# INLET SECURITIES, LLC X-17A-5 (2022-12-30) — Broker-dealer annual report - Company: INLET SECURITIES, LLC - Form: X-17A-5 - Filed: 2022-12-30 - Period: 2022-09-30 - Accession: 0001357789-22-000002 - CIK: 1357789 - File #: 8-67301 - Type: Broker-dealer - Material weakness: No - Auditor: Hacker, Johnson & Smith, P.A. - Auditor location: Orlando, FL - Contact: Jessica Gilday - Phone: 386-426-2440 - Email: jgilday@inletsecurities.com - Website: inletsecurities.com - Signed by: Jessica Gilday (Managing Member) Original filing: https://www.sec.gov/Archives/edgar/data/1357789/000135778922000002/Financials093022ShortReport3.pdf --- {0}------------------------------------------------ #### STATEMENT OF FINANCIAL CONDITION AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM SEPTEMBER 30, 2022 {1}------------------------------------------------ **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** OMB APPROVAL OMB Number: 3235-0123 Expires: Oct. 31, 2023 Estimated average burden hours per response: 12 > SEC FILE NUMBER 8-67301 # **ANNUAL REPORTS FORM X-17A-5 PART III** **FACING PAGE** **Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934** FILING FOR THE PERIOD BEGINNING \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ AND ENDING \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ 10/01/2021 09/30/2022 Inlet Securities, LLC MM/DD/YY MM/DD/YY **A. REGISTRANT IDENTIFICATION** # NAME OF FIRM: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ TYPE OF REGISTRANT (check all applicable boxes): ☐ Broker-dealer ☐ Security-based swap dealer ☐ Major security-based swap participant ☐ Check here if respondent is also an OTC derivatives dealer ■ ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | 122 Faulkner St.
_____________________________________________________________________________________ | | | | | | |-----------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------|--------------------------------|--------------------------------------------|------------|--| | | | (No. and Street) | | | | | New Smyrna Beach
_____________________________________________________________________________________ | | Florida | | 32168 | | | (City) | | (State) | | (Zip Code) | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | Jessica Gilday | 386-426-2440
_____________________________________________________________________________________ | | jgilday@inletsecurities.com | | | | (Name) | | (Area Code – Telephone Number) | (Email Address) | | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
Hacker, Johnson & Smith, P.A. | | | | | | | _____________________________________________________________________________________
(Name – if individual, state last, first, and middle name) | | | | | | | 5401 S. Kirkman Rd, Suite 620
_____________________________________________________________________________________ | | Orlando | Florida | 32819 | | | (Address) | | (City) | (State) | (Zip Code) | | | 9/29/2003
_____________________________________________________________________________________ | | | 400 | | | | (Date of Registration with PCAOB)(if 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-5(e)(1)(ii), 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}------------------------------------------------ ![](_page_2_Picture_5.jpeg) | Sighature: | | |---------------------|--| | itle: | | | Managing Member/CFO | | - - - - - - - - - - - - - - - - - - - - - - - - - - - {3}------------------------------------------------ ![](_page_3_Picture_0.jpeg) #### **Report of Independent Registered Public Accounting Firm** To the Members of Inlet Securities, LLC New Smyrna Beach, Florida #### **Opinion on the Statement of Financial Condition** We have audited the accompanying statement of financial condition of Inlet Securities, LLC (the "Company") as of September 30, 2022, 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 September 30, 2022, 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. HACKER, JOHNSON & SMITH PA We have served as Inlet Securities, LLC's auditor since 2019. Orlando, Florida December 19, 2022 {4}------------------------------------------------ #### STATEMENT OF FINANCIAL CONDITION #### SEPTEMBER 30, 2022 #### **ASSETS** | Cash | \$
39,566 | |--------------------------------------------------------------------------------|--------------| | Receivable from broker/dealers
Office furniture and equipment (net of \$421 | 30,648 | | accumulated depreciation) | 1,686 | | Other assets | 1,966 | | | | | | | | TOTAL ASSETS | \$
73,866 | | | | | LIABILITIES AND MEMBERS' CAPITAL | | | LIABILITIES | | | Accounts payable, accrued expenses | | | and other liabilities | \$
15,395 | | | | | MEMBERS' CAPITAL | \$
58,471 | | | | | | | | TOTAL LIABILITIES AND MEMBERS' CAPITAL | \$
73,866 | The accompanying notes are an integral part of these financial statements. {5}------------------------------------------------ ### NOTES TO FINANCIAL STATEMENTS #### YEAR ENDED SEPTEMBER 30, 2022 #### NOTE 1 – ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Organization - Inlet Securities, LLC (the "Company") was organized in the state of Florida in August, 2005. The Company is registered with the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority (FINRA). The Company's principal business activity is the sale of securities. Basis of Presentation - The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Revenue Recognition - Revenue from contracts with customers is recognized when: (i) a contract has been identified, (ii) the performance obligation(s) in the contract have been identified, (iii) the transaction price has been determined, (iv) the transaction price has been allocated to each performance obligation in the contract, and (v) the Company has satisfied the performance obligation. Commissions and concessions. The Company buys and sells securities on behalf of its customers. Each time a customer enters into a buy or sell transaction, the Company charges a commission. Commissions and related clearing expenses are recorded on the trade date (the date that the Company fills the trade order by finding and contracting with a counterparty and confirms the trade with the customer). The Company believes that the performance obligation is satisfied on the trade date because that is when the underlying financial instrument or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership have been transferred to/from the customer. Office Furniture and Equipment - Depreciation is provided using the straight-line method over a five year period. Concentrations of Credit Risk - The Company is engaged in various brokerage activities in which the counterparties primarily include broker/dealers, banks, other financial institutions, and the Company's own customers. In the event the counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty or issuer of the instrument. It is the Company's policy to review, as necessary, the credit standing of each counterparty. In addition, all of the Company's cash is on deposit at one financial institution and the balance at times may exceed the federally insured limit. The Company believes it is not exposed to any significant credit risk to cash. {6}------------------------------------------------ # NOTES TO FINANCIAL STATEMENTS # YEAR ENDED SEPTEMBER 30, 2022 #### NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES - continued Estimates - The preparation of financial statements in conformity with 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. Actual results could differ from those estimates. Subsequent Events – Management has evaluated events occurring subsequent to the balance sheet dated December 19, 2022 (the financial statement issuance date), determining no events require additional disclosure in the financial statements. #### NOTE 2 - INCOME TAXES As a limited liability company, the Company has elected to file as an S-Corporation for federal income tax purposes. Income taxes are therefore the responsibility of the individual members of the Company. Management is not aware of any uncertain tax positions. The Company accounts for any potential interest or penalties related to possible future liabilities for unrecognized income tax benefits as interest/other expense. The Company is no longer subject to examination by tax authorities for federal, state, or local income taxes for periods before 2019. #### NOTE 3 - CLEARING AGREEMENT AND OFF-BALANCE-SHEET RISK The Company's customers may sell securities that they do not currently own (short sales) and will therefore be obligated to purchase such securities at a future date. However, since the Company enters into these transactions solely for the benefit of its customers, the Company does not bear any of the credit or market risk associated with them, with the exception of risk to the Company should its customers fail to honor their obligations related to the foregoing transactions, as mentioned below. {7}------------------------------------------------ # NOTES TO FINANCIAL STATEMENTS # YEAR ENDED SEPTEMBER 30, 2022 #### NOTE 3 - CLEARING AGREEMENT AND OFF-BALANCE-SHEET RISK - continued As part of the terms of the agreement between the Company and Clearing Broker/dealer, the Company is held responsible for any losses arising when the customers introduced by the Company to the Clearing Broker/dealer fail to meet their contractual commitments pertaining to the purchase, sale and possible financing of securities transactions. The Company may therefore be exposed to off-balance-sheet risk in the event the customer is unable to fulfill its contracted obligations and it is necessary for the Clearing Broker/dealer to purchase or sell the securities at a loss. The Company's exposure to risk would consist of the amount of the loss realized and any additional expenses incurred pertaining to the transaction or other customer activity. According to the terms of the aforementioned agreement, the Company is required to maintain a \$20,000 deposit with Clearing Broker/dealer. This amount is included in receivable from broker/dealers on the statement of financial condition. The Company is also prohibited from entering into an agreement with another broker/dealer to perform similar services without prior written approval from the Clearing Broker/dealer. ### NOTE 4 – NET CAPITAL REQUIREMENTS As a registered broker/dealer and member of the FINRA, the Company is subject to the SEC Uniform Net Capital Rule (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 1500%. At September 30, 2022, the Company's net capital and required net capital were \$54,819 and \$5,000 respectively. The ratio of aggregate indebtedness to net capital was 28%. #### NOTE 5 - OPERATING AGREEMENT The Company's operating agreement places certain restrictions on the transfer of ownership interests. Additional information is included therein. #### NOTE 6 – RELATED PARTY TRANSACTIONS The Company occupies office space leased by one of its members. The Company paid approximately \$19,600 in rental expense on behalf of the Member. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.