# CAPACUITY SECURITIES, INC. X-17A-5 (2022-03-30) — Broker-dealer annual report - Company: CAPACUITY SECURITIES, INC. - Form: X-17A-5 - Filed: 2022-03-30 - Period: 2021-12-31 - Accession: 0000752227-22-000002 - CIK: 752227 - File #: 8-32508 - Type: Broker-dealer - Material weakness: No - Auditor: Morey, Nee, Buck & Oswald, LLC - Auditor location: Bethlehem, PA - Contact: Terry Adams - Phone: 4076870071 - Email: thopkins@foreside.com - Website: foreside.com - Signed by: Terry Adams (VP of Finance) Original filing: https://www.sec.gov/Archives/edgar/data/752227/000075222722000002/publicx17a5.pdf --- {0}------------------------------------------------ | UNITED STAl E:S
SEOIJRIT ES AIND IEXCHA!NGE COMMISStOrJ
Wasllit, gtcm, D C. 20549
ANINIIUAL REPORTS
FORM X-17A-S
PA!RI IU
FACING PAGE
lnformat!ion Re quired Pu.-suant to IRu!e s 17.a.-5, 17a-12, and 18a-7 under t he SecuritJies. Exdiang:e Act of 1.9'34 | | | | 0MB A!PPROVAL
,OMS Numb-: 31JS.-01B
E>pires: Oct. ~1. 1013
Estim;._':~d .ve,r;;i,;~ INrden
t.o,,r, per re>J>01>Se : 12
SEC IFU!f NUM]IER
13-32508 | | | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------|-------------------------------|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--| | FILI G FOR liHE PEIRIO'D BEGINNI G | ----------
AND ENIOING 121311'2021
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t2 | | | | | | | | IMM/li>li>/'l"I' | -----------
M M/li>D/'l"I' | | | | | | | A. REGISTRANT IDEN!TIIFICAl lON | | | | | | | 'AM E OF FIRM : CapAooity Securi ies, nc. | | | | | | | | TTPI: OF REG ISTRANT (check all applicab l,e boxes}:
._ Major security-based swaIp participant
!. IBrok,er-cle,aler
.__ Se cu rity-ba ~ed swap cfea er
re if re~poooe t is a1so a.n o c derwa~ives dealer
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dhecl | | | | | | | | ADDRIESS OF PRINCIIPAL. PIA!Cf Of BUS11NESS: jDo not use a P.O. box. no.) | | | | | | | | 3!1!1 lnterootiiorml Parkway, Suil.e 350 | | | | | | | | | (No. and St.reetJ | | | | | | | Lake Mary | f l | | | 32746 | | | | | jstate) | | | ~ p COdel | | | | PERSOIN TO CONl ACT WllH ·EGAIRD ro THIS FILING | | | | | | | | Thomas Hopkins | 6!1(3216-8933 | | | thopkins@foreside.com | | | | (N.ame) | (Area code - Te ~ hone IN um berl | | (Email Addres.sl | | | | | | B. ACCO UNTANT IIDENIJIFICATION | | | | | | | IN!D EPiEINDENl PUBLIC .AOCOU N1iANTwhose r,eport:5 are cont ai ned in th is f iling• | | | | | | | | Morey, Nee, Buck & Oswald, LLC | | | | | | | | | ~ · ame - if imfMidual, state last , fi1st, and middle namel | | | | | | | 25711 Baglyos c·rc1e, Slf e B21l
(Addr,ess) | Bethlehem | | PA | 113021) | | | | | (Citv) | | (state] | (Zip C-ooe) | | | | fO:R OFFICIAL USE ONL.Y | | | | | | | | ciaims for ex:emption Jira m die requ·rement lihat t he ,m nual re;po:m lbe covered by the rl!iports o an indepe.ndent publ\c | | | | | | | account ant must be w pported lby a .statement ,o facts .a nd circumstan ces 1rel'ied on as t he basis o t he exempbon . . see 17 CFR 240.17a•S!eH1Jn , i ap,plic~ble·. Pe,rsons who are t o resporidl M • t he collection of i riforma,t ion, contai 11 ed 1in, t his fo rm, are not req~i red t o ,respond u riles:s the form displays a rur,rent ly va'lid 0MB cont rol inumber. {1}------------------------------------------------ #### OATH OR AFFIRMATION 1, Bryant W. Kirk • swear (or affirm) that, to the *best* of my knowledge and belief, the financial report pertaining to the firm of CAPACUITY SECURITIES INC. as of DECEMBER 31 • 2~ 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 an ount classified solely as that of a customer. ![](_page_1_Picture_4.jpeg) | Signature/ | | | |---------------------|--|--| | | | | | Title:
PRESIDENT | | | Notary Public TLJ l ..li"' cf u0 #### This f11ing .. contains (check all applicable bo•es): - (a) Statement of nnancial condition. - (b) Notes to consolidated statement of flnandal condition. D (c) Statement of income (loss) or. if there Is other comprehensive Income In the perlod(s) presented, a statement of comprehensive Income (as denned In § 210.1-02 of Regulation S-X). - D (d) Statement of cash nows. - □ (e) Statement of changes In stockholders' or partners' or sole proprietor's equity. - 0 (I) Statement of changes in llabllltles subordinated to daims of creditors. - 0 (g) Notes to consolidated flnanclal statements. - 0 (h) Computatlon of net capital under 17 CFR 240.1Sc3-1 or 17 CFR 240.18a-1, as applicable. - D (I) Computation of tangible net worth under 17 CFR 240.lSa-2. - 0 0) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.1Sc3-3. - D (k) Computation for determination of security-based swap reserve requirements pursuant to EKhlblt B to 17 CFR 240.1Sc3-3 or Exhibit A to 17 CFR 240.lSa-4. as appllcable. - D (I) Computation for Determination of PAB Requirements under uhlblt A to§ 240.1Sc3-3. - D (m) Information relating to possession or control requirements for customers under 17 CFR 240.1Sc3-3. - D (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.1Sc3-3(p)(2) or 17 CFR 240.lSa-4, as applicable. - D (o) Reconciliations. lndudlng appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.1Sc3•1. 17 CFR 240.lSa-1, or 17 CFR 240.18a-2, as applicable. and the reserve requirements under 17 CFR 240.1Sc3-3 or 17 CFR 240. tSa-4, as appllcable, If material differences exist. or a statement that no material differences exist. - D (p) Summary of flnand al data for subsidiaries not consolidated in the statement of flnanclal condition. - IZI (q) Oath or affirmation In accordance with 17 CFR 240.17a-S, 17 CFR 240.17a-12, or 17 CFR 240.18a-7. as applicable. - D (r) Compliance report In accordance with 17 CFR 240.17a-5 or 17 CFR 240.lSa-7, as applicable. - D (sl Exemption report In accordance with 17 CFR 240.17a-S or 17 CFR 240.lSa-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 flnandal report or financial statements under 17 CFR 240.17a-5. 17 CFR 240.18a•7, or 17 CFR 240.17a-12, as applicable. - D (v) Independent public accountant's report based on an examination of certain statements In the compliance report under 17 CFR 240.17a-S or 17 CFR 240.lSa-7, as applicable. - D (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-S or 17 CFR 240.lSa-7. as applicable. - D M Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-le or 17 CFR 240.17a-12, as applicable. - D (y) Report describing any material Inadequacies found to exist or found to have existed since the date of the previous audit, or a statement that no material Inadequacies e•lst, under 17 CFR 240.l7a-12(k). D(z)Other: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_ - .. To request conf/dentlol rreotment of certain portions of chis fl/Ing, see 17 CFR 240.17o-S(e)(3) or 17 CFR 240.18o-7(d)(2), as oppllcoble. {2}------------------------------------------------ # **CAPACUITY SECURITIES, INC.** # **CONTENTS** | Report of Independent Registered Public Accounting Firm | | |---------------------------------------------------------|-----| | Statement of Financial Condition | 2 | | Notes to Financial Statements | 3-6 | {3}------------------------------------------------ ![](_page_3_Picture_0.jpeg) #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholder of CapAcuity Securities, Inc. #### **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of CapAcuity Securities, Inc. as of December 31 , 2021 , and the related notes (collectively referred to as the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of CapAcuity Securities, Inc. as of December 31 , 2021 in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** This financial statement is the responsibility of CapAcuity Securities, lnc.'s management. Our responsibility is to express an opinion on CapAcuity Securities, lnc.'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 CapAcuity 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 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 statements. Ou r 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 bel ieve that our audit provides a reasonable basis for our opinion. We have served as CapAcuity Securities, lnc.'s auditor since 2016. Bethlehem, **PA** 18020 March 25, 2022 {4}------------------------------------------------ ### **CAPACUITY SECURITIES, INC. STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2021** #### ASSETS | Cash | \$ | 241,753 | |----------------------------------------------------------|----|---------| | Accounts Receivable from Contracts with Customers | | 443,861 | | Accounts Receivable from Registered Representatives | | 13,867 | | Prepaid expenses | | 24,602 | | | | | | Total assets | \$ | 724,083 | | LIABILITIES AND SHAREHOLDER'S EQUIIT | | | | Liabilities: | | | | Commission Payable | \$ | 53,473 | | Accounts Payable | | 1,575 | | Total liabilities | \$ | 55,048 | | Shareholder's equity: | | | | Common stock, \$0.20 par value; 5,000 shares authorized; | | | | 5,000 shares issued and outstanding | | 1,000 | | Capital in excess of par value | | 108,400 | | Retained earnings | | 559,635 | | Total shareholder's equity | \$ | 669,035 | | Total liabilities and shareholder's equity | \$ | 724,083 | The Accompanying Notes are an Integral Part of this Statement {5}------------------------------------------------ #### **Notes to Financial Statements** # **NOTE 1 NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** # **Business Entity and Nature of Operations** CapAcuity Securities, Inc. (the Company), formerly Johnson Securities, Inc., is a registered broker/dealer operating since 1984. The Company operates within the exemptive provisions of Rule 15c3-3 pursuant to the provisions of subparagraph k(1) thereof. When acting as a broker/dealer, its marketing and sales activities are devoted primarily to private placement variable life insurance and mutual funds used as funding vehicles for corporate sponsored executive retirement programs. The Company's target clients for these products and services are publicly held corporations and large private companies. The Company's marketing and sales activities are conducted on a nation-wide basis. The Company is a wholly owned subsidiary of CapAcuity Financial, Inc., which purchased Johnson Securities, Inc on December 26, 2018 and subsequently changed the name of the Company to CapAcuity Securities, Inc. A summary of the Company's significant accounting policies follows : # **Cash** Cash includes interest-earning deposits and are held at financial institutions that may exceed federally insured limits. The Company has not experienced any losses on these accounts and does not believe it is exposed to any significant credit risk with respect to cash balances held in these financial institutions. # **Receivables** Receivables are primarily for commIssIons due from insurance carriers. Receivables from Contracts with Customers are collected within the following month. Accounts Receivables from Contracts with Customers at December 31 , 2020 was \$428,340 and Accounts Receivables from Registered Representatives on December 31 , 2020 was \$907. Management has determined no allowance for credit losses is necessary at December 31 , 2021 . {6}------------------------------------------------ # **Notes to Financial Statements** # **NOTE 1 Nature of the Business and Summary of Significant Accounting Policies (Continued)** #### **Income Taxes** The Company is a qualified subchapter S subsidiary "Q-Sub" under applicable provisions of the Internal Revenue Code. In lieu of corporation income taxes, the shareholders of an S Corporation are taxed on their proportionate share of the Company's taxable income. Therefore, no provision or liability for federal income taxes has been included in the financial statements. In accordance with accounting standards relating to accounting for uncertainty in income taxes, management assessed whether there were any uncertain tax positions which may give rise to income tax liabilities and determined that there were no such matters requiring recognition in the accompanying financial statements. The Company files income tax returns in the U.S. federal jurisdiction and various states. The Company is no longer subject to Federal, State or Local tax examinations for tax years prior to 2018. # **Use of Estimates** The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. # **Management's Review of Subsequent Events** The Company has evaluated all events subsequent to the balance sheet date of December 31, 2021 through March 25, 2022, which is the date the financial statements were available to be issued. {7}------------------------------------------------ #### **Notes to Financial Statements** #### **Note 2 NET CAPITAL REQUIREMENTS** The Company is subject to the Securities and Exchange Commission's net capital rule (SEC Rule 15c3-I), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, as defined, shall not exceed 15 to 1. The Company's ratio of aggregate indebtedness to net capital, as defined, at December 31 , 2021 was 0.23 to 1. At December 31 , 2021 , the Company had net capital, as defined, of \$240,178 and excess net capital of \$235,178. ### **Note 3 EXEMPTION FROM SECURITIES AND EXCHANGE COMMISSION RULE 15c3-3** The company operates pursuant to SEC Rule 15c3-3(K)(1) limiting business to the distribution of mutual funds and variable life insurance or annuities and therefore, is exempt from the computation for determination of reserve requirements pursuant to SEC Rule 15c3-3. #### **Note 4 Risk and Uncertainties** The COVID-19 Pandemic developed rapidly in 2020, with a significant number of cases. Measures taken by various governments to contain the virus have affected economic activities. At this stage, the impact on our business has not been significant and based on our experience to date we expect this to remain the case. We will continue to follow the various government policies and advice and, in parallel, we will continue our operations in the best and safest way possible. {8}------------------------------------------------ #### **Notes to Financial Statements** #### **Note 5 Related-Party Transactions** On March 1, 2019, the Company entered into an expense sharing arrangement with CapAcuity Consulting, LLC (CapAcuity Consulting), an entity under common control with the Company. Under the expense sharing agreement, CapAcuity Consulting permits the Company to market and distribute its products and services from CapAcuity Consulting's facilities used in conjunction with the CapAcuity Consulting's business, subject to reimbursement of the expenses associated with such use. During the year ended December 31 , 2021 , the Company paid CapAcuity Financial, Inc., the parent company, \$501 related to a prior year payable. CapAcuity Financial paid state filing and license fees on behalf of the Company. There are no amounts due to or from Related Parties at December 31 , 2021 . #### **Note 6 Concentrations** For the year-end December 31 , 2021 , three customers account for 37% of accounts receivable. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.