# BCG SECURITIES, INC. X-17A-5 (2021-03-01) — Broker-dealer annual report - Company: BCG SECURITIES, INC. - Form: X-17A-5 - Filed: 2021-03-01 - Period: 2020-12-31 - Accession: 0000009319-21-000001 - CIK: 9319 - File #: 8-12680 - Material weakness: No - Auditor: Citrin Cooperman Company LLP - Auditor location: Livingston, NJ - Contact: Matthew Pribila - Phone: 856-368-7201 - Signed by: Adam Paglione (President) Original filing: https://www.sec.gov/Archives/edgar/data/9319/000000931921000001/benefitconsultants.pdf --- {0}------------------------------------------------ UNITEDSTATES SECURITIESANDEXCHANGECOMMISSION Washington, D.C. 20549 SEC FILE NUMBER 8 # hours per response.. . . . . 12.00 ANNUAL AUDITED REPORT FORM X-17A-5 PART III | | OFFICIAL USE ONLY | |-----------------------------------------------|-------------------| | | FIRM I.D. NO. | | | | | | | | | | | | | | | | | | | | | | | | | | if individual, state last, first, middle name | | | | | | | | | | | | | | | | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | \*Claims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis for the exemption. See Section 240.17a-5(e)(2) Potential persons who are to respond to the collection of information contained in this form are not required to respond SEC 1410 ( ) unless the form displays a currently valid OMB control number. {1}------------------------------------------------ ### OATH OR AFFIRMATION | I. Adam Paglione | swear ======================================================================================================================================================================== | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | BCG Securities, Inc. | my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of
and and the control as as a second of the same of the same of the same of the same of the second the second the second the second the states of the second the states of the s | | 26
of February | are the success of concerner of 2021 | | classified solely as that of a customer, except as follows: | neither the company nor any partner, principal officer or director has any proprietary interest in any account | | Commonwealth of Pennsylvania - Notary Seal
DEBORAH A. CELLICH, Notary Public
Delaware County
My Commission Expires October 24, 2022
Commission Number 1025112 | Signature
President | | | Title | | Notary Public | | | This report ** contains (check all applicable boxes):
V (a) Facing Page.
(b) Statement of Financial Condition.
V
of Comprehensive Income (as defined in §210.1-02 of Regulation S-X).
7 (d) Statement of Changes in Financial Condition. < (e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital.
(f) Statement of Changes in Liabilities Subordinated to Claims of Creditors.
(g) Computation of Net Capital.
(h) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3.
(i) Information Relating to the Possession or Control Requirements Under Rule 15c3-3.
consolidation.
(1) An Oath or Affirmation.
(m) A copy of the SIPC Supplemental Report. | (c) Statement of Income (Loss) or, if there is other comprehensive in the period(s) presented, a Statement
(i) A Reconciliation, including appropriate explanation of Net Capital Under Rule 15c3-1 and the
Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3.
(k) A Reconciliation between the audited Statements of Financial Condition with respect to nethods of
(n) A report describing any material inadequacies found to have existed since the date of the previous audit. | | ** For conditions of confidential treatment of certain portions of this filing, see section 240.17a-5(e)(3). | | | | | {2}------------------------------------------------ Financial Statements and Supplemental Schedules December 31, 2020 (With Report of Independent Registered Public Accounting Firm) {3}------------------------------------------------ ## Table of Contents | | Page | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------| | Report of Independent Registered Public Accounting Firm | 1-2 | | Statement of Financial Condition | 3 | | Statement of Operations | 4 | | Statement of Changes in Stockholder's Equity | 5 | | Statement of Cash Flows | 6 | | Notes to Financial Statements | 7-15 | | Schedule I - Computation of Net Capital Pursuant to Rule 15c3-1 of the Securities and Exchange
Commission | 16 | | Schedule II - Computation for Determination of Reserve Requirements and Information Relating to
Possession or Control Requirements Under Rule 15c3-3 of the Securities and Exchange | | | Commission | 17 | | Report of Independent Registered Public Accounting Firm Regarding Rule 15c3-3 Exemption | 18 | | Rule 15c3-3 Exemption Report | 19 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) # REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholder and Board of Directors of BCG Securities, Inc. ### Opinion on the Financial Statements We have audited the accompanying statement of financial condition of BCG Securities, Inc. as of December 31, 2020, and the related statements of operations, changes in stockholder's equity, and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of BCG Securities, Inc. as of December 31, 2020, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. ### Basis for Opinion These financial statements are the responsibility of BCG Securities, Inc.'s management. Our responsibility is to express an opinion on BCG Securities, Inc.'s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to BCG Securities, Inc. in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. {5}------------------------------------------------ ![](_page_5_Picture_0.jpeg) ### Auditor's Report on Supplemental Information The supplemental information contained in Schedules I and II has been subjected to audit procedures performed in conjunction with the audit of BCG Securities, Inc.'s financial statements. The supplemental information is the responsibility of BCG Securities, Inc.'s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 C.F.R. §240.17a-5. In our opinion, the supplemental information contained in Schedules I and II is fairly stated, in all material respects, in relation to the financial statements as a whole. We have served as BCG Securities, Inc.'s auditor since 2018. Livingston, New Jersey February 26, 2021 {6}------------------------------------------------ # BCG SECURITIES, INC. Statement of Financial Condition December 31, 2020 ### Assets | Cash | S | 1,875,879 | |--------------------------------------------------------------------------------------------------------------------------|---|-----------| | Due from clearing broker, includes clearing deposit of \$100,000 | | 237,976 | | Commissions receivable | | 510,321 | | Notes receivable | | 66,779 | | Prepaid expenses | | 10,000 | | Current tax asset | | 62,099 | | Indefinite lived intangible assets | | 823,966 | | Other intangible assets, net of accumulated amortization of \$752,131 | | 642,158 | | Deferred tax asset | | 1,808,183 | | Total assets | | 6,037,361 | | 2000 - 1 - 4 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - | | | ### Liabilities and Stockholder's Equity | Liabilities | | |----------------------|--------------| | Commissions payable | 641,548
S | | Accrued expenses | 1,042 | | Due to related party | 757.972 | | Income tax payable | ર્જિક | | Total liabilities | 1,400,857 | | Stockholder's equity | |----------------------| |----------------------| | Common stock, \$.25 par value; authorized 200,000 shares; issued 110,000 shares; | | |----------------------------------------------------------------------------------|----------------| | outstanding 18,000 shares | 27.500 | | Additional paid-in capital | 12,880,400 | | Accumulated deficit | (8,004,496) | | | 4,903,404 | | 92,000 shares of treasury stock at cost | (266,900) | | Total stockholder's equity | 4,636,504 | | Total liabilities and stockholder's equity | S
6.037.361 | {7}------------------------------------------------ # BCG SECURITIES, INC. Statement of Operations For the year ended December 31, 2020 ### Revenues | Commissions
Selling and distribution fees
Miscellaneous | S
1,442,607
8,954,242
51,509 | |---------------------------------------------------------------|---------------------------------------| | | 10,448,358 | | Costs and expenses | | | Commissions | 7,393,302 | | Compensation and benefits | 1,507,920 | | Clearing firm | 262,171 | | Communications and IT | 176,503 | | Facility and related costs | 173,629 | | Subscription and training | રુ, 985 | | Travel and entertainment | 14,558 | | Professional fees | 93,275 | | Regulatory | 77,399 | | Amortization | 321,766 | | Impairment of Goodwill and intangible assets | 9,905,397 | | Other | 43,971 | | | 20,029,876 | | Loss before benefit from income taxes | (9,581,518) | | Benefit from income taxes | (1,818,404) | | Net loss | S
(7,763,114) | {8}------------------------------------------------ # Statement of Changes in Stockholder's Equity For the year ended December 31, 2020 BCG SECURITIES, INC. | | | Additional | | | | | |------------------------------|--------|------------|-------------------|----------|-------------|--| | | Common | | Shares
Paid-in | Treasury | | | | Balance at January 1, 2020 | | | 18,000 | | | | | Net loss | | | (7,763,114) | | (7,763,114) | | | Balance at December 31, 2020 | | | 18,000 | | | | | | | | | | | | {9}------------------------------------------------ # BCG SECURITIES, INC. Statement of Cash Flows For the year ended December 31, 2020 | Cash flows from operating activities | | | |---------------------------------------------------------------------------------|---|-------------| | Net loss | S | (7,763,114) | | Adjustments to reconcile net loss to net cash provided by operating activities: | | | | Reduction of note receivable due to compensation | | 26,667 | | Deferred tax asset | | (1,803,672) | | Amortization of other intangible assets | | 321.766 | | Impairment of Goodwill and intangible assets | | 9,905,397 | | Changes in assets and liabilities: | | | | Due from clearing broker | | (193,578) | | Commissions receivable | | 201,261 | | Advances to registered representative | | 146 | | Prepaid expenses | | 55.440 | | Current tax asset | | (188,563) | | Commissions payable | | (416,751) | | Accrued expenses | | (35,334) | | Due to related party | | 812.454 | | Net cash provided by operating activities | | 922,119 | | Cash used in investing activities | | | | Advances of notes receivable to registered representative | | (25,000) | | Net increase in cash | | 897.119 | | Cash, beginning of year | | 978,760 | | Cash, end of year | S | 1,875,879 | {10}------------------------------------------------ (b) Revenue Recognition ### (a) Use of Estimates {11}------------------------------------------------ Notes to the Financial Statements December 31, 2020 instrument, counterparties are identified, the pricing is agreed upon and the risks and rewards of ownership have transferred to/from the customer. In its relationship with Pershing LLC, the clearing broker, the Company acts in an agent capacity, and therefore, commission revenue is recorded net of the commission expenses paid to registered representatives. In its relationship with other fund companies or product sponsors of the mutual fund products, the Company acts in a principal capacity, and therefore, commission revenue is recorded gross on the statement of operations. For other types of contracts, such as fixed and variable annuities and life products, the Company acts in an agent capacity, and therefore, commission revenue is recorded net of the commission expenses paid to registered representatives. (b) Selling and Distribution Fees - The Company has entered into selling agreements with investment companies, mutual funds and insurance companies to offer the sale of their shares or products. The Company's compensation is established by the contract between the Company and the fund for which the Company is selling shares. Contracts may be structured with distribution fees that become determinative at different times, including upfront, over time, upon an investor's redemption, or a combination thereof. Upfront distribution fees are generally a fixed percentage of the share price. Compensation from ongoing 12b-1-1 fees is generally variable as the fees are contingent upon the net asset value (NAV). Historically, the Company receives an agreed-upon quarterly fee based on assets under management and a performance incentive fee. There are significant variable constraints which makes estimating the 12b-1 fees impracticable before they are known. therefore 12b-1 fees are recognized as revenue only when determinable. The Company agrees to provide ongoing customer monitoring and maintain customer relationships. As such, the Company acts in a principal capacity, and therefore, fees are recorded gross on the statement of operations. The following table presents the disaggregated revenue from contracts with customers reported for the year ended December 31, 2020: Commission revenue and execution and clearing costs: Mutual funds S 700.455 Variable annuities and life products 396,057 Stock, bonds, and other securities 346.095 Total commission 1,442,607 8.954.242 Selling and distribution fees Total 10,396,849 The following table presents the opening and closing balances of receivables from contracts with customers. | Receivable as of January 1, 2020 | 711-582 | |------------------------------------|---------| | Receivable as of December 31, 2020 | 510.321 | | Change increase (decrease) | | {12}------------------------------------------------ (c) Commissions Receivable (d) Comprehensive Income (e) Income Taxes Comprehensive Income (f) Goodwill and Other Intangible Assets Income Taxes {13}------------------------------------------------ (g) Long-Lived Assets Property, Plant and Equipment. (h) Advertising (i) Business Concentrations (j) Recently Adopted Accounting Standards Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments {14}------------------------------------------------ ### Notes to the Financial Statements December 31, 2020 In January 2020, the Company entered an agreement with another registered representative to loan him \$20,000. Subsequently, an additional \$5,000 was lent to him in July 2020. The note bears an interest rate of 2.63%. The Company will forgive one-third of the loan balance when the representative achieves the first revenue milestone. In addition, \$581 of interest income was accrued for this note. Therefore, the loan balance was \$25,581 as of December 31, 2020. In the ordinary course of business, the Company may have noninterest-bearing advances to registered representatives due to reoccurring fees. At December 31, 2020, \$13,334 was due from these representatives. ### Acquisitions (4) On January 2, 2019, 100 percent of the Company's stock was acquired by Horace Mann Educators Corporation from BCG with a transaction valued at \$12,400,000. The Company elected ASU 2014-17, Business Combinations (Topic 805): Pushdown Accounting and recognized goodwill and other intangible assets as a result of the purchase accounting. Other intangible assets that are amortizable have lives of 16 years. The following summarizes the consideration transferred for the Parent to acquire the Company and the amounts of identified assets acquired and liabilities assumed at the acquisition date: \$ 12.400.000 Fair value of consideration transferred | Cash | S | 765.000 | |-------------------------------------------------|---|--------------| | Commissions receivable | | 672.000 | | Value of distribution acquired intangible asset | | 5,003,000 | | Tradename intangible asset | | 1,495,624 | | Other assets | | 103.348 | | Commissions payable | | (1,063,000) | | Accrued expenses and other liabilities | | (201,000) | | Total identifiable net assets | | 6.774.972 | | Goodwill | | \$ 5,625,028 | The Goodwill is attributable to the workforce of the acquired business and significant synergies expected to arise after the acquisition. The entire amount of goodwill is expected to be deductible for tax purposes. ### (5) Goodwill and Intangible Assets Goodwill: The change in goodwill during the year is as follows: | Beginning of year | ಳ | 5.625.028 | |-------------------|---|-------------| | Acquired goodwill | | | | Impairment | | (5.625.028) | | End of year | | | Impairment exists when a reporting unit's carrying value of goodwill exceeds its fair value. On October 1, 2020, the Company had positive equity and elected to perform a qualitative assessment to determine if it was more likely than not that the fair value of the reporting unit exceeded its carrying value, including goodwill. The qualitative assessment indicated that it was more likely than not that the carrying value of the reporting unit exceeded its fair value. Therefore, the Company proceeded to complete the quantitative impairment test. The quantitative impairment test includes comparing the carrying value of the reporting unit, including the existing goodwill, to the fair value of the reporting unit. If the carrying amount of the reporting unit exceeds its fair value, a goodwill impairment charge is recorded for the amount in which the carrying value of the reporting unit exceeds the fair value of the reporting unit, up to the amount of goodwill attributed to the {15}------------------------------------------------ Notes to the Financial Statements December 31, 2020 reporting unit. After performing the quantitative testing, it was determined that the carrying amount exceeds the reporting unit's fair value, resulting in an impairment charge of \$5,625,028 for the year ended December 31, 2020. The facts and circumstances that led to an impairment of goodwill included lower expected future commission revenue due to loss of certain advisor branches. Goodwill balance is required to be reviewed for impairment at least annually or more frequently if events occur or circumstance change that would indicate that a "triggering event", as defined in FASB ASC Topic 350, Intangible - Goodwill and Other, has occurred. No other triggering events occurred during the year ended December 31, 2020. Tradename Intangible Asset: During 2020, the Company lost a few advisor branches. Accordingly, the Company evaluated the ongoing value of the tradename intangible asset from the acquisition by Horace Mann Educators Corporation. Based on the evaluation, the Company determined that this indefinite-lived asset with a carrying amount of \$1,495,624 was no longer fully recoverable and was in fact impaired and written down to its estimated fair value of \$823,966. This resulted in an impairment of \$671,658. Fair value was based on expected future cash flows using Level 3 input under ASC 820. The cash flows are those expected to be generated by the market participants, discounted at the risk-free rate of interest. Other Intangible Assets: Other intangible assets from the acquisition by Horace Mann Educators Corporation were as follows at year-end: | | Gross | | |--------------------------------|--------------|--------------| | | Carrying | Accumulated | | | Amount | Amortization | | Amortized intangible assets: | | | | Value of distribution acquired | \$ 1.394.289 | \$ 752.131 | Aggregate amortization expense was \$321,766 for the year ended December 31, 2020. Estimated amortization expense for each of the next five years are as follows: | 2021 | S | 77,869 | |------|---|--------| | 2022 | | 44.467 | | 2023 | | 45.093 | | 2024 | | 45.928 | | 2025 | | 46,763 | During 2020, the Company lost a few advisor branches. Accordingly, the Company evaluated the ongoing value of distribution acquired by Horace Mann Educators Corporation. Based on the evaluation, the Company determined that this long-lived asset with a carrying amount of \$5,003,000 was no longer fully recoverable and was in fact impaired and wrote it down to its estimated fair value. This resulted in an impairment loss of \$3,608,711. Fair value was based on expected future cash flows using Level 3 inputs under ASC 820. The cash flows are those expected to be generated by the market participants, discounted at the risk-free rate of interest ### (6) Transactions with Related Parties The Company has common management with the Parent and receives administrative services from other subsidiaries of the Parent, and is a party to several intercompany service agreements, including the one with Horace Mann Service Corporation (HMSC). The Company also pays commission to its registered representatives, who are on salary basis, via HMSC, an employer service affiliate of the Company. The Company paid \$1,977,858 for the management, administrative and professional services, and commission {16}------------------------------------------------ Notes to the Financial Statements December 31, 2020 expenses in 2020. Of this total, \$1,498,457 is included in compensation and benefits expenses, \$5,293 in travel and entertainment expenses, \$3,494 in subscription and training, \$139,996 in facility and related costs, \$165,673 in communications and IT expenses, \$74,297 in professional fees, \$17,891 in regulatory fees, and \$72,757 in other expenses on the statement of operations. Intercompany balances are settled monthly. At December 31, 2020, the Company had a net payable of \$757,972 to this related party. ### (7) Income Taxes The Company paid income tax of \$173,831 to the Parent in 2020. | Current tax asset | S | 62,099 | |------------------------------|---|--------------| | Current state tax liability | | (295) | | Deferred tax asset | | 1,808,183 | | Deferred state tax liability | | | | Net income tax asset | | \$ 1,869,987 | The "temporary differences" that gave rise to the deferred tax balances at December 31, 2020 were as follows: | Deferred tax assets: | | | |---------------------------------------|---|--------------| | Pension and employee benefits | S | 50,596 | | Non-deductible accruals | | 2.585 | | Total gross deferred tax assets | | 53.181 | | Deferred tax liabilities: | | | | Fixed assets | | 640 | | Goodwill and intangibles amortization | | (1,755,642) | | Total gross deferred tax liabilities | | (1,755,002) | | Net deferred tax asset | | \$ 1.808.183 | Based on the Company's historical earnings, future expectations of adjusted taxable income, as well as reversing gross deferred tax liabilities, the Company believes it is more likely than not that gross deferred tax assets will be fully realized and that a valuation allowance with respect to the realization of the total gross deferred tax assets is not necessary. At December 31, 2020, the Company had no available carryforwards or credits. The components of the income tax benefit for 2020 were as follows: | Current | \$ (14,732) | |--------------------------|---------------| | Deferred | (1.803.672) | | Total income tax benefit | \$(1,818,404) | Income tax expense differed from the expected tax computed by applying the federal corporate rate of 21% to income before income taxes as follows: | Expected federal tax on income | \$(2,012,119) | |-----------------------------------|---------------| | Add tax effects of: | | | Allocated non-deductible expenses | 5,372 | | Employee share-based compensation | (7,124) | | Goodwill impairment | 187.467 | | State tax expense (net) | 8.000 | | Total income tax expense | \$(1,818,404) | {17}------------------------------------------------ Notes to the Financial Statements December 31, 2020 The Company's federal income tax returns for years prior to 2017 are no longer subject to examination by the Internal Revenue Service (IRS). The Company classifies all interest and penalties as income tax expense. As of December 31, 2020, the Company has recorded \$0 in liabilities for tax related interest and penalties on its statement of financial condition. ### (8) Employee Pension and Postretirement Benefits All of the Company's personnel are employees of HMSC. Salaries, pension and related benefits are allocated by HMSC to the Company for these services. Employees participate, to the extent they meet the minimum eligibility requirements, in various benefit plans sponsored by the Parent sponsors two qualified and three non-qualified retirement plans. Substantially all employees participate in the Horace Mann 401(k) plan. The Parent matches each dollar of employee contributions in the 401(k) plan up to a 5% maximum - in addition to providing an automatic 3% "safe harbor" contribution. The Company's contribution vests after 5 years of service. Expense allocated by HMSC to the Company in 2020 for the plans total \$188,036, and is located in compensation and benefits expenses in the statement of operations. ### Net Capital Requirement (9) The Company, as a broker-dealer, is subject to the SEC's net capital requirements. Those requirements prohibit a broker-dealer from engaging in any securities transaction at a time when (a) its "aggregate indebtedness" exceeds 15 times its "net capital," as those terms are defined in Rule 15c3-1; or (b) its net capital is less than the minimum required. At December 31, 2020 the Company's net capital was \$1,112,629, which was \$1,019,238 in excess of minimum requirement of \$93,391. The Company's ratio of aggregate indebtedness to net capital was 1.26 to 1. ### (10) Concentration of Credit Risk Concentration of credit risk with respect to commissions receivable is limited due to the large number of customers comprising the Company's customer base and their dispersion across different geographic regions. As of December 31, 2020, the Company had no significant concentration of credit risk. The Company is engaged in various trading and brokerage activities in which counterparties primarily include broker-dealers, banks, and other financial institutions. In the event that counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty or issuer of the instrument. It is the Company's policy to review, as necessary, the credit standing of each counterparty. ### (11) Uncertainty During 2020, the World Health Organization declared COVID-19 to constitute a "Public Health Emergency of International Concern." This pandemic has disrupted economic markets and the economic impact, duration and spread of the COVID-19 virus are uncertain at this time. The impact on financial markets and the overall economy, all of which are highly uncertain, cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, the Company's results may be affected. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. {18}------------------------------------------------ ### BCG SECURITIES, INC. Notes to the Financial Statements December 31, 2020 ### (12) Subsequent Events The Company evaluated its December 31, 2020 financial statements for subsequent events through February 26, 2021, the date on which that the financial statements were issued. The Company is not aware of any subsequent events which would require recognition or disclosure in the financial statements. {19}------------------------------------------------ # Schedule I BCG SECURITIES, INC. Computation of Net Capital Under Rule 15c3-1 of the Securities and Exchange Commission December 31, 2020 | Total Stockholder's equity | ಕಿ | 4,636,504 | |--------------------------------------------------------------|-------|-----------| | Less nonallowable assets | | | | Commissions receivable | | 110,690 | | Notes receivable | | 66,779 | | Prepaid expenses | | 10,000 | | Current tax asset | | 62,099 | | Indefinite lived intangible assets | | 823,966 | | Other intangible assets, net | | 642,158 | | Deferred tax asset | | 1,808,183 | | Total deductions | | 3,523,875 | | Net capital | ಿಕ | 1,112,629 | | Aggregate indebtedness - total liabilities | ಕಿ | 1,400,857 | | Required net capital | | | | (the greater of \$5,000 or 6 2/3% of aggregate indebtedness) | ಕಾ | 93,391 | | Excess net capital | સ્ત્ર | 1,019,238 | | Ratio of aggregate indebtedness to net capital | | 1.26 : 1 | There are no material differences between the computation of net capital presented above and the computation of net capital reported in the Company's unaudited Form X-17A-5, Part IIA filing as of December 31, 2020. {20}------------------------------------------------ ### Schedule II BCG SECURITIES, INC. Computation for Determination of Reserve Requirements and Information Relating to Possession or Control Requirements Under Rule 15c3-3 of the Securities and Exchange Commission December 31, 2020 The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934 in that the Company's activities are limited to those set forth in the conditions for exemption appearing in paragraph (k)(2)(ii). See Report of Independent Registered Public Accounting Firm {21}------------------------------------------------ ![](_page_21_Picture_0.jpeg) ### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholder and the Board of Directors of BCG Securities, Inc. We have reviewed management's statements, included in the accompanying Exemption Report, in which (1) BCG Securities, Inc. identified the following provisions of 17 C.F.R. §15c3-3(k) under which BCG Securities, Inc. claimed an exemption from 17 C.F.R. §240.15c3-3: (k)(2)(ii) (the "exemption provisions") and (2) BCG Securities, Inc. stated that BCG Securities, Inc. met the identified exemption provisions throughout the most recent fiscal year without exception. BCG Securities, Inc.'s management is responsible for compliance with the exemption provisions and its statements. Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included inquiries and other required procedures to obtain evidence about BCG Securities, Inc.'s compliance with the exemption provisions. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to management's statements referred to above for them to be fairly stated, in all material respects, based on the provisions set forth in paragraph (k)(2)(ii) of Rule 15c3-3 under the Securities Exchange Act of 1934. Livingston, New Jersey February 26, 2021 {22}------------------------------------------------ ### Rule 15c3-3 Exemption Report For the Year Ended December 31, 2020 BCG Securities, Inc. (the "Company") is a registered broker-dealer subject to Rule 17a-5 promulgated by the Securities and Exchange Commission (17 C.F.R. §240.17a-5, "Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R. §240.17a-5(d)(1) and (4). To the best of its knowledge and belief, the Company states the following: The Company claimed an exemption from 17 C.F.R. \$240.15c3-3 under the following provisions of 17 C.F.R. §240.15c3-3 (k)(2)(ii). The Company met the identified exemption provisions and is in compliance in all aspects of business, including business with our clearing broker and direct business with companies outside of our clearing broker, in 17 C.F.R. §240.15c3-3 (k)(2)(i) throughout the year ended December 31, 2020 without exception. BCG Securities, Inc. I, Adam Paglione, swear (or affirm) that, to my best knowledge and belief, this Exemption Report is true and correct. By: President February 26,2021 Commonwealth of Pennsylvania - Notary Seal DEBORAH A. CELLICH, Notary Public Delaware County My Commission Expires October 24, 2022 Commission Number 1025112 {23}------------------------------------------------ SIPC Assessment Reconciliation December 31, 2020 (With Independent Auditors' Report Thereon) {24}------------------------------------------------ ![](_page_24_Picture_0.jpeg) # REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON APPLYING AGREED-UPON PROCEDURES To the Stockholder and the Board of Directors of BCG Securities, Inc. We have performed the procedures included in Rule 17a-5(e)(4) under the Securities Exchange Act of 1934 and in the Securities Investor Protection Corporation ("SIPC") Series 600 Rules, which are enumerated below and were agreed to by BCG Securities, Inc. (the "Company") and the SIPC, solely to assist you and SIPC in evaluating BCG Securities, Inc.'s compliance with the applicable instructions of the General Assessment Reconciliation (Form SIPC-7) for the year ended December 31, 2020. The Company's management is responsible for its Form SIPC-7 and for its compliance with those requirements. This agreed-upon procedures engagement was conducted in accordance with standards established by the Public Company Accounting Oversight Board (United States) and in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures we performed and our findings are as follows: - 1. Compared the listed assessment payments in Form SIPC-7 with respective cash disbursement records entries, noting no differences; - 2. Compared the Total Revenue amounts reported on the Annual Audited Report Form X-17A-5 Part III for the year ended December 31, 2020, with the Total Revenue amount reported in Form SIPC-7 for the year ended December 31, 2020, noting no differences; - 3. Compared any adjustments reported in Form SIPC-7 with supporting schedules and working papers, noting no differences; - 4. Recalculated the arithmetical accuracy of the calculations reflected in Form SIPC-7 and in the related schedules and working papers supporting the adjustments, noting no differences; and {25}------------------------------------------------ ![](_page_25_Picture_0.jpeg) 5. Compared the amount of any overpayment applied to the current assessment with the Form SIPC-7 on which it was originally computed, noting no differences. We were not engaged to and did not conduct an examination or a review, the objective of which would be the expression of an opinion or conclusion, respectively, on the Company's compliance with the applicable instructions of the Form SIPC-7 for the year ended December 31, 2020. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the information and use of the Company and SIPC and is not intended to be and should not be used by anyone other than these specified parties. Livingston, New Jersey February 26, 2021 {26}------------------------------------------------ | SIPC-7 | | |----------------|--| | (36-REV 12/18) | | SECURITIES INVESTOR PROTECTION CORPORATION P.O. Box 92185 Washington, D.C. 20090-2185 202-371-8300 General Assessment Reconciliation (36-REV 12/18) | or the fiscal year ended 12/31/2020 | | | | | | | | |-------------------------------------|--|--|--|--|--|--|--| |-------------------------------------|--|--|--|--|--|--|--| (Read carefully the instructions in your Working Copy before completing this Form) ### TO BE FILED BY ALL SIPC MEMBERS WITH FISCAL YEAR ENDINGS 1. Name of Member, address, Designated Examining Authority, 1934 Act registration no. and month in which fiscal year ends for purposes of the audit requirement of SEC Rule 17a-5: 8\*14\*\*\*\*\*\*\*999\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\* 12680 FINRA DEC BCG SECURITIES INC 51 HADDONFIELD RD STE 210 CHERRY HILL, NJ 08002-4801 Note: If any of the information shown on the mailing label requires correction, please e-mail any corrections to form@sipc.org and so indicate on the form filed. Name and telephone number of person to contact respecting this form. Matthew Pribila 856-368-720 - 2. A. General Assessment (item 2e from page 2) - B. Less payment made with SIPC-6 filed (exclude interest) 23 120 Date Paid - C. Less prior overpayment applied - D. Assessment balance due or (overpayment) - E. Interest computed on late payment (see instruction E) for\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ - F. Total assessment balance and interest due (or overpayment carried forward) - G. PAYMENT: V the box Check mailed to P.O. Box □ Funds Wired □ Total (must be same as F above) - H. Overpayment carried forward 3. Subsidiaries (S) and predecessors (P) included in this form (give name and 1934 Act registration number): The SIPC member submitting this form and the person by whom it is executed represent thereby that all information contained herein is true, correct and complete. Dated the 25 day of February , 2021 orporation, - Paring ship or other organization (Authorized Signature . W:TTE This form and the assessment payment is due 60 days after the end of the liscal year. Retain the Working Copy of this form for a period of not less than 6 years, the latest 2 years in an easily accessible place. | | | Received | Reviewed | | |--|-----------------------|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------| | | Postmarked Postmarked | | Documentation ________________________________________________________________________________________________________________________________________________________________ | Forward Copy | | | | | | | | | | | | | {27}------------------------------------------------ ![](_page_27_Picture_0.jpeg) # DETERMINATION OF "SIPC NET OPERATING REVENUES" AND GENERAL ASSESSMENT Amounts for the fiscal period beginning 1/1/2020 and ending 12/31/2020 Eliminate cents 497 448 Item No. 2a. Total revenue (FOCUS Line 12/Part IIA Line 9, Code 4030) 2h. Additions' - (1) Total revenues from the securities business of subsidiaries (except foreign subsidiaries) and predecessors not included above. - (2) Net loss from principal transactions in securities in trading accounts. - (3) Net loss from principal transactions in commodities in trading accounts. - (4) Interest and dividend expense deducted in determining item 2a. - (5) Net loss from management of or participation in the underwriting or distribution of securities. - (6) Expenses other than advertising, printing, registration fees and legal fees deducted in determining net profit from management of or participation in underwriting or distribution of securities. - (7) Net loss from securities in investment accounts. Total additions ### 2c. Deductions: - (1) Revenues from the distribution of shares of a registered open end investment company or unit investment trust, from the sale of variable annuities, from the business of insurance, from investment advisory services rendered to registered investment companies or insurance company separate accounts, and from transactions in security futures products. - (2) Revenues from commodity transactions. - (3) Commissions, floor brokerage and clearance paid to other SIPC members in connection with securities transactions. - (4) Reimbursements for postage in connection with proxy solicitation. - (5) Net gain from securities in investment accounts. - (6) 100% of commissions and markups earned from transactions in (i) certificates of deposit and (ii) Treasury bills, bankers acceptances or commercial paper that mature nine months or less from issuance date. - (7) Direct expenses of printing advertising and legal fees incurred in connection with other revenue related to the securities business (revenue defined by Section 16(9)(L) of the Act). - (8) Other revenue not related either directly or indirectly to the securities business. (See Instruction C): (Deductions in excess of \$100,000 require documentation) - (9) (i) Total interest and dividend expense (FOCUS Line 22/PART IIA Line 13, Code 4075 plus line 2b(4) above) but not in excess of total interest and dividend income. - (ii) 40% of margin interest earned on customers securities accounts (40% of FOCUS line 5, Code 3960). Enter the greater of line (i) or (ii) Total deductions - 2d. SIPC Net Operating Revenues - 2e. General Assessment @ .0015 268, 989 228 (to page 1, line 2.A.) Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.