# BACKSTROM MCCARLEY BERRY & CO., LLC X-17A-5 (2020-02-26) — Broker-dealer annual report - Company: BACKSTROM MCCARLEY BERRY & CO., LLC - Form: X-17A-5 - Filed: 2020-02-26 - Period: 2019-12-31 - Accession: 0001208116-20-000001 - CIK: 1208116 - File #: 8-65679 - Material weakness: No - Auditor: Dave Banerjee CPA - Auditor location: Woodland Hills, CA - Contact: Vincent McCarley - Phone: 415-857-6101 - Signed by: Vincent McCarley (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1208116/000120811620000001/report1.pdf --- {0}------------------------------------------------ BACKSTROM MCCARLEY BERRY & CO., LLC Report Pursuant to Rule 17a-5(d) Financial Statements For The Year End December 31,2019 {1}------------------------------------------------ | | UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 | OMB Number:
hours per response 12,00 | | |------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------|--------------------------------| | ANNUAL AUDITED REPORT
FORM X-17A-5
PART III | | SEC FILE NUMBER
8-65679 | | | | FACING PAGE
Information Rcquired of Brokers and Dealers Pursuant to Section 17 of the
Securities Exchange Act of 1934 and Rule 173-5 Thereunder | | | | REPORT FOR THE PERIOD BEGINNING 01/01/19 | MM/DDNY | ANDENDING 12/31/19 | ------------------
MMJDD/YY | | | A. REGISTRANT IDENTIFICATION | | | | NAME OF BROKER-DEALER: Backstrom McCarley Berry, & Co. ,LLC | | | OFFICIAL USE ONLY | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not usc P.O. Box No_) | | | FIRM I.D. NO. | | 115 Sansome Street Mez. A | | | | | | (No. and Street) | | | | San Francisco | CA | | 94104 | | (C;ty) | (State) | | (Zip Code) | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
Vincent E. McCarley | | | 415·392·5505 | | | | | (Area Code - Telephone Number) | | | B. ACCOUNTANT IDENTIFICATION | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report' | | | | | Dave Banerjee, CPA | | | | | | (Name - ifindividual, state last, first, middle name) | | | | 21860 Burbank Blvd., Suite 150 Woodland Hills | | CA | 91367 | | (Address) | (C;ty) | (State) | (Zip Code) | | CHECK ONE:
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Certified Public Accountant
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PUbliC Accountant | Accountant not resident in United States or any of its possessions. | | | | | FOR OFFICIAL USE ONLY | | | *\*Claimsfor exemption/rom the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement offacts and circumstances relied on as the basis/or the exemption. See Section 240.17a-5(e)(2J* > Potential persons who are to respond to the collection of information contained In this form are not required to respond unless the form displays a currently valid OMB control number. SEC 1410 (06-02) {2}------------------------------------------------ #### OATH OR AFFIRMATION | I, Vincent E, McCarley | | | , swear (or affirm) that, to the best of | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------|------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------| | my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of
__ Backstrom ~~ ____ McCarley ~ __ ~ __ Berry ~ ____ & Co., ~_________________________________________________________________
LLC | | | , as | | of February 18 | | | , 20_1_9 ___ ~, are true and correct. I further swear (or affirm) that | | neither the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account
classified solely as that of a customer, except as follows: | | | | | A IIOWIdentity of the Individual who slCMd.fhe dOMnlnt to. wl'ilch this clrtlflcate
1\$ attached, and n01 the truthf~!lHS. l«:urICY. or validity of that document. | | | | | State of. California
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Subscribed and sworn to (ar affirmed) before me on this
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This report ** contains (check all applicable boxes):
0"" (a) Facing Page.
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(b) Statement of Financial Condition.
E] (c) Statement of Income (Loss). | 1on
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APRILM JOHNSON
Notary Public - California
San FranCIScO County
Commission; 2218664
My Comm £:,;plre~ NQ~ 13,2021 |
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~ | | 0"" (d) Statement o[Changes in Financial Condition.
~(e) Statement of Changes in Stockholders' Equity or Partners' or Sale Proprietors' Capital.
o (f) Statement of Changes in Liabilities Subordinated to Claims of Creditors.
Er Ag) Computation of Net Capital.
B' (h) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3. | | | | | B' (i) Information Relating to the Possession or Control Requirements Under Rule 15c3-3.
Gt' U) A Reconciliation, including appropriate explanation of the Computation ofKet Capital Under Rule 15c3-1 and the
Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3.
D (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of
consolidation. | | | | | ff (I) An Oath or Affirmation.
G' (m) A copy of the SIPC Supplemental Report.
[g"'" (n) A report describing any material inadequacies found to exist or found to have existed since the date of the previous audit. | | | | • *\* \*For conditions of confidential treatment of certain portions of this filing, see section 240. I 7a-5(e)* (3). {3}------------------------------------------------ ![](_page_3_Picture_0.jpeg) DAVE BANERJEE, CPA *An Accountancy Comoralion - Member A/CPA and PCAOB* 21860 Burbank Blvd., Suite 150, Woodland Hills, CA 9 1367 \_ (818) 657-0288 e FAX (818) 657-029ge (818) 312-3283 #### Report of Independent Registered Public Accounting Firm To th e Members of Backstrom McCarley Berry & Co., LLC #### Opinion on the Financial Statements We have audited the accompanying statement of financial condition of Backstrom McCarley Berry & Co., LLC (the "Company") as of December 31, 2019, the related statement of income, changes in member's equity and cash flows, for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019, 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 the Company's management. Our responsibility is to express an opinion on the Company'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 the Company 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. #### Supplemental Information The information contained in Schedule I, II, and III ("Supplemental Information") has been subjected to audit procedures performed in conjunction with the audit of the Company's financial statements. The Supplemental Information is the responsibility of the Company'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 Olll" opinion, Schedules I, II, and III are fairly stated, in all material respects, in relation to the financial statements taken as a whole. Dave Banerjee CPA, an Accountancy Corporation We have served as the Company's auditor since 2018. Woodland Hills, California February 20, 2020 {4}------------------------------------------------ ## **BACKSTROM MCCARLEY BERRY &** CO., **LLC Statement of Financial Condition December 31, 2019** #### **Assets** | Cash | \$
199,978 | |------------------------------------|---------------| | Deposit With Clearing Organization | 293,247 | | Customer Accounts Receivable | 313,885 | | Prepaid Expenses | 33,290 | | Operating Lease Right-Of-Use Asset | 223,817 | | Total assets | \$ 1,064,217 | ### **Liabilities and Members' Equity** #### **Liabilities** | Accounts Payable And Accrued Expenses | \$
19,425 | |---------------------------------------|--------------| | Pension Payables | 80,000 | | Operating Lease Liability | 227,201 | | Total liabilities | 326,626 | Commitments and contingencies #### **Members' Equity** | Members' Equity | 737,591 | |---------------------------------------|-----------------| | Total Members' Equity | 737,591 | | Total Liabilities And Members' Equity | \$
1,064,217 | {5}------------------------------------------------ ## **BACKSTROM MCCARLEY BERRY & CO., LLC Statement of Income For The Year End December 31, 2019** ### **Revenues** | Underwritting fees | \$
1,505,686 | |-----------------------------------------------|-----------------| | Financial advisory fees | 665,704 | | Commissions | 15,976 | | Interest income | 3,081 | | Other income | 22,813 | | Total revenues | 2,213,260 | | Expenses | | | Employee compensation and benefits | 812,289 | | Commission expenses | 77,858 | | Communication and data processing | 66,343 | | Occupancy | 151,996 | | Professional fees | 260,753 | | Insurance | 128,829 | | Travel expenses | 108,223 | | Other operating expenses | 597,359 | | Total expenses | 2,203,650 | | Net income (loss) before income tax provision | 9,610 | | Income tax provision | 6,800 | | Net income (loss) | \$
2,810 | *The accompanying notes are an integral part of these financial statements.* {6}------------------------------------------------ ## **BACKSTROM MCCARLEY BERRY & CO., LLC Statement of changes in Members' Equity For the Year Ended December 31,2019** | | Total | | |------------------------------|----------|---------| | | Members' | | | | Equity | | | Balance at December 31,2018 | \$ | 659,781 | | Capital contributions | | 75,000 | | Net income (loss) | | 2,810 | | Balance at December 31, 2019 | \$ | 737,591 | {7}------------------------------------------------ | BACKSTROM MCCARLEY BERRY & CO., LLC
Statement of Cash Flows
December 31,2019 | | | | |------------------------------------------------------------------------------------|------------|----|----------| | Cash flow from operating activities: | | | | | Net income (loss) | | \$ | 2,810 | | Adjustments to reconcile net income (loss) to net | | | | | cash and cash equivalents provided by (used in) operating activities: | | | | | (Increase) decrease in : | | | | | Deposit with clearing organization | 514,419 | | | | Customer accounts receivable | (288,781 ) | | | | Prepaid expenses | 10,147 | | | | Operating lease right-of-use assets | (223,817) | | | | (Decrease) increase in : | | | | | Accounts payable and accrued expenses | (14,121) | | | | Pension payables | (320,000) | | | | Operating lease liabilities | 227,201 | | | | Total adjustments | | | (94,952) | | Net cash and cash equivalents provided by (used in) operating activities | | | (92,142) | | Net cash and cash equivalents provided by (used in) investing activities | | | | | Proceeds from capital contributions | 75,000 | |--------------------------------------------------------------------------|---------------| | Net cash and cash equivalents provided by (used in) financing activities | 75,000 | | Net increase (decrease) in cash and cash equivalents | (17,142) | | Cash and cash equivalents at December 31,2018 | 217,120 | | Cash and cash equivalents at December 31, 2019 | \$
199,978 | | | | | | | | Cash paid during the year for: | | |--------------------------------|-------------| | Interest | \$ | | Income taxes | \$
6,800 | {8}------------------------------------------------ ### NOTE 1: GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ### Organization Backstrom McCarley Berry & Co., LLC (the "Company") was organized in the State of California on June 4, 2002. The Company is a registered broker-dealer in securities under the Securities and Exchange Act of 1934. The Company is a member of the Financial Industry Regulatory Authority ("FINRA"), and the Securities Investor Protection Corporation ("SIPC"), and is registered with the Municipal Securities Rulemaking Board ("MSRB"). The Company provides public finance services as a municipal securities broker-dealer, government securities broker-dealer, non-profit securities broker-dealer, and financial advisor. Regarding municipal fixed income securities, the Company services primarily major institutional clients and specializes in selling bonds to small and medium sized institutional buyers, in addition to retail clients of bank trust departments, money managers, and advisors. Under its membership agreement with FINRA and pursuant to Rule 15c3-3(k)(2)(ii), the Company conducts business on a fully 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 to the possession or control of customer assets and reserve requirements. ### Summary of Significant Accounting Policies The presentation 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 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 revenue and expenses during the reporting period. Actual results could differ from those estimates. For purposes relating to the Statement of Cash Flows, the Company has defined cash equivalents as highly liquid investments, with original maturities of less than three months, that are not held for sale in the ordinary course of business. {9}------------------------------------------------ #### NOTE1: GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounts receivable are stated at face amount with no allowance for doubtful accounts. An allowance for doubtful accounts is not considered necessary because probable uncollectible accounts are immaterial. Securities transactions are recorded on a trade date basis with related commission income and expenses also recorded on a trade date basis. Underwriting fees are recorded at the time the underwriting is completed and the income is reasonably determined. Financial advisory fees are recognized as earned on a pro rata basis over the term of the contract. Advertising costs are expensed as incurred. For the year ended December 31, 2019, advertising expense was \$5,684. The Company, with the consent of its Members, has elected to be a California Limited Liability Company. For tax purposes the Company is treated like a partnership, therefore in lieu of business income taxes, the Members are taxed on the Company's taxable income. Accordingly, no provision or liability for Federal Income Taxes is included in these financial statements. #### NOTE 2: DEPOSIT AT CLEARING FIRM The Company has a brokerage agreement with its clearing firm to carry its account and the accounts of its clients as customers of the clearing firm. The clearing firm has custody of the Company's cash balances which serve as collateral for any amounts due to the clearing firm as well as collateral for securities sold short or securities purchased on margin. Interest is paid monthly on these cash deposits at the average overnight repurchase rate. The balance at December 31,2019 was \$293,247. #### NOTE 3: INCOME TAXES As discussed in the Summary of Significant Accounting Policies (Note 1), all tax effects of the Company's income or loss are passed through to the members. Therefore, no provision or liability for Federal Income Taxes in included in these financial statements. {10}------------------------------------------------ The Company is subject to a limited liability company gross receipts tax, with a minimum franchise tax. As of December 31,2019, the income tax provision consists of the following: | Franchise tax | \$
800 | |-----------------------------|-------------| | Gross receipts tax | 6,000 | | Total income tax provisions | \$
6,800 | ### **NOTE 4: PENSION PLAN** The Company provides certain retirement benefits to its eligible employees. In accordance with Financial Accounting Standard Board ASC 712, such costs are to be accounted for on the accrual basis. Effective January 1, 2012, the Company adopted a qualified 401 (K) Profit Sharing Plan (the "Plan"). All employees, 18 years of age or older, are eligible to participate in the Plan, provided they have been employed for more than a year with the Company. The employer's non-elective profit sharing contributions vest 100% after three years. The Company profit sharing contributions are discretionary and are determined each year by the Company. At December 31, 2019, the Company has accrued \$80,000 of contributions. ### **NOTE 5: OPERATING LEASE RIGHT-OF-USE ASSET AND LEASE LIABILITY** tn February 2016, the FASB issued ASC 842, "Leases" (ASC 842). The core principle of ASC 842 is that an entity should recognize on its balance sheet assets and liabilities arising from a lease. In accordance with that principle, ASC 842 requires that a lessee recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying leased asset for the lease term. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend on the lease classification as finance or operating lease. This new accounting guidance is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. For all other entities, the new accounting guidance is effective for fiscal years beginning after December 15, 2019, and interim periods with fiscal years beginning after December 15, 2020. On January 1, 2019, the Company adopted ASC 842 using a modified retrospective approach. All remaining future lease payments was result in a gross up **in** the statement of financial position with a liability for the amount of discounted future lease payments and a corresponding amount allocated to a lease asset. As of December 31, 2019, the operating lease right-of-use asset and lease liability are valued at \$223,817 and \$227,201, respectively. {11}------------------------------------------------ For purpose of net capital computation, the operating lease right-of-used asset is classified as an allowable asset to the extent of the corresponding lease liability. Moreover, the corresponding lease liability is excluded from the total aggregate indebtedness to the extent of the associated operating lease asset. ### NOTE 6: COMMITMENTS AND CONTINGENCIES ### Contingencies The Company maintains bank accounts at financial institutions. These accounts are insured either by the Federal Deposit Insurance Commission ("FDIC"), up to \$250,000, or the Securities Investor Protection Corporation ("SIPC"), up to \$500,000. At times during the year, cash balances held in financial institutions were in excess of the FDIC and SIPC's insured limits. The Company has not experienced any losses in such accounts and management believes that it has placed its cash on deposit with financial institutions which are financially stable. ### NOTE 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 factor (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 indebtedness of others. The Company has issued no guarantees at December 31,2019 or during the year then ended. ### NOTE 8: CONCENTRATION OF CREDIT RISK {12}------------------------------------------------ The Company is engaged in various trading and brokerage activities in which counter-parties primarily include broker-dealers, banks, and other financial institutions. In the event counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counter-party or issuer of the instrument. It is the Company's policy to review, as necessary, the credit standing of each counter-party. ### NOTE 9: SUBSEQUENT EVENTS The Company has evaluated events subsequent to the balance sheet date for items requiring recording or disclosure in the financial statements. The evaluation was performed through the date the financial statements were available to be issued. Based upon this review, the Company has determined that there were no events which took place that would have a material impact on its financial statements. ### NOTE 10: RECENTLY ISSUED ACCOUNTING STANDARDS In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers: Topic 606, to supersede nearly all existing revenue recognition guidance under GAAP. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, which deferred the effective date for implementation of ASU 2014-09 by one year and is now effective for annual reporting periods beginning after December 15, 2017, with early adoption permitted but not earlier than the original effective date. ASU 2014-09 also requires new qualitative and quantitative disclosures, including disaggregation of revenues and descriptions of performance obligations. The new standard is in effect for fiscal years beginning July 1, 2018, and interim periods therein, using the modified retrospective method. The Company has performed an assessment of its revenue contracts as well as worked with industry participants on matters of interpretation and application and has not identified any material changes to the timing or amount of its revenue recognition under ASU 2014-09. The Company's accounting policies did not change materially as a result of applying the principles of revenue recognition from ASU-2014-09 and are largely consistent with existing guidance and current practices applied by the Company. ### NOTE 11: NET CAPITAL REQUIREMENTS {13}------------------------------------------------ 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. Rule 15c3-1 also provides that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to 1. Net capital and aggregate indebtedness change day to day, but on December 31, 2019, the Company had net capital of \$554,720 which was \$454,720 in excess of its required net capital of \$100,000; and the Company's ratio of aggregate indebtedness of \$22,809 to net capital was 0.04 to 1. {14}------------------------------------------------ ### **BACKSTROM MCCARLEY BERRY & CO., LLC Schedule I - Computation of Net Capital Requirements Pursuant to Rule 15c3-1 As of December 31,2019** #### **Computation of net capital** | Members' Equity | | 737,591 | | |------------------------------------------------------------------------------------|----------|------------------|---------------| | Total Members' Equity | | | \$
737,591 | | Add: | | | | | other allowable credits | | | 80,000 | | Total Members' Equity qualified for net capital | | | 817,591 | | Account receivable, net | | (229,581 ) | | | Prepaid expenes | | (33,290) | | | Total non-allowable assets | | | (262,871 ) | | Net Capital | | | 554,720 | | Computation of net capital requirements | | | | | Minimum net capital requirement | | | | | 6 2/3 percent of net aggregate indebtedness
Minimum dollar net capital required | \$
\$ | 1,521
100,000 | | | Net capital required (greater of above) | | | 100,000 | | Excess net capital | | | \$
454,720 | | Aggregate indebtedness | | | \$
22,809 | | Ratio of aggregate indebtedness to net capital | | | 0.04: 1 | **There** was no material difference between net capital computation showned here and the net capital computation shown on the Company's unaudited Form X-17 A-5 reported dated December 31, 2019. {15}------------------------------------------------ ## **BACKSTROM MCCARLEY BERRY &** CO., **LLC** ## **Schedule II - Computation for Determination of the Reserve Requirements and Information Relating to Possession or Control Requirements For Brokers and Dealers Pursuant to SEC Rule 15c3-3** ### **as of December 31, 2019** The Company is exempt from the provision of Rule 15c3-3 under paragraph (k)(2)(ii) in that the Company carries no accounts, does not hold funds or securities for, or owe money or securities to customers. The Company will effectuate all financial transactions on behalf of its customers on a fully disclosed basis. Accordingly, there are no items to report under the requirements of this Rule. {16}------------------------------------------------ II~M ~ Backstrom McCarley Berry & Co., LLC # Assertions Regarding Exemption Provisions We, as members of management of Backstrom McCarley Berry & Co., LLC ("the Company"), are responsible for compliance with the annual reporting requirements under Rule 17a-5 of the Securities Exchange Act of 1934. Those requirements compel a broker or dealer to file annual reports with the Securities Exchange Commission (SEC) and the broker or dealer's designated examining authority (DEA). One of the reports to be included in the annual filing is an exemption report prepared by an independent public accountant based upon a review of assertions provided by the broker or dealer. Pursuant to that requirement, the management of the Company hereby makes the following assertions: ### Identified Exemption Provision: The Company claims exemption from the custody and reserve provisions of Rule l5c3-3 by operating under the exemption provided by Rule 15c3-3, Paragraph (k)(2)(ii). #### Statement Regarding Meeting Exemption Provision: The Company met the identified exemption provision without exception throughout the period January 1,2019 through December 31,201 9. Backstrom McCarley Berty & Co., LLC BY:~7 Vincent E. McCarley, CEO Date: 2/20/2020 {17}------------------------------------------------ ![](_page_17_Picture_0.jpeg) **DAVE BANERJEE, CPA** *An Accountancy CorporGtion - Member A/CPA and PCAOB* **21860 Burbank Blvd., Suile 150, Woodland Hills, CA 91367 \_ (818) 657-0288 e FAX (8 18) 657-029ge (8 18) 312·3283** #### **REPORT OF INDEPENDENT REGISTERED PUBLIC** ACCOUNTING **FIRM** To the Members of Backstrom McCarley Berry & Co., LLC We have reviewed management's statements, included in the accompanying Backstrom McCarley Berry & Co., LLC ("the Company") Exemption RepOit in which (I) the Company identified the following provisions of 17 C.F.R. § ISc3 -3(k) under which the Company claimed an exemption from 17 C.F.R. §240.I Sc3-3: (k)(2)(ii) (the "exemption provision") and (2) the Company stated that it met the identified exemption provision throughout the most recent fiscal year of 2019, without exception. Company's management is responsible for compliance with the exemption provision 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 the Company's compliance with the exemption provision. 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)(ii) of Rule ISc3-3 under the Securities Exchange Act of 1934. Dave Banerjee CPA, an Accountancy Corporation We have served as the Company's auditor since 2018. Wood land Hills, California February 20, 2020 {18}------------------------------------------------ | SECURITIES INVESTOR PROTECTION CORPORATION
SIPC-7 | P.o. Box 92185 Washinglon, D.C. 20090-2185
202-371-8300 | | SIPC-7
(36-REV 12118) | | | | | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------|--|--|--|--| | | General Assessment Reconciliation
(36-REV 12118)
For the fiscal year ended J~.3J {~JLg
(Read carefully the instructions in your workin~-topy tefore completing this Form) | | | | | | | | TO BE FILED BY All SIPC MEMBERS WITH FISCAL YEAR ENDINGS | | | | | | | | | 1. Name 01 Member, address, Designaled Examining A,thority, 1934 Act registration no. and month in which liscal year ends lor
purposes 01 the audit requirement of SEC Rule 17a·5: | | | | | | | | | " '. | | Note: If any 01 the information shown on Ihe
mailing label requires correction, please e-mail
any corrections to form@sipc.org and so
indicate on the form liled. | | | | | | | L | | Name and telephone number 01 person to
contacl respecting this form. | | | | | | | | | | | | | | | | ----
------
-
General Assessment (ilem 2e from page 2)
2. A. | | | | | | | | | Less pa menl made with SIPC-6 filed (exclude interest)
B.
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2; | | | | | | | | | | | | | | | | | | C. Less prior overpayment applied | | | | | | | | | Assessmenl balance due or (overpayment)
D. | | ) | 1/ / J'~ | | | | | | Interest compuled on lale payment (see instruction E) for ______ days al 20% per annum
E. | | | | | | | | | Total-assessment balance and interest due (or overpayment carried forward)
F. | | | | | | | | | PAYMENT:
; the box
G.
Check mailed to P.O. Box J Funds Wired 8
Total (must be same as F above) | | | | | | | | | Overpayment carried forward
H. | | \$(------- | | | | | | | 3. Subsidiaries (S) and predecessors (P) included in Ihis lorm (give name and 1934 Acl registralion number): | | | | | | | | | | | | | | | | | | The SIPC member submilting Ihis lorm and Ihe
person by whom it is executed represent thereby
that all informalion contained herein is true, correct
and complele. | | | | | | | | | | | (Aulho'izecl Si~l1alure) | | | | | | | (ft"'''''
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Dated Ihe-UL day 01 J'YUY\iVl~ .202:Q | | !Tillel | | | | | | | This form and the assessment payment is due 60 days after the end of the fiscal year. Retain the Working Copy of this form
tor a period of not less than 6 years, the lalest 2 years in an easily accessible place. | | | | | | | | | | | | | | | | | | ffi Dales:
Received
Postmarked
:s:
| Reviewed | | | | | | | | __
;;:
Calculations
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Documentation | _ | ___
Forward Copy
_ | | | | | | cc
Exceptions:
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Disposition of exceptions: | | | | | | | | | | 1 | | | | | | | | | | | | | | | | {19}------------------------------------------------ DETERMINATION OF "SIPC NET OPERATING REVENUES" AND GENERAL ASSESSMENT | | | 2a. Total revenue (FOCUS line t2iPart IIA line 9. Code 4030) | | | | | | | | |--|--|--------------------------------------------------------------|--|--|--|--|--|--|--| |--|--|--------------------------------------------------------------|--|--|--|--|--|--|--| 2b. Additions: , - (1) Tola\ revenues lrom the securities business o! subsidiaries (excep! foreign subsidiaries) and predecessors not included above. '. - " (2) Net loss from principal transactions in securHies in trading accounts. - (3) Nelloss from principal transactions in commodities in trading accounts. - (4) Interest and dividend expense deducted in determining item 2a. (5) Net loss from management of Of participation in the underwriting or distribution ot securities. (6) Expenses other than advertising. prinling, regislraUan lees and legal fees deducted in determining flet profit from management 01 or partiCipation in underwriting or distribution 01 securities, P) Nel loss Irom securities in investment accounts. Total additions #### 2c. Deduclions: - (1) Revenues from the distribution of shares of a registered open end investment company or unit investment HUS\, iJom Ihe sale of variable annuities. trom the business of insurance, from investment advisory services rendered to registered investment companies or insurance company separate accounts, and from ·transactions in security futures products. - (2} Revenues from commodity transactions. - (3) 9ommissions, floor brokerage and clearance paid 10 other slPe members in connection with securities transactions. - (4) Reimbursements lor postage in connection wHh proxy solicilalion. - (5) Net gain trom securilies in investment accounts. - (6) 100% of commissions and markups earned from transactions in (i} certilicales of deposit and (ii) Treasury bills, bankers acceptances or commercia! paper that mature nine months or tess from issuance date. - (7) Oirect expenses of printing adverlising and legal fees incurred in connection with other revenue related to the securities business (revenue delined by Section 16(9I1l) 01 the Act). - (8) Other revenue nol retated eilher directly or indirectly 10 the securiues ousiness. (See tnstruction C): (Deductions in excess 01 \$100.000 require dacumenlalion) - (9) (i) Total interest and dividend expense IFOCUS line 22.'PART ttA line 13, Code 4075 plus line 2b(4) above) but not in excess 01total inlerest and dividend income. \$. \_\_\_\_\_\_\_\_\_\_ \_ - (iil 40% of margin interest earned on customers securilies accounls (40% 01 FOCUS line 5, Code 3960). \$, \_\_\_\_\_\_\_\_\_ \_ Enter the greater 01 line (i) or (ii) Totat deductions 20. StPC Net Opera\lng Revenues 2e. General Assessment @ .0015 Eliminate cents \$ ;( *i* 2\ ~ I *2(02..* {20}------------------------------------------------ ![](_page_20_Picture_0.jpeg) **DAVE BANERJEE, CPA** *An Accountancy Corporation* **-** *Member A/CPA and PCAOB* **21860 Burbank Blvd. , Suite 150, Woodland Hills, CA 91367. (818) 657·0288. FAX (818) 657-0299\_ (818) 312-3283** #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON APPLYING AGREED UPON PROCEDURES** To the Shareholders of Backstrom McCarley Berry & Co., LLC. We have performed the procedures included in Rule 17a-5(e)(4) under the Securities Exchange Act of 1934 and in the Securities Investor Protection Corporation (SlrC) Series 600 Rules, which are enumerated below, and were agreed to by Backstrom McCarley Berry & Co., LLC. (Company) and the SIPC, solely to assist you and the SIPC in evaluating the Company's compliance with the applicable instructions of the General Assessment Reconciliation (Form SIPC-7) for the year ended December 31, 2019. Management of the Company is responsible for its Form SIPC-7 and for its compliance with **those requirements. This agreed-upon procedures engagement was conducted in accordance with the standards of the Public** Company Accounting Oversight Board (United States) and in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those **parties specified in this repOIt, Consequently. we make no representation regarding the sufficiency of the procedures** described below either for the purpose for which this rep0l1 has been requested or for any other purpose. **The procedures we performed, and OUf findings are as follows:** - **1. Compared the listed assessment payments in Form SIPC-7 with respective cash disbursement records entries noting no differences;** - 2. Compared the Total Revenue amounts reported on the Annual Audited Report Form X-17A-5 **Pal1111** for the year ended December 31, 2019, with the Total Revenue amounts repol1ed "' Form SIPC-7 for the year ended December 31,2019 noting no differences; - 3. Compared any adjustments reported in Form SIPC-7 with supp0l1ing schedules and working papers noting no **differences;** - 4. Recalculated the arithmetical accuracy of the calculations reflected in Form SIPC-7 and in the related schedules and **working papers supporting the adjustments noting no differences; and** - 5. Compared the amount of any overpayment applied to the current assessment with the Form SIPC-7 on which it was originally computed noting no differences. **We were not engaged to, and did not conduct an examination or a rev iew, the objective** of which **would be the expression of** an opinion or conclusion, respectively, on the Company's compliance with the applicable instructions of the Form SIPC-7 for the year ended December 31, 2019. Accordingly, we do not express such an opinion or conclusion. Had we performed **additional procedures, other matters might have come to our attention that would have been reported to you.** This report is intended solely for the information and use of the Company and the SIPC and is not intended to be and should not be used by anyone other than these specified parties. Dave Baneljee CPA, an Accountancy Corp. **We have served as the Company's auditor since 2018.** Woodland Hills, CA February 20, 2020 Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.