,052)
(677l'
s (96,5s6) | | Cash flows from investing activities:
Money Market Securities
Net Cash provided (used) by investing activities | | | Cash flows from financing activities:
Net Cash provided (used) by financing activities | | | Net decrease in cash | | | Cash at beginning of year | | | Cash at end of year | | | Cash paid during yearfor:
Income taxes - federal
Income taxes - state
Interest | | The accompanying notes are an integral part of these financial statements. {11}------------------------------------------------ Statement of Changes in Ownership Equity For the year ended December 31, 2022 J.K. Financial Services, Inc. | Total | | | | | |--------------------------------------------------|-------------------|-----------------------|-------------------------|-----------------------------------------------------------------| | | | | (52,766) | | | Capital Retained
Stock Distributions Earnings | 200,000 | | | 200,000 \$ 115,000 S \$(452,452) \$ 601,039 S 601,039 S 263,587 | | Common Common | | | | | | Shares | | | | | | | | | | | | Balances at | December 31, 2021 | Capital Distributions | Balances at
Net Loss | December 31, 2022 | The accompanying notes are an integral part of these financial statements. 9 {12}------------------------------------------------ #### J.K. Financial Services, Inc. Footnotes to Financial Statements For the year ended December 3L, 2OZ2 #### Note 1- Organization and Nature of Business JK Financial services, Inc' (The "company") is a broker-dealer registered with the securities a nd Exchange commission (sEC) and is a member of the Financial Industry Regulation Authority (FINRA), The company is california corporation that incorporated on October 20, 1999. #### Note 2 - Significant Accounting policies Basis of Presentation - The company conducts the following types of business as a securities broker-dealer, which comprises several classes of services, including: - , Broker or dea ler reta iling corporate eq uity securities over-the-cou nter - . Broker of dealer selling corporate debt securities - , Mutualfund retailer - , U,S. government securities broker - . M unicipal securities broker - . Broker or dealer seiling variabre rife insurance or annuities - . Put and call broker or dealer or option writer - . Non-exchange member arranging for transactions in risted securities by exchange member #### (k)(2)(ii) operating exemption Under its membership agreement with FINRA and pursuant a fully to Rule 15c3(kx2xii), the company conducts business on disclosed basis and does not execute or clear securities transactions for customers. Accordingly, the company is exempt from the requirement of Rule 15c3-3 under the Securities Exchange Act of 1934 pertaining possession to the or control of customer assets and reserve requirements, Use of Estimates - the pr principles nformity with U.S, generaily accepted accounting requires mana and ptions that affect th1 reported amounts of assets liabilities at the date the reporting period. Ac ported amounts of revenues and expenses during imates. account Securities and owned - Profit and loss arising from all securities and commodities transactions entered into the risk of the company are recorded on a trade date basis. {13}------------------------------------------------ #### J,l(, Financial Services, Inc. Footnotes to Financial Statements For the year ended December 3L,2O2Z (Continued) Provision for Income Taxes - The company has elected to be taxed under the provisions of subchapter s of the Internal Revenue code and comparable state of california statues wherein the company,s taxable federal and state income is taxed directly to the shareholder. The accounting principles generally accepted inthe UnitedStates of America provides accounting and disclosure guidance about positionstaken byan organization in itstax returnsthat might be uncertain. Management has considered itstax positions and believes that all of the positions taken bythe company in its Federal and State organization tax returns are more likely than not to be sustained upon examination. The company is subject to examinations by U.s. Federaland statetax authorities from 2ol7tothe present, generally for three years after they are filed. Depreciation and Amortization - Depreciation is provided on a straight-line basis using estimated useful lives of three to seven years, Start-up expenditures are amortized over five years and have been fully amortized and no longer represented in the statement of financial condition, cash and cash equivalents - the company has defined cash equivalents as highly liquid investments, with original maturities of lessthan three monthsthat are not heldfor sale inthe ordinary course of business. #### Note 3- Fair Value FASB ASc 820 defines fair value, establishes a framework for measuring fair value and establishes a fair value hierarchy which prioritizes the inputs to valuation techniques. Fairvalue isthe price that would be received to sellan asset or paidto transfer a liability in an orderly transaction between market participants atthe measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Valuation techniques that are consisted with the market, income or cost approach, as specified by FASB ASc 820, are used to measure fair value. The fair value hierarchy prioritizes the inputsto valuation techniques used to measure fair value into three broad evets: Level L inputs are quoted prices (unadjusted) in active markets for identicalassets or a liability the Company has the ability to access. Leve 2 inputs are inputs (other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 are unobservable inputs for the asset or liability and rely on management,s own assumptions about the assumptions that market participants would use in pricing the asset or liability' (The unobservable inputs should be developed based on the best information available in the circumstances and may include the company's own data.) {14}------------------------------------------------ #### J.K. Financial Services, Inc. Footnotes to Financial Statements For the year ended December 31.,2022 (Continued) The following table presents the company's fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as December 3'J,,2022. The Company does not have any securities positions. #### Note 4 - Net Capital Requirements The company is subject to the sEC Uniform Net capital Rule (sEC Rule 1sc3-L), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, should not excess 15 to 1' Rule 15c3-L also provides that equity capital may not be withdrawn, or cash dividends paid if the resulting net capital ratio would exceed 10to 1. #### Note5-lncomeTaxes As discussed in Note 2 - significant Accounting Policies, the company has elected to be taxed as an sgcorporpation, and as such the Company makes no provisions for Federal income taxes in its financial statements. #### Note 6 - Exemption from the SEC Rule I5c3-3 The Company is an introducing broker - dealer that clears alltransactions for customers on a fully disclosed basis with an independent securities clearing company and promptly transmits all customer funds and securities tothe clearing company, which carries all of the accounts of such customers and maintains and preserves such books and records pertaining thereto pursuant to the requirements of the sEC Rule i.7a-3 and !7a-4,as are customarily made and kept by a clearing broker or dealer. The company also conducts business directly with mutual fund companies, and as such relies on Footnote 74 of sEC Release No, 34-70073 for this ,,non\_covered,, activity, #### Note 7 - Clearing Broker Deposit The company has an agreement with a clearing broker which requires a minimum deposit of 550,000. The clearing broker deposit at December Jt,2OZ2 was \$50,679. #### Note 8 - Operating Lease Commitments In February 2016, the FASB established Topic 842, Leases, by issuing Accounting standards Update No.2016-02, which requires lessors to classify leases as sales-type, direct financing, or operating lease. Topic g42 was subsequently amended by ASU No' 2018-01, Land Easement Practical rxpedient for transition to Topic g42; ASU No. 201g-10, codification improvements to Topic 842; and ASU No, 2oL8-1,1,,Targeted lmprovements. The new standard is effective forthecompanyonJanuary!,2o22,withearlyadoptionpermitted. The companyadoptedthe new standard on its effective date' A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financialstatements as its date of initialapplication, lf an entity choosesthe second option, the transition requirements for existing leases also apply to leases entered into between the date of initial application and the effective date. The entity must also recast its comparative period financial statements and provide {15}------------------------------------------------ #### J.K. Financial Services, Inc. Footnotes to Financial Statements For the year ended December 3t,2O2Z (Continued) the disclosures required by the new standard for the comparative periods. The company adopted the new standard on January 1-, 2022, and uses this as the effective date as our date of initial application, consequently, financial information will not be updated, and the disclosures new standard will not be provided for dates and periods beforeJanuary L,2022. The new standard ptional practical expedients in transition, The company expects to elect the 'package of practical permits us not to reassess under the new standard our prior conclusions about lease identification, n and initial direct costs. The company did not elect the use\_ of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. The Company continuesto evaluate certain aspects of the newstandard and does not e-xpect the new standard to have amaterial effect on the financial statements or have a significant change in leasing activities. The company rents office space under an annual lease agreement with an option to renew the lease annually from August L,2019, to July 31",2023' The Company currently operates pursuant to this one-year renewal. #### Note 9-Related Party Transactions The Company pays the principal owner of the company a recruiting fee. ln 2o22,the amount paid to the owner was 56,000. #### Note 10-ASC-606 Revenue Recognition #### Revenue Recognition The company adopted ASU 2014-09, Revenue from contracts with customers, (codified in ASC 606). The company recognizes revenue when services are transferred to clients. Revenue is recognized based on the amount of consideration that management expects to receive in exclange for these services ln accordance with the terms of the contract with the client. To determine the amount and timing of revenue recognition, the company must (1) identify the contract with the client, (2) identify the performance obligations in the contra.i, 1s1 d.t.rrine the iransaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when the Company satisfies a performance obligation. #### General Securities Transaction Revenue Revenue from contracts with customers includes commissions from retail and institutional broker/dealer clients and is recognized when promised goods or services are delivered to the client in an amount the company expects to receive in exchange for those goods or services (i.e., the transaction price). The recognition and measurement of revenue is based on the assessment of individual contract terms between the customer and the clearing affiliate (,,Customer Agreement,,), commissions and related clearing expenses are recorded on the trade date in an amount established in the agreement between the company and the clearing affiliate ("clearing Agreement"). The company believes that the performance obligations are satisfied because that is the date that the underlying financial instrument is purchased or sold, the purchaser or seller is identified, the pricing is agreed, and the risk and rewards of ownership or dispossession has occurred and transferred' The company also receives fees charged to the customer pursuant to terms in the in the customer Agreement, or shares in the fees charged the customer pursuant to the terms of the Customer Agreement in an amount set forth in the clearing Agreement, and might include, but not be limited to, shared debit interest charges, sweep credit interest earnings, {16}------------------------------------------------ #### J.K, Financial Services, Inc. Footnotes to Financial Statements For the year ended December 31,,2022 (Continued) dividend income from operations, and other fees ("Additional Fees"), The company has no performance obligations to meet to earn these Additional Fees. The amount of Additional Fees is not known in advance of receipt of a statement from the clearing affiliate and are therefore recorded when a statement is received. #### Investment company shares & Insurance-based product Revenue The Company receives revenue from the sale of investment company shares (mutual funds) and insurance-based products sold via subscription/application or via direct deposit by a customer into their existing investment account. The contract with the customer is set forth in the purchase agreement with terms for commissions paid by the customer established in the accompanying mutual fund or insurance product prospectus. The company's portion of the commission paid by the customer, also referred to as a concession for mutual fund lroducts, is established in the Selling Agreement between the insurance company sponsor ("Sponsor"). The amount of concession varies depending the client invested with the family of funds (Rights of Accumulation) or intends to invest ent)' Some classes of shares sold provide for concessions to be received on an on-going basis (i'e', "Trails")' The company has met its obligation and recognizes revenue when the company forwards the applications and checks to the fund Sponsor. Customers may make additional investments into their investment account without the Company's knowledge, in which case the Company is entitled to a concession or commission based on the amountofinvestmentassetforthintheprospectusandthetermsofthesellingAgreement. Insuchcircumstances,the Company has no performance obligation to satisfy and recognizes revenue upon receipt of notification of the investment by the customer from the Sponsor. #### 12b-L Fee Revenue The company receives 12b-L fees from the sale of mutual funds. The amount of 12b-J. fees due to the company is established in the selling Agreement between the company and the mutual fund sponsor. There is no performance obligation required to be performed by the company to earn and recogniz e r2b-tfees. The amount of t2b-1.fees due to the company is calculated based on the average assets under management for the period in which the L2b-1 fee is calculated' The company does not know the amount of average assets under management until receipt of a statement from the mutual fund company sponsor, at which time the 12b-i. fee revenue is iecognized and recorded as of the calculation date indicated on the statement. #### Note 11- Commitments & Contingencies There are currently no asserted claims or legal proceedings against the company, however, the nature of the company,s business subjects it to various claims, regulatory examinations, and other proceedings in the ordinary course of business. The ultimate outcome of any such action against the company could have an adverse impact on the financial condition, results of operations, or cash flows of the company. lf such action were to occur and would be expected to be settled against the favor of the company, the company would record the expected cost of such event on its financial statements. #### Note 13- Subsequent Events Management has reviewed the results of operation for the period of time from its year end through the date of issuance and has determined that no adjustments are necessary to the amounts reported in the accompanying combined financial statements nor have any subsequent events occurred, the nature of which would require disclosure. {17}------------------------------------------------ J.K. Financial Services, Inc. Pursuant to sEA Rule i.7a-5 of the securities and Exchange Act of 1934 As of and for the year ended December g1,,2022 {18}------------------------------------------------ #### J.l(, Financial Services, Inc. Su pplemlenta rv Co,m putations Pursuant to sEA Rule i.7a-5 ofthe securities and Exchange Act of 1934 As of and for the year ended December 3I, ZO22 #### Computation of Net Capital | Total Stockholde/s Equity
Allowable Subordinated Loans
NonAllowable Assets
Haircuts on Securities positions
Securities Haircuts | \$ 263,587
62,646 | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------| | Undue Concentration C harges
NetAllowable Capital | :
\$ 200,941 | | Computation of Net Capital Requirement | | | Minimum Net capital Required as a percentage of Aggregate lndebteoness
Minimum Dollar Net capital Requirement of Reporting Broker/Dealer
Net Capital Requirement
Excess Net Capital | | | Computation of Aggregate Indebtedness | | | Total Agg regate Indebtedness
Percentage of Aggregate lMebtedness to Net Capital | \$ 34,117
16.98% | | Computation of Reconciliation of Net Capital | | | Net capital computed and Reported on FocUS llA as of becember 31,2022
Adjustments | \$ 162,145 | | Increase (Decrease) in Equity
Increase (Decrease) in Subordinated Loans | 23,620 | | (lncrease) Decrease in NonAllowable Assets
(lncrease) Decrease in Securities Haircuts | 15,176 | | (lncrease) Decrease in Undue Concentration Charges
Net Capital per Audit | : | | Reconciled Difference | \$ 200,941 | | | \$ | \*Primary change in equity and non-allowable assets due to increase in depreciation expense and reduction in value of non-allowable fixed assets, and increase in non-allowable 12b-1 fees. {19}------------------------------------------------ #### J.K. Financial Services, Inc. Supplementarv Statements Pursuant to sEA Rule i.7a-5 of the securities and Exchange Act of i.934 As of and for the year ended December 3I, ZO2Z The Company is a member of the FINRA and is subject to th maintenance of minimum net capital and requires that the r shall not exceed 1500% (15:1.), or, during its first year of op ratio may fluctuate on a daily basis. At December 3L,2022,t in excess of its required net capital of \$5,000. The Company The Company has elected to use the basic computation method, as is permitted by the rule, which requires that the company maintain minimum Net capital pursuant to a 'ixed dollar amou nt or 6-2/3% percent of total aggregate indebtedness, as defined, whichever is greater, and does n lt, therefore, calculate its net capital requirement under the alternative reserve requirement method. There were no material differences reported as Net capital in the audited computation of Net capital and the broker- dealer's corresponding unaudited part llA of the FocUS report required under Rule 15c3-1. The company does not have possession or control of customer's funds or securities. There were no material inadequacies in the procedures followed in adhering to the company's operating pursuant to 15c3-3(k)(2)(ii) and Footnote 74 of sEC Release 34-70073. #### Statement Related to Material Inadequacies This audit did not disclose any since the previous audit of the financial statements in the accounting system or in the internal cont gor the practices and procedures required pursuant to Rule j.7a-5. The firm does not maintain cu ities and, therefore, does not maintain customer funds to segregate nor does it maintain separate accounts for customers. #### Statement Related to SlpC Reconciliation sEA Rule 17a-5(e)(a) requires a registered broker-dealer not exempt from slpc membership with gross revenues the exceed 5500,000 to file an Agreed Upon Procedures Report (AUP Report). slpc members with gross revenues below 5500,000 are not required to file an AUP Report. Broker-dealers exempt from slpc membership must file a Form slpc-3 and are required to file an AUP Report. lf an AUP Report is required to filed with slpc, such report may be filed separately or included within this Supplemental Information section, {20}------------------------------------------------ Pursuant to SEA Rule 17a-5(dXlXiXBX2) Of the Securities and Exchange Act of j.934 As of and for the year ended December 3L,2O2Z {21}------------------------------------------------ ![](_page_21_Picture_0.jpeg) #### Supplementary Schedules Pursuant to SEA Rule 17a-5 Of the Securities and Exchange Act of 1934 For the Year-End December 31, 2022 Report of Independent Registered Public Accounting Firm Exemption Review Report Pursuant to 15c3-3 Exemption: 15c3-3(k)(2)(ii) Joe Jiankang Zheng J.K. Financial Services, Inc. 149 Cross Rail Lane, Stuite 102 Norco, CA 92860 Dear Joe Zheng : We have reviewed management's statements, included in the accompanying Exemption Report, in which J.K. Financial Services, Inc. identified 15c3-3(k)(2)(i) as the provision under 17 C.F.R. § 15c3-3(k) under which it claims exemption from 17 C.F.R. §240.153-3. J.K. Financial Services, Inc. stated that it thas met the 15c3-3(k)(2)(i) exemption throughout the most recent fiscal year without exception, or, with exception, as noted in the Exemption Report. I.K. Financial Services, Inc. management is responsible for compliance with the exemption provisions and its statements. Our review was conducted in accordance with the estandards of the Public Company Accounting Oversight Board (United States) and, accordingly, included inquiries and other required procedures to obtain evidence about J.K. Financial Services, Inc.'s compliance with the exemption is substantially less in second .I.S. examination, the objective of which is the expression of an opinion on managements. Accordingly, we do not express such an opinion. Based on my review, I am not avare of any material nodifications that should be made o management's statements refered to above for them to be fairly stated, in all material respects, based on the provisions set forth in Rule 15c3-3 under the Securities Exchange Act of 1934. Tuttle & Bond, PLLC Juttle & Sand, ILL Fredericksburg, Texas April 13, 2023 ![](_page_21_Picture_9.jpeg) {22}------------------------------------------------ #### J.K. Financial Services, Inc. Supplementary Customer Protection Exemption Letter Pursuant to SEA Rule 17a-5(d)(1)(i)(B)(2) of the Securities and Exchange Act of 1934 As of the year ended December 31, 2022 J.K. Financlal Services, Inc. 149 Cross Rail Lane, Stuite 102 Norco, CA 92860 #### J.K. Financial Services, Inc.'s Exemption Report To: Tuttle & Bond PLLC Re: 17 C.F.R. § 240.15c3-3(k) J.K. Financial Services, Inc. (the "Company") is a registered broker-dealer subject to Rule 27a-5 promulgated by the Securities in the Securities and Exchange Commission (17 C.F.B. S240;17a-5, "Reports to be made subject to Rule 27a-5 promulgers"). and Exchange Commission (17 C.F.R. §240;17a-5, "Reports to be made by This Exemption Report was prepared as required by 17 C.F.R. § 240.176-5(d)(1) and (4). To the best of Its knowledge and belief, the Company states the following: - 1. The Company claimed an exemption from 17 C.F.R. § 240.15c3-3 under the foilowing provisions of 17 C.F.R. § 240.15c3-3 (k): (k){2)(ii) - 2. The Company met the ldentified exemption provisions In 17 C.F.R. § 240.15c3-3(k) from January 01, 2022 through December 31, 2022 without exception, - 3. The Company is also filing this Exemption Report relying on Footnote 74 of the SEC Release No. 34-70073 adopting to amenting to 17 C.F.R. g.R.o.net nepot relying on Foothote 74 of the SEC Releas No. 34-70073 adopting amendments to 17 C.F.R. 9 240.17a-5 because the Commery limits excludies transactlons via subscriptions on a subscription way bash where the funds are payable to the lisuer or lts agent and not not not The Company (2) did not directly receive, hold, or otherwise owe funds or securities for or to customers, (other than money or other consideration received and promply transmitted in compliance with paragraph (a) or the contomers, Rule 15c2-4 and/or funds received and rromptly t Rule 15c2-4 and/or funds received and promply transmitted in complance with paragraph (a) or (b)(2) or (b)(2) or (b)(2) or (b)(2) or (b)(2) or (b)(2) or way basis where the funds are issuer or its are me the transactions vis subscriptions on a subscriptions on a subscriptions on a subscription on a subscription for customers; and (3) did not carry PAB accounts (as defined in Rule 15ct (1) 10th not cary accounts of on 31, 2022 without exception. 31, 2022 without exception. J.K. Financial Services, Inc. I, Joe Jiankang Zheng, affirm that, to my best knowledge and belief, this Exemption Report is true and correct. {23}------------------------------------------------ J.K. Financial Services, Inc. ### Supplementary Auditor's Agreed Upon Procedures Report ## Pursuant to SEA Rule 17a-5(d)(1)(i)(B)(2) of the Securities and Exchange Act of 1934 As of the year ended December 31, 2022 {24}------------------------------------------------ ![](_page_24_Picture_0.jpeg) ### J.Ii Financial Services. fnc. #### supplementaryschedules PursuanttosEA Rule 17a-5 ofthe securities and ExchangeActoflg34 As of and forthe year\_ inded December3l, 2022 # Form StpC-7 J.K. Financial services, Inc. is a member of the Securities Investor under the Securities Exchange Act of 1934, we have performed Schedule of Assessments and payments, Forms SIPC\_7 to the Secu December' 31,2022, which were agreed to by J.K. Financial Se Industry Regulatory Authority and the SIpC, solely to assist you an compliance with the applicable instructions of the Assessment Rec is responsible for J,K. Financial Services, Inc.,s compliance with conducted in accordance with attestation standards established by thl company Accounting oversight Board (United States). The sufficiency of these procedures is solely the responsibility of those parties specified in this reporl' Consequently, we make no representation regarding the sufficiency ofthe procedures described below either for i||,#tJ"tt for which this report has been requested or for any other purpose. The procedurr, \*.r. performed, and our findings are as - 1' Compared the listed assessment payments represented on Form SIPC 6 & 7 with the respective cash disbursements record entries, noting no differences, - 2Compared audited rotal Revenue for the period of January 0l,2022through December 31,2022(fiscal year-end) with the amounts repofted on Forms SIpC-7, noting no differences, - 3' compared any adjustments reported on Form SIPC-7 with supporting schedules and workpapers, to the extent such exists, noting no differences. - 4' Proved the arithmetical accutacy of the calculations reflected on Form slpc-7, noting no differences. - 5' was If applicable, compared the amount of any overpayment applied to the current assessment with the Form SIPC-7 on which it originally computed, noting no differences. we are not e Accordingly' an examination for which the objective would be to express an opinion on compliance. inion. Had we performed additional procedures other matters might have come to our attention that used This report by anyone is intended other solely for the information and use ofthe specified parties listed above and is not intended to be and should not be than these specified parties. ( Aprtl 13, 2023 ![](_page_24_Picture_15.jpeg) frt?ie I gard, il-L( ?9-Sddle\$ru\*; l\* tu(-dilirii1i)\*i& t\ i\$62,, tnr 91t,\*{f.\$.SX: {25}------------------------------------------------ #### J.K. Financial Services, Inc. Supplementary Agreed Upon Procedures Report SIPC Reconciliation Pursuant to SEA Rule 17a-5(d)(1)(i)(B)(2) of the Securities and Exchange Act of 1934 As of the year ended December 31, 2022 | JK Financial | | | | | | |----------------------------------------------------------|----|-----|------------------------------|-----------------|------------------| | December 31, 2022 | | | | | | | SIPC 7 Reconciliation | | | | | | | Total Due - SIPC 7 | \$ | 145 | | | | | Overpayment Applied | 5 | | | | | | Balance Due after SIPC 6 Payment and Applied Overpayment | \$ | 67 | | | | | Paid with SIPC 6 | \$ | 78 | Date Paid:
August 3, 2022 | Check #:
ACH | Paid To:
SIPC | | Paid with SIPC 7 | S | ୧୫ | April 10, 2023 | ACH | SIPC | | Total Paid | | 146 | | | | | Reconciled Difference (Overpayment) Underpayment | 5 | | | | | Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.