UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM 1−SA
☒ SEMIANNUAL REPORT
PURSUANT TO REGULATION A
or
☐ SPECIAL FINANCIAL
REPORT PURSUANT TO REGULATION A
For the fiscal semiannual
period ended February 29, 2024
BAKER GLOBAL ASSET
MANAGEMENT INC.
(Exact name of issuer as specified in its charter)
| New
York |
|
11-2432960 |
(State or other jurisdiction
of
incorporation or organization) |
|
(I.R.S. Employer
Identification No.) |
750 Veterans Memorial Highway, Suite 210
Hauppauge, NY 11788
(Full mailing address of principal executive offices)
(516) 931-1090
(Issuer’s telephone number, including area
code)
Item 1. Management’s Discussion and
Analysis of Financial Condition and Results of Operations
Use of Terms
Except as otherwise indicated by the context
and for the purposes of this report only, references in this report to “we,” “us,” “our,” “our
company,” the “Company” or “Baker Global” refer to Baker Global Asset Management Inc., a New York corporation.
Special Note Regarding Forward Looking Statements
Certain information contained in this report
includes forward-looking statements. The statements herein which are not historical reflect our current expectations and projections
about our future results, performance, liquidity, financial condition, prospects and opportunities and are based upon information currently
available to us and our interpretation of what is believed to be significant factors affecting the businesses, including many assumptions
regarding future events.
Forward-looking statements are generally identifiable
by use of the words “may,” “should,” “expect,” “anticipate,” “estimate,”
“believe,” “intend,” or “project” or the negative of these words or other variations on these words
or comparable terminology. Actual results, performance, liquidity, financial condition, prospects and opportunities could differ materially
from those expressed in, or implied by, these forward-looking statements as a result of various risks, uncertainties and other factors.
Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including,
without limitation, the risks outlined under “Item 1. Business—Risk Factors” included in our most recent Annual Report
on Form 1-K, and matters described in this report generally. In light of these risks and uncertainties, there can be no assurance that
the forward-looking statements contained in this report will in fact occur.
Potential investors should not place undue reliance
on any forward-looking statements. Except as expressly required by the federal securities laws, there is no undertaking to publicly update
or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.
Overview
We are a holding company that owns all of the
issued and outstanding capital stock of Benjamin Securities, Inc., or Benjamin. Benjamin is a boutique investment firm established in
1977 and has been a FINRA licensed broker-dealer since 1979 and a registered investment advisor registered with the SEC since 1987. On
May 24, 2022, FINRA granted the application of Benjamin to expand its business to include investment banking services, and the application
was confirmed complete by FINRA on October 20, 2022. Our broker-dealer business engages in the purchase and sales of securities for individuals,
high net worth individuals and retirement plans with typical investable assets in the range of $100,000 to $5,000,000 in exchange for
a commission and our investment advisory business serves the same type of clients for a fee based on a percentage of assets under management.
We do not have a minimum account size; rather, we aim to establish long-term relationships with our customers. Our investment strategy
is that of the classic value investor, seeking growth and dividends compounding returns for long-term capital appreciation and income.
We typically select individual stocks or bonds for our clients based on value, sustainable earnings growth and consistent dividends over
time. Investments are diversified across industries and geographical regions and each customer’s portfolio is custom designed based
on age, risk tolerance and other personal objectives.
Growth Strategies
Our strategy is to grow our core businesses of
asset management and advisory services. We believe that asset management is one of the fastest growing segments of the financial services
industry. Not only will we focus on internal growth of our asset management and advisory services business, but we will also consider
acquiring other advisory firms that not only fit with our strategy, but present favorable returns on invested capital.
We intend to expand our investment banking services,
as well as principal investments and trading. Investment banking represents an opportunity for us as a member of a selling group, as
an underwriter, as well as in mergers and acquisitions advisory work.
In addition, we will be looking to expand our
geographic reach. We believe there is plenty of growth opportunity by expanding our geographic reach nationally, as well as internationally.
Recent Developments
On November 13, 2023, we conducted an initial
closing of this offering, pursuant to which we sold 58,960 shares of our common stock at a price of $5.00 per share, for gross proceeds
to our company of $294,800.
Results of Operations
Comparison of Six Months Ended February
29, 2024 and February 28, 2023
The following table sets forth key components
of our results of operations during the six months ended February 29, 2024 and February 28, 2023.
| Revenue: | |
For Six Months
Ended February
29,
2024 and February 28,
2023 | |
| | |
2024 (unaudited) | | |
2023 (unaudited) | |
| Income from Investment in Benjamin Securities | |
$ | 625,458 | | |
$ | 279,208 | |
| | |
| | | |
| | |
| Expenses: | |
| | | |
| | |
| Professional fees | |
| 22,169 | | |
| 24,700 | |
| Other | |
| 4,020 | | |
| 1,660 | |
| Total expenses | |
| 26,189 | | |
| 26,360 | |
| | |
| | | |
| | |
| Net profit | |
$ | 599,269 | | |
$ | 252,848 | |
For the six months ended February 29, 2024, we
generated revenue in the amount of $625,458 and our expenses totaled $26,189, which consisted primarily of compensation for employees
and consultants, professional fees and other expenses incurred in connection with general operations. As a result of the foregoing, our
net profit for the six months ended February 29, 2024 was $599,269.
For the six months ended February 28, 2023, we
generated revenue in the amount of $279,208 and our expenses totaled $26,360, which consisted primarily of compensation for employees
and consultants, professional fees and other expenses incurred in connection with general operations. As a result of the foregoing, our
net profit for the six months ended February 28, 2023 was $252,848.
Liquidity and Capital Resources
As of six months ended February 29, 2024, we had
cash and cash equivalents in the amount of $118,816. The following table sets forth a summary of our cash flows for the periods presented:
| | |
Six Months Ended | |
| | |
February 29,
2024 | | |
February 28,
2023 | |
| Net cash provided by (used in) operating activities | |
$ | 599,269 | | |
$ | 302,848 | |
| Net cash provided by (used in) financing activities | |
| 5,100 | | |
| (15,000 | ) |
| Cash and cash equivalents at beginning of period | |
| 56,655 | | |
| 1,362 | |
| Cash and cash equivalents at end of period | |
$ | 118,816 | | |
$ | 10,001 | |
Net cash provided by operating activities was
$599,269 for the six months ended February 29, 2024, as compared to $302,848 for the six months ended February 28, 2023.
Net cash provided by financing activities was
$5,100 for the six months ended February 29, 2024, as compared to $(15,000) net cash provided by investing activities for the six months
ended February 28, 2023. The principal use of cash for operating activities was to fund our operating expenses during our development
of the Company.
Net cash at the beginning of the period was $56,655
for the six months ended February 29, 2024 and at the end of such period was $56,655, as compared to $1,362 at the beginning of the period
for the six months ended February 28, 2023 and $10,001 at the end of such period.
Net cash increased by $62,161 during the six months
ended February 29, 2024 as compared to $8,639 for the six months ended February 28, 2023.
Capital Expenditures and Other Obligations
We incurred no capital expenditures during the
six months ended February 29, 2024 and February 28, 2023, respectively.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity
with U.S. generally accepted accounting principles requires our management to make assumptions, estimates and judgments that affect the
amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain
accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for
an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important
to the portrayal of our financial condition and results of operations and require management’s difficult, subjective, or complex
judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in
subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and
because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments.
We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of
our financial statements:
Basis of Accounting
The financial statements are prepared using the
accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.
Use of Estimates
The preparation of financial statements and related
disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts
of income and expenses during the reporting period. Accordingly, actual results could differ from those estimates and such differences
could be material.
Cash and Cash Equivalents
The Company and its Subsidiary define cash equivalents
as highly liquid investments, with original maturities of less than three months that are not held for sale in the ordinary course of
business.
Revenue Recognition
Effective July 1, 2018, the Company and its Subsidiary,
adopted ASC Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”). The new revenue recognition guidance requires
that an entity recognize revenue to depict the transfer of 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. The guidance requires an entity to follow a five
step model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the
transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when
(or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration
only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when
the uncertainty associated with the variable consideration is resolved. The Company and its Subsidiary applied the modified retrospective
method of adoption which resulted in no adjustment as of September 1, 2018 to opening members equity. The new revenue recognition guidance
does not apply to revenue associated with financial instruments, interest income and expense, leasing and insurance contracts.
Significant Judgement
Significant judgement is required to determine
whether performance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance
obligations are identified; when to recognize revenue based on the appropriate measure of the Company and its Subsidiary’s progress
under the contract; and whether constraints on variable consideration should be applied due to uncertain future events.
Advisory fees
Advisory fees are earned by the Subsidiary for
providing general investor-related advice and are earned, in accordance with the terms of their respective contracts, only when performance
obligations have been fully met.
Corporate Advisory Fees
During the current fiscal year the Subsidiary
began offering corporate advisory services, consulting, and investment banking. The firm earns revenues from fees paid by the corporate
customers for these services, as well as underwriting fees and selling concessions. The fees is earned when the performance obligations
of the engagement are fulfilled by the Subsidiary.
Commission Revenue and Related Clearing Expenses
Commissions for brokering securities transaction,
and related clearing expenses are recorded by the Subsidiary when earned, on a trade date basis.
Other revenue
Other revenue includes interest income and reimbursed
postage fees. Postage fee reimbursements are recognized as they are incurred.
Receivables and Contract Balances
Receivables arise when the Company and its Subsidiary
have an unconditional right to receive payment under a contract with a customer and are derecognized when the cash is received. There
are no receivable balances as of February 29, 28, 2024 and 2023.
Contract assets arise when the revenue associated
with the contract is recognized prior to the Company and its Subsidiary’s unconditional right to receive payment under a contract
with a customer (i.e., unbilled receivable) and are derecognized when either it becomes a receivable or the cash is received. Contract
assets are reported in the Consolidated Statement of Financial Condition. As of February 29, 28, 2024 and 2023, contract asset balances
were $0.
Contract liabilities arise when customers remit
contractual cash payments in advance of the Company and its Subsidiary satisfying its performance obligations under the contract and
are derecognized when the revenue associated with the contract is recognized when the performance obligation is satisfied. As of February
29, 28, 2024 and 2023 there were no contract liabilities.
Due from Clearing Brokers
Deposits with clearing brokers consist of deposits
of cash or other short term securities held by other clearing organizations or exchanges. The carrying amounts approximate their fair
value due to their short-term nature. This financial instrument generally has no stated maturities or has short-term maturities and carries
interest rates that approximate market rates
Income Taxes
The Company and its Subsidiary are taxed under
the provisions of Subchapter C of the Internal Revenue Code. The amount of current and deferred taxes payable is recognized as of the
date of the financial statements, utilizing currently enacted tax laws and rates. Deferred tax expenses or benefits are recognized in
the financial statements for the changes in deferred tax liabilities or assets between years. The tax years 2023 ,2022, 2021, 2020, remain
open to examination by the major taxing jurisdictions to which the entity is subject.
Recently Issued Accounting Pronouncements
In February 2016, the FASB issued ASU No. 2016-02,
Leases (“ASU 2016-02”). This update requires all leases with a term greater than 12 months to be recognized on the balance
sheet through a right of use asset and a lease liability and the disclosure of key information pertaining to leasing arrangements. This
new guidance is effective for years beginning after December 15, 2018, with early adoption permitted. The Company and its Subsidiary
are evaluating the effect that ASU 2016-02 will have on its financial statements with related disclosures. The Company and its Subsidiary
believe the impact of the ASU is minimal due to the nature of the lease.
Item 2. Other Information
We have no information to disclose that was required
to be in a report on Form 1-U during the semiannual period covered by this Form 1-SA, but was not reported.
We are an emerging growth company as that term
is used in the Jumpstart Our Business Startups Act of 2012, as amended, and, as such, we have elected to take advantage of certain reduced
public company reporting requirements for this prospectus and future filings.
Item 3. Financial Statements
INDEX TO FINANCIAL STATEMENTS
OF BAKER GLOBAL ASSET MANAGEMENT INC.
| |
Page |
| |
|
| Unaudited
Consolidated Financial Statements for Six Months Ended February 29, 2024 and February 28, 2023 |
|
| Balance
Sheets as of February 29, 2024 and August 31, 2023 |
F-4 |
| Statements
of Operations for the Six Months Ended February 29, 2024 and February 28, 2023 |
F-5 |
| Statements
of Changes in Stockholders’ Equity for the Six Months Ended February 29, 2024 and February 28, 2023 |
F-6 |
| Statements
of Cash Flows for the Six Months Ended February 29, 2024 and February 28, 2023 |
F-7 |
| Notes
to the Unaudited Financial Statements |
F-9 |
BAKER
GLOBAL ASSET MANAGEMENT INC AND SUBSIDIARY
CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE PERIODS SEPTEMBER 1, 2023
TO FEBRUARY 29, 2024 AND SEPTEMBER 1, 2022 TO
FEBRUARY 28, 2023
UNAUDITED
BAKER
GLOBAL ASSET MANAGEMENT INC AND SUBSIDIARY
TABLE OF CONTENTS
FOR THE PERIODS SEPTEMBER 1, 2023
TO FEBRUARY 29, 2024 AND SEPTEMBER 1, 2022 TO
FEBRUARY 28, 2023
BAKER
GLOBAL ASSET MANAGEMENT INC AND SUBSIDIARY
CONSOLIDATED
STATEMENT OF FINANCIAL CONDITION
FEBRUARY 28,29 2023 AND 2024
| | |
February 29,
2024 | | |
August 31,
2023 | |
| | |
| | |
| |
| ASSETS | |
| | |
| |
| Current Assets: | |
| | |
| |
| Cash | |
$ | 118,816 | | |
$ | 56,655 | |
| Total current assets | |
| 118,816 | | |
| 56,655 | |
| | |
| | | |
| | |
| Property and Equipment | |
| | | |
| | |
| | |
| | | |
| | |
| Depreciable assets | |
| 1 ,251 | | |
| | |
| Accumulated depreciation | |
| (1,251 | ) | |
| | |
| Net property and equipment | |
| - | | |
| - | |
| | |
| | | |
| | |
| Other Assets | |
| | | |
| | |
| Investment in Benjamin Securities Inc. | |
| 1,972,188 | | |
| 1,429,980 | |
| Total other assets | |
| 2,091,004 | | |
| 1,486,635 | |
| Total Assets | |
| 2,091,004 | | |
| 1,486,635 | |
| | |
| | | |
| | |
| LIABILTIES AND STOCKHOLDER’S EQUITY | |
| | | |
| | |
| | |
| | | |
| | |
| Current liabilities | |
| | | |
| | |
| Accounts payable | |
| 107,215 | | |
| 107,215 | |
| Loan payable | |
| 460,083 | | |
| 460,083 | |
| Total Liabilities | |
| 567,298 | | |
| 567,298 | |
| | |
| | | |
| | |
| STOCKHOLDER’S EQUITY: | |
| | | |
| | |
| Capital stock | |
| 2,900 | | |
| 2,900 | |
| Preferred stock | |
| 598,015 | | |
| 598,015 | |
| Additional Paid in Capital | |
| 70,100 | | |
| | |
| Return of capital | |
| (682,063 | ) | |
| (682,063 | ) |
| Dividends paid | |
| (157,000 | ) | |
| (92,000 | ) |
| Accumulated deficit | |
| 1,092,485 | | |
| (160,943 | ) |
| Net Income | |
| 599,269 | | |
| 1,253,428 | |
| Total stockholder’s equity | |
| 1,523,706 | | |
| 919,337 | |
| Total liabilities and stockholder’s equity | |
$ | 2,091,004 | | |
$ | 1,486,635 | |
The accompanying notes are an integral part of this statement.
UNAUDITED
BAKER
GLOBAL ASSET MANAGEMENT INC AND SUBSIDIARY
CONSOLIDATED STATEMENT OF INCOME
FOR THE PERIODS SEPTEMBER 1, 2023
TO FEBRUARY 29, 2024 AND SEPTEMBER 1, 2022
TO FEBRUARY 28, 2023
| | |
As of
February 29, 28 | |
| | |
2024 | | |
2023 | |
| Revenue: | |
| | | |
| | |
| Income from Investment in Benjamin Securities | |
$ | 625,458 | | |
$ | 279,208 | |
| | |
| | | |
| | |
| Expenses: | |
| | | |
| | |
| Professional fees | |
| 22,169 | | |
| 24,700 | |
| Other | |
| 4,020 | | |
| 1,660 | |
| Total expenses | |
| 26,189 | | |
| 26,360 | |
| Net profit | |
$ | 599,269 | | |
$ | 252,848 | |
The accompanying notes are an integral
part of this statement.
UNAUDITED
BAKER
GLOBAL ASSET MANAGEMENT INC AND SUBSIDIARY
CONSOLIDATED STATEMENT OF
CHANGES IN STOCKHOLDER’S EQUITY
FOR THE PERIOD OF SEPTEMBER 1, 2023 TO FEBRUARY 29, 2024
| | |
CAPITAL | | |
PREFERRED | | |
CAPITAL | | |
RETURN
OF | | |
DIVIDENDS | | |
PREF
DIVIDENDS | | |
ACCUMULATED | | |
TOTAL
STOCKHOLDER’S
| |
| | |
STOCK | | |
STOCK | | |
ACCOUNT | | |
CAPITAL | | |
PAID | | |
PAID | | |
DEFICIT | | |
EQUITY | |
| STOCKHOLDER’S EQUITY, | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| AUGUST 31, 2022 | |
$ | 2,900 | | |
$ | 598,015 | | |
| | | |
$ | (682,063 | ) | |
$ | (67,000 | ) | |
$ | - | | |
$ | (160,943 | ) | |
$ | (309,091 | ) |
| CAPITAL ADJUSTMENT | |
| | | |
| | | |
| | | |
| - | | |
| | | |
| (15,000 | ) | |
| | | |
| (15,000 | ) |
| NET INCOME | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 252,847 | | |
| 252,847 | |
| STOCKHOLDER’S EQUITY, | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| FEBRUARY 28, 2023 | |
| 2,900 | | |
| 598,015 | | |
| | | |
| (682,063 | ) | |
| (67,000 | ) | |
| (15,000 | ) | |
| 91,904 | | |
| (71,244 | ) |
| CAPITAL ADJUSTMENT | |
| | | |
| | | |
| | | |
| - | | |
| (10,000 | ) | |
| | | |
| | | |
| (10,000 | ) |
| NET INCOME | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 1,000,581 | | |
| 1,000,581 | |
| STOCKHOLDER’S EQUITY, | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| AUGUST 31, 2023 | |
$ | 2,900 | | |
$ | 598,015 | | |
| | | |
$ | (682,063 | ) | |
$ | (77,000 | ) | |
$ | (15,000 | ) | |
$ | 1,092,485 | | |
| 919,337 | |
| CAPITAL ADJUSTMENT | |
| | | |
| | | |
| 70,100 | | |
$ | - | | |
$ | - | | |
| (65,000 | ) | |
| | | |
| 5,100 | |
| NET INCOME | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 599,269 | | |
| 599,269 | |
| STOCKHOLDER’S EQUITY, | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| FEBRUARY 29, 2024 | |
$ | 2,900 | | |
$ | 598,015 | | |
$ | 70,100 | | |
$ | (682,063 | ) | |
$ | (77,000 | ) | |
$ | (80,000 | ) | |
$ | 1,691,754 | | |
| 1,523,706 | |
The accompanying notes are an integral
part of this statement.
UNAUDITED
BAKER GLOBAL ASSET MANAGEMENT
INC AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH
FLOWS
FOR THE PERIOD OF SEPTEMBER 1, 2023
TO FEBRUARY 29, 2024
| | |
For The Period of
September 2023
through
February
2024 | |
| Net Income | |
| 599,269 | |
| Accounts Payable | |
| - | |
| Net cash provided by Operating Activities | |
$ | 599,269 | |
| | |
| | |
| Investing Activities: | |
| | |
| Investment in Benjamin Securities | |
| (542,208 | ) |
| Net cash provided by Investing Activities | |
| (542,208 | ) |
| | |
| | |
| Financing Activities: | |
| | |
| Additional Paid in Capital | |
| 70,100 | |
| Dividends Paid | |
| (65,000 | ) |
| Net cash provided by Financial Activities | |
| 5,100 | |
| Net cash increase for period | |
| 62,161 | |
| Cash at beginning of period | |
| 56,655 | |
| Cash at end of the period | |
| 118,816 | |
The accompanying notes are an integral
part of this statement.
UNAUDITED
BAKER GLOBAL ASSET MANAGEMENT
INC AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH
FLOWS
FOR THE PERIOD OF SEPTEMBER 1, 2022
TO FEBRUARY 28, 2023
| | |
For The Period of
September 2022
through
February
2023 | |
| Net Income | |
$ | 252,848 | |
| Loan Payable | |
| 50,000 | |
| Net cash provided by Operating Activities | |
| 302,848 | |
| | |
| | |
| Investing Activities: | |
| | |
| Investment in Benjamin Securities | |
| (279,208 | ) |
| Net cash used in Investing Activities | |
| (279,208 | ) |
| | |
| | |
| Financing Activities: | |
| | |
| Return of Capital | |
| - | |
| Dividends Paid | |
| (15,000 | ) |
| Net cash provided by Financial Activities | |
| (15,000 | ) |
| Net cash increase for period | |
| 8,640 | |
| Cash at beginning of period | |
| 1,362 | |
| Cash at end of the period | |
| 10,001 | |
The accompanying notes are an integral
part of this statement.
UNAUDITED
BAKER
GLOBAL ASSET MANAGEMENT INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE PERIODS SEPTEMBER 1, 2023
TO FEBRUARY 29, 2024 AND SEPTEMBER 1, 2022 TO
FEBRUARY 28, 2023
1.
Organization and Nature of Business
Baker Global Asset Management, Inc. (the
“Company”) is a Corporation that was formed in the state of New York and commenced operations on May 12, 2010. The Company wholly-owns
Benjamin Securities, Inc. (the “Subsidiary”).
Benjamin Securities, Inc. (the
“Subsidiary”), was incorporated under the laws of the State of Delaware, is a broker-dealer registered with the Securities
and Exchange Commission (“SEC”) and is a member of the Financial Industry Regulatory Authority (“FINRA”). The Company
does not clear trades or carry customer accounts. The Company has entered into clearing agreements with unaffiliated registered broker-dealers
(the “clearing brokers”) that are members of the New York Stock Exchange and other national securities exchanges to provide
these services. The clearing brokers are responsible for customer billing, recordkeeping, custody of securities and securities clearance
on a fully disclosed basis.
The Subsidiary acts as an introducing
broker, and its activities consist of accepting customer orders for equity and fixed income securities that are executed and processed
by the clearing broker.
2. Significant
Accounting Policies
Basis of accounting
The financial
statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the
United States of America.
Use of estimates
The preparation of financial statements
and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported
amounts of income and expenses during the reporting period. Accordingly, actual results could differ from those estimates and such differences
could be material.
Cash and cash equivalents
The Company and its Subsidiary define cash equivalents as
highly liquid investments, with original maturities of less than three months that are not held for sale in the ordinary course of business.
BAKER
GLOBAL ASSET MANAGEMENT INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODS SEPTEMBER 1, 2023
TO FEBRUARY 29, 2024 AND SEPTEMBER 1, 2022 TO
FEBRUARY 28, 2023
2. Significant
Accounting Policies (continued)
Revenue recognition
Effective July 1,
2018, the Company and its Subsidiary, adopted ASC Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”).
The new revenue recognition guidance requires that an entity recognize revenue to depict the transfer of 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. The guidance requires an entity to follow a five step model to (a) identify the contract(s) with a customer, (b) identify
the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the
performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In
determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a
significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the
variable consideration is resolved. The Company and its Subsidiary applied the modified retrospective method of adoption which
resulted in no adjustment as of September 1, 2018 to opening members equity. The new revenue recognition guidance does not apply to
revenue associated with financial instruments, interest income and expense, leasing and insurance contracts.
Significant Judgement
Significant judgement is required to determine
whether performance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance
obligations are identified; when to recognize revenue based on the appropriate measure of the Company and its Subsidiary’s progress under
the contract; and whether constraints on variable consideration should be applied due to uncertain future events.
Advisory fees
Advisory fees are earned by the
Subsidiary for providing general investor-related advice and are earned, in accordance with the terms of their respective contracts, only
when performance obligations have been fully met.
Corporate Advisory Fees
During the current fiscal year the Subsidiary began
offering corporate advisory services, consulting, and investment banking. The firm earns revenues from fees paid by the corporate customers
for these services, as well as underwriting fees and selling concessions. The fees is earned when the performance obligations of the engagement
are fulfilled by the Subsidiary.
Commission Revenue and Related Clearing Expenses
Commissions for brokering securities transaction, and related
clearing expenses are recorded by the Subsidiary when earned, on a trade date basis.
Other revenue
Other revenue includes interest income and reimbursed
postage fees. Postage fee reimbursements are recognized as they are incurred.
BAKER
GLOBAL ASSET MANAGEMENT INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODS SEPTEMBER 1, 2023
TO FEBRUARY 29, 2024 AND SEPTEMBER 1, 2022 TO
FEBRUARY 28, 2023
2. Significant
Accounting Policies (continued)
Revenue recognition (continued)
Receivables and Contract Balances
Receivables arise when the Company and its
Subsidiary have an unconditional right to receive payment under a contract with a customer and are derecognized when the cash is received.
There are no receivable balances as of February 29, 28, 2024 and 2023.
Contract assets arise
when the revenue associated with the contract is recognized prior to the Company and its Subsidiary’s unconditional right to
receive payment under a contract with a customer (i.e., unbilled receivable) and are derecognized when either it becomes a
receivable or the cash is received. Contract assets are reported in the Consolidated Statement of Financial Condition. As of
February 29,28, 2024 and 2023, contract asset balances were $0. Contract liabilities arise when customers remit contractual cash
payments in advance of the Company and its Subsidiary satisfying its performance obligations under the contract and are derecognized
when the revenue associated with the contract is recognized when the performance obligation is satisfied. As of February 29, 28,
2024 and 2023 there were no contract liabilities.
3.
Due from clearing brokers
Deposits with clearing brokers
consist of deposits of cash or other short term securities held by other clearing organizations or exchanges. The carrying amounts approximate
their fair value due to their short-term nature. This financial instrument generally has no stated maturities or has short-term maturities
and carries interest rates that approximate market rates.
4.
Income taxes
The Company and its Subsidiary
are taxed under the provisions of Subchapter C of the Internal Revenue Code. The amount of current and deferred taxes payable is recognized
as of the date of the financial statements, utilizing currently enacted tax laws and rates. Deferred tax expenses or benefits are recognized
in the financial statements for the changes in deferred tax liabilities or assets between years. The tax years 2023,2022, 2021, 2020,
remain open to examination by the major taxing jurisdictions to which the entity is subject.
5.
Recently Issued Accounting Pronouncements
In February 2016, the FASB issued
ASU No. 2016-02, Leases (“ASU 2016-02”). This update requires all leases with a term greater than 12 months to be recognized
on the balance sheet through a right of use asset and a lease liability and the disclosure of key information pertaining to leasing arrangements.
This new guidance is effective for years beginning after December 15, 2018, with early adoption permitted. The Company and its Subsidiary
are evaluating the effect that ASU 2016-02 will have on its financial statements with related disclosures. The Company and its Subsidiary
believe the impact of the ASU is minimal due to the nature of the lease.
BAKER
GLOBAL ASSET MANAGEMENT INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODS SEPTEMBER 1, 2023
TO FEBRUARY 29, 2024 AND SEPTEMBER 1, 2022 TO
FEBRUARY 28, 2023
6.
Financial Instruments with Off-Balance Sheet Risk
In the normal course of business,
the Subsidiary’s customer activities involve the execution and settlement of various customer securities transactions. The activities
may expose the Company and its Subsidiary to off-balance-sheet risk in the event the customer or the other broker is unable to fulfill
its contracted obligations and the Subsidiary has to purchase or sell the financial instrument underlying the contract at a loss. The
Subsidiary does not carry the accounts of their customers and does not process or safekeep customer funds or securities, and is therefore
exempt from rule 15c3-3 of the Securities and Exchange Commission.
7. Concentration
of Credit Risk
Cash
The Company and its Subsidiary
maintain principally all cash balances in two financial institution which, at times, may exceed the amount insured by the Federal Deposit
Insurance Corporation. The exposure to the Company and its Subsidiary is solely dependent upon daily bank balances and the strength of
the financial institution. The Company and its Subsidiary have not incurred any losses on this account. At February 28, 2022 and 2021,
the amount in excess of insured limits were $0, respectively.
8.
Fixed Assets
Fixed assets were fully depreciated as of February 29, 28
2024 and 2023.
BAKER
GLOBAL ASSET MANAGEMENT INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODS SEPTEMBER 1, 2023
TO FEBRUARY 29, 2024 AND SEPTEMBER 1, 2022 TO
FEBRUARY 28, 2023
9.
Note Payable
The Company entered into a note
and warrant agreement with a third party (“the Holder”) on July 19, 2019 which was then amended on September 30, 2020. The Holder
purchased an unsecured promissory note (the “Note”) issued by the Company in the amount of $370,000, at an interest rate of
10% per annum. In connection with such purchase of the Note, the Holder also received a warrant for the purchase of such number of shares
of the Common Stock of the Company, no par value per share that is equal to the quotient of $37,000 divided by divided by the price per
share at which securities of the Company are sold in its next planned offering under Reg A of the Act or any other public or private offering
of its securities (the “Warrant”). The Note and accrued interest was $410,083 as of February 29,28, 2024 and 2023.
The Company received a loan in the amount of $50,000
on October 31, 2022. This loan remains payable as of February 29, 2024.
10.
Subsequent Events
The Company and its Subsidiary
have evaluated events subsequent to the statement of financial condition date for items requiring recording or disclosure in the Consolidated
financial statements. The evaluation was performed through the date the financial statements were available to be issued.
Item 4. Exhibits
| Exhibit
No. |
|
Description |
| 2.1 |
|
Restated Certificate of Incorporation of Baker Global
Asset Management Inc., incorporated by reference to the Company’s Regulation A Offering Statement on Form 1-A as filed with
the SEC on April 20, 2023 |
| 2.2 |
|
Bylaws of Baker Global Asset Management Inc., incorporated
by reference to the Company’s Regulation A Offering Statement on Form 1-A as filed with the SEC on April 20, 2023 |
| 4 |
|
Form of Subscription Agreement, incorporated by reference
to the Company’s Regulation A Offering Statement on Form 1-A as filed with the SEC on April 20, 2023 |
| 6.1 |
|
Agreement of Lease dated July 2013 between Fairfield
Office Park at Hauppauge LLC and Benjamin Securities, Inc., incorporated by reference to the Company’s Regulation A Offering
Statement on Form 1-A as filed with the SEC on April 20, 2023 |
| 6.2 |
|
10% Unsecured Promissory Note between Baker Global
Asset Management, Inc. and MJC Builders of Knollwood, Inc. dated July 16, 2019, incorporated by reference to the Company’s
Regulation A Offering Statement on Amendment No. 2 to Form 1-A as filed with the SEC on June 7, 2023 |
| 6.3 |
|
Lease Extension dated November 21, 2019, incorporated
by reference to the Company’s Regulation A Offering Statement on Form 1-A as filed with the SEC on April 20, 2023 |
| 6.4 |
|
Lease Extension dated October 28, 2020, incorporated
by reference to the Company’s Regulation A Offering Statement on Form 1-A as filed with the SEC on April 20, 2023 |
| 6.5 |
|
Amendment of Lease dated October 9, 2023 between Fairfield
Office Park at Hauppauge LLC and Benjamin Securities Inc., incorporated by reference to the Company’s Annual Report on Form
1-K as filed with the SEC on February 8, 2024 |
| 6.6 |
|
Lease Agreement dated April 24, 2023 between One Palafox
Place, LLC and Benjamin Securities Inc., incorporated by reference to the Company’s Annual Report on Form 1-K as filed with
the SEC on February 8, 2024 |
| 6.7 |
|
Lease Agreement dated October 30, 2023 between Brigantia
LLC and Benjamin Securities Inc., incorporated by reference to the Company’s Annual Report on Form 1-K as filed with the SEC
on February 8, 2024 |
| 6.8 |
|
Placement Agent Agreement dated April 19, 2023 between
Baker Global Asset Management, Inc. and Alexander Capital, L.P., incorporated by reference to the Company’s Regulation A Offering
Statement on Form 1-A as filed with the SEC on April 20, 2023 |
| 6.9 |
|
Fully Disclosed Clearing Agreement dated August 20,
2013 between RBC Capital Markets, LLC and Benjamin Securities, Inc., incorporated by reference to the Company’s Regulation
A Offering Statement on Form 1-A as filed with the SEC on April 20, 2023 |
| 6.10 |
|
FINRA Membership Agreement CRD No. 7754 with respect
to Benjamin Securities, Inc. dated June 14, 2022, incorporated by reference to the Company’s Regulation A Offering Statement
on Form 1-A as filed with the SEC on April 20, 2023 |
| 6.11 |
|
Amendment to Placement Agent Agreement dated May 18,
2023 between Baker Global Asset Management, Inc. and Alexander Capital, L.P., incorporated by reference to the Company’s Regulation
A Offering Statement on Amendment No. 1 to Form 1-A as filed with the SEC on May 19, 2023 |
| 6.12 |
|
Form of Lock-Up Agreement, incorporated by reference
to the Company’s Regulation A Offering Statement on Amendment No. 1 to Form 1-A as filed with the SEC on May 19, 2023 |
SIGNATURES
Pursuant to the requirements
of Regulation A, the issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: May 31, 2024 |
BAKER GLOBAL ASSET MANAGEMENT, INC. |
| |
|
| |
/s/
William Thomas Baker |
| |
Name: |
William Thomas Baker |
| |
Title: |
CEO, President and Chief
Compliance Officer |
Pursuant to the requirements
of Regulation A, this report has been signed below by the following persons on behalf of the issuer and in the capacities and on the
dates indicated.
| SIGNATURE |
|
TITLE |
|
DATE |
| |
|
|
|
|
| /s/
William Thomas Baker |
|
CEO, President
and Chief Financial Officer |
|
May
31, 2024 |
| William Thomas Baker |
|
(principal executive
officer and
principal financial and accounting officer) |
|
|
7
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