# PALMETTO ADVISORY GROUP X-17A-5/A (2024-03-26) — Broker-dealer annual report - Company: PALMETTO ADVISORY GROUP - Form: X-17A-5/A - Filed: 2024-03-26 - Period: 2023-12-31 - Accession: 0001462329-24-000003 - CIK: 1462329 - File #: 8-68240 - Type: Broker-dealer - Material weakness: No - Auditor: SANVILLE & COMPANY - Auditor location: DALLAS, TX - Contact: JOAN GRAVA - Phone: 8437682535 - Email: jgrava@palmadv.com - Website: palmadv.com - Signed by: DERRICK GRAVA (PRESIDENT, CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1462329/000146232924000003/publicaudit20231.pdf --- {0}------------------------------------------------ | UNITED STATES | | | | | | |------------------------------------|--|--|--|--|--| | SECURITIES AND EXCHANGE COMMISSION | | | | | | | Washington, D.C. 20549 | | | | | | | ANNUAL REPORTS | |----------------| | FORM X-17A-5 | | PART Ill | 0MB APPROVAL 0MB Number: 3235-0123 Expires: Nov. 30, 2026 Estimated average burden hours per response: 12 | SEC FILE NUMBER | | |-----------------|--| | 8-68240 | | **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 01101123 | | AND ENDING | 12131123 | | |-------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|-----------------------------------------|------------------------|-------------------------------------------------| | | ---------
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MM/DD/VY | | | | A. REGISTRANT IDENTIFICATION | | | | | NAME OF FIRM: Palmetto Advisory Group | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
~ Broker-dealer
D Check here if respondent is also an OTC derivatives dealer | □ Security-based swap dealer | □ Major security-based swap participant | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: {Do not use a P.O. box no.) | | | | | | 21 0 Yellowthroat Lane | | | | | | | (No. and Street) | | | | | Kiawah Island | SC | | 29455 | | | (City) | | (State) | | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | Joan Grava | 843-768-2535 | | jgrava@palmadv.com | | | (Name) | (Area Code -Telephone Number) | (Email Address) | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
Sanville & Company | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | 325 N.Saint Paul St. #3100 | Dallas | | TX | 75201 | | (Address)
09/18/03 | (City) | 169 | (State) | (Zip Code) | | Tte of Reg;~,atioo with PCAOB)Of appl;cable] | | | | I
(PCAOB Reg,stcatioo N,mbec, ;f 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(e)(l)(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 0MB control number.** {1}------------------------------------------------ ## **OATH OR AFFIRMATION** | financial report pertaining to the firm of PALMETTO ADVISORY GROUP
as of
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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.
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This filing** contains (check all applicable boxes):
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(a) Statement of financial condition.
□ (b) Notes to consolidated statement of financial condition.
□ (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§ 210.1-02 of Regulation S-X).
□ (d) Statement of cash flows.
□ (e) Statement of changes in stockholders' or partners' or sole proprietor's equity.
□ (f) Statement of changes in liabilities subordinated to claims of creditors.
II (g) Notes to consolidated financial statements.
□ (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable.
□ (i) Computation of tangible net worth under 17 CFR 240.18a-2.
□ 0) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3.
□ (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 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.
□ (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.
□ (o) Reconciliations, including 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-l, 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.
□ (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition.
□ (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.
□ (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
□ (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
□ (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 financial report or financial statements under 17
CFR 240.17a-S, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable.
□ (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17
CFR 240.17a-5 or 17 CFR 240.18a-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 240.18a-7, as applicable.
□ (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-le or 17 CFR 240.17a-12,
as applicable. | I, Derrick M Grava | swear (or affirm) that, to the best of my knowledge and belief, the | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------|---------------------------------------------------------------------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | □ (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). D (z) Other:----------------------------------------- \*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e}(3} or 17 CFR 240.18a-7{d)(2}, as applicable. {2}------------------------------------------------ # PALMETTO ADVISORY GROUP, LLC KIAWAH ISLAND, SOUTH CAROLINA AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 {3}------------------------------------------------ # **TABLE OF CONTENTS** | Report of Independent Registered Public Accounting Firm | 1 | |---------------------------------------------------------|-----| | Statement of Financial Condition | 2 | | Notes to the Financial Statements | 3-4 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) # **Report of Independent Registered Public Accounting Firm** To the Members and Those Charged With Governance of Palmetto Advisory Group, LLC ## **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of Palmetto Advisory Group, LLC (the Company) as of December 31, 2023, and the related notes (collectively, the financial statement). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of December 31, 2023, 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 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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. 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 statement. We believe that our audit provides a reasonable basis for our opinion. We have served as the Company's auditor since 2021 . Dallas, Texas March 15, 2024 > 325 North Saint Paul Street Suite 3100 Dallas, Texas 75201 214.738.1998 {5}------------------------------------------------ # **PALMETTO ADVISORY GROUP, LLC STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2023** ## **ASSETS** | Cash | \$
43,906 | |------------------------|--------------| | Commissions receivable | 12,584 | | Other assets | 591 | | | | | TOTAL ASSETS | \$
57,081 | # **LIABILITIES AND MEMBERS' EQUITY** | Accrued expenses
Commissions payable | \$
36,000
3,250 | |-----------------------------------------|-----------------------| | TOTAL LIABILITIES | 39,250 | | MEMBERS' EQUITY: | | | Membership interest | 17,831 | | TOTAL LIABILITIES AND MEMBERS' EQUITY | \$
57,081 | The accompanying notes are an integral part of these financial statements. {6}------------------------------------------------ # **1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** # **Organization and Nature of Business** Palmetto Advisory Group, LLC (the "Company") is a South Carolina limited liability company and operates as a registered, non-carrying broker-dealer registered with the Securities and Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority, Inc. (FINRA). The Company primarily solicits the registered representatives of larger broker dealers on behalf of independent mutual fund companies and is typically compensated through a portion of the mutual fund's management fee and sometimes also on a retainer basis. # **Use of Estimates** The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Significant estimates are primarily the collectability of commissions receivable. It is at least reasonably possible that the estimate of the effect on the financial statements of a condition, situation, or set of circumstances that existed at the date of the financial statements will change in the near term due to one or more future confirming events. The effect of this change could be material to the financial statements. #### **Cash** The Company maintains cash deposits with financial institutions that, at times, may exceed federally insured limits. #### **Commissions Receivable** Commissions receivable are stated at the amount the Company expects to collect. By their nature, receivables involve risk, including credit risk of nonpayment by the client. Accounts deemed uncollectible are charged directly to bad debt expense. Commissions receivable at the end of the year totaled \$12,584. #### **Revenue Recognition** The Company has contracts under which it receives non-refundable retainers from investment managers. Retainers are typically due and recognized on the first day of each quarter when the performance obligations of the contracts have been satisfied. The Company receives commission income when referred clients purchase an interest in private investment funds and on a periodic basis as referred clients maintain balances in the private investment funds. Commission income is recognized in the month in which it is earned. The majority of the Company's revenue arrangements generally consist of a single performance obligation. #### **Income Taxes** The Company has elected to be taxed as a subchapter "S" corporation. Under this election the Company's taxable income and tax credits are passed through to its members for inclusion in their individual income tax returns. The Company records liabilities for income tax positions taken or expected to be taken when those positions are deemed uncertain to be upheld in an examination by taxing authorities. No liabilities for uncertain income tax positions were recorded as of December 31, 2023. {7}------------------------------------------------ # **2. CERTAIN SIGNIFICANT RISKS AND UNCERTAINTIES** # **Industry and Regulatory Requirements** The Company is subject to complex legal and regulatory requirements that continue to evolve. The Company might be subject to a variety of legal proceedings including FINRA arbitrations, as well as civil lawsuits, class actions and other regulatory examinations, reviews, investigations (both formal and informal), audits and requests for information by various governmental regulatory agencies and selfregulatory organizations in jurisdictions where the Company does business. # **3. NET CAPITAL REQUIREMENTS** The Company is subject to the SEC Uniform Net Capital Rule (SEC Rule 15c3-l), which requires the maintenance of minimum net capital, and requires that the ratio of aggregate indebtedness to net capital, as defined, shall not exceed 15 to 1. As of December 31, 2023, the Company had net capital of \$16,240 which was \$11,240 in excess of its required net capital of \$5,000. As of December 31, 2023, the Company's ratio of aggregate indebtedness to adjusted net capital was 2.41 to 1. ## **4. COMMITMENTS AND CONTINGENCIES** The Company does not have any commitments, guarantees or contingencies. The Company is not aware of any threats or other circumstances that may lead to the assertion of a claim at a future date. #### **5. OPERATING AGREEMENT** The Members of Palmetto Advisory Group, LLC are subject to an operating agreement which specifies the rights and obligations of its members. Among other things, the agreement stipulates the allocation of profits, losses and distributions to its members, as well as the terms and conditions under which ownership interest can be sold or transferred. The Company is considered a "Non-Covered Firm" exempt from 15c3-3 by relying on footnote 74 to SEC Release 34-70073 and therefore, is not required to maintain a "Special reserve bank account for the Exclusive benefit of customers." #### **6. RETIREMENT PLANS** The Company maintains a defined contribution profit sharing plan, which covers all employees meeting certain age and length of service requirements. Contributions are determined annually by the Company. Employer contributions to the plan totaled \$30,000 for the ye~r ended December 31, 2023. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.