EXHIBIT 99.1
US SECURITIES & FUTURES CORP.
FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1997
WITH
REPORT OF CERTIFIED PUBLIC ACCOUNTANT
JIM SUNG CPA
Jim Sung CPA
19 Union Avenue
Rutherford, NJ 07070
The board of Directors and Stockholder of
US SECURITIES & FUTURES CORP.
We have audited the accompanying statement of Financial Condition of US
SECURITIES & FUTURES CORP. as of December 31, 1997, and the related statements
of income, change in stockholder's equity, and cash flows for the year then
ended. These financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of US SECURITIES & FUTURES CORP.
as of December 31, 1997, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The statement contained in Schedule I
is represented for purpose of additional analysis and are not a required part
of the basic financial statements, but is supplementary information required by
rule 17a-5 of the Securities and Exchange Commission. Such information has
been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
Jim Sung CPA
Rutherford, New Jersey
February 27, 1998
US SECURITIES & FUTURES CORP.
Statement of Financial Condition
December 31, 1997
ASSETS
Cash ............................................. $ 386,374
Cash and securities segregated under
federal and other regulations(note 3)............ 4,180,362
Deposits with clearing organizations
(Cash $1,898,538 and securities with
a market value of $5,524,105).................... 7,422,643
Receivable from brokers and dealers (note 2)...... 66,748
Other receivable.................................. 43,438
Securities owned (note 2)
Marketable, at market value...................... 757,396
Not readily marketable, at estimated fair value.. 580
Furniture, equipment, and leasehold improvements,
at cost, less accumulated depreciation and
amortization of $76,006 (note 2)................. 133,360
Other assets...................................... 199,401
--------------
$ 13,190,302
=============
LIABILITIES AND STOCKHOLDERS' EQUITY
Payable to brokers and dealers..................... $ 788,414
Securities sold, not yet purchased, at market value 90,537
Payable to customers............................... 11,142,912
Accounts payable, accrued expenses,
and other liabilities............................. 210,779
-------------
12,232,642
Commitments and contingent liabilities (note 4)
Stockholders' equity
Common stock..................................... 1,185,000
Additional paid-in capital....................... 0
Related earnings................................. (227,340)
------------
Total stockholder equity........................... 957,660
------------
$ 13,190,302
============
The accompanying notes are an integral part of these financial statements
US SECURITIES & FUTURES CORP.
Statement of Income
For the Year Ended December 31, 1997
Revenues
Commissions (note 2).............................. $ 13,568,400
Interest and dividends............................ 327,642
Other income...................................... 33,468
-----------
13,929,510
-----------
Expenses
Employee compensation and benefits................ 1,442,551
Commission........................................ 10,677,712
Communications.................................... 223,598
Occupancy and equipment rental.................... 522,511
Taxes, other than income taxes.................... 109,535
Other operating expenses.......................... 806,863
-----------
13,782,770
-----------
Income or (loss) before income taxes............... 146,740
Income taxes ...................................... 3,137
----------
Net income or (loss)............................... $ 143,603
===========
The accompanying notes are an integral part of these financial statements
US SECURITIES & FUTURES CORP.
Statement of Cash Flow
For the Year Ended December 31, 1997
Cash Flow From Operation Activities
Net income or (loss)............................... $ 143,603
Additions:
Depreciation & amortization expenses............... 35,819
Decrease in segregated fund........................ 1,271,116
Decrease in commission receivable.................. 23,716
Decrease in other receivable....................... 53,837
Increase in commission payable..................... 83,862
Increase in securities sold, yet not purchased..... 90,537
Increase in customers payable...................... 6,310,226
Subtractions:
Increase in deposits with clearing organizations... (7,176,556)
Increase in other assets........................... (138,191)
Increase in securities............................. (757,296)
Decrease in accounts payable....................... (6,846)
------------
Net Cash Flow From Operations...................... (66,173)
Cash Flow From Investing Activities
Acquisition of capital expenditures................ (22,790)
------------
Net Cash Flow From Investing Activities............ (22,790)
Cash Flow From Financing Activities
Proceeds from issuing capital stocks............... 130,000
-----------
Net Cash Flow From Financing Activities............ 130,000
Net Increase in Cash and Cash Equivalents.......... 41,037
Cash and Cash Equivalents at Beginning of The Period 345,337
-----------
Cash and Cash Equivalents at Ending of The Period.. $ 386,374
===========
The accompanying notes are an integral part of these financial statements
<TABLE>
<CAPTION>
US SECURITIES & FUTURES CORP.
Statement of Change in Stockholders' Equity
For the Year Ended December 31, 1997
Capital Stocks Paid-in Capital Retained Earnings Total
------------------ --------------- ----------------- ----------
<S> <C> <C> <C> <C>
Beginning balance
January 1, 1997...... $ 1,055,000 0 (370,943) $ 684,057
Capital Contribution. 130,000 0 130,000
Net gain............ 0 143,603 143,603
----------------- --------------- ------------------- -----------
Ending balances
December 31, 1997 $ 1,185,000 0 (227,340) $ 957,660
================= =============== ================== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
Schedule I
US SECURITIES & FUTURES CORP.
Computation of Net Capital Under Rule 15c3-1 of the
Securities and Exchange Commission
As of December 31, 1997
NET CAPITAL
Total stockholders' equity.............................. $ 957,660
A. Non-allowable assets
Other receivable.................................... 3,590
Furniture, equipment and leasehold improvements..... 133,360
Other assets........................................ 95,211
---------
232,161
Net capital before haircut on securities position....... 725,499
Haircuts on securities
(computed, where applicable, pursuant to rule 15c3-1(f))
Certificate of deposit.................................. 7,863
Stocks & municipal government obligations............... 35,460
Stocks & warrants....................................... 21,139
Other- conversion....................................... 4,957
---------
69,419
Net capital............................................. $ 656,080
==========
COMPUTATION OF BASIC NET CAPITAL REQUIREMENT
Minimum net capital required: (based on Aggregate
Indebtedness) ......................................... 168,528
Minimum dollar requirement.............................. 445,716
----------
Net capital requirement................................. 445,716
----------
Excess net capital...................................... 210,364
==========
Excess net capital at 1000%............................. 403,262
==========
AGGREGATE INDEBTEDNESS
Total AI liabilities from balance sheet................. 2,528,176
==========
Total aggregate indebtedness............................ 2,528,176
==========
RECONCILIATION WITH COMPANY'S COMPUTATION
Net capital, as reporting Company's Part II
(Unaudited) FOCUS report................................ $ 656,843
Net audit adjustments................................... (763)
-----------
Net capital per above................................... $ 656,080
===========
US SECURITIES & FUTURES CORP.
FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
WITH
REPORT OF CERTIFIED PUBLIC ACCOUNTANT
JIM SUNG CPA
Jim Sung CPA
19 Union Avenue
Rutherford, NJ 07070
The board of Directors and Stockholder of
US SECURITIES & FUTURES CORP.
We have audited the accompanying statement of Financial Condition of US
SECURITIES & FUTURES CORP. as of December 31, 1998, and the related statements
of income, change in stockholder's equity, and cash flows for the year then
ended. These financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of US SECURITIES & FUTURES CORP.
as of December 31, 1998, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The statement contained in Schedule I
is represented for purpose of additional analysis and are not a required part
of the basic financial statements, but is supplementary information required
by rule 17a-5 of the Securities and Exchange Commission. Such information has
been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
Jim Sung CPA
Rutherford, New Jersey
February 19, 1999
US SECURITIES & FUTURES CORP.
Statement of Financial Condition
December 31, 1998
ASSETS
Cash............................................... $ 103,264
Cash and securities segregated under federal
and other regulations(note 3)..................... 2,723,747
Deposits with clearing organizations and others
(Cash $1,396,210 and securities with a market value
of $5,188,963).................................... 6,585,173
Receivable from brokers and dealers (note 2)....... 140,715
Other receivable................................... 84,627
Securities owned (note 2)
Marketable, at market value....................... 4,078,780
Furniture, equipment, and leasehold improvements,
at cost, less accumulated depreciation and
amortization of $120,193 (note 2)................. 147,935
Other assets....................................... 701,897
----------
$ 14,566,138
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Payable to brokers and dealers..................... $ 789,659
Payable to customers............................... 8,954,385
Accounts payable, accrued expenses, and
other liabilities................................ 162,929
-----------
9,906,973
Commitments and contingent liabilities (note 4)
Stockholders' equity
Common stock...................................... 1,179,000
Related earnings.................................. 3,480,165
-----------
Total stockholder equity........................... 4,659,165
------------
$ 14,566,138
============
The accompanying notes are an integral part of these financial statements
US SECURITIES & FUTURES CORP.
Statement of Income
For the Year Ended December 31, 1998
Revenues
Commissions (note 2).............................. $ 15,403,680
Interest and dividends............................ 505,525
Trading gains (realized and unrealized)........... 4,071,248
Other income...................................... 277,198
------------
20,257,651
Expenses
Employee compensation and benefits................ 1,527,826
Commission........................................ 12,379,303
Communications.................................... 334,157
Occupancy and equipment rental.................... 710,696
Taxes, other than income taxes.................... 115,744
Other operating expenses.......................... 1,468,350
------------
16,536,076
-----------
Income or (loss) before income taxes............... 3,721,575
Income taxes....................................... 14,070
------------
Net income or (loss)............................... $ 3,707,505
============
The accompanying notes are an integral part of these financial statements
US SECURITIES & FUTURES CORP.
Statement of Cash Flow
For the Year Ended December 31, 1998
Cash Flow From Operation Activities
Net income or (loss)............................... $ 3,707,505
Additions:
Depreciation & amortization expenses............... 44,186
Decrease in segregated fund........................ 1,456,615
Decrease in deposits with clearing organizations... 837,470
Increase in commission payable..................... 1,245
Subtractions:
Increase in commission receivable.................. (73,967)
Increase in other receivable....................... (41,189)
Increase in other assets........................... (502,496)
Increase in securities............................. (3,320,804)
Decrease in securities sold, yet not purchased..... (90,537)
Decrease in customers payable...................... (2,188,527)
Decrease in accounts payable....................... (47,850)
-------------
Net Cash Flow From Operations...................... (218,349)
Cash Flow From Investing Activities
Acquisition of capital assets...................... (58,761)
------------
Net Cash Flow From Investing Activities............ (58,761)
Cash Flow From Financing Activities
Purchase treasury stocks........................... (6,000)
-----------
Net Cash Flow From Financing Activities............ (6,000)
Net (decrease) in Cash and Cash Equivalents........ (283,110)
Cash and Cash Equivalents at Beginning of The Period 386,374
-----------
Cash and Cash Equivalents at Ending of The Period... $ 103,264
===========
The accompanying notes are an integral part of these financial statements
<TABLE>
<CAPTION>
US SECURITIES & FUTURES CORP.
Statement of Change in Stockholders' Equity
For the Year Ended December 31, 1998
Capital Stocks Paid-in Capital Retained Earnings Total
----------------- ----------------- ----------------- -----------
<S> <C> <C> <C> <C>
Beginning balance
January 1, 1998..... $ 1,185,000 0 (227,340) $ 957,660
Treasury stocks..... (6,000) 0 (6,000)
Net gain............ 0 3,707,505 3,707,505
----------------- ---------------- --------------- ----------
Ending balances
December 31, 1998... $ 1,179,000 0 3,480,165 $4,659,165
================= ================ ============== ===========
The accompanying notes are an integral part of these financial statements
</TABLE>
Schedule I
US SECURITIES & FUTURES CORP.
Computation of Net Capital Under Rule 15c3-1 of the
Securities and Exchange Commission
As of December 31, 1998
NET CAPITAL
Total stockholders' equity...................... $ 4,659,165
A. Non-allowable assets
Other receivable............................ 83,746
Furniture, equipment and leasehold improvements 147,935
Other assets................................ 701,897
------------
933,578
Net capital before haircut on securities position 3,725,587
Haircuts on securities
(computed, where applicable, pursuant to rule 15c3-1(f))
Certificate of deposit...................... 1,337
Stocks & warrants........................... 1,898,816
Undue concentrations........................ 328,994
Other- conversion........................... 6,898
----------
2,236,045
Net capital................................. $ 1,489,542
============
COMPUTATION OF BASIC NET CAPITAL REQUIREMENT
Minimum net capital required: (based
on Aggregate Indebtedness)................ 133,153
Minimum dollar requirement.................. 321,916
-----------
Net capital requirement..................... 321,916
-----------
Excess net capital.......................... 1,167,627
===========
Excess net capital at 1000%................. 1,055,693
===========
AGGREGATE INDEBTEDNESS
Total AI liabilities from balance sheet..... 1,997,494
===========
Total aggregate indebtedness................ 1,997,494
===========
RECONCILIATION WITH COMPANY'S COMPUTATION
Net capital, as reporting Company's Part II
(Unaudited) FOCUS report.................... $ 1,766,460
Net audit adjustments....................... (276,918)
------------
Net capital per above....................... $ 1,489,542
============
