# CANNON SECURITIES, INC. X-17A-5 (2020-02-27) — Broker-dealer annual report - Company: CANNON SECURITIES, INC. - Form: X-17A-5 - Filed: 2020-02-27 - Period: 2019-12-31 - Accession: 0001476588-20-000001 - CIK: 1476588 - File #: 8-68437 - Material weakness: No - Auditor: Moore, Colson & Company P.C. - Auditor location: Atlanta, GA - Contact: Kelly Dixon - Phone: 706-548-3422 - Signed by: Kelly Dixon (CCO) Original filing: https://www.sec.gov/Archives/edgar/data/1476588/000147658820000001/canaudit.pdf --- {0}------------------------------------------------ ## UNITEDSTA TES SECURITIES AND EXCHANGE COMMlSSION Washington, D.C. 20549 OMB APPROVAL OMB Number: 3235-0123 Expires: August 31, 2020 Estimated average burden hours per response ... . . . 12.00 SEC FILE NUMBER 8-68437 ## **ANNUAL AUDITED REPORT FORM X-17A-5 PART Ill** | FACING PAGE | | |-------------|--| Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 a nd Rule 17a-5 Thereunder | | /01/19
AND ENDING 12/31/19
REPORT FOR THE PERIOD BEGINNING 01 | | | | |--------------------------------------------------------------------------|---------------------------------------------------------------------|----------|------------------------------------|--| | | MMIDDIYY | | ----------------------
MM/DDIYY | | | | A. REGISTRANT IDENTIFICATION | | | | | NAME OF BROKER-DEALER: CANNON SECURITIES, INC. | | | OFFICIAL USE ONLY | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | FIRM 1.0. NO. | | | 649 SOUTH MILLEDGE AVE., SUITE 6 | | | | | | | (No. and Street) | | | | | ATHENS | GA | | 30605 | | | (City) | (State) | | (Zip Code) | | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT fN REGARD TO THIS REPORT | | | | | | Kelly Dixon | | | (706) 548-3422 | | | | | | (Area Code - Telephone Number) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report* | | | | | | MOORE, COLSON, & COMPANY P.C. | | | | | | | if indi••idual. stare last. jli'SI. middle name)
(Name | | | | | 600 Galleria Parkway SE, Suite 600 Atlanta | | GA | 30339 | | | (Address) | (City} | (Sta te) | (Zip Code) | | | CHECK O
NE: | | | | | | !/'!certified Public Accountant | | | | | | Public Accountant
O | | | | | | D | Accountant not resident in United States or any of its possessions. | | | | | | | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | | | | | | *\*Claims for exemption from the requirement/hal the annual report be covered by the opinion of an independent public accountant IIlllS* I*be supported by a statement of facts and circwnslances relied on as the basis for the exemption. See Section 240. I 7a-5(e)(2)* > 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. {1}------------------------------------------------ ## OATH OR AFFIRMA TTON I, KELLY DIXON . swear (or affirm) that, to the best of my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of CANNON SECURITIES, INC. . as | of DECEMBER 31 | ---
. 20 19 | . arc 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 fol lows: | | | ceo | |-----|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | Title
blic
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~'i-fw.s. : | | | | This report** contains (check all appli | | | | 0 (a) Facing, Page . | | | | .; (b) Statement of Financial Condition. | | | | (c) Statement of Income (Loss).
(d) Statement of Changes in Financial Co~ | | | | | | | | (e) Statement of Changes in Stockholders' Equity
ncrs· or Sole Proprietors· Capital.
ims of Creditors.
(f) Statement of Changes in Liabilities Subordinated to Cla | | "' | | (g) Computation of Net Capital. | | "' | | (h) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3. | | | (i) | Information Relating to the Possession or Control Requirements Under Rule 15c3-3. | | | U) | A Reconciliation, including appropriate explanation ofthe Computation ofNet Capital Under Rule 15c3-l and the | | | | Computation fo r Determination ofthe Reserve Requirements Under Exhi
bit A of Rule 15c3-3. | | | | 0 (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of
con so I ad at ion. | | 0./ | | (I) An Oath or Affirmation. | | | | 0 (m) A copy of the SIPC Supplemental Report. | | | | 0 (n) A report describing any material inadequacies found to exist or found to have existed since the date oft he previous audit. | *\*\*For conditions of conjidenlialtreatmem of certain portions of !his filing. see section 2-10. 17 a-5(e}(3).* {2}------------------------------------------------ CANNON SECURITIES, INC. FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION WITH REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDED DECEMBER 31, 2019 {3}------------------------------------------------ ## **CANNON SECURITIES, INC.** ## Table of Contents | Report of Independent Registered Public Accounting Firm | | |--------------------------------------------------------------------------------------------------------------------------|--| | Statement of Financial Condition 1 | | | Statement of Operations 2 | | | Statement of Changes in Shareholders' Equity 3 | | | Statement of Cash Flows 4 | | | Notes to Financial Statements S-7 | | | Supplemental Information: | | | Schedule I - Computation of Net Capital Under SEC Rule 15c3-1 8 | | | Schedule II - Computation For Determination of ~eserve
Requirements Under SEC Rule 15c3-3 (exemption) 9 | | | Schedule Ill-
Information Relating to the Possession or Control
Requirements Under SEC Rule 15c3-3 (exemption) 10 | | | Report of Independent Registered Public Accounting Firm -
Review of the Exemption Report SEA Rule 17a-5(d)(4) 11 | | | Exemption Report SEA Rule 17a-5-(d)(4) 12 | | {4}------------------------------------------------ # **lil[MOORE c 0 C' 0** *CPAs and Advisors* ### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders of Cannon Securities, Inc. Athens, Georgia ## Opinion on the Financial Statements We have audited the accompanying statement of financial condition of Cannon Securities, Inc. as of December 31 , 2019, the related statements of operations, changes in shareholders' 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 Cannon Securities, Inc. 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 Cannon Securities, Inc.'s management. Our responsibility is to express an opinion on Cannon Securities, Inc.'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 Cannon Securities, Inc. in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements al'e free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. ## Auditor's Report on Supplemental Information The information contained in Schedule I, Computation of Net Capital Under SEC Rule 15c3-1, Schedule II, Computation for Determination of Reserve Requirements Under SEC Rule 15c3-3 (exemption) and Schedule Ill, Information Relating to the Possession or Control Requirements Under SEC Rule 15c3-3 (exemption) has been subjected to audit procedures performed in conjunction with the audit of Cannon Securities, Inc.'s financial statements. The supplemental information is the responsibility of Cannon Securities, Inc.'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 inforrmation, we evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 C.F .R. §240.17a-5. In our opinion, the information contained in Schedule I, Computation of Net Capital Under SEC Rule 15c3-1, Schedule II, Computation for Determination of Reserve Requirements Under SEC Rule 15c3-3 (exemption) and Schedule Ill, Information Relating to the Possession or Control Requirements Under SEC Rule 15c3-3 (exemption) is fairly stated, in all materiial respects, in relation to the financial statements as a whole. M~,~~Cu-r~f~. We have served as Canno'r\ Securities, Inc.'s auditor since 2011. Atlanta, Georgia February 26, 2020 600 galleria parkway se suite 600 atlanta, georgia 30339 p 770.989.0028 f 770.989.0201 MooreColson.com membe294,534 | | Accounts receivable | 161,034 | | Other current assets | 3,099 | | TOTAL | \$
458,667 | | LIABILITIES AND SHAREHOLDERS' EQUITY | | | CURRENT LIABILITIES: | | | Accounts payable | \$
3,854 | | Accounts payable - related party | 87,875 | | Commissions payable | 19,067 | | Total current liabilities | 110,796 | | SHAREHOLDERS' EQUITY: | | | Common stock | 50,000 | | Additional paid-in capital | 20,000 | | Treasury stock | (50,000) | | Retained earnings | 327,871 | | Total shareholders' equity | 347,871 | | | | TOTAL See accol'lllanying notes to financial statements and report of independent registered publ'ic accounting f irm. \$ 458,667 {6}------------------------------------------------ ## CANNON SECURITIES, INC. STATEMENT OF OPERATlONS FOR THE YEAR ENDED DECEMBER 31 , 2019 | 274,847 | |---------------| | 63,709 | | 21,680 | | 70,424 | | 65,336 | | 32,058 | | 528,054 | | 513,302
\$ | | | See accoJll)anying notes to financial statements and report of independent registered public accounting firm. {7}------------------------------------------------ ## CANNON SECURITlES, INC. STAlEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEAR ENDED DECEMBER 31, 2019 | | COMMON
STOCK | ADDITIONAL
PAID-IN-CAPITAL | TREASURY
STOCK | EARNINGS | TOTAL
RETAINED SHAREHOLDERS'
EQUITY | |----------------------------------|-----------------|-------------------------------|-------------------|------------|-------------------------------------------| | Balances at December 31,
2018 | \$ 50,000 | \$
20,000 | \$ (50,000) | \$ 164,569 | \$
184,569 | | Net income | | | | 513,302 | 513,302 | | Distributions to shareholders | | | | (350,000) | (350,000) | | Balances at December 31,
2019 | \$ 50,000 | \$
20,000 | \$ (50,000) | \$ 327,871 | \$
347,871 | See accorrpanying notes to financial statements and report of independent registered public accounting firm {8}------------------------------------------------ ## CANNON SECURITIES, INC. STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2019 | CASH FLOWS FROM OPERATING ACllVITIES: | | |-------------------------------------------------------------------------|---------------| | Net income | \$
513,302 | | Adjustments to reconcile net income to net cash provided | | | by operating activities: | | | Accounts receiVclble | (50,370) | | Other current assets | 266 | | Accounts payable - related party | 14,322 | | Commissions payable | (36,487) | | NET CASH PROVIDED BY OPERA llNG ACTIVITIES | 441 ,033 | | CASH FLOWS FROM FINANCING ACllVIllES -
Distributions to shareholders | (350,000) | | NET INCREASE IN CASH | 91,033 | | CASH, BEGINNING OF THE YEAR | 203,501 | | CASH, END OF lHE YEAR | \$
294,534 | See accolll'anying notes to financial statements and report of independent register ed public accounting firm {9}------------------------------------------------ ## CANNON SECURITIES, INC. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2019 ## 1. NATURE OF BUS II NESS AND SIGNIFICANT ACCOUNTING POLICIES #### A. Nature of Business Cannon Securities, Inc. ("the Company") was incorporated in the state of Georgia in 2009. The Company is a broker-dealer registered with the Securities Exchange Commission (the "SEC") and has been a member of the Financial Industry Regulatory Authority ("FINRA") since May 2010. The Company operates as an introducing broker, does not hold funds or securities for customers, and does not carry customer accounts. ## B. Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and reported revenues and expenses. Actual results could vary from the estimates that were used. C. Cash The Company considers deposits in banks and highly liquid investments with original maturities of 90 days or less to be cash. The Company maintains balances in financial institutions that at times may exceed the amounts that are insured by the· Federal Deposit Insurance Corporation. #### D. Accounts Receivable The Company uses the allowance method to account for uncollectible accounts receivable. Management continually monitors the collectability of its customer accounts; when indications arrise that an amount is not likely to be collected, it is charged to the allowance for doubtful accournts. Accounts are considered past due when they are 30 days old. As of December 31, 2019, management has reviewed the status of accounts receivable and determined that an allowance for doubtful accounts is not necessary. ## E. Revenue Recognition The Company's revenue consists of commissions earned on customer balances and investments made. Related commissions expense to registered representatives is recognized in the same period in which commissions revenue is recognized. The Company recognizes revenue in accordance with ASU 2014-09, Revenue from Contracts with Customers, together with subsequent amendments and updates (collectively "ASC 606"). The standard's core principle is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 prescribes a five-step process to accomplish this core principle, including: - · Identification of the contract with the customer; - · Identification of the performance obligation(s) under the contract; - · Determination of transaction price; - · Allocation of the transaction price to the identified performance obligation(s); and - · Recognition of revenue as (or when) an entity satisfies the identified performance obligation(s). {10}------------------------------------------------ ## CANNON SECURITIES, INC. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2019 ## 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Continued) ## E. Revenue Recognition (Continued) The Company receives commission revenues under contracts with investment and insura11ce companies. Commissions are primarily based on customer assets under management as well as certain customer deposits into variable annuity products and are received based on contractual terms. The performance obligation for commissions received based on customer assets under management is generally satisfied at the end of the contractual measurement period when the commissions are calculated, typically monthly or quarterly. The performance obligation for commissions received on customer deposits into variable annuity products is generally satisfied when the deposit is received by the insurance company from the customer. Commissions represent variable consideration as they are based on values which fluctuate due to deposits, withdrawals, and market performance. Accounts receivable related to commissions revenues totaled \$161 ,034 at December 31, 2019. F. Income Taxes The Company has elected to be taxed as an S corporation whereby the income or losses of the Company flow through to its shareholders. Therefore, no income tax provision has been recorded in the accompanying financial statements. The Company has not identified any unsubstantiated tax positions that would require provision of a liability under Accounting Standards Codification Topic 740, Income Taxes. G. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments- Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326), which modifies the measurement of expected credit losses of certain financial instruments. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and will be applied as a cumulative effect adjustment to retained earnings as of the beginning of the first reporting period for which the guidance is effective. The Company is currently evaluating the impact of the ASU and does not expect that adoption will have a material impact on its financial statements. H. Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases(Topic 842), together with subsequent amendments, updates and an extension of the effective date (collectively "ASC 842"), which requires lessees to recognize a right-of-use asset and lease liability on their balance sheet for operating and financing leases that have a term in excess of one year. Expense is recognized in the statement of operations similar to current accounting guidance. Entities will need to disclose qualitative and quantitative information about their leases, including characteristics and amounts recognized in the financial statements. The Company adopted ASC 842 on January 1, 2019 and there was no impact on its financial statements. #### I. Subsequent Events Subsequent events have lbeen evaluated through February 26, 2020, which is the date the financial statements were available to be issued. {11}------------------------------------------------ ## CANNON SECURITIES, INC. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2019 ## 2. RELATED PARTY TRANSACTIONS The Company is affiliated with Cannon Financial Strategists, Inc. ("CFS") through common ownership. The Company has an expense sharing agreement with CFS. Expenses related to this agreement totaled \$115,073 for the year ended December 31 , 2019 and are included in shareholders' compensation, general and administrative and occupancy expenses in the accompanying statement of operations. At December 31 , 2019, \$24,646 was due to CFS for expenses incurred on behalf of the Company and is included in accounts payable-related party. The Company entered into a management agreement with a shareholder in 2011. The shareholder is compensated based upon the aggregate net income of the Company and CFS. Expenses related to this agreement totaled \$63,229 for tlhe year ended December 31, 2019 and are included in shareholders' compensation in the accompanying statement of operations. Management fees payable to the shareholder of \$63,229 are included in accounts payable - related party at December 31, 2019. ### 3. CONCENTRATIONS For the year ended December 31 , 2019, substantially all revenues were derived from commissions earned on customer accounts held at two financial institutions. Almost all accounts receivable as of December 31, 2019 were due from these two financial institutions. For the year ended December 31 , 2019, revenues earned from four customers' accounts totaled \$713,958 or 69% of the Company's total revenues. Accounts receivable related to these customers totaled \$137,91 1 or 86% of total accounts receivable at December 31 , 2019. #### 4. COMMON STOCK At December 31 , 2019, the Company has 100,000 shares of \$-1- par value common stock authorized, with 50,000 shares issued and 49,250 outstanding. ## 5. NET CAPITAL REQUIREMENT As a registered broker-dealer under the SEC and member of the FINRA, the Company is subject to the SEC's Uniform Net Capital Rule 15c3-1 under the Securities Exchange Act of 1934. The Rule requires the Company to maintain minimum net capital of the greater of \$5,000 or 6.67% of total aggregate indebtedness and requires that the ratio of aggregate indebtedness to net capital shall not exceed 15 to 1. Net capital and aggregate indebtedness change from day to day, but as of December 31, 2019, the Company had net capital of \$202,805 which exceeded the minimum net capital requirement of \$7,386 by \$195,419. At December 31 , 2019, the Company's ratio of aggregate indebtedness to net capital was 0.546 to 1. {12}------------------------------------------------ SUPPLEMENTAL INFORMATION {13}------------------------------------------------ ## CANNON SECURITIES, INC. SCHEDULE I COMPUTATION OF NET CAPITAL UNDER SEC RULE 15c3-1 DECEMBER 31, 2019 | COMPUTATION OF NET CAPITAL: | | |-----------------------------------------------------------------------------------------------------|------------------| | Total shareholders' equity | \$
347,871 | | Deduct non-allowable assets: | | | Accounts receivable
Other current assets | 141,967
3,099 | | Net capital | \$
202,805 | | COMPUTATION OF AGGREGATE INDEBTEDNESS: | | | Accounts payable | 3,854 | | Accounts payable -related party | 87,875 | | Commissions payable | 19,067 | | Total aggregate indebtedness | \$
110,796 | | COMPUTATION OF MINIMUM NET CAPITAL REQUIREMENT:
Net capital | \$
202,805 | | Minimum net capital to be maintained
(greater of \$5,000 or 6%% of total aggregate indebtedness) | 7,386 | | Net capital in excess of requirement | \$
195,419 | ## Schedule of Reconciliation of Net Capital per unaudited FOCUS Report with Audit Report: Pursuant to Rule 17a-5(d)(2), there are no material differences between net capital as reported in Form X-17 A-5 and net capital as computed abo\€; therefore, a reconciliation is not considered necessary. {14}------------------------------------------------ ## CANNON SECURITIES, INC. SCHEDULE II COMPUTATION FOR DETERMINATION OF RESERVE REQUIREMENTS UNDER SEC RULE Rule15c3-3 (Exemption) AS OF DECEMBER 31 , 2019 The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934, pursuant to paragraph (k)(1) of the rule. See accompanying report of independent registered public accounting firm. {15}------------------------------------------------ ## CANNON SECURITIES, INC. SCHEDULE Ill INFORMATION RELATING TO THE POSSESSION OR CONTROL REQUIREMENTS UNDER SEC RULE 15c3-3 (Exemption) AS OF DECEMBER 31 , 2019 The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934, pursuant to paragraph (k)(1) of the rule. See accompanying report of independent registered public accounting firm. {16}------------------------------------------------ # **lil[MOORE c 0 C' 0** energy . Insight . growth *CPAs and Advisors* ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Shareholders of Cannon Securities, Inc. Athens, Georgia We have reviewed management's statements, included in the accompanying Exemption Report SEA Rule 17a-5(d)(4), in which (1 ) Cannon Securities, Inc. identified the following provisions of 17 C.F.R. §15c3-3(k) under which Canrnon Securities, Inc. claimed an exemption from 17 C.F.R. §240.15c3-3: (1) (the "exemption provision") and (2) Canrnon Securities, Inc. stated that Cannon Securities, Inc. met the identified exemption provisions throughout the most recent fiscal year without exception. Cannon Securities, Inc.'s management is responsible for compliance with the exemption provisions 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 Cannon Securities, Inc.'s compliance with the exemption provisions. 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)(1 ) of Rule 15c3-3 under the Securities Exchange Act of 1934. ;1{\_.\_, ~ *+-* ~ f c\_., Atlanta, Georgia February 26, 2020 {17}------------------------------------------------ ## **Cannon Securities, Inc.** EXEMPTION REPORT SEA RULE 17a-5(d)(4) February 26, 2020 Moore Colson 600 Galleria Parkway Suite 600 Atlanta, GA 30339 To Whom It May Concern: The below information is designed to meet the Exemption Report criteria purs'Uant to SEA Ru1 1e 17a-5(d)(4): Cannon Securities, Inc. is a broker/dealer registered with the SEC and FINRA. Pursuant to paragraph (k)(1) of SEA Rule 15c3-3, the Company is claiming an exemption from SEA Rule 15c3-3 for the fiscal year ended December 31 , 2019. The Company has met the identified exemption provisions throughout the most recent fiscal year without exception. The above statement is true and correct to the best of my and the Company's knowledge. Signed: Title: Chief Compliance Officer {18}------------------------------------------------ ## **CANNON SECURITIES, INC.** INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AGREED-UPON PROCEDURES REPORT ON GENERAL ASSESSMENT RECONCILIATION (FORM SIPC-7) FOR THE YEAR ENDED DECEMBER 31 , 2019 {19}------------------------------------------------ ![](_page_19_Picture_1.jpeg) ## REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON APPLYING AGREED-UPON PROCEDURES To the Shareholders of Cannon Securities, Inc. Athens, Georgia 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 (SIPC) Series 600 Rules, which are enumerated below and were agreed to by Cannon Securities, Inc. and the SIPC, solely to assist you and SIPC in evaluating Cannon Securities, Inc.'s compliance with the applicable instructions of the General Assessment Reconciliation (Form SIPC-7) for the year ended December 31 , 2019. Cannon Securities, Inc.'s management is responsible for its Form SIPC-7 and for its compliance with those requirements. This agreed-upon procedures engagement was conducted in accordance with standards established by 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 report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures we performed and our findings are as follows: - 1. Compared the listed assessment payments in Form SIPC-7 with respective cash disbursement records entries, noting no differences; there were no payments during the year ended December 31 I 2019 (See 5 below); - 2. Compared the Total Revenue amount reported on the Annual Audited Report Form X-17A-5 Part Ill for the year ended December 31 , 2019 with the Total Revenue amount reported in Form SIPC-7 for the year ended December 31 I 2019, noting no differences; - 3. Compared any adjustments reported in Form SIPC-7 with supporting schedules and working papers, noting no differences; there were no adjustments for the year ended December 31 , 2019; - 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 review, the objective of w'hich would be the expression of an opinion or conclusion, respectively, on Cannon Securities, Inc.'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 Cannon Securities, Inc. and the SIPC and is not intended to be and should not be used by anyone other than these specified parties. f1{ \_.\_, u,.\_\_ ,\_ Cu-r-( f. G Atlanta, Georgia February 26, 2020 600 galleria parkway se suite 600 atlanta, georgia 30339 p 770.989.0028 f 770.989.0201 MooreColson.com memberor ~ PrimeGiobal ...;/ {20}------------------------------------------------ | | SIPC-7 | SECUR | | ITIES INVESTOR PROTECTION CORPORATION
P.O. Box 92185 Washington, D.C. 20090-2185
202-37 1-8300 | | | SIPC-7 | | |----------------|-----------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------|--------------|--------------------------------------------------|---| | | (36-REV 12/1 8) | Gen | | eral Assessment Reconci
liation | | | (36· REV 12/18) | | | | | | | 12/31/19
For the fiscal year ended - ------------- | | | | | | | | | | (Read carefully the instructions 1n your Working Copy before completing this Form) | | | | | | | | | | TO BE FILED BY ALL SIPC MEMBERS WITH FISCAL YEAR ENDINGS | | | | | | | | 1. Name of Member, address, Designated Examining Authority, 1934 Act registration no. and month in which fiscal year ends for | | | | | | | | | | purposes of the audit requirement of SEC Rule 17a·5: | | | Note: If any of the information shown on the | | | | | | lo6B437 | | | | | | mailing label requires correction, please e-mail | | | | | CANNON SECURITIES, INC. | | | any corrections to form@sipc.org and so
indicate on the form med. | | | | | | | 649 SOUTH MILLEDGE AVE. | | | | | | | | | SUITE 6
I | | | | Name and telephone number of person to
contact respecting this form. | | | | | | | ATHENS, GA 30605 | | _j | Rick Alvarez 770-263-7300 | | | | | B. | | 2. A. General Assessment (item 2e from page 2)
Less payment made with SIPC-6 filed (exclude interest) | | | | | | | | | Date Paid | | | | | | | | | | C. Less prior overpayment applied | | | | | | | | | | | D. Assessment balance due or (overpayment) | | | | (150) | | | | E. | | Interest computed on late payment (see instruction E) for ____ days at 20% per annum | | | | 0 | | | | | | | | | | s (150) | | | | | | F. Total assessment balance and interest due (or overpayment carried forward) | | | | | | | | | G. PAYMENT: | '\/ the box
Check mailed to P.O. Box D Funds Wired D
Total (must be same as F above) | | AcHD\$ __0 ____________ __ | | | | | | | H. Overpayment carried forward | | | \$( 150 | | | | | | | | 3. Subsidiaries (S) and predecessors (P) included in this form (g ive name and 1934 Act registration number): | | | | | | | | | | The SIPC member submitting this form and the
person by whom it is executed represent thereby
that all information contained herein is true, correct | | CANNON SECURITIES, INC. | | | | | | | and complete. | | | | | | | | | | | | | | | | | | | Dated the | day of | | | | | | | | | | | This form and the assessment payment is due 60 days after the end of the fiscal year. Retain the Working Copy of this form
for a period of not less than 6 years , the latest 2 years in an easily accessible place. | | | fTillo) | | | | | | | | | | | | | | | ~ Dates:
;: | Postmarked | Received | Reviewed | | | | | | | L&.l | > Calculations __ | _ | | __
Documentation
_ | | Forward Copy | ___ | _ | | L&.l
a: | | | | | | | | | | u
Q | Exceptions: | | | | | | | | | | v.; Disposition of exceptions: | | | | | | | | {21}------------------------------------------------ #### **DETERMINATION OF "SIPC NET OPERATING REVENUES" AND GENERAL ASSESSMENT** Amounts for the fiscal period | | | | beginning ~1~11 /1~9~--­
a nd ending .~o""2f31,~o~,l.l.i 191---- | |----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------|---------------------------------------------------------------------| | | o. | | Eliminate cents
\$1,041,356 | | | 2a. Total revenue (FOCUS l ine 12/Part IIA Line 9, Code 4030) | | | | 2b. Additions: | (1) Total revenues from the securities business of subsidiaries (except foreign subsidiaries) and
predecessors not included above. | | | | | (2) Net loss from principal transactions in securities in trading accounts. | | | | | (3) Net loss ~rom principal transactions in commodities in trading accounts. | | | | | (4) Interest and dividend expense deducted in determining item 2a. | | | | | (5) Net loss from management of or participation in the underwriting or distribution of securities. | | | | | (6) Expenses other than advertising, printing, registration fees and legal fees deducted in determining net
profit from management of or participation in underwriting or distribution of securities. | | | | | (7) Net loss from securities in investment accounts. | | | | | Total additions | | 0 | | | 2c. Deductions: | | | | | (1) Revenues from the distribution of shares of a registered open end investment company or unit
investment trust, from the sale of variable annuities, from the business of insurance, from investment
advisory services rendered o registered investment companies or insurance company separate
accounts, and from transactions in security futures products. | | 1,041
,356 | | | (2) Revenues from commodity transactions. | | | | | (3) Commissions, floor brokerage and clearance pa.id to other StPC members in connection with
securities transactions. | | | | | (4) Reimbursements for postage in connection with proxy solicitation. | | | | | (5) Net gain from securities in investment accounts. | | | | | (6) 100% of commissions and markups earned from transactions in (i) certificates of deposit and
(ii) Treasury bills, bankers acceptances or commercial paper that mature nine months or less
from issuance date. | | | | | (7) Direct expenses of printing advertising and legal fees incurred in connection with other revenue
related to the securities business (revenue defined by Section 16(9)(L) of the Act). | | | | | (8) Other revenue not related either directly or indirectly to the securities business.
(See Instruction C): | | | | | (Deductions in excess of \$100,000 require documentation) | | | | | | | | | | (9) (i) Total interest and dividen.d expense (FOCUS l ine 22/PART IIA Line 13,
Code 4075 plus line 2b(4) above) but not in excess
of total interest and dividend income. | '-----------
\$ | | | | (ii) 40% of margin interest earned on customers securities
accounts (40% of FOCUS line 5, Code 3960). | \$. ________________ _ | | | | Enter the greater of line (i) or (ii) | | 0 | | | Total deductions | | 1,041
,356 | | \._/ | 2d. SIPC Net Operating Revenues | | | | | 2e. General Assessment @ .0015 | | | | | | | (to page 1, line 2.A.) | Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.