# COBALT CAPITAL, INC. X-17A-5 (2022-03-30) — Broker-dealer annual report - Company: COBALT CAPITAL, INC. - Form: X-17A-5 - Filed: 2022-03-30 - Period: 2021-12-31 - Accession: 0001330760-22-000001 - CIK: 1330760 - File #: 8-66979 - Type: Broker-dealer - Material weakness: No - Auditor: Spicer Jeffries LLP - Auditor location: Denver, CO - Contact: Pamela Ohab - Phone: 407-740-7311 - Email: ben@cobaltcapitalinc.net - Website: cobaltcapitalinc.net - Signed by: Benjamin Schick (President) Original filing: https://www.sec.gov/Archives/edgar/data/1330760/000133076022000001/Public.pdf --- {0}------------------------------------------------ PUBLIC **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ANNUAL REPORTS FORM X-17A-S PART** Ill **FACING PAGE** 0MB APPROVAL 0MB Number: 3235-0123 Expires: Oct. 31, 2023 Estimated **average** burden hours per response: 12 SEC FILE NUMBER 8-66979 **Information Required Pursuant to Rules 17a-S, 17a-1Z, and lBa-7 under the Securities Exchange Act of 1934** FILING FOR THE PERIOD BEGINNING **01/01/2021** MM/DD/YV AND ENDING **12/31/2021** MM/DD/VY **A. REGISTRANT** IDENTIFICATION NAME OF FIRM: COBALT CAPITAL INC TYPE OF REGISTRANT (check all applicable boxes): I!! Broker-dealer □ Security-based swap dealer □ Check here If respondent Is also an OTC derivatives dealer D Major security-based swap participant ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) 250 INTERNATIONAL PARKWAY, SUITE 270 (No. and Street) LAKE MARY FL 32743 (City) (State) (Zip Code) PERSON TO CONTACT WITH REGARD TO THIS FILING BENJAMIN SCHICK 407-649-3150 ben@cobaltcapitalinc.net **(Name)** (Area Code - Telephone Number) (Email Address) **B. ACCOUNTANT IDENTIFICATION** INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing\* SPICER JEFFRIES LLP (Name - if individual, state last, first, and middle name) 4601 TC BLVD, STE 700 DENVER co 80237 (Address) (City) (State) (Zip Code) OCTOBER 20, 2003 349 (Date of Registration with PCAOB)(lf applicable) (PCAOB Registration Number, If applicable) **FOR OFFICIAL USE ONLY** • Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-S(el(ll(ii), If applicable. **Persons who are** to **respond** to the collectlon **of Information contained In this** form are not required **to respond** unless the form **displays a** currently **valld 0MB** control **number.** {1}------------------------------------------------ #### OATH **OR AFFIRMATION** | swear (or affirm) that, to the best of my knowledge Jnd belief, the
I, BENJAMIN SCHICK | | | | | | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--| | 2~
financial report pertaining to the firm of COBALTCAPITALINC
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Is true and correct. I further swear (or affirm) that neither the company nor I ny
DECEMBER 31 | | | | | | | partner, officer, director, or equivalent person, as the case may be, has any proprietary Interest In any account classifieds leiy | | | | | | | | asi ·•-~
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PRESIDENT | | | | | | | | | | | | | | This filing•• contains (check all applicable boxes): | | | | | | | ii (a) Statement of financial condition. | | | | | | | ii (b) Notes to consolidated statement of financial condition. | | | | | | 0 | (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 § ho.1-02 of Regulation S-X). | | | | | | | □ (d) Statement of cash flows. | | | | | | | □ (el Statement of changes In stockholders' or partners' or sole proprietor's equity. | | | | | | | □ (f) Statement of changes In llabilltles subordinated to dalms of creditors. | | | | | | | □ (g) Notes to consolidated flnanclal statements.
□ (h) Computation of net capital under 17 CFR 240.1Sc3-1 or 17 CFR 240.18a-1, as applicable. | | | | | | | D (I) Computation of tangible net worth under 17 CFR 240.18a-2. | | | | | | 0 | Ul Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. | | | | | | | D {kl Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3- or | | | | | | | Exhibit A to 17 CFR 240.18a-4, as applicable. | | | | | | | □ {I) Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3. | | | | | | | □ (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. | | | | | | | D {n) Information relatlng 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. | | | | | | | D (o) Reconcillatlons, Including appropriate explanations, of the FOCUS Report with computation of net capital or tangible ne~
worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-1, or 17 CFR 240,18a-2, as applicable, and the reserve requirements und~r 17
CFR 240.1Sc3-3 or 17 CFR 240.18a-4, as applicable, If material differences exist, or a statement that no material difference!
exist. | | | | | | | □ (p) Summary of financial data for subsidiaries not consolidated in the statement of fin and al condition. | | | | | | | Ii (q) Oath or affirmation In accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.lSa-7, as applicable. | | | | | | | D (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.lBa-7, as applicable. | | | | | | | D (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.lSa-7, as applicable. | | | | | | | Ii (t) Independent public accountant's report based on an examination of the statement of financial condition. | | | | | | | □ (u) Independent public accountant's report based on an examination of the flnanclal report or financial statements under 1:
CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable.
J | | | | | | 0 | (v) Independent public accountant's report based on an examination of certain statements in the compllance report under ' 7 | | | | | | | CFR 240.17a-S or 17 CFR 240.lSa-7, as applicable. | | | | | | | □ (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17
CFR 240.lSa-7, as applicable. | | | | | | | □ (x) Supplemental reports on applying agreed-upon procedures, In accordance with 17 CFR 240.1Sc3-le or 17 CFR 240.17a-l!2,
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). | | | | | | □ (z) Other: | | | | | | | -*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17o-S(e)(3) or 17 CFR 240.18a-7(d)(2l as | | | | | | | I
applicable. | | | | | | {2}------------------------------------------------ #### **REPORT PURSUAi"'l'T TO RULE 17a-S{d)** #### **YEAR ENDED DECEMBER 311 2021** The report is deemed **CONFIDENTIAL** in accordance with Rule 17a-5(e)(3) ~nder the Securities Exchange Act of 1934. A statement of financial condition has been filed with the Securities and Exchange Commission simultaneously herewith as a PUBLIC DOCUMENT. {3}------------------------------------------------ ![](_page_3_Picture_0.jpeg) Certified Public Accountants 4601 DTC BOULEVARD· SUITE 700 DENVER, COLORADO 80237 TELEPHONE: (303) 753-1959 FAX: (303) 753-0338 www.spicerjeffries.com ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Board of Directors and Shareholders of Cobalt Capital, Inc. ## **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of Cobalt Capital, Inc. (the "Company") as of December 31, 2021, and the related notes to the statement of financial condition. In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of December 31, 2021 in conformity with accounting principles generally accepted in the United States of America. ## **Basis for Opinion** This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statement 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 statement is 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 statement, 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 statement. 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. We have served as Cobalt Capital, Inc.'s auditor since 2008. Denver, Colorado March 25, 2022 ![](_page_3_Picture_13.jpeg) {4}------------------------------------------------ ### **STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2021** ## **ASSETS** | CASH AND CASH EQUIVALENTS | \$
570,983 | |--------------------------------------------------------|-------------------| | COMMISSIONS RECEIVABLE | 16,143 | | FEES RECEIVABLE | 49,126 | | OTHER RECEIVABLE | 3,458 | | OPERATING LEASE ASSET | 102,966 | | OTHER ASSETS | 35,762 | | Total assets | \$
7782
439 | | LIABILITIES AND SHAREHOLDERS' EQUITY | | | LIABILITIES: | | | Accrued expenses | \$
27,013 | | OPERATING LEASE LIABILITY | 102,966 | | Total liabilities | 129,980 | | SHAREHOLDERS' EQUITY | | | Common stock, \$1 par value; 10,000 shares authorized, | | | 200 shares issued and outstanding | 200 | | Additional paid-in-capital | 32,752 | | Retained earnings | 615,507 | | Total shareholders' equity | 648,459 | | Total liabilities and shareholders' equity | \$
778,439 | The accompanying notes are an integral part of this statement. {5}------------------------------------------------ #### **NOTES TO FINANCIAL STATEMENTS** ### *NOTEJ- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES* #### *Organization and business* Cobalt Capital, Inc. (the "Company") is a Florida corporation incorporated on March 10, 2005. The Company operates as a limited broker-dealer managing the distribution and marketing of real estate limited company units of direct participation programs. The Company operates as the managing brokerdealer which will function as the "distributor" or "wholesaler" broker-dealer and will engage other broker-dealers to make its programs available for retail distribution. The Company is registered with the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"). #### *Revenue recognition* Commissions from the sale of units of private placements and partnership interests are recognized when escrow closes on the respective programs. #### *Deferred syndication costs* Costs incurred in the organization and sale of equity interests in real estate ventures are deferred until the related revenues are recognized. The Company incurs syndication costs related to the organization and future sale of partnership interests. These costs are deferred until escrow closes and are included in the accompanying statement of operations. At December 3 I, 2021, the Company had no deferred syndication costs. #### *15c3-3 exemption* The Company is not claiming an exemption from SEC Rule l 5c3-3, in reliance on footnote 74 to SEC Release 34-70073 and as discussed in Q&A 8 of the related FAQ issued by SEC staff. The Company . applied for this exemption and was accepted on September 18, 2020. The Company does not carry or clear customer accounts and does not hold funds or securities on behalf of customers. #### *Cash and cash equivalents* For purposes of cash flows, the Company considers money market funds with maturities of three months or less to be cash equivalents. #### *Estimates* The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect 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. Actual results could differ from those estimates. {6}------------------------------------------------ ### **NOTES TO FINANCIAL STATEMENTS** #### *NOTE 1- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (concluded)* #### *Income taxes* The Company is recognized as an S-Corporation by the Internal Revenue Service. The Company's shareholders are liable for federal and state income taxes on the Company's taxable income. The Company is required to determine whether a tax position is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any tax related appeals or litigation processes, based on the technical merits of the position. The Company files an income tax return in the U.S. federal jurisdiction, and may file income tax returns in various U.S. states. The Company is not subject to income tax return examinations by major taxing authorities for years before 2018. The tax benefit recognized is measured as the largest amount of benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. De-recognition of a tax benefit previously recognized results in the Company recording a tax liability that reduces net assets. However, the Company's conclusions regarding this policy may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analyses of and changes to tax laws, regulations and interpretations thereof. The Company recognizes interest accrued related to unrecognized tax benefits and penalties related to unrecognized tax benefits in income taxes payable, if assessed. No interest expense or penalties have been recognized as of and for the year ended December 31, 2021. ## *NOTE2- NET CAPITAL REQUIREMENTS* Pursuant to the net capital provisions of Rule 15c3-1 of the Securities Exchange Act of 1934, the Company is required to maintain a minimum net capital, as defined under such provisions. At December 31, 2021, the Company had net capital and net capital requirements of \$543,970 and \$5,000 respectively. The Company's net capital ratio (aggregate indebtedness to net capital) was 4.97% to 1. According to Rule 15c3-l, the Company's net.capital ratio shall not exceed 15 to l. ## *NOTE3- LEASES* The Company adopted the new guidance for leases prospectively effective January 1, 2019. The new guidance requires that the Company determine if an arrangement is a lease at inception of the transaction. Operating lease assets are included in right-of-use ("ROU") assets while the corresponding lease liabilities are included in operating lease liabilities in the statement of financial condition. Finance leases are included in property and equipment while the related liabilities are included in loans payable in the statement of financial condition. {7}------------------------------------------------ ### NOTES TO FINANCIAL STATEMENTS ## *NOTE3- LEASES ( continued)* A ROU asset represents the Company's right to use an underlying asset for the lease term while the related operating lease liability represents the obligations to make future lease payments arising from the lease. A ROU asset and related operating lease liability are recognized at lease commencement date, based on the present value of lease payments over the lease term. The Company does not borrow funds and does not have a determinable incremental borrowing rate. The incremental borrowing rate used is the Treasury Bill Rate approximating the term of the operating lease. The ROU asset also includes any lease payments made and excludes lease incentives. The lease term may include options to extend or terminate the lease when it is reasonably certain that the Company exercise that option. The lease expense for a ROU asset is recognized on a straight-line basis over the lease term The components of lease expense for the year ended December 31, 2021 were as follows: | Operating lease costs: | | |-----------------------------------------|----------| | Amortization of right-of-use assets | \$ 8,334 | | Interest on operating lease liabilities | 1.456 | | Total operating lease costs | \$ 9,790 | Supplemental statement of financial condition at December 31, 2021, relating to leases were as follows: | Operating lease: | | |--------------------------------|------------| | Right-of-use assets | \$111,100 | | Accumulated amortization | 8,134 | | Right-of-use assets, net | \$102,966 | | Operating lease liabilities | \$102,966 | | Average Remaining Lease Terms: | 2.75 years | | Average Discount Rate: | 4.0% | The Company leases office space from unrelated parties under a non-cancelable operating lease expiring through September 2024. Future minimum rental commitments to the Company under the rental agreement are approximately as follows: | | Year | Amount | |---------------------------|--------|---------| | | 2022 | 38,649 | | | 2023 | 39,809 | | | 2024 | 30.523 | | | | | | | Total: | 108,981 | | Less Interest Expense | | 6.015 | | Gross of Interest Expense | | 102,966 | {8}------------------------------------------------ ## **NOTES TO FINANCIAL STATEMENTS** ## *NOTE3- LEASES ( continued)* Total rental expense, including the lease referred to above, is included in occupancy costs and totaled \$27,256 (including sales tax) for the year ended December 31, 2021. ### *NOTE* **4** • *PAYCHECK PROTECTION PROGRAM LOAN* In April of 2020, the Company received a loan in the amount of \$44,447 under the Paycheck Protection Program established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. An additional \$60,000 was received in 2021. The loan was forgiven in full in 2021in the amount of \$104,447. ## *NOTES- FINANCIAL INSTRUMENTS, OFF-BALANCE SHEET RISK AND CONTINGENCIES* The Company's future operating results may be affected by several factors. These factors are comprised of, but are not limited to the overall downturn of the real estate industry and the general and local economic, political and social conditions that can affect the real estate market. The Company's financial instruments, including cash and cash equivalents, commissions' receivable, other receivables, other assets and accrued expenses, are carried at amounts that approximate fair value due to the short-term nature of these instruments. ## *NOTE6- RECENT ACCOUNTING PRONOUNCEMENTS* . The Company has implemented F ASB ASC 842, for leases - effective for fiscal years beginning after December 15, 2018 and has updated its recognition of the corresponding lease assets and liabilities. # *NOTE* **7-** *SUBSEQUENT EVENTS* The Company has performed an evaluation of subsequent events through the date the financial statements were issued. The evaluation did not result in any subsequent events that required disclosures and/or adjustments. 12 Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.