# EDGAR Filing Document

**Accession Number:** 0000726555
**File Stem:** 0000726555-23-000002
**Filing Date:** 2023-3
**Character Count:** 7884
**Document Hash:** b4e8ebdf0dfeed5ad85b4257d752e916
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000726555-23-000002.hdr.sgml**: 20230301

**ACCESSION NUMBER**: 0000726555-23-000002

**CONFORMED SUBMISSION TYPE**: X-17A-5

**PUBLIC DOCUMENT COUNT**: 2

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230301

**DATE AS OF CHANGE**: 20230301

**EFFECTIVENESS DATE**: 20230301

**PERIOD START**: 20220101

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** CAPITOL SECURITIES MANAGEMENT, INC.
- **CENTRAL INDEX KEY:** 0000726555
- **IRS NUMBER:** 541170635
- **STATE OF INCORPORATION:** VA
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** X-17A-5
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 008-30353
- **FILM NUMBER:** 23690190

**BUSINESS ADDRESS:**
- **STREET 1:** 4050 INNSLAKE DRIVE
- **STREET 2:** SUITE 250
- **CITY:** GLEN ALLEN
- **STATE:** VA
- **ZIP:** 23060
- **BUSINESS PHONE:** 804-612-9713

**MAIL ADDRESS:**
- **STREET 1:** 4050 INNSLAKE DRIVE
- **STREET 2:** SUITE 250
- **CITY:** GLEN ALLEN
- **STATE:** VA
- **ZIP:** 23060

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** FS SECURITIES INC/VA/                                  //BD
- **DATE OF NAME CHANGE:** 19880309

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CAPITOL SECURITIES MANAGEMENT INC                       /BD
- **DATE OF NAME CHANGE:** 19880309

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** IFS SECURITIES INC /BD/
- **DATE OF NAME CHANGE:** 19880203

### Attached PDF Documents

**Attachment 1:** `csmauditedfinancials22p.pdf`

CAPITOL SECURITIES MANAGEMENT, INC.

NOTES TO FINANCIAL STATEMENT

DECEMBER 31, 2021

## Note 7-Operating leases

The Company has obligations as a lessee for office space at seven locations. The Company classified these leases as operating leases. Lease terms expire over the next one to eight years and contain renewal options. Because the Company is not reasonably certain to exercise these renewal options, the optional periods are not included in determining the lease term, and associated payments under these renewal options are excluded from lease payments. The Company's leases do not include termination options for either party to the lease or restrictive financial or other covenants. Payments due under the lease contracts include fixed payments plus, for many of the Company's leases, variable payments. The Company's office space leases require it to make variable payments for the Company's proportionate share of the building's property taxes, insurance, and common area maintenance. These variable lease payments are not included in lease payments used to determine lease liability and are recognized as variable costs when incurred.

Amounts reported on the balance sheet on December 31, 2022 are as follows:

| Operating Leases |  |
| --- | --- |
| Operating Lease ROU Assets | $3,367,990 |
| Operating Lease Liabilities | 3,414,986 |

Future minimum lease payments under non-cancellable operating leases are as follows:

| Years ending December 31, |  |
| --- | --- |
| 2023 | 668,282 |
| 2024 | 651,806 |
| 2025 | 575,710 |
| 2026 | 554,430 |
| 2027 | 546,899 |
| 2028 | 287,363 |
| Thereafter | 226,908 |
|  | $3,511,398 |

## Note 8-Notes receivable - advisors

As described in Note 2, the Company has seven outstanding notes with advisors. The agreements' payment terms specify that the borrowers will make monthly payments over various time periods as detailed in each individual note. These payments are to be withheld from the related party's monthly pay. These notes are non-interest bearing; management has determined imputed interest to be immaterial.

CAPITOL SECURITIES MANAGEMENT, INC.
NOTES TO FINANCIAL STATEMENT
DECEMBER 31, 2021

## Note 9-Income taxes

The provision for federal and state income taxes, for the year ended December 31, 2022 is as follows:

| Current income tax expense |  |
| --- | --- |
| Federal | $41,000 |
| State | 22,000 |
| Provision for Income taxes | $63,000 |

The Company is a member of a group that files a consolidated tax return. The separate return method is used to allocate current and deferred taxes among the group members when issuing separate financial statements. In the current year, the Company included this amount as part of the income taxes payable recorded on the statement of financial condition as an income tax liability of $63,000. The Company has not recorded deferred income taxes, as such amounts were deemed to be immaterial to this financial statement.

The Company is subject to routine audits by taxing jurisdictions, however, there are currently no audits in progress. The Company remains subject to examinations federal and various state authorities for years ending after December 31, 2022.

## Note 10-Related Parties

The Company has a shared service agreement with the Parent where it pays its portion of any bills that are paid at the Parent that directly relate to the Company. These expenses are recorded as management fee expense on the Company. There were no management fees paid to the Parent for the year ended December 31, 2022. The Company has an affiliated insurance agency which reimburses the Company for commissions paid to representatives for revenue generated at the agency. The revenue is recognized as part of commissions and is used to offset representative commissions expense. This amount was 1,493,000 for the year ended December 31, 2022

## Note 11-Litigation

The Company is involved in various legal proceedings arising in the ordinary course of its business activities. The Company believes that these various asserted claims and litigation will not materially affect its financial position, future operating results or cash flows, although no assurance can be given with respect to the ultimate outcome of any such claims or litigation. The Company's exposure to any actual losses is limited to the amount of its insurance policy deductible, which in general is $100,000 per occurrence, less any amounts the Company seeks to recover from its registered representatives, if applicable.

## Note 12-Line of Credit

The Company has a line of credit of $750,000 with its financial institution at a variable interest rate. There were no funds utilized in 2022 and there was no balance as of December 31, 2022.

8

CAPITOL SECURITIES MANAGEMENT, INC.
NOTES TO FINANCIAL STATEMENT
DECEMBER 31, 2021

## Note 13-Subsequent Events

Management has evaluated subsequent events through February 27, 2023, the date on which the financial statements were available to be issued. There were no subsequent events that require adjustment or disclosure in the financial statements.

9

### UNITED STATES SECURITIES AND EXCHANGE COMMISSION
**Washington, D.C. 20549**

## FORM X-17A-5

### ANNUAL AUDITED REPORT

### Filer Information

**Filer CIK:** 0000726555

**Filer CCC:** XXXXXXXX

**Is this a LIVE or TEST filing?:** LIVE

**Would you like a Return Copy?:** Yes

### Submission Information

**Report Period Begin Date:** 01-01-2022

**Report Period End Date:** 12-31-2022

**Type of Registrant:** Broker-dealer

**Any material weaknesses identified?:** No

### Registrant Identification

**Name of Broker-Dealer:** CAPITOL SECURITIES MANAGEMENT, INC.

**Business Address:** 4050 INNSLAKE DRIVE, SUITE 250, GLEN ALLEN, VA, 23060

**Contact Person:** Irina Zubov

**Contact Phone:** 617499944

### Independent Public Accountant Identification

**Accountant Name:** Ohab and Company, PA

**Accountant Address:** 100 E Sybelia Ave, Suite 130, Maitland, FL, 32751

**Accountant Type:** Certified Public Accountant

### OATH OR AFFIRMATION

I, **Irina Zubov**, swear (or affirm) that, to the best of my knowledge and belief, the accompanying financial statements and supporting schedules pertaining to the firm of **CAPITOL SECURITIES MANAGEMENT, INC.**, as of **12-31-2022**, are true and correct.

**Signature:** Irina Zubov

**Title:** Director of Finance

**Notarized:** Yes