# KEEL POINT CAPITAL, LLC X-17A-5 (2024-09-24) — Broker-dealer annual report - Company: KEEL POINT CAPITAL, LLC - Form: X-17A-5 - Filed: 2024-09-24 - Period: 2019-12-31 - Accession: 0000276721-24-000005 - CIK: 276721 - File #: 8-22990 - Type: Broker-dealer - Material weakness: No - Auditor: EEPB, P.C. - Auditor location: Houston, TX - Contact: Sandra H. Stephens - Phone: 256-704-5113 - Signed by: Sandra H. Stephens (CFO) Original filing: https://www.sec.gov/Archives/edgar/data/276721/000027672124000005/KeelPointConfidential19.pdf --- {0}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 0MB APPROVAL 0MB Number: 3235-0123 Expires: August 31, 2020 Estimated average burden hours per response ...... 12.00 > SEC FILE NUMBER **B-22990** # **ANNUAL AUDITED REPORT FORM X-17A-5 PART Ill** **FACING PAGE** **Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder** | | Securities Exchange Act of 1934 and Rule 17a-5 Thereunder | | | |---------------------------------------------------------------------------|-----------------------------------------------------------|-----------------------|--------------------------------| | REPORT FOR THE PERIOD BEGINNING 0 1/01/2019 | | AND ENDING 12/31/2019 | | | | MM/DD/YY | | MM/DD/YY | | | A. REGISTRANT IDENTIFICATION | | | | NAME oF BROKER-DEALER: Keel Point, LLC | | | OFFICIAL USE ONLY | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | FIRM I.D. NO. | | 100 Church Street, Suite 500 | | | | | | (No. and Street) | | | | (City) | (State) | | (Zip Code) | | NAME AND TELEPHONE NUMBER OF PERSON TO CONT ACT IN REGARD TO THIS REPORT | | | | | | | | (Area Code - Telephone Number) | | | B. ACCOUNTANT IDENTIFICATION | | | | INDEPENDENT PUBLIC ACCOUNT ANT whose opinion is contained in this Report* | | | | | EEPB, P.C. | | | | | | (Name - if individual, state last, first, middle name) | | | | 2950 North Loop W | Houston | TX | 77092 | | (Address) | (City) | (State) | (Zip Code) | | CHECK ONE: | | | | | I
Iv'
certified Public Accountant | | | | | Public Accountant | | | | | B
Accountant not resident in United States or any of its possessions. | | | | | | 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)* SEC 1410 (11-05) **Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid 0MB control number.** {1}------------------------------------------------ #### **OATH OR AFFIRMATION** 1, Sandra **H.** Stephens , swear (or affirm) that, to the best of my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of Keel Point, LLC ---------------------------------------------, as of December 31 are true and correct. I further swear (or affirm) that neither the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account classified solely as that of a customer, except as follows: | Signature | | | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--| | Cko | | | | Title | | | | This report** contains (check all applicable boxes):
0 (a) Facing Page.
0 (b) Statement of Financial Condition.
0 (c) Statement oflncome (Loss) or, if there is other comprehensive income in the period(s) presented, a Statement
of Comprehensive Income (as defined in §210.1-02 of Regulation S-X). | | | | (d) Statement of Changes in Financial Condition .
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( e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital. | | | | (f) Statement of Changes in Liabilities Subordinated to Claims of Creditors.
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.,. (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. | | | | ~
D (j) A Reconciliation, including appropriate explanation of the Computation of Net Capital Under Rule 15c3-1 and the
putation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3. | | | | 0 (k)
A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of
consolidation. | | | | (I) An Oath or Affirmation .
_.,.J | | | | -
(m) A copy of the SlPC Supplemental Report.
(n) A report describing any material inadequacies found to exist or 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. J 7a-5(e)(3). | | | {2}------------------------------------------------ FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION DECEMBER 31, 2019 {3}------------------------------------------------ # **CONTENTS** | PAGE
NUMBER | |--------------------------------------------------------------------------------------------------------------------------------------------| | 3-4
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | | FINANCIAL
STATEMENTS | | 5
STATEMENT OF FINANCIAL CONDITION | | 6
STATEMENT OF INCOME ··························
| | STATEMENT OF CHANGES IN MEMBER'S EQUITY
7 | | STATEMENT OF CASH FLOWS
·•·•••••••··•·•·••••·•••••··•·•·•••• 8 | | 9-15
NOTES TO FINANCIAL STATEMENTS | | AL INFORMATION
SUPPLEMENT | | 16
COMPUTATION OF NET CAPITAL. | | KEEL POINT CAPITAL, LLC EXEMPTION REPORT
17 | | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
18 | | INDEPENDENT ACCOUNTANTS' REPORT ON APPLYING AGREED UPON
PROCEDURES RELATED TO AN ENTITY'S SIPC
ASSESSMENT
19-20
RECONCILIATION | | GENERAL ASSESSMENT RECONCILIATION (FORM SIPC-7)
21-22 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) # REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM February 27, 2020 To the Board of Directors and Member of KEEL POINT CAPITAL, LLC # **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of KEEL POINT CAPITAL, LLC as of December 31, 2019, the related statements of income, changes in member'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 KEEL POINT CAPITAL, LLC as of December 31, 2019, 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 KEEL POINT CAPITAL, LLC's management. Our responsibility is to express an opinion on KEEL POINT CAPITAL, LLC'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 KEEL POINT CAPITAL, LLC 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. #### **Auditor's Report on Supplemental Information** The Computation of Net Capital Pursuant to SEC Rule 15c3-1 has been subjected to audit procedures performed in conjunction with the audit of KEEL POINT CAPITAL, LLC's financial statements. The supplemental information is the responsibility of KEEL POINT CAPITAL, LLC'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 {5}------------------------------------------------ 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 Computation of Net Capital Pursuant to SEC Rule 15c3-1 is fairly staled, in all material respects, in relation to the financial statements as a whole. EEPB We have served as KEEL POINT CAPITAL, LLC's auditor since 2001. Houston, Texas {6}------------------------------------------------ #### STATEMENT OF FINANCIAL CONDITION #### DECEMBER 31 2019 #### ASSETS | Current Assets | | |---------------------------------|-----------------| | Cash | \$
809,115 | | Cash held wltli clearing broker | 58,644 | | lntercompany receivable | 829,393 | | Accounts receivable | 32,965 | | Deposits with clearing broker | 50,000 | | Other current assets | 54,189 | | Total current assets | 1,834.306 | | TOT Al ASSETS | 1,834,306
\$ | #### LIABILITIES **AND MEMBER'S** EQUITY | Liabilities | | | |----------------------------------------|----|-----------| | Accounts payable and accrued expenses | s | 71,350 | | Member's Equity | | 1,762.956 | | TOT Al LIABILITIES AND MEMBER'S EQUITY | \$ | 1,834,306 | {7}------------------------------------------------ #### STATEMENT OF INCOME #### FOR THE YEAR ENDED DECEMBER 31 2019 | Revenues | | | | |-------------------------------------|---------------|--|--| | Commission income | s
835,652 | | | | Dividends and Interest | 87,535 | | | | other income | 9,501 | | | | Total revenues | 932,688 | | | | Expenses | | | | | Salaries and employee benefits | 630,757 | | | | Office and other operating expenses | 548,915 | | | | Total operating expenses | 1,179,672 | | | | Net Loss | s
F46.984l | | | {8}------------------------------------------------ #### STATEMENT OF CHANGES IN MEMBER'S EQUITY #### FOR THE YEAR ENDED DECEMBER 31, 2019 | | Memben
Equity | | |--------------------------------|------------------|-----------| | Balance. beginning of the year | S | 2.009.940 | | Net Loss | | (246,984) | | Balance. encl of year | S | 1,762.956 | {9}------------------------------------------------ #### STATEMENT OF CASH FLOWS #### FOR THE YEAR ENDED DECEMBER 31 2019 #### CASH FLOWS FROM OPERA TING ACTIVITIES | Net loss | \$ | (246,984) | |----------------------------------------------------------|----|-----------| | Adjustments to reconcile net income to net | | | | cash provided by (used In) operating activities | | | | Increase (decrease) in cash related to changes In assets | | | | Cash held with clearing broker | | 21,541 | | Accounts receivable | | 12,044 | | Other current assets | | (13,685) | | Decrease in cash related to changes In liabilities. | | | | Accounts payable and accrued expenses | | {91,981} | | NET CASH USED IN OPERATING ACTIVITIES | | (319,065) | | CASH FLOWS PROVIDED BY FINANCING ACTIVITIES | | | | Payments to Keel Point, LLC | | 97.530 | | NET DECREASE IN CASH ANO CASH EQUIVALENTS | | (221,535) | | CASH ANO CASH EQUIVALENTS, BEGINNING OF YEAR" | | 1,030,650 | | CASH ANO CASH EQUIVALENTS. END OF YEAR | \$ | 809,115 | | CASH PAID FOR INTEREST | s | | | CASH PAID FOR TAXES | s | | Amounts do not include cash held with clearing broker {10}------------------------------------------------ #### NOTES TO FINANCIAL STATEMENTS #### DECEMBER 31, 2019 #### NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES #### Organization KEEL POINT CAPITAL, LLC (the "Company"), is a Delaware limited liability company. The Company was formed for the purpose of conducting business as a broker/dealer in securities. The Company is a member of and is subject to regulations by the Financial Industry Regulatory Authority (FINRA). The Company is a wholly owned subsidiary of Keel Point Partners, LLC ("Keel Point"). #### Cash and Cash Equivalents For the purpose\$ of the statement of cash flows, the Company considers cash and highly liquid investments with original maturities of three months or less when purchased to be cash and cash equivalents. At times, the Company maintains cash in bank deposits that, at times, exceed federally insured limits. The Company did not experience any losses and does not anticipate any losses associated with these accounts. #### Accounts Receivable During the year, the Company earned commissions for certain variable annuities. The Company's management has not experienced issues collecting any of these commissions and believes the remainder is collectable, thus no allowance has been made. #### Deposits Held by Clearing Brokers Under the terms of the Clearing Agreement with National Financial Services, LLC ("NFS"), the Company is required to maintain a certain level of cash on deposit with NFS which amounted to \$50,000 at December 31, 2019. Should NFS suffer a loss due to a failure of the Company's customer to complete a transaction, the Company is required to indemnify NFS to the extent of such loss. As of December 31, 2019, there were no amounts owed to the clearing broker nor did the company incur a loss during the year ended December 31, 2019 due to a customer's failure to complete a transaction. #### Marketable Securities Marketable securities are recorded at market value based on quoted market prices as of the balance sheet date. The difference between cost and market value is included in income. {11}------------------------------------------------ #### NOTES TO FINANCIAL STATEMENTS #### NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) #### Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. #### Income Taxes The Company is a single member limited liability company and reports on a combined basis with its parent company as a partnership for federal income tax purposes. The Company's taxable income or loss is therefore passed through to the parent company members and reported on their respective tax returns. Accordingly, no provision for federal income taxes has been recorded in these financial statements. #### Fair Value of Financial Instruments The Company accounts for all financial assets and liabilities ASC 820-10, "Fair Value Measurements." ASC 820-10 provides standards and disclosures for assets and liabilities that are measured and reported at fair value. As defined in ASC 820- 10, 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 (exit price). ASC 820-10 requires disclosure that establishes a framework for measuring fair value and expands disclosure about fair value measurements. The statement requires fair value measurements be classified and disclosed in one of the following categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Measured based upon inputs that are observable, either directly or indirectly, for the asset or liability other than quoted market prices included in Level 1. These inputs include: a) quoted prices for similar asset or liabilities in active markets b) quoted prices for identical or similar assets or liabilities in markets that are not active c) inputs other than quoted market prices that are observable and d) inputs that are derived primarily from or corroborated by observable market data by correlation or other means. {12}------------------------------------------------ #### NOTES TO FINANCIAL STATEMENTS # NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Level 3: Measured based on unobservable inputs for the asset or liability for which there is little, if any, market activity for the asset or liability at the measurement date. This input includes management's own assumptions about the assumptions that market participants would use in pricing the asset or liability. The inputs are developed based on the best information available in the circumstances, which might include management's own data. As required by ASC 820-10, financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The Company has no assets or liabilities that are measured and reported at fair value as of December 31, 2019. # NOTE 2: RECOGNITION OF REVENUES #### Revenue Recognition Revenues are recognized when control of the promised services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Revenues are analyzed to determine whether the Company is the principal (i.e., reports revenues on a gross basis) or agent (i.e., reports revenues on a net basis) in the contract. Principal or agent designations depend primarily on the control an entity has over the product or service before control is transferred to a customer. The indicators of which party exercises control include primary responsibility over performance obligations, inventory risk before the good or service is transferred and discretion in establishing the price. #### Commission Revenue Commission revenue represents sales commissions generated by advisors for their clients' purchases and sales of securities on exchanges and over-the-counter, as well as purchases of other investment products. The Company views the selling, distribution and marketing, or any combination thereof, of investment products to such clients as a single performance obligation to the product sponsors. The Company is the principal for commission revenue, as it is responsible for the execution of the clients' purchases and sales and maintains relationships with the product sponsors. Advisors assist the Company in performing its obligations. Accordingly, total commission revenues are reported on a gross basis. {13}------------------------------------------------ #### NOTES TO **FINANCIAL** STATEMENTS #### NOTE 2: RECOGNITION OF REVENUES ((Continued) The following table presents our total commission revenue disaggregated by investment product category: | | Twelve Months Ended
December 31, 2019 | | |-------------------------------------|------------------------------------------|---------| | Structured Notes | s | 198,200 | | Mutual Funds and Variable Annuities | | 375,523 | | 401 (k) Plans | | 123,744 | | Fixed income | | 83,485 | | Equltln | | '2,028 | | 529 Plans | | 32,692 | | To1al commiaaion revenue | s | 835.852 | The Company generates two types of commIssIon revenue: sales-based commission revenue that is recognized at the point of sale on the trade date and trailing commission revenue that is recognized over time as earned. Sales-based commission revenue varies by investment product and is based on a percentage of an investment product's current market value at the time of purchase. Trailing commission revenue is generally based on a percentage of the current market value of clients' investment holdings in trail-eligible assets, and is recognized over the period during which services, such as on-going support, are performed. As trailing commission revenue is based on the market value of clients' investment holdings, this variable consideration is constrained until the market value is determinable. {14}------------------------------------------------ #### NOTES TO FINANCIAL STATEMENTS #### NOTE 2: RECOGNITION OF REVENUES (Continued) The following table presents our sales-based and trailing commission revenues disaggregated by product category: | | Twetve Month• Ended
Oe1:ember 31, 2019 | | |-------------------------------------|-------------------------------------------|---------| | Sales-baseNon-allowable assets | (883.583)
\$
879,373 | | Net capital before haircuts on marketable securities positions | | | Haircuts on marketable securities | (1,172) | | Net Capital | \$
878,201 | | Net capital required based on leverage: | | | Total liabilities -
aggregate indebtedness | \$
71,350 | | Total capital required based on 6 2/3% of liabilities | 4.757
\$ | Under its current agreement with the FINRA, KEEL POINT CAPITAL, LLC (the "Company") is required to maintain net capital of \$50,000. ## STATEMENT PURSUANT TO PARAGRAPH (D)(4) OF RULE 17A-5 There was no material difference between the above computation of net capital pursuant to Rule 15c3-1 and the corresponding computation prepared by the Company and included in the Company's unaudited Part II A FOCUS report filing as of December 31, 2019. #### STATEMENT OF OMITTED SUPPLEMENTAL DATA The Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3 and the Information Relating to Possession or Control Requirements Under Rule 15c3-3 have been omitted because KEEL POINT CAPITAL, LLC is exempt from the requirements of Rule 15c3-3 under condition (k)(2)(ii). The conditions of the exemption were being complied with as of December 31, 2019 and no facts came to our attention to indicate that the exemption had not been complied with during the year ended December 31, 2019. {19}------------------------------------------------ ![](_page_19_Picture_0.jpeg) 100 Churc:h Street, Suite 500 Hu111sville, Alabama 35801 T 256.704.5111 F 256.704.5110 www.keelpoint tom February 11, 2020 Exemption **Report** Customer Protection Rule: The company Is required bv the (k)(2)(11) e,cemptlon to SEC Rule 1Sc303 to clear all transactions with and for customers on a fullv disclosed basis with a clearlng broker, and to promptly transmit all customer funds and securities to the dearlr« broker which canies all the accounts of such customers. K~I Point Capital, UC Assertions: We confirm, to the but of our **knowted1e** and belief, that: - 1. Keel Point capital, LLC claimed an t>Cemption from SEC Rule 15c3-3 under the provisions In paragraph of (k)(2)(«) tnrou,hout ttie year ended December 31, 2019. - 2. Keet Point capital, LLC met the Identified exemption provisions ifl SEC Rule 15c3-3(k)(Z)(II) throughout the vear ended December 31, 2019 without e,cceptlon. Roben c. Ma~s. CEO Sandra H. Stephens, FINOP {20}------------------------------------------------ ![](_page_20_Picture_0.jpeg) # REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM February 27, 2020 To the Board of Directors and Member of KEEL POINT CAPITAL, LLC We have reviewed management's statements, included in the accompanying Exemption Report, in which (1) KEEL POINT CAPITAL, LLC identified the following provisions of 17 C.F.R. §15c3-3(k) under which KEEL POINT CAPITAL, LLC claimed an exemption from 17 C.F.R. §240.15c3-3:(k)(2)(ii) (exemption provisions) and (2) KEEL POINT CAPITAL, LLC stated that KEEL POINT CAPITAL, LLC met the identified exemption provisions throughout the most recent fiscal year without exception. KEEL POINT CAPITAL, LLC'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 KEEL POINT CAPITAL, LLC'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)(2Xii) of Rule 15c3-3 under the Securities Exchange Act of 1934. EEPB Houston, Texas 2950 North Loop WIIBI, Suite 1200 I Houston, TX 77092 I (p) 713.622.0018 I *(I)* 713.622.5527 Iwww.eepb.com An lndepondenl Member of **Dl=K** lnlernaUonal Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.