Capital Financial (CPFH) 10-Q 14 Nov 14 2014 Q3 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	9 Months Ended
	Sep. 30, 2014
Document And Entity Information	'
Entity Registrant Name	'Capital Financial Holdings, Inc
Entity Central Index Key	'0000944696
Document Type	'10-Q
Document Period End Date	30-Sep-14
Amendment Flag	'false
Current Fiscal Year End Date	'--12-31
Is Entity a Well-known Seasoned Issuer?	'No
Is Entity a Voluntary Filer?	'No
Is Entity's Reporting Status Current?	'Yes
Entity Filer Category	'Smaller Reporting Company
Entity Common Stock, Shares Outstanding	1,241
Document Fiscal Period Focus	'Q3
Document Fiscal Year Focus	'2014

CONDENSED_CONSOLIDATED_BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Sep. 30, 2014	Dec. 31, 2013
CURRENT ASSETS	'	'
Cash and cash equivalents	$1,093,608	$1,665,123
Accounts receivable (net of an allowance of $24,000 for 2014 and 2013)	1,834,368	1,733,765
Prepaids	47,935	77,915
Total current assets	2,975,911	3,476,803
PROPERTY AND EQUIPMENT	'	'
Property and equipment	423,607	387,974
Less accumulated depreciation	-323,824	-301,207
Net property and equipment	99,783	86,767
OTHER ASSETS	'	'
Goodwill	2,132,026	2,132,026
Severance escrow	257,605	257,412
Baron notes receivable	500,000	0
Deferred tax asset - non-current	339,179	501,403
Other assets (net of accumulated amortization of $214,444 for 2014 and 2013)	180,841	180,663
Total other assets	3,409,651	3,071,504
TOTAL ASSETS	6,485,345	6,635,074
CURRENT LIABILITIES	'	'
Accounts payable	189,384	340,244
Commissions payable	1,836,391	1,861,049
Other current liabilities	62,713	48,096
Settlements payable	0	22,000
Line of credit	252,179	200,723
Total current liabilities	2,340,667	2,472,112
TOTAL LIABILITIES	2,340,667	2,472,112
STOCKHOLDERS' EQUITY	'	'
Series A preferred stock - 5,000,000 shares authorized, $.0001 par value; 3,050,000 and 3,050,000 shares issued and 0 outstanding, respectively	305	305
Additional paid in capital - series A preferred stock	1,524,695	1,524,695
Common stock - 1,000,000,000 shares authorized, $.0001 par value; 1,241 and 1,446 shares issued and outstanding, respectively	1,241	1,241
Additional paid in capital - common stock	10,221,515	10,221,515
Accumulated deficit	-6,303,078	-6,284,794
Less Treasury stock, 3,050,000 preferred shares at $0.4262	-1,300,000	-1,300,000
TOTAL STOCKHOLDERS' EQUITY	4,144,678	4,162,962
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$6,485,345	$6,635,074

CONDENSED_CONSOLIDATED_BALANCE1

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Sep. 30, 2014	Dec. 31, 2013
CURRENT ASSETS	'	'
Allowance for doubtful accounts	$24,000	$24,000
OTHER ASSETS	'	'
Accumulated amortization	$214,444	$214,444
STOCKHOLDERS' EQUITY	'	'
Series A Preferred stock, par value	$0.00	$0.00
Series A Preferred stock shares authorized	5,000,000	5,000,000
Series A Preferred stock shares issued	3,050,000	3,050,000
Series A Preferred stock shares outstanding	0	0
Common stock, par value	$0.00	$0.00
Common stock shares authorized	1,000,000,000	1,000,000,000
Common stock shares issued	1,241	1,241
Common stock shares outstanding	1,446	1,446
Treasury stock	3,050,000	3,050,000

CONDENSED_CONSOLIDATED_STATEME

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
OPERATING REVENUES	'	'	'	'
Fee income	$242,620	$255,660	$817,456	$776,260
Commissions	5,197,621	4,804,955	14,894,807	14,751,599
Interest and other income	179,477	192,555	468,058	430,534
Total revenue	5,619,718	5,253,170	16,180,321	15,958,393
OPERATING EXPENSES	'	'	'	'
Compensation and benefits	445,915	309,549	1,091,835	968,430
Commission expense	4,730,498	4,470,304	13,892,303	13,599,949
General and administrative expenses	295,476	256,487	887,417	898,132
Depreciation and amortization	7,778	5,733	22,617	18,779
Total operating expenses	5,479,667	5,042,073	15,894,172	15,485,290
OPERATING INCOME	140,051	211,097	286,149	473,103
OTHER INCOME (EXPENSES)	'	'	'	'
Interest expense	-2,418	-1,701	-11,705	-5,607
Interest income	10,477	0	10,477	0
INCOME OF OPERATIONS BEFORE INCOME TAX EXPENSE	148,110	209,396	284,921	467,496
INCOME TAX EXPENSE	-135,775	-84,728	-303,206	-193,372
NET INCOME	$12,335	$124,668	($18,285)	$274,124
NET INCOME PER COMMON SHARE:	'	'	'	'
Basic	$10	$93	($15)	$194
Diluted	$10	$93	($15)	$194
Basic	1,241	1,341	1,241	1,410
Diluted	1,241	1,341	1,241	1,410

CONDENSED_CONSOLIDATED_STATEME1

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES	'	'
Net Income (loss)	($18,285)	$274,124
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:	'	'
Depreciation	22,617	18,779
Deferred income taxes	162,224	19,911
(Increase) decrease in:	'	'
Accounts receivable	-100,603	-443,672
Prepaids & Other	29,803	35,851
Severance escrow	-193	-3,151
Accounts Payable	-150,860	84,537
Commissions Payable	-24,658	526,388
Other liabilities	14,617	-68,944
Net cash (used in) provided by operating activities	-65,338	443,823
CASH FLOWS FROM INVESTING ACTIVITIES	'	'
Purchase of property and equipment	-35,633	-23,637
Baron notes receivable	-500,000	0
Net cash used in investing activities	-535,633	-23,637
CASH FLOWS FROM FINANCING ACTIVITIES	'	'
Repayment of short-term borrowings	51,456	-125,668
Decrease in settlements payable	-22,000	22,000
Proceeds from short-term borrowings	0	297,048
Payments on short-term borrowings	0	-24,293
Retirement of shares	0	-224,991
Repayment of promissory note	0	-67,173
Net cash used in financing activities	29,456	-123,077
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	-571,515	297,109
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	1,665,123	1,221,606
CASH AND CASH EQUIVALENTS AT END OF PERIOD	1,093,608	1,518,715
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:	'	'
Cash paid for interest on promissory note	0	5,512
Cash paid for interest on line of credits	5,763	0
Cash paid for interest on taxes	$5,933	$0

1_BASIS_OF_PRESENTATION

1. BASIS OF PRESENTATION	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
NOTE 1 - BASIS OF PRESENTATION	'
	The accompanying condensed consolidated financial statements of Capital Financial Holdings, Inc., a North Dakota corporation, and its subsidiaries, Capital Financial Services, Inc. (“CFS”) and Capital Natural Resources, Inc. (“CNR”) (collectively, the "Company"), included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).  All significant intercompany balances and transactions have been eliminated in consolidated. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the footnotes thereto contained in the Annual Report on Form 10-K for the year ended December 31, 2013, of Capital Financial Holdings, Inc., as filed with the SEC.  The condensed consolidated balance sheet at December 31, 2013, contained herein, was derived from audited financial statements, but does not include all disclosures included in the Form 10-K and applicable under accounting principles generally accepted in the United States of America.  Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America, but not required for interim reporting purposes, have been condensed or omitted.
	In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments (which are of a normal, recurring nature) necessary for a fair presentation of the financial statements.  The results of operations for the nine months ended September 30, 2014, are not necessarily indicative of operating results for the entire year.

2_RECENTLY_ADOPTED_ACCOUNTING_

2. RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
NOTE 2 - RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS	'
	A summary of our significant accounting policies is included in Note 1 of our 2013 Form 10-K filed on March 18, 2014.
	ASU 2014-15 —Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern was issued in August of 2014. The Company has not adopted this update as of September 30, 2014, as it was not applicable to the Company at this time. It is not known at this time whether the updated pronouncement will have an impact on the Company.

3_RECLASSIFICATION

3. RECLASSIFICATION	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
NOTE 3 - RECLASSIFICATION	'
	Certain amounts in the 2013 condensed consolidated financial statements have been reclassified to conform to the 2014 presentation.  These reclassifications had no effect on the Company’s net income (loss).

4_BARON_NOTES_RECEIVABLE

4. BARON NOTES RECEIVABLE	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
NOTE 4 - BARON NOTES RECEIVABLE	'
	On June 9, 2014, the Company launched a new wholly-owned operating subsidiary, Capital Natural Resources, Inc., by acquiring 1,000,000 shares, .001 par value common stock of Capital Natural Resources, Inc. for the amount of $100,000. Capital Natural Resources, Inc. will seek opportunities related to natural resources in the United States, including petroleum, natural gas and/or other minerals, water resources and land. The new subsidiary is expected to diversify the business operations of the Company and is unrelated to any current or past business. On June 17, 2014, the Company acquired an additional 400,000 shares, .001 par value common stock of CNR for the amount of $40,000.  On July 21, 2014, the Company acquired an additional 3,750,000 shares, .001 par value of common stock of CNR for the amount of $375,000. As of September 30, 2014, the Company owned 5,150,000 shares of CNR.
	On June 11, 2014, June 27, 2014, and July 22, 2014, Baron Energy, Inc., issued promissory notes receivable to Capital Natural Resources, Inc. (the “note holder”) in the amounts of $85,000, $40,000 and $375,000 respectively. The three notes carry an interest rate of 15% per annum, payable monthly, and mature on June 12, 2016, June 28, 2016 and July 23, 2016 respectively.  As of September 30, 2014, notes held with Baron Energy, Inc. carried a balance of $500,000. At maturity, the notes are convertible at the option of the note holder into specified non-operating minority working interests in approximately 8,000 acres of Baron Energy, Inc.’s oil and gas operations in Frio County, Texas.  As additional compensation to the note holder, at the maturity of the notes, regardless of whether the note holder elects to convert the principal of the notes to non-operating minority working interests, the note holder will be assigned specified non-operating minority working interests in approximately 8,000 acres of Baron Energy, Inc.’s oil and gas operations in Frio County, Texas.  The note holder also has the option to receive additional working interests if it extends the maturity dates of the notes. Interest income earned the quarter ended September 30, 2014, was $10,477.

5_GOODWILL

5. GOODWILL	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
NOTE 5 - GOODWILL	'
	The Company’s goodwill represents the excess of purchase prices over the fair value of the identifiable net assets of previously acquired broker/dealer businesses.  The goodwill is not amortized; instead it is tested for impairment annually or more frequently if the fair value of a reporting unit is below its carrying value. Absent any impairment indicators, the Company performs its annual goodwill impairment testing as of June 30 of each year.
	The Company’s policy is to test goodwill for impairment using a fair value approach at the reporting unit level.  The Company performs its goodwill impairment test in two steps.  Step one compares the fair value of the reporting unit to its carrying value, including goodwill.  If the fair value of the unit determined in step one is lower than its carrying value, the Company proceeds to step two, which then compares the carrying value of goodwill to its implied fair value.  Any excess of carrying value of goodwill over its implied fair value at a reporting unit is recorded as impairment.
	The valuation methodology the Company utilizes in testing the Company’s goodwill for impairment is based on the income approach.  The income approach is based on a discounted cash flow methodology in which expected future net cash flows are discounted to present value, using a discounted rate that compensates for the risk in attaining the projected cash flows.  This approach is dependent upon a number of significant management estimates about future performance including but not limited to, market performance, income taxes, capital spending and working capital changes.
	The Company tests goodwill for impairment annually during the second quarter of each fiscal year.  If an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value, goodwill will be evaluated for impairment between annual tests. There were no events that occurred nor a change in circumstances that would more likely than not reduce the fair value of a reporting unit below its carrying value during the third quarter in 2014. In compliance with its annual testing policy, the Company performed a complete two step analysis on its goodwill. It was determined that the Company’s book value was below the fair market value for the Company, indicating that no impairment was required.

6_LINE_OF_CREDIT

6. LINE OF CREDIT	9 Months Ended
	Sep. 30, 2014
Debt Disclosure [Abstract]	'
NOTE 6. LINE OF CREDIT	'
	On August 9, 2013, the Company signed loan documents for a line of credit with a local bank, American Bank Center, in the amount of $300,000 in order to help fund the cash redemption of less than whole shares which resulted from the 1:10,000 reverse stock split, which occurred on August 14, 2013. The line of credit has a variable interest rate of 1.509 percent above Wall Street Journal U.S. Prime Rate. The Company makes monthly interest payments. The loan matured August 8, 2014.  The Company set up monthly payments with an automatic payment of $25,000. There are no financial covenants associated with the line of credit. On July 9, 2014, the Company made a monthly payment of $25,000 to the line of credit. On July 17, 2014, the Company made a final payment to the line of credit in the amount of $29,422 closing this line of credit. As of September 30, 2014, there is no longer an outstanding balance on this line of credit.
	On July 14, 2014, the Company signed new loan documents for a line of credit with American Bank Center in the amount of $300,000.The line of credit has a variable interest rate of 1.509 percent above Wall Street Journal U.S. Prime Rate which was 3.25% as of September 30, 2014. The Company makes monthly interest payments. The loan matures with the principal due on July 14, 2015. The Company has set up monthly payments with an automatic payment of $25,000. As of September 30, 2014, the outstanding balance was $252,179 and interest expense on this line of credit was $2,064.

7_STOCK_WARRANTS_STOCK_SPLITS_

7. STOCK WARRANTS, STOCK SPLITS, AND STOCK OPTIONS	9 Months Ended
	Sep. 30, 2014
Stock Warrants Stock Splits And Stock Options	'
NOTE 7 - STOCK WARRANTS, STOCK SPLITS, AND STOCK OPTIONS	'
	The Company measures and records compensation expense for all share-based payment awards made to employees and directors, including employee stock options, based on estimated fair values.  There were no compensation costs or deferred tax benefits recognized for stock-based compensation awards for the nine months ended September 30, 2014 and 2013. Changes are due to the stock buyback and reverse stock split.
	Option activity for the twelve months ended December 31, 2013 and the nine months ended September 30, 2014 was as follows:
		Number of		Weighted Average Exercise Price per Share		Weighted Average Grant Date Fair Value		Aggregate
		Options						Intrinsic Value
	Outstanding on January 1, 2013		539	$	5,400	$	2,800	$	-
	Granted		-		-		-
	Exercised		-		-		-
	Canceled		-		-		-
	Outstanding on December 31, 2013		539	$	5,400	$	2,800	$	-
	Granted		-		-		-
	Exercised		-		-		-
	Canceled		124		-		-
	Outstanding on September 30, 2014		415	$	5,400	$	2,800	$	-
	Exercisable options totaled 538.8113 at December 31, 2013 and totaled 414.5613 at September 30, 2014.

8_INCOME_TAXES

8. INCOME TAXES	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
NOTE 8 - INCOME TAXES	'
	Deferred taxes arise because of different tax treatment between financial statement accounting and tax accounting, known as “temporary differences.” The Company records the tax effect of these temporary differences as “deferred tax assets” (generally items that can be used as a tax deduction or credit in future periods) and “deferred tax liabilities” (generally items for which the Company has received a tax deduction and has not yet been recorded in the consolidated statement of operations).
	Management reviews and adjusts those estimates annually based upon the most current information available. However, because the recoverability of deferred taxes is directly dependent upon the future operating results of the Company, actual recoverability of deferred taxes may differ materially from management’s estimates.
	The provision for income taxes is based on earnings before income taxes reported for financial statement purposes and consisted of the following: as of September 30, 2014, current income tax expense was $106,425 and deferred tax expense was $196,781. Of the $196,781 recorded as deferred tax expense approximately $150,000 was due to the stock options associated with stock compensation valued under the Black Scholes model that were reduced as of September 30, 2014.

9_EARNINGS_PER_SHARE

9. EARNINGS PER SHARE	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
NOTE 9 - EARNINGS PER SHARE	'
	Basic earnings per share are computed by dividing earnings available to common shareholders by the weighted average number of common shares outstanding during the period.  Diluted earnings per share reflect per share amounts that would have resulted if dilutive potential common shares had been converted to common shares.  The following reconciles amounts reported in the financial statements:
		Three Months Ended September 30, 2014								Three Months Ended September 30, 2013
		Numerator			Denominator		Per Share Amount			Numerator		Denominator		Per Share Amount
	Net (Loss) Income	$	12,335								124,668
	Less:  Preferred Stock Dividends
	Income Available to Common Shareholders – Basic Earnings per Share	$	12,335			1,241		10			124,668		1,341	$	93
	Effect of Dilutive Securities:
	Preferred Stock Dividends
	Stock Options and Warrants
	Income Available to Common Shareholders – Diluted Earnings per Share	$	12,335			1,241		10			124,668		1,341	$	93
		Nine Months Ended September 30, 2014								Nine Months Ended September 30, 2013
		Numerator			Denominator		Per Share Amount			Numerator		Denominator		Per Share Amount
	Net (Loss) Income	$	(18,285	)							274,124
	Less:  Preferred Stock Dividends
	Income Available to Common Shareholders – Basic Earnings per Share	$	(18,285	)		1,241		(15	)		274,124		1,410	$	194
	Effect of Dilutive Securities:
	Preferred Stock Dividends
	Stock Options and Warrants
	Income Available to Common Shareholders – Diluted Earnings per Share	$	(18,285	)		1,241		(15	)		274,124		1,410	$	194
	Options and warrants to purchase 624,3613 common shares at exercise prices between $3,500 and $14,300 were outstanding at September 30, 2014, but were not included in the computation of diluted earnings per share for the quarter ending September 30, 2014 and September 30, 2013, because their effect was anti-dilutive.

10_FAIR_VALUE_DISCLOSURES

10. FAIR VALUE DISCLOSURES	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
NOTE 10 - FAIR VALUE DISCLOSURES	'
	The Company has adopted a framework for measuring fair value, and establishes a fair value hierarchy which prioritizes the inputs to valuation techniques.  Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market.  Valuation techniques that are consistent with the market, income or cost approach are used to measure fair value.
	The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value in three broad levels:
	● Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities the Company has the ability to access.
	● Level 2 inputs are inputs (other than quoted prices included within level 1) that are observable for the asset or liability, either directly or indirectly.
	● Level 3 are unobservable inputs for the asset or liability and rely on management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability.  (The unobservable inputs should be developed based on the best information available in the circumstances and may include the Company’s own data.)
	The application of valuation techniques applied to similar assets and liabilities has been consistently applied.  The following is a description of the valuation methodologies used for instruments measured at fair value:
	On February 12, 2009, CFS entered into a settlement agreement with a client, which resulted in CFS purchasing the client’s investment in the Omega 2007 Drilling Program 1, LP.  This limited partnership carries a “presentment” feature which allows CFS to sell the investment to the General Managing Partner of the limited partnership; and this feature has become available.  CFS had determined based off of the information provided by the Limited Partnership that the fair market value of the $76,876 investment was estimated at $45,000 based on discounted cash flows at the time of purchase by CFS which was included in other assets at December 31, 2013. Since then, CFS determined, based off of information provided by the Limited Partnership that, as of March 19, 2013, the fair market value of this $76,876 investment was $12,214, based on discounted cash flows. In May of 2013, CFS opted to exercise the “presentment” feature and was paid the current value of the investment in the amount of $11,923. No balance remains as of September 30, 2014.
	The Company has accumulated cash for the possible future payments of severance and benefits for senior management, should they leave. This is an accrual the Company has elected to set aside for possible future obligations. These funds are reflected as Severance Escrow on the balance sheet, and consist of cash accounts.
		Carrying Value at September 30, 2014								Quarter ended
		Total		Level 1		Level 2		Level 3		September 30,
										2014
										Total Losses
	Severance Escrow	$	257,605	$	257,605		-		-		-
		Carrying Value at September 30, 2013								Quarter ended
		Total		Level 1		Level 2		Level 3		September 30,
										2013
										Total Losses
	Severance Escrow	$	257,347	$	257,347	$	-	$	-	$	-

11_LEGAL_PROCEEDINGS

11. LEGAL PROCEEDINGS	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
NOTE 10. LEGAL PROCEEDINGS	'
	The Company operates in a legal and regulatory environment that exposes it to potentially significant litigation risks. Issuers of certain alternative products sold by the Company are in Bankruptcy or may have other financial difficulties. As a result of such alleged failings of alternative products and the uncertainty of client recovery from the various product issuers, the Company is subject to several legal and/or arbitration proceedings. These proceedings include customer suits and arbitrations related to the failure of Medical Capital, other alternative investments alleged to be unsuitable, the bankruptcy proceedings of the various DBSI entities and the bankruptcy of other various entities. The Company vigorously contests the allegations of the various proceedings and believes that there are multiple meritorious legal and fact based defenses in these matters. Such cases are subject to many uncertainties, and their outcome is often difficult to predict, including the impact on operations or on the financial statements, particularly in the earlier stages of a case. The Company makes provisions for cases brought against it when, in the opinion of management after seeking legal advice, it is probable that a liability exists, and the amount can be reasonably estimated. The current proceedings are subject to uncertainties and, as such, the Company is unable to estimate the possible loss or range of loss that may result from the outcome of these cases; however, results in these cases that are against the interests of the Company could have a severe negative impact on the financial position of the Company. As of October 28, 2014, the Company is a defendant in four on-going suits or arbitrations as discussed above. The Company expects to vigorously defend and ultimately prevail in these cases. During 2012, the Company settled a lawsuit that required a $22,000 payment in 2013 and an additional $22,000 payment during 2014. The additional and final payment was booked as a current liability as of December 31, 2013, and payment was made on April 25, 2014, in the amount of $22,000. No further payments will be required on the aforementioned settled proceedings.

12_SUBSEQUENT_EVENTS

12. SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
NOTE 12. SUBSEQUENT EVENTS	'
	On November 12, 2014, the Company issued a press release entitled “Capital Financial Holdings, Inc. Announces Capital Dividend” announcing that the Board of Directors approved a cash capital dividend of $50 per share payable on the company’s common stock.  The dividend is payable on approximately December 24, 2014 to shareholders of record as of the record date, December 12, 2014.  The ex-dividend date for the dividend is December 10, 2014.

13_OPERATING_SEGMENTS

13. OPERATING SEGMENTS	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
NOTE 13 - OPERATING SEGMENTS	'
	Segment Information
		Holding			Natural Resource			Broker-Dealer
	As of, and for the three months ended:	Company			Activities			Services			Total
	30-Sep-14
	Revenues from external customers		28			10477			5,619,690			5,630,195
	Interest expense		(2,409	)		-			(9	)		(2,418	)
	Depreciation and amortization		764			-			7,014			7,778
	Income (loss) before income tax benefit (expense)		(151,538	)		1,114			298,534			148,110
	Income tax benefit (expense)		(20,473	)		1,736			(117,038	)		(135,775	)
	Net income (loss)		(172,012	)		2,851			181,496			12,335
		Holding			Natural Resource			Broker-Dealer
	As of, and for the three months ended:	Company			Activities			Services			Total
	30-Sep-13
	Revenues from external customers		2,799			-			5,250,371			5,253,170
	Interest Expense		(1,701	)		-			-			(1,701	)
	Depreciation and amortization		714			-			5,019			5,733
	Income (loss) before income tax benefit (expense)		(137,684	)		-			347,080			209,396
	Income tax benefit (expense)		51,238			-			(135,966	)		(84,728	)
	Net income (loss)		(86,446	)		-			211,114			124,668
		Holding			Natural Resource			Broker-Dealer
	As of, and for the nine months ended:	Company			Activities			Services			Total
	30-Sep-14
	Revenues from external customers		883			10,477			16,179,438			16,190,798
	Interest expense		(11,696	)		-			(9	)		(11,705	)
	Depreciation and amortization		2,679			-			19,938			22,617
	Income (loss) before income tax benefit (expense)		(336,790	)		(10,061	)		631,772			284,921
	Income tax benefit (expense)		(61,656	)		6,117			(247,667	)		(303,206	)
	Net income (loss)		(398,446	)		(3,944	)		384,105			(18,285	)
		Holding			Natural Resource			Broker-Dealer
	As of, and for the nine months ended:	Company			Activities			Services			Total
	30-Sep-13
	Revenues from external customers		4,541			-			15,953,852			15,958,393
	Interest Expense		(5,607	)		-			-			(5,607	)
	Depreciation and amortization		2,275			-			16,504			18,779
	Income (loss) before income tax benefit (expense)		(437,403	)		-			904,899			467,496
	Income tax benefit (expense)		161,373			-			(354,745	)		(193,372	)
	Net income (loss)		(276,030	)		-			550,154			274,124

7_STOCK_WARRANTS_STOCK_SPLITS_1

7 - STOCK WARRANTS, STOCK SPLITS, AND STOCK OPTIONS (Tables)	9 Months Ended
	Sep. 30, 2014
Stock Warrants Stock Splits And Stock Options	'
Option activity	'
		Number of		Weighted Average Exercise Price per Share		Weighted Average Grant Date Fair Value		Aggregate
		Options						Intrinsic Value
	Outstanding on January 1, 2013		539	$	5,400	$	2,800	$	-
	Granted		-		-		-
	Exercised		-		-		-
	Canceled		-		-		-
	Outstanding on December 31, 2013		539	$	5,400	$	2,800	$	-
	Granted		-		-		-
	Exercised		-		-		-
	Canceled		124		-		-
	Outstanding on September 30, 2014		415	$	5,400	$	2,800	$	-

9_EARNINGS_PER_SHARE_Tables

9. EARNINGS PER SHARE (Tables)	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
Basic Earning per share	'
		Three Months Ended September 30, 2014								Three Months Ended September 30, 2013
		Numerator			Denominator		Per Share Amount			Numerator		Denominator		Per Share Amount
	Net (Loss) Income	$	12,335								124,668
	Less:  Preferred Stock Dividends
	Income Available to Common Shareholders – Basic Earnings per Share	$	12,335			1,241		10			124,668		1,341	$	93
	Effect of Dilutive Securities:
	Preferred Stock Dividends
	Stock Options and Warrants
	Income Available to Common Shareholders – Diluted Earnings per Share	$	12,335			1,241		10			124,668		1,341	$	93
		Nine Months Ended September 30, 2014								Nine Months Ended September 30, 2013
		Numerator			Denominator		Per Share Amount			Numerator		Denominator		Per Share Amount
	Net (Loss) Income	$	(18,285	)							274,124
	Less:  Preferred Stock Dividends
	Income Available to Common Shareholders – Basic Earnings per Share	$	(18,285	)		1,241		(15	)		274,124		1,410	$	194
	Effect of Dilutive Securities:
	Preferred Stock Dividends
	Stock Options and Warrants
	Income Available to Common Shareholders – Diluted Earnings per Share	$	(18,285	)		1,241		(15	)		274,124		1,410	$	194

10_FAIR_VALUE_DISCLOSURES_Tabl

10. FAIR VALUE DISCLOSURES (Tables)	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
Fair Value disclosure	'
		Carrying Value at September 30, 2014								Quarter ended
		Total		Level 1		Level 2		Level 3		September 30,
										2014
										Total Losses
	Severance Escrow	$	257,605	$	257,605		-		-		-
		Carrying Value at September 30, 2013								Quarter ended
		Total		Level 1		Level 2		Level 3		September 30,
										2013
										Total Losses
	Severance Escrow	$	257,347	$	257,347	$	-	$	-	$	-

13_OPERATING_SEGMENTS_Tables

13. OPERATING SEGMENTS (Tables)	9 Months Ended
	Sep. 30, 2014
Notes to Financial Statements	'
Segment Information	'
		Holding			Natural Resource			Broker-Dealer
	As of, and for the three months ended:	Company			Activities			Services			Total
	30-Sep-14
	Revenues from external customers		28			10477			5,619,690			5,630,195
	Interest expense		(2,409	)		-			(9	)		(2,418	)
	Depreciation and amortization		764			-			7,014			7,778
	Income (loss) before income tax benefit (expense)		(151,538	)		1,114			298,534			148,110
	Income tax benefit (expense)		(20,473	)		1,736			(117,038	)		(135,775	)
	Net income (loss)		(172,012	)		2,851			181,496			12,335
		Holding			Natural Resource			Broker-Dealer
	As of, and for the three months ended:	Company			Activities			Services			Total
	30-Sep-13
	Revenues from external customers		2,799			-			5,250,371			5,253,170
	Interest Expense		(1,701	)		-			-			(1,701	)
	Depreciation and amortization		714			-			5,019			5,733
	Income (loss) before income tax benefit (expense)		(137,684	)		-			347,080			209,396
	Income tax benefit (expense)		51,238			-			(135,966	)		(84,728	)
	Net income (loss)		(86,446	)		-			211,114			124,668
		Holding			Natural Resource			Broker-Dealer
	As of, and for the nine months ended:	Company			Activities			Services			Total
	30-Sep-14
	Revenues from external customers		883			10,477			16,179,438			16,190,798
	Interest expense		(11,696	)		-			(9	)		(11,705	)
	Depreciation and amortization		2,679			-			19,938			22,617
	Income (loss) before income tax benefit (expense)		(336,790	)		(10,061	)		631,772			284,921
	Income tax benefit (expense)		(61,656	)		6,117			(247,667	)		(303,206	)
	Net income (loss)		(398,446	)		(3,944	)		384,105			(18,285	)
		Holding			Natural Resource			Broker-Dealer
	As of, and for the nine months ended:	Company			Activities			Services			Total
	30-Sep-13
	Revenues from external customers		4,541			-			15,953,852			15,958,393
	Interest Expense		(5,607	)		-			-			(5,607	)
	Depreciation and amortization		2,275			-			16,504			18,779
	Income (loss) before income tax benefit (expense)		(437,403	)		-			904,899			467,496
	Income tax benefit (expense)		161,373			-			(354,745	)		(193,372	)
	Net income (loss)		(276,030	)		-			550,154			274,124

6_LINE_OF_CREDIT_Details_Narra

6. LINE OF CREDIT (Details Narrative) (USD $)	9 Months Ended
	Sep. 30, 2014
Debt Disclosure [Abstract]	'
Variable interest rate	1.51%
Prime Rate	3.25%
Interest expense	$2,064
Outstanding line of credit	$252,179

7_STOCK_WARRANTS_STOCK_SPLITS_2

7. STOCK WARRANTS, STOCK SPLITS, AND STOCK OPTIONS (Details) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Stock Warrants Stock Splits And Stock Options Details	'	'
Number of options, Outstanding Beginning	539	539
Number of options, Granted	'	'
Number of options, Exercised	'	'
Number of options, Canceled	124	'
Number of options, Outstanding Ending	415	539
Weighted Average Exercise Price per Share, Beginning	$5,400	$5,400
Weighted Average Exercise Price per Share, Granted	'	'
Weighted Average Exercise Price per Share, Exercised	'	'
Weighted Average Exercise Price per Share, Canceled	'	'
Weighted Average Exercise Price per Share, Ending	$5,400	$5,400
Weighted Average Grant Date Fair Value, Beginning	$2,800	$2,800
Weighted Average Grant Date Fair Value, Granted	'	'
Weighted Average Grant Date Fair Value, Exercised	'	'
Weighted Average Grant Date Fair Value, Canceled	'	'
Weighted Average Grant Date Fair Value, Ending	$2,800	$2,800
Aggregate Intrinsic Value, Beginning	'	'
Aggregate Intrinsic Value, Granted	'	'
Aggregate Intrinsic Value, Exercised	'	'
Aggregate Intrinsic Value, Canceled	'	'
Aggregate Intrinsic Value, Ending	'	'

7_STOCK_WARRANTS_STOCK_SPLITS_3

7. STOCK WARRANTS, STOCK SPLITS, AND STOCK OPTIONS (Details Narrative)	Sep. 30, 2014	Dec. 31, 2013
Stock Warrants Stock Splits And Stock Options Details Narrative	'	'
Exercisable options	414.5613	538.8113

8_INCOME_TAXES_Details_Narrati

8. INCOME TAXES (Details Narrative) (USD $)	9 Months Ended
	Sep. 30, 2014
Income Taxes Details Narrative	'
Stock compensation recorded through tax expense	$106,425

9_EARNINGS_PER_SHARE_Details

9. EARNINGS PER SHARE (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Net (Loss) Income	$12,335	$124,668	($18,285)	$274,124
Numerator [Member]	'	'	'	'
Net (Loss) Income	12,335	124,668	-18,285	274,124
Income Available to Common Shareholders - Basic Earnings per Share	12,335	124,668	-18,285	274,124
Effect of Dilutive Securities:	'	'	'	'
Income Available to Common Shareholders - Diluted Earnings per Share	12,335	124,668	-18,285	274,124
Denominator [Member]	'	'	'	'
Income Available to Common Shareholders - Basic Earnings per Share	1,241	1,341	1,241	1,410
Effect of Dilutive Securities:	'	'	'	'
Income Available to Common Shareholders - Diluted Earnings per Share	$1,241	$1,341	$1,241	$1,410
Basic, per share amount	$10	$93	($15)	$194
Diluted, per share amount	$10	$93	($15)	$194

9_EARNINGS_PER_SHARE_Details_N

9. EARNINGS PER SHARE (Details Narrative) (USD $)	9 Months Ended
	Sep. 30, 2014
Earnings Per Share Details Narrative	'
Incremental Common Shares Attributable to Call Options and Warrants	6,243,613
Common shares minimum exercise prices	$3,500
Common shares maximum exercise prices	$14,300

10_FAIR_VALUE_DISCLOSURES_Deta

10. FAIR VALUE DISCLOSURES (Details) (USD $)	Sep. 30, 2014	Sep. 30, 2013
Components of accumulated cash for the possible future payments	'	'
Severance Escrow	$257,605	$257,347
Level 1 [Member]	'	'
Components of accumulated cash for the possible future payments	'	'
Severance Escrow	257,605	257,347
Level 2 [Member]	'	'
Components of accumulated cash for the possible future payments	'	'
Severance Escrow	'	'
Level 3 [Member]	'	'
Components of accumulated cash for the possible future payments	'	'
Severance Escrow	'	'

13_OPERATING_SEGMENTS_Details

13. OPERATING SEGMENTS (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Revenues from external customers	$5,619,718	$5,253,170	$16,180,321	$15,958,393
Interest expense	-2,418	-1,701	-11,705	-5,607
Depreciation and amortization	7,778	5,733	22,617	18,779
Income (loss) before income tax benefit (expense)	148,110	209,396	284,921	467,496
Income tax benefit (expense)	135,775	84,728	303,206	193,372
Net income (loss)	12,335	124,668	-18,285	274,124
Holding Company	'	'	'	'
Revenues from external customers	28	2,799	883	15,953,852
Interest expense	-2,409	-1,701	-11,696	0
Depreciation and amortization	764	714	2,679	16,504
Income (loss) before income tax benefit (expense)	-151,538	-137,684	-336,790	904,899
Income tax benefit (expense)	-20,473	51,238	-61,656	-354,745
Net income (loss)	-172,012	-86,446	-398,446	550,154
Natural Resource Activities	'	'	'	'
Revenues from external customers	10,477	0	10,477	0
Interest expense	0	0	0	0
Depreciation and amortization	0	0	0	0
Income (loss) before income tax benefit (expense)	1,114	0	-10,061	0
Income tax benefit (expense)	1,736	0	6,117	0
Net income (loss)	2,851	0	-3,944	0
Broker-Dealer Services	'	'	'	'
Revenues from external customers	5,619,690	5,250,371	16,179,438	4,541
Interest expense	-9	0	-9	-5,607
Depreciation and amortization	7,014	5,019	19,938	2,275
Income (loss) before income tax benefit (expense)	298,534	347,080	631,772	-437,403
Income tax benefit (expense)	-117,038	-135,966	-247,667	161,373
Net income (loss)	$181,496	$211,114	$384,105	($276,030)