# KENSINGTON CAPITAL CORP. X-17A-5 (2023-03-28) — Broker-dealer annual report

- Company: KENSINGTON CAPITAL CORP.
- Form: X-17A-5
- Filed: 2023-03-28
- Period: 2022-12-31
- Accession: 0000707011-23-000001
- CIK: 707011
- File #: 8-28301
- Type: Broker-dealer
- Material weakness: No
- Auditor: RGNC and S Certified Public Accountants PLLC
- Auditor location: Woodbury, NJ
- Contact: Philip Ciantro
- Phone: 6462269300
- Email: pciantro@kenscap.com
- Website: kenscap.com
- Signed by: Moses Silver (Chief Executive Officer)

Original filing: https://www.sec.gov/Archives/edgar/data/707011/000070701123000001/kccshort2022.pdf

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

OMB APPROVAL OMB Number: ϯϮϯϱͲϬϭϮϯ Expires: KĐƚ͘ϯϭ͕ϮϬϮϯ Estimated average burden hours per response:

# **ANNUAL REPORTS FORM X-17A-5 PART III**

SEC FILE NUMBER 8-28301

**FACING PAGE** 

**Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934** 

FILING FOR THE PERIOD BEGINNING \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ AND ENDING \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ MM/DD/YY MM/DD/YY 01/01/2 12/31/2

**A. REGISTRANT IDENTIFICATION**

#### NAME OF FIRM: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Kensington Capital Corp.

TYPE OF REGISTRANT (check all applicable boxes):

܆ Broker-dealer ܆ Security-based swap dealer ܆ Major security-based swap participant ܆ Check here if respondent is also an OTC derivatives dealer ■

ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.)

#### \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ 4910 13th Avenue

|                                                                                                                                                                                                                |                                                                                                       | (No. and Street)                                           |                 |                      |  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------|------------------------------------------------------------|-----------------|----------------------|--|
| Brooklyn<br>_____________________________________________________________________________________                                                                                                              |                                                                                                       | NY                                                         |                 | 11219                |  |
| (City)                                                                                                                                                                                                         |                                                                                                       | (State)                                                    |                 | (Zip Code)           |  |
| PERSON TO CONTACT WITH REGARD TO THIS FILING                                                                                                                                                                   |                                                                                                       |                                                            |                 |                      |  |
| Philip Ciantro                                                                                                                                                                                                 | 646-226-9300<br>_____________________________________________________________________________________ |                                                            |                 | pciantro@kenscap.com |  |
| (Name)                                                                                                                                                                                                         | (Area Code – Telephone Number)                                                                        |                                                            | (Email Address) |                      |  |
|                                                                                                                                                                                                                |                                                                                                       | B. ACCOUNTANT IDENTIFICATION                               |                 |                      |  |
| INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*<br>RGNC&S Certified Public Accountants PLLC<br>_____________________________________________________________________________________ |                                                                                                       | (Name – if individual, state last, first, and middle name) |                 |                      |  |
| 97 Froehlich Farm Blvd<br>_____________________________________________________________________________________                                                                                                |                                                                                                       | Woodbury                                                   | NY              | 11797                |  |
| (Address)                                                                                                                                                                                                      |                                                                                                       | (City)                                                     | (State)         | (Zip Code)           |  |
| 02/23/10<br>_____________________________________________________________________________________                                                                                                              |                                                                                                       |                                                            | 5028            |                      |  |
|                                                                                                                                                                                                                | (Date of Registration with PCAOB)(if applicable)<br>(PCAOB Registration Number, if applicable)        |                                                            |                 |                      |  |
|                                                                                                                                                                                                                |                                                                                                       | FOR OFFICIAL USE ONLY                                      |                 |                      |  |
|                                                                                                                                                                                                                |                                                                                                       |                                                            |                 |                      |  |

\* Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-5(e)(1)(ii), if applicable.

**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 OMB control number.** 

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#### OATH OR AFFIRMATION

.... = .. (1) ..

|       | swear (or affirm) that, to the best of my knowledge and belief, the<br>Moses Silver                                                                                              |  |  |  |  |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
|       | financial report pertaining to the firm of Kensington Capital Corp.<br>as of                                                                                                     |  |  |  |  |
| 12/31 | 2 022 , is true and correct. I further swear (or affirm) that neither the company nor any                                                                                        |  |  |  |  |
|       | partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely                                              |  |  |  |  |
|       | as that of a customer.                                                                                                                                                           |  |  |  |  |
|       |                                                                                                                                                                                  |  |  |  |  |
|       | Signature                                                                                                                                                                        |  |  |  |  |
|       | Ince:                                                                                                                                                                            |  |  |  |  |
|       | Chief Executive Officer                                                                                                                                                          |  |  |  |  |
|       |                                                                                                                                                                                  |  |  |  |  |
|       | 3<br>ERAN ABRAHAN<br>Notary Public<br>Notary Public - State of New York<br>NO. 01AB6395809                                                                                       |  |  |  |  |
|       | Qualified in Kings County<br>This filing ** contains (check all applicable boxes):<br>My Commission Expires Aug 5, 2023                                                          |  |  |  |  |
|       | (a) Statement of financial condition.                                                                                                                                            |  |  |  |  |
|       | [b) Notes to consolidated statement of financial condition.                                                                                                                      |  |  |  |  |
|       | @ (c) Statement of income (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 cash flows.                                                                                                                                                     |  |  |  |  |
|       | = (e) Statement of changes in stockholders' or partners' or sole proprietor's equity.                                                                                            |  |  |  |  |
|       | (f) Statement of changes in liabilities subordinated to claims of creditors.                                                                                                     |  |  |  |  |
|       | (g) Notes to consolidated financial statements.                                                                                                                                  |  |  |  |  |
|       | (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable.                                                                                       |  |  |  |  |
|       | [ (i) Computation of tangible net worth under 17 CFR 240.18a-2.                                                                                                                  |  |  |  |  |
|       | [] Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3.                                                                    |  |  |  |  |
|       | [ (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or                                                    |  |  |  |  |
|       | Exhibit A to 17 CFR 240.18a-4, as applicable.                                                                                                                                    |  |  |  |  |
|       | [1] Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3.                                                                                           |  |  |  |  |
|       | [ (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3.                                                                          |  |  |  |  |
|       | [n] Information relating to possession or control requirements for security-based swap customers under 17 CFR                                                                    |  |  |  |  |
|       | 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable.                                                                                                                             |  |  |  |  |
|       | [0] Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net                                                     |  |  |  |  |
|       | worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-1, or 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17                                                       |  |  |  |  |
|       | CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences                                                    |  |  |  |  |
|       | exist.                                                                                                                                                                           |  |  |  |  |
|       | [p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition.                                                                         |  |  |  |  |
|       | [q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable.                                                              |  |  |  |  |
|       | [r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.                                                                                    |  |  |  |  |
|       | [s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.                                                                                     |  |  |  |  |
|       | [t] Independent public accountant's report based on an examination of the statement of financial condition.                                                                      |  |  |  |  |
|       | [u] Independent public accountant's report based on an examination of the financial statements under 17<br>CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. |  |  |  |  |
|       | (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17<br>CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.  |  |  |  |  |
|       | [w] Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17<br>CFR 240.18a-7, as applicable.                               |  |  |  |  |
|       | (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.17a-12,<br>as applicable.                                                             |  |  |  |  |
|       | [ (y) Report describing any material inadequacies found to have existed since the date of the previous audit, or                                                                 |  |  |  |  |
|       | a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k).                                                                                                     |  |  |  |  |
|       | [ (z) Other:                                                                                                                                                                     |  |  |  |  |
|       | ** To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18c-7(d)(2), as                                                |  |  |  |  |

1

applicable.

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## KENSINGTON CAPITAL CORPORATION

Statement of Financial Condition and Supplemental Report of Independent Registered Public Accounting Firm For the Year Ended

DECEMBER 31, 2022

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## KENSINGTON CAPITAL CORP, INC. As of and for the year ended December 31, 2022

## Table of Contents

| Report of Independent Registered Public Accounting Firm |  |
|---------------------------------------------------------|--|
| Financial Statements                                    |  |
| Statement of Financial Condition                        |  |
| Notes to Financial Statements                           |  |

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![](_page_4_Picture_0.jpeg)

#### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Stockholders of Kensington Capital Corp.

#### **Opinion on the Financial Statement**

We have audited the accompanying statement of financial condition of Kensington Capital Corp. (the "Company") (a limited liability company), as of December 31, 2022, and the related notes to the financial statement. In our opinion, the statement of financial condition presents fairly, in all material respects, the financial position of the Company as of December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

#### **Basis for Opinion**

This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statement 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 the Company 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 statement is 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 statement, 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 statement. 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 statement. We believe that our audit provides a reasonable basis for our opinion.

Raphael Goldberg Nikpour Cohen & Sullivan Certified Public Accountants PLLC

We have served as Kensington Capital Corp.'s auditors since 2016.

Woodbury, New York March 31, 2023

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## KENSINGTON CAPITAL CORP, INC. Statement of Stockholders' Equity December 31, 2022

| Assets                                     |              |
|--------------------------------------------|--------------|
| Cash in bank                               | S<br>217,358 |
| Due from clearing firm                     | 115,043      |
| Clearing broker deposit                    | 150,733      |
| Securities owned, at fair value            | 91,374       |
| Fixed assets, net                          | રતેર         |
| Total assets                               | S<br>575,203 |
| Liabilities and Stockholders' Equity       |              |
| Accounts payable and accrued expenses      | S<br>35,753  |
| Payable to broker-dealer and clearing firm | 153,204      |
| Accrued payroll                            | 113,890      |
| Total liabilities                          | 302,847      |
| Stockholders' Equity                       |              |
| Common stock, no par value                 |              |
| 200 shares issued and outstanding          | 40,000       |
| Additional paid-in-capital                 | 251,885      |
| Retained deficit                           | (19,529)     |
| Total stockholders' equity                 | 272,356      |
| Total liabilities and stockholders' equity | S<br>575,203 |

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## 1. Business and Summary of Significant Accounting Policies

### Business

Kensington Capital Corp. ("the Company") is a registered broker-dealer with the Securities and Exchange Commission ("SEC"), is a member of Financial Industry Regulatory Authority ("FINRA") and is registered with the National Futures Association ("NFA"). The Company introduces its customers' business on a fully disclosed basis to a clearing broker, who clears and carries the Company's customer accounts.

### Basis of Presentation

The Company's financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). Revenue is recognized when earned, while expenses and losses are recognized when incurred.

### Cash in Bank

The Company maintains its bank accounts in high credit quality institutions. Balances at times may exceed federally insured limits. The company has not experienced any losses in such accounts and believes it is not exposed to any significant risk. At December 31, 2022, the Company held no bank balances in excess of the FDIC insured limits.

### Receivable from Clearing Firm and Restricted Cash

The Company has an agreement with a clearing broker to execute and clear, on a fully disclosed basis, customer accounts of the Company. In accordance with this agreement, the Company is required to maintain a deposit in cash or securities. The Company has a deposit with its clearing broker, which is refundable to the Company should it discontinue its arrangement. Amounts receivable from its clearing organization consist of commissions receivable. The receivable is considered fully collectible and no allowance is required.

### Property and Equipment

Furniture and equipment are stated at cost less accumulated depreciation. Depreciation is based on the straight-line method over the estimated useful lives. The estimated useful lives of furniture and equipment are from 5 to 7 years. Expenditures for maintenance and repairs are charged against operations. Additions, improvements, and expenditures that extend the life of the assets are capitalized.

The Company periodically assesses the recoverability of the carrying amounts of long-lived assets. A loss is recognized when expected undiscounted cash flows are less than

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#### securities owned in the accompanying statement of income

Amounts receivable and payable for securities transactions that have not reached their contractual settlement date are recorded net on the statement of financial condition.

#### 2 Revenue from Contracts with Customers

The Company recognizes revenue in accordance with Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC Topic 606"). The new revenue recognition guidance requires that an entity recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration of which the entity expects to receive for those goods or services. The guidance requires an entity to follow a five-step model to (i) identify the contract; (ii) identify the performance obligations in the contract; (ii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the performance obligation is satisfied. Each of these steps involves management's judgment and an analysis of the material terms and conditions of the contract.

#### Securities Transactions

The Company buys and sells securities on behalf of its customers. Each time a customer enters into a buy or sell transaction, the Company charges a commission. Commissions and related clearing expenses are recorded on the trade date (the date that the Company fills the trade order by finding and contracting with a counterparty and confirms the trade with the customer). The Company believes that the performance obligation is satisfied on the trade date because that is when the underlying financial instrument or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership of the securities have been transferred to/from the customer.

The Company enters into arrangements with managed accounts or other pooled investment vehicles (funds) to distribute shares to investors. The Company may receive distribution fees paid by the fund up front, over time, upon the investor's exit from the fund (that is, a contingent deferred sales charge), or as a combination thereof. The Company believes that its performance obligation is the sale of securities to investors and as such this is fulfilled on the trade date. Any fixed amounts are recognized on the trade date and variable amounts are recognized to the extent it is probable that a significant reversal will not occur once the uncertainty is resolved. For variable amounts, as the uncertainty is dependent on the value of the shares at future points in time as well as the length of time the investor remains in the fund, both of which are highly susceptible to factors outside the Company's influence, the Company does not believe that it can overcome this constraint until the market value of the fund and the investor activities are known, which are usually monthly or quarterly. Distribution fees recognized in the current period are primarily related to performance obligations that have been satisfied in prior periods.

{9}------------------------------------------------

#### 3. Property and Equipment

| Assets                                       | December 31, 2022 |                           |  |
|----------------------------------------------|-------------------|---------------------------|--|
| Furniture and Fixtures<br>Computer Equipment | S                 | 10,982<br>3.995<br>14,977 |  |
| Accumulated Depreciation                     |                   | 14,282                    |  |
| Net Property and Equipment                   | S                 | (સ્તેર                    |  |

Depreciation expenses related to property and equipment was \$1,200 in 2022.

#### Fair Value of Financial Instruments 4.

FASB ASC 820 defines fair value, establishes a framework for measuring fair value, and establishes a hierarchy for fair value inputs. 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 advantages market. Valuation techniques that are consistent with the market, income or cost approach, as specified by FASB ASC 820, are used to measure fair value.

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the measurement date.

Level 2 - Inputs other than quoted prices included within level 1 that are observable for the asset or liability either directly or indirectly.

Level 3 - Unobservable inputs for the asset or liability.

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including for example, the type of security, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in level 3.

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{11}------------------------------------------------

generally are standard contractual terms and are entered into in the normal course of business. The maximum potential amount of future payments that the Company could be required to make under these indemnifications cannot be estimated. However, the Company believes that it is unlikely it will have to make material payments under these arrangements and has not recorded any contingent liability in the financial statements for these indemnifications.

#### 8. Net Capital Requirements

The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (15c3-1), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. The Company is also subject to the net capital requirements of Regulation 1.17 under the Commodity Futures trading Commission ("CFTC") which requires the Company to maintain a minimum net capital, as defined, in the amount of \$100,000. At December 31, 2022, the Company had net capital of \$257,668 which was \$157,668 in excess of its required net capital of \$100,000. The Company's aggregate indebtedness to net capital ratio percentage was 117.53%.

#### 9.

Pursuant to a clearing agreement, the Company introduces all of its securities transactions to a clearing broker on a fully disclosed basis. Therefore, all of the customer's money balances and long and short securities positions are carried on the books of the clearing broker. Under certain conditions, as defined in the clearing broker agreement, the Company has agreed to indemnify the clearing broker for losses, if any, which the clearing broker may sustain from carrying securities transactions introduced by the Company. In accordance with industry practice and regulatory requirements, the Company, and the clearing broker, monitor collateral on the securities transactions introduced by the Company.

The Company is subject to arbitration and litigation in the normal course of business. The Company has no litigation in progress at December 31, 2022.

The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash and trade accounts receivable. The Company places its cash and temporary cash investments with high credit quality institutions. Such investments at times may exceed the Federal Deposit Insurance Corporation and Securities Investor Protection Corporation insurance limits.

{12}------------------------------------------------

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