# THINKEQUITY LLC X-17A-5 (2022-08-16) — Broker-dealer annual report - Company: THINKEQUITY LLC - Form: X-17A-5 - Filed: 2022-08-16 - Period: 2021-12-31 - Accession: 0000822489-22-000007 - CIK: 822489 - File #: 8-38622 - Type: Broker-dealer - Material weakness: No - Auditor: grassi advisors& accountants - Auditor location: new york city, NY - Contact: richard j adams - Phone: 212-732-8500 - Email: radams@think-equity.com - Website: think-equity.com - Signed by: william baquet (C O O) Original filing: https://www.sec.gov/Archives/edgar/data/822489/000082248922000007/fixedaudirreportpdf.pdf --- {0}------------------------------------------------ | | 0MB APPROVI\L | | | | | |---------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------|----------|-----------------------------------------|--|--| | SECURITIES AND EXCHANGE COMMISSION | 0 M B Number: 3235-01 23
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12 | | | | | | | | | | | | | | SEC FI LE NUMBER | | | | | | | FORM X-17A-5
PART Ill | | 8-38622 | | | | | | | | | | | | 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 O 1/01/2021 | MM/DD/VY | | AND ENDING 12/31/2021
MM/DD/VY | | | | | | | | | | | | A. REGISTRANT IDENTIFICATION | | | | | | NAME OF FIRM: THINKEQUITY, LLC. | | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
C!l Broker-dealer
D Check here if respondent is also an OTC derivatives dealer | □ Security-based swap dealer | | D Major security-based swap participant | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | 17 STATE STREET, 41ST FLOOR | | | | | | | | (No. and Street) | | | | | | NEW YORK | | NY | | | | | (City) | (State) | | 10005
(Zip Code) | | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | RICHARD ADAMS | (646) 467-5487 | | radams@think-equity.com | | | | (Name) | (Area Code -Telephone Number) | | (Email Address) | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | | | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | | Grassi Advisors & Accountants | | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | | 750 Third Avenue | NEW YORK | NY | 10017 | | | | (Address) | (City) | (St ate) | (Zip Co de) | | | | October 22 2003 | | 606 | | | | | r
te of Registcatioa with PCAOB)lit applicable) | | {!'CAOB | """""°"
Nombec, if applicab~J | | | | | 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-S(e)(l)(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 OMS control number.** {1}------------------------------------------------ ## **OATH OR AFFIRMATION** | | as of
financial report pertaining to the firm of THINKEQUITY, LLC.
_1_2_/_3_1 ___________ , 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 any account classified solely | | | as that of a customer. | | | | | | | | | | | | -i
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| | | This filing** contains (check all applicable boxes): | | | ~ (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. | | D | (f) Statement of changes in liabilities subordinated to claims of creditors. | | | ii (g) Notes to consolidated financial statements. | | | ~ (h) Computation of net capital under 17 CFR 240.15c3-l or 17 CFR 240.18a·l, as applicable. | | | □ (i) Computation of tangible net worth under 17 CFR 240.18a-2. | | D | (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. | | D | (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. | | | □ (I) Computation for Determination of PAB Requirements under Exh ibit A to § 240.15c3-3. | | | □ (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. | | D | (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. | | | □ (o) 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 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-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 | | | CFR 240.18a-7, as applicable. | | | □ (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-le or 17 CFR 240.17a-12, | | | as applicable. | | | □ (y) Report describing any material inadequacies found to exist or found to have existed since the date of the previous audit, or | | | ---------------
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a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). | | | | {2}------------------------------------------------ # **FINANCIAL STATEMENTS WITH SUPPLEMENTAL INFORMATION AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** **FOR THE YEAR ENDED DECEMBER 31, 2021** This reposi is deemed C()NF!DENTl:\L in accordance with Rule l7a-5(er(3) under the Securities Exchange ,\ct of i 9.}L *:\* stmcmcn1 uf financial condition hound has been fi!ec! wi1ll Securiti es and Exd1angc Cornmi,,sion sinw!laneously herewith as a f'U[HJC document. {3}------------------------------------------------ ### **FOR THE YEAR ENDED DECEMBER 31, 2021** ### **TABLE OF CONTENTS** | | Page No(s). | |---------------------------------------------------------------------|-------------| | Report of Independent Registered Public Accounting Firm | | | Financial Statements: | | | Statement of Financial Condition | 2 | | Statement of Income | 3 | | Statement of Changes in Membe
r's Equity | 4 | | Statement of Cash Flows | 5 | | Notes to Financial Statements | 6 - ! I | | Supplementary Information: | | | Computation of Net Capital Under Rule I 5c3-
Schedule l:
I | | | Schedule fl: Computation for Determinatio n of Reserve Requirements | | Under Rule 15c3-3 ## **Supplemental Reports:** Independent Registered Public Accounting Finn's Report on E'.xemption Report Independent Registered Public Accounting F irm's Report on Schedule of Assessment and Payments (Form SI PC-7) {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) # REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Managing Member of ThinkEquity, LLC ### Opinion on the Financial Statements We have audited the accompanying statement of financial condition of ThinkEquity, LLC (the "Company") as of December 31 , 2021 , and 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 ThinkEquity, LLC as of December 31, 2021, 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 the Company's management. Our responsibility is to express an opinion on the Company'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 the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the U.S. Securities and Exchange Commission ("SEC") 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. ### Auditors' Report on Supplemental Information The supplemental information in Schedules I and II ("Supplemental Information") has been subjected to audit procedures performed in conjunction with the audit of the Company's financial statements. The Supplemental Information is the responsibility of the Company'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 in Schedules I and II is fairly stated , in all material respects, in relation to the financial statements as a whole. ~ c( *Co/2fAs1 PC.* GRASSI & CO., CPAs, P.C. We have served as ThinkEquity, LLC's auditors since 2020. New York, New York August 15, 2022 7i,;,o THIRD AVENUE, 28TH F-LOOR. NEVV YOFd< , NY 10017 P: /.12 b6'1 .6 1b6 • F ; ) 1).-/ ::"i '.:;< .b]ilR • G, l~ f.-... SS!CP/.~S .''.::Ofv1 NC\:V YOPf( I f'-J EV.J JCRS CY I M1\~--;~;r'\ CHUS!::TTS i f7"LORtD/', ![](_page_4_Picture_15.jpeg) N--1 IH DEPU·-IDENT FIR M ;..\SSOC l /:. Tt:D !TH MOOF< F GLOB/1..L N ETWO HJ< UiVll ! LU {5}------------------------------------------------ ### **STATEMENT OF FINANCIAL CONDITION** ### **AS OF DECEMBER 31 , 2021** ### **ASSETS** | Assets | | | |---------------------------------------|------------------|------------------| | Cash | \$
23,316,289 | | | Deposits with clearing organizations | 36,032,540 | | | Due from broker dealers | 248,342 | | | Forgivable loans | 108,153 | | | Right of use asset | 5,253,067 | | | Prepaid expenses | 146,496 | | | Security Deposit | 542,300 | | | Total assets | | | | | | \$
65,647,187 | | Total assets | | | | | | | | LIABILITIES AND MEMBER'S EQUITY | | | | Current Liabilities: | | | | Accounts payable and accrued expenses | \$
8,353,118 | | | Bonus payable | 4,492,500 | | | Deferred revenue | 1,027,000 | | | Commissions payable | 1,285,202 | | | Operating lease liability | 5,461 ,137 | | | Income Taxes payable, net | 5,649,379 | | | | | | **Total current liabilities Commitments and Contingencies** \$ 26,268,336 **Member's Equity Total liabilities and member's equity** 39,378,851 \$ **65,647,187** The accompanying notes are an integral part of these financial statements {6}------------------------------------------------ ## **STATEMENT OF INCOME** ### **FOR THE YEAR ENDED DECEMBER 31, 2021** | Revenue: | | | |------------------------------------------|---------------|-------------------| | \$
Corporate finance income | 166,041 , 614 | | | Commissions income | 5,374,419 | | | Corporate finance income - warrants | 1,843,406 | | | Rebates and handling fee income | 169,505 | | | Trading income | 210,276 | | | Total revenue | | \$
173,639,220 | | | | | | Expenses: | | | | Compensation and related benefits | 123,352,173 | | | General and administrative | 13,731 ,387 | | | Brokerage, exchange and clearing fees | 973,714 | | | Total expenses | | \$
138,057,274 | | | | | | Operating Income | | 35,58 1,946 | | | | | | Other income | | | | PPP loan forgivenss | 180,089 | | | Interest income | 3,365 | | | | | 183,454 | | Total other income | | | | Income before provision for income taxes | | 35,765,400 | | Provision for income taxes | | 5,874,151 | | | | | | Net income | | \$
29,891,249 | The accompanying notes are an integral part of th,ese financial statements {7}------------------------------------------------ #### **STATEMENT OF CHANGES IN MEMBER'S EQUITY** #### **FOR THE YEAR ENDED DECEMBER 31, 2021** | | Common
Stock | | Additional
Paid
Capital | | Retained
Earnings | | Member's
Equity | | Total
Member's
Equity | | |-------------------------------------------|-----------------|----------|-------------------------------|--------------|----------------------|--------------|--------------------|---------------|-----------------------------|---------------| | Balance December 31, 2020, as
restated | \$ | 15,000 | \$ | 4,854,059 | \$ | 7,620,248 | \$ | | | \$ 12,489,307 | | Net income (loss) | | | | | | 30,589,076 | | (697,827) | | 29,891,249 | | Capital contributions | | | | | | | | 266,472 | | 266,472 | | Capital distributions | | | | (3,268,177) | | | | | | (3,268,177) | | Conversion from C-corp to LLC | | (15,000) | | (1 ,585,882) | | (38,209,324) | | 39,810,206 | | | | Balance December 31, 2021 | \$ | | \$ | | \$ | | | \$ 39,378,851 | \$ | 39,378,851 | The accompanying notes are an integral part of these financial statements {8}------------------------------------------------ ### **STATEMENT OF CASH FLOWS** ### **FOR THE YEAR ENDED DECEMBER 31, 2021** | Cash flows from operating activities: | | |---------------------------------------------------|------------------| | Net income | 29,891,249
\$ | | Adjustments to reconcile net income to net cash | | | provided by operating activities: | | | Forgivable loans | 17,166 | | Forgiveness of PPP loan | (180,163) | | Decrease (increase) in operating assets: | | | Securities owned at fair value | | | Deposits with clearing organizations | (15,283,053) | | Receivable from broker dealers | 10,158,547 | | Prepaid expenses · | 15,912 | | Right of use asset | (5,253,067) | | Security deposits | (521,500) | | Increase (decrease) in operating liabilities: | | | Accounts payable and accrued expenses | 8,247,869 | | Deferred revenue | 632,578 | | Bonus payable | (8,455,882) | | Right of use liability | 5,461 ,137 | | Commissions payable | (7,457, 149) | | Income taxes payable, net | 1,449,209 | | Net cash provided by operating activities | \$ 18,722,853 | | Cash flows from financing activities | | | Capital contributions | 266,472 | | Capital distributions | (3,268,177) | | Net cash used by financing activities | (3,001 ,705) | | Net increase in cash | 15,721 ,1 48 | | Cash and cash equivalents - beginning of the year | 7,595 ,140 | | Cash and cash equivalents - end of the year | \$ 23,316,288 | | Supplemental disclosure of cash flow information: | | | Cash paid during the year for income taxes | \$
4,418,016 | Cash paid during the year for Interest The accompanying notes are an integral part of these financial statements \$ 2,243 {9}------------------------------------------------ # **NOTES TO FINANCIAL STATEMENTS** # **FOR THE YEAR ENDED DECEMBER 31, 2021** ### **Note t - Organization and Nature of Business** ThinkEquity LLC formerly known as Fordham Financial Management. Inc. (the "Company") is a broker-dealer registered with the United States Securities and Exchange Commission (the ·'SEC') and is a member of the Financial Industry Regulatory Authority ("FlNRA") and the Securities Investor Prntcction Corporation ("SIPC"). Effective August 16. 202 1, Fordham Financial ,vlanagement, Inc. converted from a Co lorado corporation into a Delaware limited liability company changing its name to ThinkEquity LLC. The Company is a wholly-owned subsidiary of Fordham Holdings. Inc. (the "Parent"). The Company is engaged in a single line of business as a securities brokerdealer, which comprises several classes of serv ices, includi ng private placements and investment banking. The Company operates under the provisions of Paragraph (k)('.')(ii) of Rule l 5c3-3 of the Securities Exchange Act of 1934 and, accordingly, is exempt from the ri:maining provisions of that rule. Essentially, the requirements of Paragraph (k)(2)(ii) prov ide that the Company clear a.It tra nsactio ns on behalf of customers on a fully disc losed basis with a clearing bwker and promptly transmits all customer funds and securities to clearing broker deale r. The clearing broker-dealer carries all the accounts of customers and maintains all related books and records as are customarily kept by a clearing broker-dealer. ### **Note 2 - Summary of Significant Accounting Policies** ### **Basis of presentation** The Company follows accounting standards established by the Financial Accounting Standards Board (the "FASB") to ensure consisti:nt reporting of financial condition, results of operations, and cash flows. Reforences to the accounting prin ciples generally acce pted in the United States of Ame rica ("U.S. CiAAP") in these notes are r.o the FASH Accountiug Standards Codification, sometimes referred to as the "Codification" or ''ASC'. ### **Use of estimates** The preparation of financial statements in conformity with U.S. GAAP requires that management make estimates and assumptio ns that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities m 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. ### **Cash and cash equivalents** For the purpose of the statement of cash flows. the Company conside rs highly liqu id investments with a11 original maturity of three months or less to be cash equivalents. ### **Property and equ\_ipment** Property and equipment arc stated at cost. Depreciation is provided using a straight line approach using estimated nscfol lives of fiw to seven years. Major additions nnd improvements are capitalized, and repairs and maintGmmcc are charged to operations as incurred. All property and equipment was fu lly deprec iated as of December 31. 2018 and there were no purchases during the year ended D~cember 31. 2021. {10}------------------------------------------------ ## **NOTES TO FINANCIAL STATEMENTS** ## **FOR THE YEAR ENDED DECEMBER 31, 2021** ### **Revenue recognition** The Company follo,vs the provisions of FASB ASC Topic 606. *Revenue,liwn comracrs with Customers* ("ASC Topic 606'"). The revenue recognition guidance requires that an entity recognize revenue to depict the transfer of promised good or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange of those goods or service. The guidance requires an entity to follow· a five-step model to ( I.) identify the contrnct(s) with a customer, (2) identi(y the performance obligations in the contract, (3) determine the transaction price, (4) allocak. the trnnsaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. ln determining the rransaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the arn,)unt of cumulative revenue recogn ized would not occur when the unc.:rtuinty associate d with th e variable consideration is resolved. The revenue recognition guidance docs not apply to revenue associated with financial instruments, interest income and expense. leasing and insurance contracts. The following is a description of the principal activities from which the Company generates its revenue. The Company provides corporate finance and commissions transaction related services to its customers. The benefits of the Company·, services an: generally lransforred to the customers at a point in time upon executing a transaction. The timing of the Company's revenue recogn ition may differ from the timing of payment by its customers. The Company records a receivable when revenue is recognized prior to payment and ihe Company has an unconditional right to payment. Alt.:rnativcly. when payment precedes the provision of the rel ated services. the Company records deterred revenue wh ich represents a contract liabi lity until the performance obligation s arc satisfied. There were no contract assets or contract liabi lities at the beginning and end of yea r. ### **Corporate finance income** Corporate finance income is earned from providing private placement. underwriting and adv isc•ry services. Tbc benefits of the Company's services are generally transforred to the Company's customers over time, since the customers sirnultaneous.ly receive and consume the benefits as the Company performs the service. The Company's contracts are usually cancellable by either party at any time and the considerations typ ically include expense advances and success fees. Expense advances arc generally collected near the beginning of each deal as deferred revenue and recognized into revenue as expenses related to the dea ls are incurred. However. success fees arc variable and subject to constraints, and are typically not recogn ized until the transaction completion date, due to tbc uncertainty associated with those events. As of December 31, 2021. expense advances included in tbc accompanying statement of financial condition as deferred revenue totaled \$1.027,022. The Company may receive stock warrants as part of agreed-upon compensation for services. In accordance with ASC Topic 606. these warrants are valued at fair value at the initiation of the contract if determinable . Otherwise. the warrants are valued based on the typical charge for the service provided. At the completion of the contract the warrant foir values arc recognized into revenue as corporate finance income ... warrants and as compensation expense, as these warrants are allocated at closing to certain employees. The Company utilizes valuation techniques to determine the fair value of the warrants at the date of grant util izing market data to convert foturc amounts to a single amount based 011 current. market ex pcctmions about the future amounts (lattice models). For the year ended December 31, 2021, the Company recorded revenue and compen~ation expense from receipt and is~uance of these warra nts totaling \$1 ,843.406. ### **Commission Income** Securities transactions and the recognition of related income and expenses arc reco rded on a trade date basis. Commissions and related clearing charges are also recorded on a trade-date basis as securities transactions occur. {11}------------------------------------------------ # **NOTES TO FINANCIAL STATEMENTS** # **FOR THE YEAR ENDED DECEMBER 31, 2021** ### **Income taxes** On August 16, 2021 , the Company converted from a C-Corporation to a limited liability company. A pro visio n has been made for income taxes currently due Federal, New York State and New York City tax authorities through the effective date of the conversion. The amount of current income taxes payable or refundable is recognized as the date of the financial statements utilizing currently enacted tax laws and rates. There are no deferred income tax items recogni zed in the financial statements. See Note 6 for a breakdown of the prov ision for income taxes. The Company recogni zes and measures its unrecogni zed tax benefits in acco rdance with F ASB ASC Topic 740, Income Taxes. Under that guidance the Company assesses the likelihood, based on their technical merit, that the tax positions will be sustained upon examination based on the facts, circumstances, and information available at the end of each period. The measurement of unrecognized tax benefits is adjusted when new information is available, or when an event occurs that requires a change. The Company recogni zes the accrual of any interest and penalties related to unrecogni zed tax benefits in income tac expense. The FASB provide s guidance for how uncertain tax positions should be recognized, measured, disclosed and presented in the financial statements. This requires the evaluation of tax positions take n or expected to be taken in the course of preparing the Company's tax returns to determine whether tax positions are "more likely than not" of be ing sustai ned " when challenged" or " when examined" by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense and I iabil ity in the current year. For the yea r ended December 3 I, 2021, management has determined that there are no uncertain tax positions. The Company is not subject to examination by U.S. fe deral, state and local tax authorities for tax years before 2018. ### **New accounting and authoritative guidance** Right of use asset and operating lease liab ility be e-mailed under system cover. In January 20 I 6, the FASB issued ASU No. 2016-02, *Leases (Topic 842).* This standard requires that a lessee recogni ze the assets and liabilities that arise from operating leases. A lessee should recogni ze in the statement of financial position a liab ility to make lease payments (the lease liability) and a ri ght-of-use asset representing its right to use the underlying asset fo r the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy e lection by class of underlying asset not to recogni ze lease assets and lease liabilities. The Company adopted this standard last year, but did have any operating leases. The adoption of the new leases have a material impact on the Company's finan cials states. ln March 2016, the FASB issued ASU No. 2016-08, *Revenue/ram Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net).* This standard clarifies the implementation guidance on principal versus agent con siderations. The gu idance includes indicators to assist an entity in determining whether it controls a spec ified good or service before it is transferred to the customers. The effective date and transition requirements, of ASU 2016-08 are the same as the effective date and transition requirements for ASU 20 14- 09. The adoption of this guidance resulted in a prior period adj ustment to defe rred revenue and retained earnings total ing \$394,422. See Note I 0. In April 2016, the FASB issue ASU No. 2016-10, *Revenueji·om Contracts with Customers (Topic 606): identifying Pe,formance Obligations and Licensing* which amends certain aspects of the F ASB's new revenue standard. ASU 20 16-10 identifies performance obligations and provides li censing impleme ntation guidance. The effective date and transition requirements of ASU 20 I 6- IO are the same as the effective date and transition requirements for ASU 20 I 4- 09. The ado ption of this standard does not have a materi al impact on the Company's financial statements. ### **Note 3** - **Receivable from Clearing Broker/Securities Held at Broker** The Company conducts business and clears its proprietary and customer transaction s throug h one clearing broker on a fully disclosed basis. The Company earns commissions as an introducing broker for the transactions of its customers. The clearing and depository operations fo r the Company's customer accounts are performed by its clearing broker pursuant to a clearance agreement {12}------------------------------------------------ ### **NOTES TO FINANCIAL STATEMENTS** ### **FOR THE YEAR ENDED DECEMBER 31, 2021** ### **Note 4 - Commitments and Contingencies** ### **Lease commitments** In February 20 I 7, the FASB issued ASU No. 20 l 6-02, Leases ("Topic 842"), to provide guidance on recognizing lease assets and lease liabilities on the Statement of Financial Condition and disclosing key information about lease arrangements, spec ific differentiating between different types of leases. The Company adopted Topic 842, with an effective date of January **l ,** 2020, but did not have any operating leases at that time. The Company engaged their first operating in 2021. This standard requ ires all lessees to recognize a right-ot~use asset and a lease liab ility, initially measured at the present value of the lease payments. The present value of the ex isting operating lease was determined by using the risk-free borrowing rate at the lease inception of 2.09%. Under Topic 842, the Company applied a dual approach to all leases whereby the Company is a lessee and classifies leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the Company. Lease classification is evaluated at the inception of the lease agreement. Regardless of classification, the Company records a right-of-use asset and a lease liability for all leases with a term greater than 12 months. Operating lease expense is recogn ized on a strai ght-line basis over the te rm of the lease. Operating right of use ("ROU") assets and operating lease liabilities are recognized at the lease commencement date. Operating lease liabilities represe nt the present value of lease payments not yet paid. Operating right of use assets represent our right to use an underlying asset and is based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, we estimate incremental sec ured borrowing rates corresponding to the maturities of the leases. The adoption of the new lease standard had a si gnificant impact on the Statement of Financial Condition, resulting in the recognition of \$4,134,367 of right-of-use assets, and \$5,461,137 of lease I iabilities as of December 3 I, 2021. In addition, the Company recognized an approximate \$964,774 cumulative effect adjustment to member's equity on the Statement of Changes in Member's Equity rel ated to the unamorti zed deferred lease costs incurred in prior periods which do not meet the definition of initial direct costs under Topic 842. The adoption of Topic 842 did not have a significant impact on the lease classification or a materi al impact on the Statements of Income and liquidity. At December 31 , 2021 , future minimum lease payments under the non-cance lable operating leases are as fo llows: Twelve Months Endin g December 3 **l ,** 2022 \$ 347,667 2023 \$372,500 2024 \$],l !7,500 2025 \$ 1, 117,500 2026 \$ 1, 117,500 Thereafter \$1,862,500 Total lease payment \$5,935, 167 The Company is currently on a month-to-month lease for its office space located at 17 Battery Place, New York, NY and 960 South Broadway, Hicksville, NY. Rent expense fo r the year ended December 31 , 2021 amounted to \$475,565 . {13}------------------------------------------------ # **NOTES TO FINANCIAL STATEMENTS** # **FOR THE YEAR ENDED DECEMBER 31, 2021** ### **Brokerage activities** ln the normal course of business, the Company is engaged in various broke rage activities on an agency basis through a clearing broker. ln connection with these acti vities, a customer's unsettled transactions may expose the Company to off-balan ce sheet risk in the event the customer is unable to fulfill the ir contractual obligations. Significant credit expos ure may result in the event that the Company 's clearing broker is unable to fulfill their contractual obligation. ### **Contingency** On May 26, 2022 the Company was granted a stay by the Financial Industry Regulatory Authority 's ("FINRA") Depa rtment of Enforcement as the Company fa iled to time ly file an annual audit. The Company has a hearing schedu led with· F[N RA fo r the e nd of August. The Company cannot accurately predict the likelihood of a favorab le or unfavorable outcome or quantify the amount or range of any potential fin ancial impact, if any. Accordingly, regarding this matter, no adjustment has been made in the Company's accompanying financial statements. ### **Note S - Forgivable loans** The Company extended cred it ("forgivable loans") to new adv isors in 202 1 in the form of signing bonuses and commission advances. The decision to extend credit to adv iso rs are generally based on the adv isor's ability to generate future commissions. These advances are forgivable over the terms of the advisor agreement provided the advisor remains licensed through the Company for a period of time . At December 31 , 2021 , \$108, 153 of extended cred it is fo rgivable . ### **Note 6 - Income Taxes** On August 16, 2021 , the Company converted from a C-Corporation to a Limited Liability Company. The provision for in come taxes fo r the yea r ended December 3 1, 2021 consists of the fo llowing: ### **Current income tax expense (benefit)** | Federal
State and loca l | \$7,041 ,208
(1.167.057) | |-----------------------------------|-----------------------------| | Total pro vision for income taxes | \$5,874,151 | Net taxes payable (receivab le) as of December 3 I, 2021 consists of the fo llowin g: | Federal | \$6,346,558 | |-----------------|-------------| | State and local | (697,179) | | | | \$5,649,37 9 {14}------------------------------------------------ ### **NOTES TO FINANCIAL STATEMENTS** ## **FOR THE YEAR ENDED DECEMBER 31, 2021** ### **Note** 7 - **Net Capital Requirements** The Company is subject to the SEC Uniform Rule (SEC Rule l 5c3- l ), 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 J (and the rule of the "applicable" exchange also provides that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed IO to I). At December 31, 2021, the Company had net capital of \$38,789,707 which was \$37,471 ,285 in excess of its required net capita l of \$1,3 I 8,887. The Company's aggregate inde bted ness to net capital ratio was 0.5099 to I at December 31 , 2021. Certain advances, dividend payments and other equity withdrawals are restricted by the provisions of the rules of the Securities and Exchange Commission. Under the arrangements with the clearing broker-dealer, the Company is required to maintain certain minimum leve ls of capital and comply with other financial ratio requirements. ### **Note 8** - **Paycheck Protection Program Loan** On April 3, 2020 ("effective date") the Company signed a Paycheck Protection Program Term Note ("PPP Loan") Term Note ("PPP Loan") in the amount of \$180,089. The Term Note ("PPP Loan") contains provisions for the fo rgiveness of the facility, subj ect to program requirements outlined in Section I I 06 of the Coro na virus Aid Relief, and Economic Security Act. Loan forgiveness is subject to the sole approval of the Small Business Administration. The Company is elig ible for loan forgiveness in an amount equal to payments made during the 24-week period begi nning on the Effecti ve Date with the exception that no more than 40% of the amount of loan forgiveness may be fore expenses other than payro ll expenses. Any amounts outstanding under the Term Note (" PPP Loan")shall accrue interest at a rate of I%, The Company 's PPP loan was fully forgiven in July 202 l and the outstanding balance of the Term Note ('·PPP Loan") in the amount of \$ 180,089 is recorded as PPP Loan Forgiveness on the accompanying Statement of Income. ### **Note 9 - Concentrations and Credit Risks.** The Company clears its securities transactions through a major financial service firm. These activities may expose the Company to off-balance-sheet risk in the eve nt that the in stitution is unable to fulfill its obligation and the Company has to purchase or se ll the securities at a loss. The Company maintains its cash balances in various commercial banks which, at times, can exceed the Federa l Deposit Insurance Corporation ("FDIC") limit of \$250,000 per depositor. At December 31, 2021, the Company's cash balances held at the commercial banks exceeded the FDfC limit. The Company has not experienced any losses in such acco unts and these accounts currently exceeds the FDIC limit by \$22,566,024. Financial instruments that potentially subj ect the Company to concentrations of credit risk consist principally of the clearing organizations rece ivab le. The Company has cash on deposit with a clearing organization. The amount of cred it risk associated with the deposits with clearing organization is approximately \$36,000,000 and is reflected in the statement of fin ancia l condition. ### **Note 10- Subsequent Events** The Company has evaluated subsequent events through August 15, 2022, the date the financial statements were available to be issued. {15}------------------------------------------------ ### SUPPLEMENTARY INFORMATION {16}------------------------------------------------ ## **SCHEDULE** I - **COMPUTATION OF NET CAPITAL UNDER SEC RULE 15c-3-1** # **AS OF DECEMBER 31, 2021** | Total member's equity | | \$
39,378,851 | |-----------------------------------------------------------------------------------------------------------|-----------|------------------| | Addback Focus Line 3525 | | | | Difference Between Right used asset and Operating lease liabiity | 208,070 | 208,070 | | Deduction/charges | | | | Non-allowable assets | | | | Prepaid expenses | 146,496 | | | Forgivable loans | 108,153 | | | Security deposits | 542,300 | | | Total deduction/charges | | 796,949 | | Net Capital before haircuts | | \$
38,789,972 | | Haircuts on securities pursuant to 15c31 (f) | | | | Net Capital per rule 15c3-1 | | 38,789,972 | | Aggregate indebtedness | | | | Accounts payable and accrued expenses | 8,353,119 | | | Bonus payable | 4,492,500 | | | Commissions payable | 1,285,202 | | | Income taxes payable, net | 5,649,379 | | | Total aggregate indebtedness: | | \$
19,780,200 | | Computed minimum net capital required( The greater of)
(\$100,000 or 6 2/3% of aggregate indebtedness) | | \$
1,318,687 | | | | | | Excess Net Capital | | 37,471 ,285 | | Percentage of Aggregate Indebtedness to Net Capital | | 50.99% | | Reconciliation with Company's Computation (included part Ila of form X-17 A-5 as of Decenber 31, 2021) | | | | Net Capital, as reported in the Company's Part II (Unaudited) Focus Report | | 37,319,526 | | Audit Adjustments Dec 2021 | | 1,470,446 | | Net Capital, as reported above | | 38,789,972 | {17}------------------------------------------------ ![](_page_17_Picture_0.jpeg) # REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Managing Member of ThinkEquity, LLC We have reviewed management's statements, included in the accompanying Exemption Report, in which (1) ThinkEquity, LLC (the "Company") identified the following provisions of 17 C.F.R. §15c3-3(k) under which 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 "exemption provisions") and (2) the Company stated that the Company met the identified exemption provisions throughout the most recent fiscal year without exception. The Company'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 the Company'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. *~ce\_ Co/2fAs; PC.* GRASSI & CO., CPAs, P.C. New York, New York August 15, 2022 **MOORE** J\N I NDEPEN DE NT FIRM ASS OC l /:..TED V/J T H ~-IIOOF~F C LOBf'>.L f'4 E T 'vVO HK LIMITLD 71:,0 THIRD AVEMUE, 23 Tt·! r LOOR . NEV\/ YOF{I<. i'JY 10017 P: 2 ·!? f1fi·J.f:i ·l b6 • F ; 2 12 .'Jr:: '.). b ]/18 • G l~/\SS.JCP/~S- f.':()fv'1 NE\:V YORI<. I NE\N J ERSEY l tv11\SS (\ CH U t)[TTS ! r LO RIDI\ {18}------------------------------------------------ # THlNKEQUITTES, LLC # EXEMPTION REPORT FO.R THE YEAR ENDED DECEMBER 31, 2021 THINKEQUITY LLC. (the "Company") is a registered broker-dealer subject to rule **t** 7a-5 promulgated by the Securities and Exchange Commission (17 C.F.R 240. 17a-5, "Reports to he made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R.240.17a-S(d)(I) and (4). To the best of its knowledge and belief, the Company asserts the following: (1) The Company claimed an exemption from 17 C.F.R 240, 15c3-3 under the provisions of 17 C.F.R. H0.15c3-3 (k)(2)(ii) throughout the J>eriod January 11 2021 through December 31, 202 I. (2) The Company met the identified exemption provisions in 17 C.F.R. 240. l5c3- 3(k)(2)(ii) throughout the period .January 1, 2021 through December 31, 2021 without exception. Tlrnse assertions arc the responsibility of management. The Company acknowledges it is .nlso management's responsibility for compliance with the identified exemption provisions th rough out the period ended December 31, 2021. The Company has made available to the accountants all records and other information relevant to the Company's asser·tions, including a II communications from regu hi tory agencies, external auditors, otl1ers who perform an equivalent function, compliance functions and other auditors concerning possible exceptions to the exemption provisions, received through the date of the revi.ew opinion. There were no events, subsequent to the peri.od addressed in the Company's assertions, any known events, or other factors that might significantly affect the broker's or dealer's compliance with the identified c.xem ption p1·ovisions. ThinkEquity, LLC. l, \Villiam Baquet swear (or affirm) that, to my best knowledge aud belief, this Exemption Report is true and correct. **See revi~w rcpc,rt of in\_Uept.•11den1 1·t~gislered puhlk :lci'oun li ng tlnn** Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.