# CHIRON SECURITIES LLC X-17A-5 (2020-04-14) — Broker-dealer annual report - Company: CHIRON SECURITIES LLC - Form: X-17A-5 - Filed: 2020-04-14 - Period: 2019-12-31 - Accession: 0000884982-20-000003 - CIK: 884982 - File #: 8-44665 - Material weakness: No - Auditor: Hartgraves Accounting & Consulting LLC - Auditor location: Dallas, TX - Contact: Scott W. Johnson - Phone: 713-929-9081 - Signed by: Scott W. Johnson (President, Managing Director) Original filing: https://www.sec.gov/Archives/edgar/data/884982/000088498220000003/2019chironsecauditreport.pdf --- {0}------------------------------------------------ **UNITEDSTATES SECURITIESANDEXCHANGECOMMISSION Washington, D.C. 20549** OMB APPROVAL 0MB Number: 3235-0123 Expires: August 31,2020 Estimated average burden # hoursper response 12.00 **ANNUAL AUDITED REPORT FORM X-17A-5 PART III** | SEC FILE NUMBER | |-----------------| | 8-44665 | **FACING PAGE** **Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder** | REPORT
THE
PERIOD
FOR
BEGINNING | 01/01/2019
12/31/2019
AND
ENDING | | | | |----------------------------------------------------------------------------------------------------|-----------------------------------------------------------|-----------------------------------|--------------------------------|--| | | MM/DD/YY | | MM/DD/YY | | | A. | REGISTRANT
IDENTIFICATION | | | | | Chiron
BROKER-DEALER:
OF
NAME | Securities
LLC | | OFFICIAL USE ONLY | | | BUSINESS:
No.)
ADDRESS
OF
PRINCIPAL
PLACE
OF
(Do
not
use
P.O.
Box | | | FIRM I.D.
NO. | | | 1301
McKinney,
Suite
2800 | | | | | | | (No. and Street) | | | | | Houston | TX | | 77010 | | | (City) | (State) | | (Zip Code) | | | NAME
AND
TELEPHONE
NUMBER
OF
PERSON
Scott W. Johnson | TO
CONTACT | IN REGARD
TO
THIS
REPORT | (713) 929-9081
(Area Code - | | | ACCOUNTANT
B. | IDENTIFICATION | | Telephone Number) | | | | | | | | | INDEPENDENT
PUBLIC
ACCOUNTANT
whose | opinion
is
contained | in
this
Report* | | | | Hartgraves
Accounting
&
Consulting | LLC | | | | | | (Name -if
individual, state last, first, middle name ) | | | | | St.
325
Paul
suite
3100
N.
Street, | Dallas | TX | 75201 | | | (Address) | (City) | (State) | (Zip Code) | | | CHECK
ONE: | | | | | | Certified
Public
Accountant | | | | | | Accountant
Public | | | | | | Accountant
resident
in
United
not | States
or any
of
its | possessions. | | | | FOR | OFFICIAL
USE | ONLY | | | | | | | | | | | | | | | | | | | | | *\*Claims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis for the exemption. See Section 240.17a-5(e)(2)* **Potential persons who are to respond to the collection of information contained in this form are notrequired to respond** SEC 1410 **unless the form displays a currently valid OMB control number.** {1}------------------------------------------------ #### **OATH OR AFFIRMATION** | I, Scott Johnson | , swear (or affirm) that, to the best of | |-----------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------| | my knowledge and belief the accompanying Financial statement and supporting schedules
Chiron Securities LLC | pertaining to the firm of
, as | | 0f December 31 | , 20l
^
are true and correct. I further swear (or affirm) that | | neither the company nor any partner, proprietor, principal officer or director has | any proprietary interest in any account | | classified solely as that of a customer, except as follows: | | | | | | | | | , 1
HI AN( A Of I A CiMM
Notary 10 vi .UMJhSW
My Commis.ion L
vs
V'v
Januarv '
Vi , V ) / 1
' | 7
-
ignature | | | President
Tit | | Notary Public | | | This report ** contains (check all applicable boxes): | | | E
(a) Facing Page. | | | E
(b) Statement of Financial Condition. | | | 0
of Comprehensive Income (as defined in §210.1-02 of Regulation S-X). | (c) Statement of Income (Loss) or, if there is other comprehensive income in the period(s) presented,
a Statement | | j (d) Statement of Changes in Financial Condition. | (e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital. | | (f)
Statement of Changes in Liabilities Subordinated to Claims of Creditors. | | | (g) Computation of Net Capital.
^ | | | (h) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3. | | | (i)
(j) A Reconciliation, including appropriate explanation of the Computation of Net Capital | Information Relating to the Possession or Control Requirements Under Rule 15c3-3.
Under Rule 15c3- l and the | | | | - Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3. - (k ) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of consolidation. - (1 ) An Oath or Affirmation. - (m) A copy of the SIPC Supplemental Report. - (n) A report describing any material inadequacies found to exist or found to have existed since the date of the previous audit. *\*\*For conditions of confidential treatment of certain portions of this filing, see section 240.17a-5(e)(3).* {2}------------------------------------------------ # **CHIRON SECURITIES LLC** **(Formerly Known as Chiron Capital LLC)** **FINANCIAL REPORT** **DECEMBER 31, 2019** {3}------------------------------------------------ # **C O N T E N T S** | | | Page | |-------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|------| | REPORT | OF
INDEPENDENT
REGISTERED
PUBLIC
FIRM
ACCOUNTING | 1 | | FINANCIAL | STATEMENTS | | | | Statement
of
Financial
Condition | 3 | | | Statement
of
Operations | 4 | | | Statement
of
Changes
in
Member's
Equity | 5 | | | Statement
Cash
of
Flows | 6 | | Notes | to
Financial
Statements | 7 | | | SUPPLEMENTAL
INFORMATION | | | Schedule
Ratio | Capital,
Computation
Net
Aggregate
of
of
Indebtedness,
and
15c3-1
of
Aggregate
Indebtedness
to
Net
Capital
under
Rule | 11 | | EXEMPTION | REPORT | | | Report | of
Independent
Registered
Public
Accounting
Firm | 14 | | | Exemption
Report | 15 | | | | | {4}------------------------------------------------ #### **CHIRON SECURITIES LLC STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2019** | ASSETS | | | |----------------------------|-----------------------------------|--------------| | | Cash | \$
6,024 | | | Other Assets:
Advance to Owner | \$
19,500 | | | TOTAL ASSETS | \$
25,524 | | LIABILITIES & EQUITY | | | | LIABILITIES | | | | | Other Liabilities: | | | | TOTAL LIABILITIES | \$ | | EQUITY | | | | | TOTAL MEMBER'S
EQUITY | \$
25,524 | | TOTAL LIABILITIES & EQUITY | | \$
25,524 | The accompanying notes are an integral part of these financial statements. {5}------------------------------------------------ #### **CHIRON SECURITIES LLC STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2019** #### **REVENUES** | | Fee Income | \$ | 1,247 | | |----------|------------------------------------|----|----------|--| | | | | | | | | Total revenues | | 1,247 | | | | | | | | | | OPERATING EXPENSES | | | | | | Accounting | | 5,000 | | | | Bank Charges | | 24 | | | | Compensation | | 9,081 | | | | Insurance | | 412 | | | | Occupancy and Equipment Expenses | | 436 | | | | Other Expenses | | 347 | | | | Professional
Service Fees | | 10,000 | | | | Promotional Fees | | 1,274 | | | | Registration | | 25 | | | | Regulatory | | 5,380 | | | | Research | | 427 | | | | Technology, Data and Communication | | 373 | | | | Travel & Entertainment | | 1,395 | | | | | | | | | | Total operating expenses | | 34,174 | | | | | | | | | NET LOSS | | | (32,927) | | **The accompany notes are an integral part of these financial statements.** {6}------------------------------------------------ #### **CHIRON SECURITIES LLC STATEMENT OF CHANGES IN MEMBER'S EQUITY FOR THE YEAR ENDED DECEMBER 31, 2019** | BALANCE,
December 31,
2018 | \$ 55,452 | |----------------------------------|-----------| | Contributions | 2,999 | | Net
Income | (32,927) | | BALANCE,
December 31,
2019 | \$ 25,524 | The accompany notes are an integral part of these financial statements. {7}------------------------------------------------ | CASH FLOWS FROM OPERATING
ACTIVITIES | | |-------------------------------------------------------------------------------------------------------------|-----------------| | income
Net | \$
(32,927) | | to
to
Adjustments
net
reconcile
income
net
in
cash used
activities:
operating | | | Payable to
Chiron
Financial | (272,307) | | Net
cash used in
operating
activities | (305,234) | | CASH FLOWS FROM FINANCING
ACTIVITIES | | | Contributions | 2,999 | | Net
Cash used in financing activities | 2,999 | | Decrease in cash | \$
(302,235) | | CASH,
period
beginning of | \$
308,259 | | CASH,
end of
period | \$
6,024 | 6 The accompany notes are an integral part of these financial statements. {8}------------------------------------------------ ## **NOTE 1. ORGANIZATION AND OPERATIONS** Weisser, Johnson & Co. Capital Corporation was organized on January 10, 1992 under the laws of the State of Delaware to engage solely in the business of a registered broker dealer. In February 2003, the Company converted to Weisser Johnson Capital LP, a limited partnership, and in December 2009 the Company converted to Weisser Johnson Capital LLC (the Company). In November 2015, the name of the Company was changed to Leecam Advisors LLC and in October 2016 the name of the Company was changed to Chiron Capital LLC. In December of 2018 the name of the Company was changed to Chiron Securities LLC. The Company is a registered broker dealer with the Securities and Exchange Commission (SEC) and a member of the Financial Industry Regulatory Authority (FINRA). The Company operates in Houston, Texas brokering private placement investments to a select group of institutional investors. #### **NOTE 2. SIGNIFICANT ACCOUNTING POLICIES** This summary of significant accounting policies of the Company is presented to assist in understanding the financial statements. The financial statements and notes are representations of management, who are responsible for their integrity and objectivity. These accounting policies reflect industry practices, conform to accounting principles generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements. The following items comprise the significant accounting policies of the Company. #### **Revenues** Revenues are recognized at the date of funding, which typically occurs in conjunction with the brokered deal. #### **Income Taxes** The Company is treated as a flow-through entity for income tax purposes. As a result, the net taxable income of the Company and any related tax credits, for federal income tax purposes, are deemed to pass to the individual members and are included in their personal tax returns even though such net taxable income or tax credits may not actually have been distributed. Accordingly, no tax provision has been made in the financial statements since the income tax is a personal obligation of the individual members. The Company recognizes and measures its unrecognized tax benefits in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 740, *Income Taxes.* FASB ASC 740 provides guidance on derecognition, measurement and classification of amounts relating to uncertain tax positions, accounting for and disclosure of interest and penalties, and disclosures relating to the adoption of the accounting standard. As of December 31, 2019, the Company believes there are no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. {9}------------------------------------------------ # **NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED** The Company recognizes interest and penalties on state income taxes in the statement of operations. For the year ended December 31, 2019, the Company had no interest or penalties on state income taxes. The Company's tax years 2014 through the present remain subject to examination by major tax jurisdictions. #### **Use of Estimates** The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, if any, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. #### **NOTE 3. NET CAPITAL REQUIREMENTS** The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (SEC 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. At December 31, 2019, the Company's aggregate indebtedness to net capital ratio was 0% and its net capital was \$6,024, which exceeds the minimum net capital required of \$5,000. ## **NOTE 4. LIABILITIES SUBORDINATED TO CLAIMS OF GENERAL CREDITORS** During the year ended December 31, 2019, there were no liabilities subordinated to the claims of general creditors. Accordingly, a statement of changes in liabilities subordinated to claims of general creditors has not been included in these financial statements. #### **NOTE 5. POSSESSION OR CONTROL REQUIREMENTS UNDER RULE 15c3-3** The Company operates pursuant to the exemptive provisions of paragraph (k)(2)(i) of SEC Rule 15c3-3 and paragraph (a)(2)(vi) of SEC Rule 15c3-1. Accordingly, the Company does not carry securities accounts for customers or perform custodial functions relating to customer securities and, as such, a review of the practices and procedures over safeguarding securities was not performed. #### **NOTE 6. RELATED PARTY TRANSACTIONS** During 2019, the Company had no paid employees and shared office space with Chiron Financial LLC, an entity that has common ownership. In prior years the Company shared an office with Weisser, Johnson & Co which no longer exists. The Company has historically shared expenses relating to rent, personnel, and other overhead under an expense sharing agreement. In 2019 such expenses relating to the Company's services to a client company were remitted to Chiron Financial LLC, which employs all personnel involved in Company activities. When charged, reimbursed expenses are not necessarily indicative of the costs that would have been incurred had the Company been a separate and independent operation. {10}------------------------------------------------ ## **NOTE 6. RELATED PARTY TRANSACTIONS - CONTINUED** During the year ended December 31, 2019, Chiron Financial, LLC. did not charge the Company for any overhead expenses. The Company has in prior years assigned its retainer fees, certain warrants to acquire equity securities, certain fees unrelated to securities transactions, and the reimbursement of expenses associated with client assignments to Weisser, Johnson & Co. under an informal arrangement. During the year ended December 31, 2019, the Company made no assignments to Chiron Financial LLC. The Company has also participated in past years in a profit sharing arrangement along with Weisser, Johnson & Co. in which certain employees and members are entitled to receive a portion of the distributed net profits of Weisser, Johnson & Co. under an expense sharing agreement. During the year ended December 31, 2019, the Company did not participate in any profit sharing arrangements, though it did reimburse expenses of Chiron Financial LLC. As of December 31, 2019, no expense reimbursement amounts were due to any related party. ## **NOTE 7. CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS** Financial instruments that potentially subject the Company to concentration of credit risk consist principally of temporary cash investments. The Company minimizes its credit risk associated with cash by utilizing high credit quality financial institutions. Cash balances are insured by the Federal Deposit Insurance Corporation (FDIC) up to \$250,000. The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in these accounts and believes it is not exposed to any significant risk on cash. Major customers are defined as those comprising more than 10% of the Company's annual revenue. During the year 100% of the Company's revenue was received from one customer. #### **NOTE 8. CAPITAL TRANSACTIONS** The Company received \$2,999 in capital contributions and no capital redemptions for the year ended on December 31, 2019. {11}------------------------------------------------ **SUPPLEMENTAL INFORMATION** {12}------------------------------------------------ #### **SCHEDULE I CHIRON SECURITIES LLC COMPUTATION OF NET CAPITAL UNDER RULE 15C3-1 OF THE SECURITIES AND EXCHANGE COMMISSION AS OF DECEMBER 31, 2019** | COMPUTATION
OF
CAPITAL
NET
Total
members' equity
qualified
capital
for
net | \$
25,524 | |-----------------------------------------------------------------------------------------------------------|--------------| | Add:
deductions
or
Other
allowable
credits | | | Total
capital
and
allowable
subordinated
liabilities | 25,524 | | Deductions
and/or
charges
expenses
Prepaid | 19.500 | | before
haircuts
on
securities
positions
Net
capital | 6,024 | | securities
(computed,
where
applicable
Haircuts
on
Rule
15c3-1(f))
pursuant
to | | | Net
capital | \$
6.024 | | AGGREGATE
INDEBTEDNESS | | | financial
condition:
Items
included
in
statement
of | | | Other
liabilities | \$ | | Total
aggregate
indebtedness | £ | {13}------------------------------------------------ #### **SCHEDULE I - CONTINUED CHIRON SECURITIES LLC COMPUTATION OF NET CAPITAL UNDER RULE 15C3-1 OF THE SECURITIES AND EXCHANGE COMMISSION AS OF DECEMBER 31, 2019** #### **COMPUTATION OF BASIC NET CAPITAL REQUIREMENT** | capital
2/3%
total
Minimum
net
required
(6
of
aggregate
indebtedness) | \$ | |-------------------------------------------------------------------------------------------------------------------|-------------| | Minimum
dollar
net
capital
requirement
of
reporting
broker
dealer
or | 5.000
S | | Net
capital
requirement
(greater
of
above
two
minimum
requirement
amounts) | \$
5.000 | | capital
in
excess
required
minimum
Net
of | \$
1.024 | | capital
1000%
Excess
net
at | \$
24 | | capital
Ratio:
Aggregate
indebtedness
to
net
RECONCILIATION
WITH
COMPANY'S
COMPUTATION | Oto
1 | There were no differences in the computation of net capital under Rule 15c3-1 from the Company's computation. {14}------------------------------------------------ # Accounting & Consulting, LLC #### **Report of Independent Registered Public Accounting Firm** To the Member of Chiron Securities, LLC We have reviewed management's statements, included in the accompanying Exemption Report, in which (a) Chiron Securities, LLC identified the following provisions of 17 C.F.R. § 240.15c3-3(k) under which Chiron Securities, LLC claimed an exemption from 17 C.F.R. § 240.15c3-3: (k)(2)(i) (the exemption provisions) and (b) Chiron Securities, LLC stated that Chiron Securities, LLC met the identified exemption provisions throughout the most recent fiscal year without exception. Chiron Securities, LLC's management is responsible for compliance with the exemption provisions and its statements. Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included inquiries and other required procedures to obtain evidence about Chiron Securities, LLC's compliance with the exemption provisions. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to management's statements referred to above for them to be fairly stated, in all material respects, based on the provisions set forth in paragraph (k)(2)(i) of 17 C.F.R. § 240.15c3-3. Dallas, Texas February 27, 2020 (214) 738-1998 admin@hartgravesllc.com {15}------------------------------------------------ # Chiron Securities LLC **Exemption Report** Chiron Securities LLC (the "Company") is a registered broker-dealer subject to Rule 17a-5 promulgated by the Securities and Exchange Commission (17 C.F.R. §240.17a-5, "Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R. § 240.17a-5(d)(1) and (4). To the best of its knowledge and belief, the Company states the following: - (1) The Company claims an exemption from 17 C.F.R. § 240.15c3-3 under 17 C.F.R. § 240.15C3-3 (k)(2)(i). - (2) The Company met the identified exemption provisions under 17 C.F.R. § 240.15c3-3 (k)(2)(i) throughout the most recent fiscal year without exception. CHIRON SECURITIES LLC I, Scott W. Johnson, affirm that, to my best knowledge and belief, this Exemption Report is true and correct. By: Scott(Joj>hson Title: Managing Director February 10, 2019 {16}------------------------------------------------ # Accounting & Consulting, LLC #### **Report of Independent Registered Public Accounting Firm** To the Member of Chiron Securities, LLC #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of Chiron Securities, LLC (the "Company") as of December 31, 2019, and the related statements of operations, changes in member's equity and cash flows for the year then ended, and the related notes to the financial statements (collectively, the financial statements). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2019, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** These financial statements are the responsibility of 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 U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. 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. #### **Supplemental Information** The supplementary information contained in Schedule I, Computation of Net Capital Under Rule 15c3-1 under the Rules of the Securities and Exchange Commission have 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 supplementary {17}------------------------------------------------ information contained in Schedule I, Computation of Net Capital Under Rule 15c3-1 under the Rules of the Securities and Exchange Commission are fairly stated, in all material respects, in relation to the financial statements as a whole. This is our initial year as the auditor for the Company. Dallas, Texas February 27, 2020 Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.