# BOURNEHILL INVESTMENT SERVICES, INC. X-17A-5 (2023-03-28) — Broker-dealer annual report - Company: BOURNEHILL INVESTMENT SERVICES, INC. - Form: X-17A-5 - Filed: 2023-03-28 - Period: 2022-12-31 - Accession: 0001111120-23-000001 - CIK: 1111120 - File #: 8-52474 - Type: Broker-dealer - Material weakness: No - Auditor: Jennifer Wray CPA PLLC - Auditor location: Sugar Land, NY - Contact: Gregory Bodkin - Phone: 516-744-2124 - Email: gbodkin@boumehlllls.com - Website: boumehlllls.com - Signed by: Gregory Bodkin (Chief Compliance Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1111120/000111112023000001/bispublic2022.pdf --- {0}------------------------------------------------ Bournehill Investment Services, Inc. STATEMENT OF FINANCIAL CONDITION (WITH REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM THEREON) DECEMBER 31, 2022 {1}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 > ANNUAL REPORTS FORM X-17A·S PART Ill | OMB APPROVAL | | |--------------------------|--| | OMB Number: 3235·0123 | | | Expires: Oct. 31, 2023 | | | Estimated average burden | | | hours per relpOI)se: 12 | | | SEC FILE NUMBER | | | |-----------------|---------|--| | | 8-52474 | | FACING PAGE Information Required Pursuant to Rules 17a-S, 17a-12, and 18a·7 under the Securities Exchange Act of 1934 FiliNG FOR THE PERIOD BEGINNING 1/1/2022 MM/DD/YY AND ENDING 12/31/2022 MM/DD/YY A. REGISTRANT IDENTIFICATION NAME oF FIRM: Boumehill Investment Services, Inc. TYPE OF REGISTRANT (cfler:k all applicable boxes}: [!] Broker-dealer 0 Security-based swap dealer 0 Major security-based.swap participant 0 Check here If respondent Is also an OTC derivatives dealer -------------------------------'"-· -·- ADDRESS OF PRINCIPAl PLACE OF BUSINESS: (Do not use a P.O. box no.) 55 Willis Avenue, 2nd Floor. | | (No. and Street) | | | |----------------------------------------------|----------------------------------------------------------------------------|-------------------------|--| | Mineola | NY | 11501 | | | (City) | (State) | (Zip Co~e) | | | PERSON TO CONTACT WITH REGARD TO THIS FiliNG | | | | | Gregory Bodkin | 516-744-2124 | gbodkin@boumehlllls.com | | | (Name) | {Area Code-Telephone Numb~r) | (Email Address) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | | | | INDEPENDENT PUBliC ACCOUNTANT wltose reports are contained in this filing* | | | | Jennifer Wray CPA PLLC | | | | | BOO Bonaventure Way, Suite 168 Sugar Land | (Name - If Individual, state last, first, and middle name) | TX | 77479 | |--------------------------------------------------|------------------------------------------------------------|---------|--------------------------------------------| | (Address) | (City) | (State) | (Zip Code) | | 11/30/2016 | | 6328 | | | (Date of Registration with PCAOB)(if applicable) | | | (PCAOB Registration Number, if applicable) | | | FOR OFFICfAL USE ONLY | | | • aaims 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 rel!ed on as the basis of the exemption. See 17 CFR 240.17a-5(e)(l){U}, if applicable. Persons who are to respond to the collection of Information contained In this form are not required to respond unless the form displays a currently valid OMB control number. {2}------------------------------------------------ #### OATH OR AFFIRMATION | I, GregofY Bodkin | | | swear (or affirm) that, to the best of my knowledge and belief, the | | |-------------------|--|-------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------|--| | | | | flnancfal report pertaining to the firm of Boumohill Investment SCNiees, Inc.
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. ![](_page_2_Picture_3.jpeg) Title: /.' *1* /' / / *L.,.. c.;* /,t..,· *e* <:f- *t..o,...,f .. a..,\_rc O'P""•C.b.r* #### This filing•\* contains (check all applic:able boxes): - i!i (a} Statement of financial condition. - iii (b) Notes to consolidated statement of financial condition. - 0 (c) Statement of Income (loss) or, if there Is other comprehensive Income in the perlod(s) presented, a statement of comprehensive Income (as defined In § 210.1-02 of Regulation S-X). - 0 (d) Statement of cash flows. - 0 (e) Statement of changes In stockholders' or partners' or sole proprietor's equity. - 0 (f) Statement of changes in liabilities subordinated to claims of creditors. - 0 {g) Notes to consolidated financial statements. - 0 (h) Computation of net capital under 17 CFR 240.1Sc3-1 or 17 CFR 240.18a-l, as applicable. - 0 (f) Computation of tangible net worth under 17 CFR 240.18a-2. - 0 0) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.1Sc3-3. - 0 (k) Computation for determination of securit'(-based swap reserve requirements pursuant to Exhibit B to 17 CfR 240.1Sc3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable. - 0 (I) Computation for Determination of PAB Requirements under Exhibit A to§ 240.15c3-3. - 0 (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - 0 (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. - 0 (o) Reconciliations, lnduding 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. - 0 (p) Summary of financial data for subsidiaries not consolidated In the statement of financial condition. - ii (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. - 0 (r) Compliance report In accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - 0 (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - iii (t) Independent public accountant's report based on an examination of the statement of financial condition. - 0 {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. - 0 (v) Independent public accountant's report based on an examination of certain statements In the compliance report under 17 CFR 240.17a-s or 17 CFR 240.18a-7, as applicable. - 0 (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. - 0 (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-1e or 17 CFR 240.17a-12, as applicable. - 0 (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). 0 (z) Other=-------------------:----------------- - - ' ••ro *request* confidentfal *treatment of* certain portions *of* this filing, see 17 CF« 240.lla·S{e}(3) *or* 1.7 CF« 240.1Ba-7(d}(2}, *as* applicable. {3}------------------------------------------------ # **Bournehilllnvestment Services, Inc. Index December 31, 2022** | | Page(s) | |--------------------------------------------------------------|---------| | Report of Independent Registered Public Accounting Firm 1-2 | | | Financial Statements | | | Statement of Financial Condition 3 | | | Notes to Financial Statements 4-7 | | {4}------------------------------------------------ # **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the member of Bournehill lnvestment Services, Inc #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of Bournehilllnvestment Services, Inc as of December 31, 2022, the related statements of income, changes in member's equity, and cash flows for the year ended December 31 , 2022, and the related notes and schedules. In our opinion, the financial statements present fairly, in all material respects, the financial position of Bournehilllnvestment Services, Inc as of December 31, 2022 and the results of its operations and its cash flows for the year ended December 31 , 2022 in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** These financial statements are the responsibility · of Bournehill Investment Services, Inc's management. Our responsibility is to express an opinion on Bournehill Investment Services, Inc 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 Bournehill Investment 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 supplementary information contained in Schedules I, II & Ill have been subjected to audit procedures performed in conjunction with the audit of Bournehill Investment Services, Inc financial statements. The supplemental information is the responsibility of Bournehilllnvestment Services, Inc 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 Supplementary schedule is fairly stated, in all material respects, in relation to the financial statements as a whole. Jennifer Wray CPA PLLC We have served as Bournehilllnvestment Services, Inc's auditor since 2019. Sugar Land, Texas March 23, 2023 {5}------------------------------------------------ # **Bournehill Investment Services, Inc. Statement of Financial Condition As of December 31, 2022** | A\$8ts | | |---------------------------------------------|--------------| | Cash | \$
14,248 | | Accounts recievable | 731 | | Other assets | 25,634 | | Due from clearing organization | 48,201 | | Operating lease right of use asset | 8,112 | | Total assets | \$
96,926 | | Liabilities and Stockholder's Equity | | | Accounts payable and other accrued expenses | \$
17,886 | | Due to affiliate | 3,008 | | Operating lease liability | 8,172 | | Total liabilities | 29,066 | | Stockholder's equity | | | Common stock | 200 | | Additional paid in capital | (14,215) | | Retained Earnings | 81 ,875 | | Total stockholder's equity | 67,860 | | Total liabilities and stockholder's equity | \$
96,926 | {6}------------------------------------------------ ### **1. Organization** Bournehill Investments Services, Inc. (formerly known as Callaway Financial Services, Inc.) ("Bournehill" or "the Company") became a FINRA member broker-dealer in September 2000. The Company is registered as a broker-dealer with the Securities and Exchange Commission ("SEC") and is a member of FINRA. The Company is a wholly owned subsidiary of IHT Holding, Inc. (the Parent.) The Company conducts a traditional retail business, and acts in the capacity of an introducing broker, clearing all transactions through Axes Clearing LLC. # **2. Summary of Significant Accounting Policies** ## **Basis of Presentation** The Company's financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). The preparation of the financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The following is a summary of the significant accounting policies followed by the Company. #### **Cash** Cash consists of cash in banks, primarily held at two financial institutions which did not exceed federally insured limits. # **Fair value measurement** The carrying amounts of the following financial assets and financial liabilities approximate their fair values: accrued expenses and other liabilities, due to their short-term nature. ### **Leases** The Company recognizes and measures its leases in accordance with F ASB ASC 842, Leases. The Company is a lessee in a noncancellable operating leases, for office space. The lease liability is initially and subsequently recognized based on the present value of its future lease payments. The discount rate is the implicit rate if it is readily determinable or otherwise the Company uses its incremental borrowing rate. The implicit rates of our leases are not readily determinable and accordingly, the Company used its incremental borrowing rate based on the information available at the commencement date for all leases. The Company's incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms and in a similar economic environment. The ROU asset is subsequently measured throughout the lease term at the amount of the remeasured lease liability (i.e., present value of the remaining lease payments), plus unamortized initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received, and any impairment recognized. Lease cost for lease payments is recognized on a straightline basis over the lease term. The discount rate used to determine the lease liability and right of use asset was 4%. The Company has elected, for all underlying classes of assets, to not recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less at lease commencement, and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. The Company recognizes the lease cost associated with its shortterm leases on a straight-line basis over the lease term. {7}------------------------------------------------ # 2. Summary of Significant Accounting Policies (continued) ## Income Taxes At December 31, 2022, management has determined that the Company had no uncertain tax positions that would require financial statement recognition. This determination will always be subject to ongoing reevaluation as facts and circumstances may require. The Company also applies ASC Topic 740-10, "Accounting for Uncertainty in Income Taxes" which sets out a framework for management to use to determine the appropriate level of tax reserves to maintain for uncertain tax positions. This interpretation uses a twostep approach wherein a tax benefit is recognized if a position is more likely than not to be sustained, and the amount of benefit is then measured on a probabilistic approach, as defined in the ASC Topic. The ASC Topic also sets out disclosure requirements to enhance transparency of an entity's tax reserves. ### 3. Deposit with clearing broker Pursuant to an agreement with its clearing broker, Axos Clearing, the Company is required to maintain a clearing deposit of \$50,000. #### 4. Related Party Transactions On March 151 2022, the Company and the parent entered into an Administrative Services Agreement (the "Expense Sharing Agreement"). In accordance with the Expense Sharing Agreement, the Company is charged, on a monthly basis, for a proportional share of related expenses from the parent. #### 6. Lease Commitments The Company has obligations as a lessee for office space, with initial noncancellable terms in excess of one year. The Company classified this lease as an operating lease. The Company's lease does not include termination options for either party to the lease or restrictive financial or other covenants. Amounts reported in balance sheet as of December 31 , 2022 were as follows: Operating lease ROU asset\$ 8,112 Operating lease liability \$ 8,172 Maturities of lease liabilities under noncancellable operating leases as of December 31, | Year ending December 31, Minimum Lease | Commitments | | | |----------------------------------------|-------------|-------|--| | 2023 | | 8,240 | | | | \$ | 8,240 | | | Imputed interest | | (68) | | | Lease liability | \$ | 8,172 | | {8}------------------------------------------------ # **6. Contingencies** The Company's customers' securities transactions are introduced on a fully-disclosed basis to its clearing broker. The clearing broker carries all of the customer accounts and is responsible for collection and payment of funds and receipt and delivery of securities relative to customer transactions. These transactions may expose the Company to off-balance-sheet risk, wherein the clearing broker may charge the Company for any losses it incurs in the event that customers may be unable to fulfill their contractual commitments and margin requirements are not sufficient to fully cover losses. As the right to charge the Company has no maximum amount and applies to all trades executed through the clearing broker, the Company believes there is no maximum amount assignable to this right. The Company has the right to pursue collection or performance from the counterparties who do not perform under their contractual obligations. The Company seeks to minimize this risk through procedures designed to monitor the creditworthiness of its customers and to ensure that customer transactions are executed properly by the clearing broker, subject to the credit risk of the clearing broker. The Company maintains a deposit of \$50,000 with its current clearing broker. In the ordinary course of business, the Company is subject to regulatory examinations, information gathering requests, inquiries, and investigations. As a registered broker/dealer, the Company is subject to regulation by the SEC, FINRA, and state securities regulators. In connection with formal and informal inquiries by those agencies, the Company may receive requests from such regulators. To date, there are no significant financial contingencies resulting from any regulatory reviews or inquiries. ## **7. Guarantees** FASB ASC 460, Guarantees, requires the Company to disclose information about its obligations under certain guarantee arrangements. FASB ASC 460 defines guarantees as contracts and indemnification agreements that contingently require a guarantor to make payments to the guaranteed party based on changes in an underlying value (such as an interest or foreign exchange rate, security or commodity price, an index or the occurrence or nonoccurrence of a specified event) related to an asset, liability, or equity security of a guaranteed party. This guidance also defines guarantees as contracts that contingently require the guarantor to make payments to the guaranteed party based on another entity's failure to perform under an agreement, as well as Indirect guarantees of the indebtedness of others. The Company has issued no guarantees effective at December 31, 2022 or during the year then ended. ## **8. Net Capital Requirements** As a member of FINRA, the Company is subject to the SEC Uniform Net Capital Rule 15c3-1. This 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, and that equity capital may not be withdrawn if the resulting net capital ratio would exceed 10 to 1. At December 31 , 2022, the Company's net capital was \$41,495 which was \$36,495 in excess of its minimum requirement of \$5,000. {9}------------------------------------------------ ## **9. Exemption from Rule 16c3-3** The Company is exempt from the SEC Rule 15c3-3 pursuant to the exemptive provisions under subparagraph (k)(2)(ii). The Company also claims the Exemption because the Company's other business activities contemplated by Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17 a-5.The Company is exempt from the SEC Rule 15c3-3 pursuant to the exemptive provisions under sub-paragraph (k)(2)(ii). ### **10.** SubsequentEven~ The Company has made a review of material subsequent events from December 31 , 2022 through the date of this report and found no material subsequent events reportable during this period. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.