# IAM CAPITAL CORPORATION X-17A-5 (2020-02-27) — Broker-dealer annual report - Company: IAM CAPITAL CORPORATION - Form: X-17A-5 - Filed: 2020-02-27 - Period: 2019-12-31 - Accession: 0001058997-20-000001 - CIK: 1058997 - File #: 8-50930 - Material weakness: No - Auditor: PKF O'Connor Davies, LLP - Auditor location: Woodcliff Lake, NJ - Contact: Lane Bucklan - Phone: 203-341-9053 - Signed by: Lane Bucklan (Chief Compliance Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1058997/000105899720000001/iamcapaudit.pdf --- {0}------------------------------------------------ **UNITEDSTATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** 0MB APPROVAL 0MB Number: 3235-0123 Expires: August 31, 2020 Estimated average burden hours rres onse ..... . 12.00 # **ANNUAL AUDITED REPORT FORM X-17A-5 PARTIII** SEC FILE NUMBER 8-50930 **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 FOR THE PERIOD BEGINNING 01/01/2019 | | AND ENDING 12/31/2019 | | | |---------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------|------------------------------------|--------------------------------|--------------------| | | MM/DD/YY | | MM/DD/YY | | | | A. REGISTRANT IDENTIFICATION | | | | | NAME OF BROKER-DEALER: 1AM Capital Corporation
ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | OFFICIAL USE ONLY
FIRM 1.D. NO. | | | | | | | | 276 Post Road West | | | (No. and Street) | | | | | Westport | CT | | 06880 | | | (City) | (State) | | (Zip Code) | | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
Lane S. Bucklan | | | 203-341 -9053 | | | | | | (Area Code - Telephone Number) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report*
PKF O'Connor Davies, LLP | | | | | | | (Name - if individual. stare last. first. middle name) | | | | | 300 Tice Blvd. | Woodcliff Lake | NJ | 07677 | | | (Address) | (City) | (State) | (Zip Code) | | | CHECK ONE:
j/jcertified Public Accountant
DPublic Accountant
DAccountant not resident in Un | ited 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 fac ts and circumstances relied on as the basis for the exemption. See Section 240. I 7a-5(e)(2)* > **Potential persons who are to respond to the collection of Information contained In this form are not required to respond unless the form displays a currently valid 0MB control number.** SEC 1410 (11 -05) {1}------------------------------------------------ ## **OATH OR AFFIRMATION** | __
J, _L_a_n_e_s_._B_u_c_kl_a_n
_ | _____________________ | , swear (or a ffirm) that, to the best of | |---------------------------------------------------|---------------------------|------------------------------------------------------------------------------------------------------------------| | | | my knowledge and belief the accompany ing financial statement and supporting schedules pertaining to the firm of | | -------
------
1AM Capital Corporation
- | ----------
-
-
- | -----------------,
as | | | | | -*(* \ . ' ' - t . of December 31 a re 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 sole ly as that of a customer, except as fol lows: | | Signature | |-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------| | | Chief Compliance Officer | | | Title | | This report** contains (check all applicable boxes): | | | 0 (a) Facing Page.
0 (b) Statement of Financ
ial Condition.
of Comprehensive Income (as defined in §2 | [{] ( c) Statement of Income (Loss) or, if there is other comprehensive income in the period(s) presented, a Statement
10. 1-02 of Regu
lation S-X). | | [Z]./ (d) Statement of Changes in Financial Condition.
0 (e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital.
D (t) Statement of Changes in Liabilities Subordinated to Cla
(g) Computation of Net Capital.
,1 | ims o f Creditors. | | (h) Computation for Determination of Reserve Requirements Pursuant to Rule I 5c3
(i) Information Relating to the Possession or Control Requirements Under Rule 15c3-3.
~./ | -3. | | D U) A Reconc
Computation for Determination of the Reserve Requirements Under Exhibit A of Rule I 5c3-3. | iliation, inc luding appropriate explanation of the Computatio n of Net Capital Under Rule l 5c3-
l and the | | consolidation. | D (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of | | 0 (1) An Oath or Affirmation.
D (m) A copy of the SIPC Supplemental Report.
0 (n) A report descri | bing any materia l inadequacies fou nd to exist or fo und to have existed since the date of the previous audit. | | ** For conditions of confidential treatment of certain portions of this filing, see section 240. I 7a-5(e)(3). | | {2}------------------------------------------------ ANNUAL REPORT DECEMBER 31, 2019 {3}------------------------------------------------ #### ANNUAL REPORT ### DECEMBER 31, 2019 #### TABLE OF CONTENTS Page | IAM Capital Corporation's Exemption Report | 1 | |--------------------------------------------------------------------------------------------------------------------------------------------|------| | Report of Independent Registered Public Accounting Firm | 2-3 | | Financial Statements: | | | Statement of Financial Condition | 4 | | Statement of Operations | 5 | | Statement of Changes in Stockholder's Equity | 6 | | Statement of Cash Flows | 7 | | Notes to Financial Statements | 8-10 | | Supporting Schedules: | | | Schedule I, Computation of Net Capital Under Rule 15c3-1 | 11 | | Schedule II, Computation for Determination of Reserve
Requirements Under Rule 15c3-3 (exemption) | 12 | | Schedule III, Information Relating to Possession or Control
Requirements Under Rule 15c3-3 of the
Securities and Exchange Commission | 13 | | Report of Independent Registered Public Accounting Firm
On review of exemption report | 14 | {4}------------------------------------------------ - - {5}------------------------------------------------ ![](_page_5_Picture_0.jpeg) ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** ## **To the Board of Directors and Stockholder IAM Capital Corporation** ## *Opinion on the Financial Statements* We have audited the accompanying statement of financial condition of IAM Capital Corporation (the "Company"), as of December 31, 2019, and the related statements of operations, changes in stockholder's equity and cash flows for the year then ended, and the related notes to the financial statements (collectively referred to as the "financial statements"). In our opinion, the financial statements 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 the U.S. federal securities laws and applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. ## *Supporting Schedules* The supporting schedules required by Rule 17a-5 under the Securities Exchange Act of 1934 ("SEA") have been subjected to audit procedures performed in conjunction with the audit of the Company's financial statements. The supporting schedules are the responsibility of the Company's management. Our audit procedures included determining whether the information in the supporting schedules 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 supporting schedules. In forming our opinion on the supporting schedules, we evaluated whether the supporting schedules, including their form and content, are presented in conformity with 17 C.F.R. §240.17a-5. In our opinion, the supporting schedules are fairly stated, in all material respects, in relation to the financial statements as a whole. {6}------------------------------------------------ **To the Board of Directors and Stockholder IAM Capital Corporation Page 2** ## *Emphasis of a Matter* As more fully described in Notes 1 and 5 to the financial statements, the Company is dependent on, and has material transactions with, a related party. Because of this relationship, it is possible that the terms of these transactions are not the same as those that would result from transactions between unrelated parties. Our opinion is not modified with respect to this matter. We have served as the Company's auditor since 2012. {7}------------------------------------------------ ## STATEMENT OF FINANCIAL CONDITION December 31, 2019 #### ASSETS | Cash
Prepaid expenses
Deferred tax assets | \$
258,544
2,867
9,000 | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------| | TOTAL ASSETS | \$
270,411 | | LIABILITIES AND STOCKHOLDER'S EQUITY | | | LIABILITIES
Accrued expenses and taxes payable | \$
3,700 | | STOCKHOLDER'S EQUITY
Common stock, no par value, 100 shares
authorized, issued and outstanding
Paid-in capital
Retained earnings
TOTAL STOCKHOLDER'S EQUITY | 100
259,900
6,711
266,711 | | TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY | \$
270,411 | {8}------------------------------------------------ ### STATEMENT OF OPERATIONS For the Year Ended December 31, 2019 | REVENUES: | | |--------------------------------------|--------------| | Service fee income- related party | \$
25,000 | | Interest income | 281 | | TOTAL REVENUES | 25,281 | | EXPENSES: | | | Regulatory fees and expenses | 6,437 | | General and administrative expenses | 18,350 | | TOTAL EXPENSES | 24,787 | | NET INCOME BEFORE STATE INCOME TAXES | 494 | | STATE INCOME TAXES | 70 | | NET INCOME | \$
424 | See Notes To Financial Statements {9}------------------------------------------------ ### STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY For the Year Ended December 31, 2019 | | Common
Stock | | Paid-in
Capital | | Retained
Earnings | | Total
Stockholder's
Equity | | |------------------------------|-----------------|-----|--------------------|---------|----------------------|-------|----------------------------------|---------| | Balance at January 1, 2019 | \$ | 100 | \$ | 259,900 | \$ | 6,287 | \$ | 266,287 | | Net Income | | - | | - | | 424 | | 424 | | Balance at December 31, 2019 | \$ | 100 | \$ | 259,900 | \$ | 6,711 | \$ | 266,711 | #### See Notes To Financial Statements {10}------------------------------------------------ ## STATEMENT OF CASH FLOWS For the Year Ended December 31, 2019 | CASH FLOWS FROM OPERATING ACTIVITIES
Net Income
Adjustments to reconcile net income to net cash from operating activities: | \$
424 | |----------------------------------------------------------------------------------------------------------------------------------|---------------| | Change in operating assets:
Prepaid expenses
Change in operating liabilities: | (403) | | Accrued expenses and taxes payable | (8,900) | | NET CASH FROM BY OPERATING ACTIVITIES | (8,879) | | NET CHANGE IN CASH | (8,879) | | CASH – beginning of year | 267,423 | | CASH – end of year | \$
258,544 | | SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for income taxes | \$
8,570 | See Notes To Financial Statements {11}------------------------------------------------ ### NOTES TO FINANCIAL STATEMENTS December 31, 2019 #### 1. ORGANIZATION AND NATURE OF BUSINESS IAM Capital Corporation (the "Company") is a broker-dealer registered with the Securities and Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority (FINRA). The Company is a Connecticut Corporation that is a wholly owned subsidiary of Iridian Asset Management LLC (Parent). The Company has historically funded operations through capital contributions and service fees from the Parent. Future operations are dependent on the continued service fees from the Parent. ### 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES #### Basis of Presentation The financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). #### Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. #### Revenue Recognition The Company adopted ASU 2014-09, Revenue from Contracts with Customers, on January 1, 2018. To determine the amount and timing of revenue recognition, the Company must (1) identify the contract with the client, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the Company satisfies a performance obligation. The Company will recognize revenue on its contract services when the services are provided over the terms of the agreement. #### Income Taxes The Company accounts for income taxes in accordance with the "Liability Method," pursuant to U.S. GAAP. Under this method, income taxes consist of taxes currently due plus those deferred due to temporary differences between the financial reporting basis and tax basis of the Company's assets and liabilities measured by enacted tax rates for the years in which the taxes are expected to be paid or recovered. The Company recognizes the benefit from income tax positions taken in its income tax returns only when those positions are believed to be more likely than not to be sustained upon review by the tax authorities. Deferred tax assets are reduced by a valuation allowance when in the opinion of management; it is more likely than not that some portion or all of a deferred tax asset will not be realized. The Company recognizes interest and penalties on income taxes as a component of income tax expense. Management has determined that the Company had no uncertain tax positions that would {12}------------------------------------------------ ## NOTES TO FINANCIAL STATEMENTS December 31, 2019 ## 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) require financial statement recognition or disclosure. The Company is no longer subject to U.S. federal, state or local income tax examinations for periods prior to December 31, 2015. ### Statement of Cash Flows For purposes of the Statement of Cash Flows, cash is defined as cash balances in operating bank accounts, interest-bearing deposits, and savings accounts. The Company has defined cash equivalents as highly liquid investments, with original maturities of less than three months that are not held for sale in the ordinary course of business. ### 3. NET CAPITAL REQUIREMENTS The Company is subject to the SEC 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 had net capital of \$254,844 which was \$249,844 in excess of its required net capital of \$5,000. The Company's ratio of net capital to aggregate indebtedness is 1.45%. ## 4. INCOME TAXES The Company had no provision for Federal taxes and \$70 for State income taxes for the year ended December 31, 2019. At December 31, 2019 the Company has approximately \$2,500 of Federal and \$106,000 of State net operating losses. At December 31, 2019, the Company's deferred tax assets totaled \$9,000 for net operating loss carryforwards. Management has determined that based on expected future operations, the deferred tax assets at December 31, 2019 will more likely be utilized to offset future taxes. Therefore, no valuation allowance related to such deferred tax assets has been recorded at December 31, 2019. The components of the Company's deferred tax assets are as follows: | | As of
December
31, 2019 | | |------------------------------------------|-------------------------------|--| | Deferred tax assets:
Federal
State | \$
1,000
8,000 | | | Deferred tax assets: | \$
9,000 | | {13}------------------------------------------------ ## NOTES TO FINANCIAL STATEMENTS December 31, 2019 #### 5. RELATED PARTY TRANSACTIONS The Company has entered into a service agreement with the Parent for the purpose of establishing services to be provided by the Company and fees to be charged. During 2019, management evaluated general market conditions and determined that charging a fee was appropriate for the services that the Company has been providing. For the year ended December 31, 2019, total service fee income charged by the Company was \$25,000. Included in general and administrative expenses is \$2,340 of overhead reimbursement paid to the Parent for the year ended December 31, 2019. #### 6. CONCENTRATION OF CREDIT RISK The Company maintains cash balances in financial institutions. The balances are insured by the Federal Deposit Insurance Corporation. At times, the Company's bank balances may exceed insurable limits. Financial instruments that potentially subject the Company to credit risk consist primarily of cash on deposit. #### 7. SUBSEQUENT EVENTS Management has evaluated subsequent events through February 26, 2020 the date on which the financial statements were available to be issued. There were no material subsequent events that required recognition or additional disclosure in these financial statements. {14}------------------------------------------------ SUPPORTING SCHEDULES {15}------------------------------------------------ ## SCHEDULE I COMPUTATION OF NET CAPITAL UNDER RULE 15c3-1 OF THE SECURITIES AND EXCHANGE COMMISSION December 31, 2019 ## **Computation of Net Capital** | Total stockholder's equity | \$
266,711 | |-------------------------------------------------------------------------------------------|---------------| | Deductions: | | | Nonallowable assets:
Prepaid expenses | 2,867 | | Deferred tax assets | 9,000 | | | | | Net Capital | \$
254,844 | | | | | Aggregate Indebtedness | | | Total aggregate indebtedness | \$
3,700 | | | | | Computation of Basic Net Capital Requirement | | | a) Minimum net capital required (6-2/3% of total aggregate indebtedness) | \$
247 | | b) Minimum dollar net capital requirement of reporting broker-dealer | \$
5,000 | | Net capital requirement (greater of (a) or (b)) | \$
5,000 | | Excess net capital | \$
249,844 | | | | | Excess net capital at 1,000 percent
(Net capital less 120% of (b) minimum net capital) | \$
248,844 | | | | | Ratio: Aggregate indebtedness to net capital | 1.45% | | | | There are no material differences between the above computation and the Company's corresponding unaudited part IIA of Form X-17A-5 as of December 31, 2019. {16}------------------------------------------------ ## SCHEDULE II COMPUTATION FOR DETERMINATION OF RESERVE REQUIREMENTS UNDER RULE 15c3-3 OF THE SECURITIES AND EXCHANGE COMMISSION December 31, 2019 The Company is exempt from the provisions of Rule 15c3-3 under paragraph (k)(2)(i) under the Securities Exchange Act of 1934. {17}------------------------------------------------ ## SCHEDULE III INFORMATION RELATING TO POSSESSION OR CONTROL REQUIREMENTS UNDER RULE 15c3-3 OF THE SECURITIES AND EXCHANGE COMMISSION December 31, 2019 The Company carries no customer accounts and does not handle or hold possession of securities, and therefore is exempt from the provisions of Rule 15c3-3 under paragraph (k)(2)(i) under the Securities Exchange Act of 1934. {18}------------------------------------------------ ![](_page_18_Picture_0.jpeg) ## **Report of Independent Registered Public Accounting Firm on Review of the Exemption Report** ## **To the Board of Directors and Stockholder IAM Capital Corporation** We have reviewed management's statements, included in the accompanying SEA Rule 15c3-3 Exemption Report, in which (1) IAM Capital Corporation (the "Company") identified the following provision of 17 C.F.R. § 15c3-3 (k) under which the Company claimed an exemption from 17 C.F.R. § 240.15c3-3 (k)(2)(i) (the exemption provision); and (2) the Company stated that it met the identified exemption provision throughout the year ended December 31, 2019 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 provision. 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 provision set forth in paragraph (k)(2)(i) of Rule 15c3-3 under the Securities Exchange Act of 1934. {19}------------------------------------------------ - - Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.