# BENCHMARK INVESTMENTS, LLC X-17A-5 (2022-03-31) — Broker-dealer annual report - Company: BENCHMARK INVESTMENTS, LLC - Form: X-17A-5 - Filed: 2022-03-31 - Period: 2021-12-31 - Accession: 0001103223-22-000004 - CIK: 1103223 - File #: 8-52280 - Type: Broker-dealer - Material weakness: No - Auditor: Nowrocki Smith LLP - Auditor location: Hauppauge, NY - Contact: Nikita Brown - Phone: 2124047002 - Email: nbrown@kingswoodus.com - Website: kingswoodus.com - Signed by: Michael Nessim (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1103223/000110322322000004/bmiauditocr1.pdf --- {0}------------------------------------------------ **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** > **ANNUAL REPORTS FORM X-17A-5 PART** Ill 0MB APPROVAL 0MB Number: 3235-0123 Expires: Oct 31, 2023 Estimated average burden hours per response: 12 SEC FILE NUMBER 8-52280 **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 **1/01** /21 AND ENDING **12/31/2021** --------- MM/DD/ Y Y MM/DD/YY **A. REGISTRANT IDENTIFICATION** NAME OF FIRM: BENCHMARK INVESTMENTS, LLC TYPE OF REGISTRANT (check all applicable boxes): iii Broker-dealer □ Security-based swap dealer □ Check here if respondent is also an OTC derivatives dealer D Major security-based swap participant ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) # 175 COUNTRY CLUB DRIVE, BLD 400, SUITED | | GA | | | |--------------|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | STOCKBRIDGE | | | 30281 | | | (St.ite) | | (Zip Code) | | | | | | | NIKITA BROWN | | nbrown@kingswoodus.com | | | (Name) | | | | | | | | | | | | | | | | | NY | 11788 | | | (City) | (State) | (Zip Code) | | | | 3370 | | | | | | | | | NOWROCKI SMITH LLP | PERSON TO CONTACT WITH REGARD TO THIS FILING
212-404-7002
(Area Code -Telephone Number)
100 MOTOR PARKWAY, SUITE 580 HAUPPAUGE | ( Email Address)
B. ACCOUNTANT IDENTIFICATION
INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
(Name - if individual, state last, first, and middle name) | \* Claims for exemption from the requirement that the annuDecember 31 | is true and correct I further swear (or affirm) that neither the company nor any | | | | partner, officer, director, or equiv a lent person, as the case may be, has any proprietary interest in any account classified solely | ~ | | | | as that of a customer. | | | | | ft 1/eD.J(IJf
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un y | | | | | Y Comm1sswn Expires 02-D1 -2025 | | | | | This filing** contains {check all applicable boxes): | | | | iiiil | {a) Statement of financial condition. | | | | | D (b) Notes to consolidated statement of financial condition. | | | | ii' | (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). | | | | | ii (d) Statement of cash flows. | | | | iii | (e) Statement of changes in stockholders' or partners' or sole proprietor's equity, | | | | | □ (f) Statement of changes in liabilities subordinated to claims of creditors. | | | | | ~ (g) Notes to consolidated financial statements.
iii (h) Computation of net capital under 17 CFR 240.1Sc3-1 or 17 CFR 240.18a-1, as applicable. | | | | D | (i) Computation of tangible net worth under 17 CFR 240.18a-2. | | | | | □ (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.1Sc3-3. | | | | D | (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.1Sc3-3 or | | | | | Exhibit A to 17 CFR 240.18a-4, as applicable. | | | | D | (I) Computation for Determination of PAB Requirements under Exhibit A to§ 240.1Sc3-3. | | | | D | (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. | | | | liiiiiil | (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. | | | | D | (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.lBa-7, as applicable. | | | | D | {r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
ii (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240. lBa-7, as applicable. | | | | | D (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 | | | | ii!! | CFR 240.17a-S, 17 CFR 240.18a-7, or 17 CFR 21l0.17a-12, as applicable. | | | | | □ (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. | | | | | [l (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-1e or 17 CFR 240.17a-12,
as applicable. | | | | C | (y) Report describing any material inadequacies found to exist or found to have existed since the date of the previous audit, or | | | | | a statement that no material inadequacies exist, under 17 CFR. 240.17a-12(k).
Other:---------------------------------------- | | | | D | (z) | | | applicable, {2}------------------------------------------------ ## Financial Statements and Supplemental Information with Report of Independent Registered Public Accounting Firm ## BENCHMARK INVESTMENTS, LLC DECEMBER 31, 2021 {3}------------------------------------------------ #### BENCHMARK INVESTMENTS, LLC *As of and for the year ended* December 31, 2021 # **Table of Contents** | Report of Independent Registered Public Accounting Firm1 | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | Financial Statements | | Statement of Financial Condition2 | | Statement of Income3 | | Statement of Changes in Member's Equity4 | | Statement of Cash Flows5 | | Notes to Financial Statements6-12 | | Supplementary Information | | Schedule I -
Computation of Net Capital under Rule 15c3-1 of the Securities and Exchange Commission
.14 | | Schedule II-
Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3
15
Exemption Report Review of Independent Registered Public Accounting Firm…………………………16
Exemption Report Pursuant to Securities and Exchange Commission Rule 17a5(d)(4)
…………………17 | | Report of Independent Registered Public Accounting Firm on Applying Agreed-Upon Procedures
(Form SIPC-7) ……………………………………………………………………………………………18
Schedule III-
Reconciliation of "SIPC Net Operating Revenues" and General Assessment……………….19 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Member of Benchmark Investments, LLC: #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of Benchmark Investments, LLC (the "Company") as of December 31, 2021, 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 Benchmark Investments, 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 Benchmark Investments, LLC's management. Our responsibility is to express an opinion on Benchmark Investments, LLC'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 Benchmark Investments, LLC in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial 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. #### **Auditor's Report on Supplemental Information** The supplemental information contained in Schedules I and II have been subjected to audit procedures performed in conjunction with the audit of Benchmark Investments, LLC's financial statements. The supplemental information is the responsibility of Benchmark Investments, LLC'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 is fairly stated, in all material respects, in relation to the financial statements as a whole. We have served as Benchmark Investments, LLC's auditor since 2020. Hauppauge, New York March 31, 2022 {5}------------------------------------------------ ## BENCHMARK INVESTMENTS, LLC *Statement of Financial Condition* December 31, 2021 | Assets | | | |------------------------------------------|----|----------------------------------------| | Cash | \$ | 15,108,889 | | Due from clearing firm | | 1,276,949 | | Restricted Cash | | 50,032 | | Accounts and commissions receivable | | 705,196 | | Investments
(lower of cost or market) | | 263,367 | | Prepaid expenses | | 325,489
271,768
3,493
100,561 | | Right of use lease assets | | | | Deferred Tax Asset | | | | Fixed assets, net | | | | Other assets | | 127,621 | | Total assets | \$ | 18,233,365 | | Liabilities and Member's
Equity | | | | Accounts payable and accrued expenses | \$ | 254,224 | | Commissions payable | | 1,898,060 | | Due to related party | | 12,737,255 | | Lease liability | | 286,960 | | Deferred Clearing Incentive Fee | | 350,724 | | Total liabilities | | 15,527,223 | | Member's
equity | | | | Total member's
equity | | 2,706,142 | | Total liabilities and member's
equity | \$ | 18,233,365 | {6}------------------------------------------------ ## BENCHMARK INVESTMENTS, LLC *Statement of Income* Year ended December 31, 2021 #### *Revenue* | Commission income | \$
13,283,498 | |-------------------------------------|------------------| | Consulting fee income | 2,069,599 | | Mutual fund fees | 1,089,756 | | Interest income | 156,156 | | Underwriting and Investment Banking | 144,937,872 | | Other revenue | 1,606,289 | | | | | Total revenue | 163,143,170 | | Expenses | | | Compensation and Benefits | \$
20,038,935 | | Management Fees | 5,633,721 | | Investment Banking Expenses | 128,499,799 | | Occupancy | 151,774 | | Clearance fees | 314,688 | | Technology and communications | 399,898 | | Regulatory fees | 246,857 | | Depreciation expense | 33,661 | | Tax Expense | 401,619 | | Professional Fees | 665,279 | | Marketing and Firm Development | 2,287,800 | | Insurance | 255,216 | | Other | 937,613 | | Total expenses | 159,866,860 | | Net Income | 3,276,310 | {7}------------------------------------------------ ### BENCHMARK INVESTMENTS, LLC *Statement of Changes in Member's Equity* Year Ended December 31, 2021 | | Total
Equity | |------------------------------|-----------------| | Balance at January 1, 2021 | \$
1,739,515 | | Net Income | 3,276,310 | | Contributions from Member | -0- | | Distributions to Member | 2,309,683 | | | | | Balance at December 31, 2021 | \$
2,706,142 | {8}------------------------------------------------ ## BENCHMARK INVESTMENTS, LLC *Statement of Cash Flows* Year ended December 31, 2021 | Cash flows
from operating activities: | | |----------------------------------------------------------------------|------------------| | Net Income | \$
3,276,310 | | Adjustments to reconcile net income to net cash | | | provided by operating activities: | | | Depreciation | 33,661 | | (Increase)decrease in operating assets: | | | Receivables from broker-dealers | (141,589) | | Right of use asset | 152,297 | | Prepaid expenses and other assets | (92,751) | | Accounts payable and commissions receivable | (39,018) | | Other assets
–
Investments
(LCM) | (263,367) | | Increase (decrease) in operating liabilities: | | | Commissions Payable | (108,536) | | Accounts payable and accrued expenses | 12,042,871 | | Lease liability | (156,129) | | Payable to related parties | 808,502 | | Deferred clearing incentive | 87,919 | | Net cash provided by operating activities | 15,573,508 | | Net cash used by
investing activities | | | Purchase of fixed assets | (106,206) | | Net cash used by
financing activities: | | | SBA Loan | (137,300) | | Distributions to
members | (2,309,683) | | Net cash used by financing activities | (2,446,983) | | Net increase
in cash, cash equivalents and restricted cash | 13,046,981 | | Cash,
cash equivalents and restricted cash -
beginning of year | 2,111,941 | | Cash, cash equivalents and restricted cash -
end of year | \$
15,158,922 | | | | Reconciliation of Cash, Cash Equivalents and Restricted Cash as reported within the Statement of Financial Condition to the amounts in the Statement of Cash Flows: | Cash | \$
15,108,890 | |---------------------------------------------------------------------------------------|------------------| | Restricted cash | 50,032 | | Total cash, cash equivalents and restricted cash shown in the statement of cash flows | \$
15,158,922 | {9}------------------------------------------------ #### 1. Business and Summary of Significant Accounting Policies #### Business BENCHMARK INVESTMENTS, LLC (formerly known as Benchmark Investments, Inc. "the Company") is a registered broker-dealer with the Securities and Exchange Commission ("SEC"). The Company introduces its customers' business on a fully disclosed basis to a clearing broker, who clears and carries the Company's customer accounts. The Company underwent a plan of conversion in the current fiscal year. The Company formed and existing under the laws of the State of Arkansas converted into a limited liability company organized and existing under the laws of the State of Nevada. #### Basis of Presentation The Company's financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). Revenue is recognized when earned, while expenses and losses are recognized when incurred. #### Cash The Company maintains its bank accounts in high credit quality institutions. Balances at times may exceed federally insured limits. The company has not experienced any losses in such accounts and believes it is not exposed to any significant risk. #### Receivable from Clearing Firm and Restricted Cash The Company has an agreement with a clearing broker to execute and clear, on a fully disclosed basis, customer accounts of the Company. In accordance with this agreement, the Company is required to maintain a deposit in cash or securities. The Company has a deposit with its clearing broker, which is refundable to the Company should it discontinue its arrangement. Amounts receivable from its clearing organization consist of commissions receivable. The receivable is considered fully collectible, and no allowance is required. #### Property and Equipment Property and equipment are stated at cost. Depreciation is provided on a straight-line basis using estimated useful lives of five to ten years. Leasehold improvements are amortized over the lesser of the economic useful life of the improvement or the term of the lease. Expenditures for repairs and maintenance are charged to expense as incurred. For assets sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any related gain or loss is reflected in income for the period. {10}------------------------------------------------ #### Income Taxes The Company has a net operating loss carryforward at December 31, 2021 of approximately \$108,000 arising from the year 2006 through 2019 and a deferred tax asset related to the net operating loss carryforward of approximately \$3,500. Realization of the future tax benefits related to the deferred tax asset is dependent upon many factors, including the Company's ability to generate future taxable income. The Company's federal net operating loss carry forwards expire from 2027 to 2037. ASC Topic 740-10, Accounting for uncertainty in income taxes, prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. As of December 31, 2021, the Company has no uncertain tax positions. #### Use of Estimates The process of preparing financial statements in conformity with US GAAP requires the use of estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Such estimates primarily relate to transactions in process and events as of the date of the financial statements. Accordingly, upon completion, actual results may differ from estimated amounts. #### 2. Revenue from Contracts with Customers #### Significant Judgements Revenue from contracts with customers includes commission income, consulting fees and fees from investment banking. The recognition and measurement of revenue is based on the assessment of individual contract terms. Significant judgment is required to determine whether performance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance obligations are identified; when to recognize revenue based on the appropriate measure of the Company's progress under the contract; whether revenue should be presented gross or net of certain costs; and whether constraints on variable consideration should be applied due to uncertain future events. *Brokerage commissions.* The Company buys and sells securities on behalf of its customers. Each time a customer enters into a buy or sell transaction, the Company charges a commission. Commissions and related clearing expenses are recorded on the trade date (the date that the Company fills the trade order by finding and contracting with a counterparty and confirms the trade with the customer). The Company believes that the performance obligation is satisfied on the trade date because that is when the underlying financial instrument or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership of the securities have been transferred to/from the customer. {11}------------------------------------------------ *Distribution fees.* The Company enters into arrangements with managed accounts or other pooled investment vehicles (funds) to distribute shares to investors. The Company may receive distribution fees paid by the fund up front, over time, upon the investor's exit from the fund (that is, a contingent deferred sales charge), or as a combination thereof. The Company believes that its performance obligation is the sale of securities to investors and as such this is fulfilled on the trade date. Any fixed amounts are recognized on the trade date and variable amounts are recognized to the extent it is probable that a significant revenue reversal will not occur once the uncertainty is resolved. For variable amounts, as the uncertainty is dependent on the value of the shares at future points in time as well as the length of time the investor remains in the fund, both of which are highly susceptible to factors outside the Company's influence, the Company does not believe that it can overcome this constraint until the market value of the fund and the investor activities are known, which are usually monthly or quarterly. Distribution fees recognized in the current period are primarily related to performance obligations that have been satisfied in prior periods. *Consulting Fees.* The Company enters into contracts with other broker-dealers to provide analysis and guidance on financial transactions and earns fees associated with these services. #### Investment Banking *Underwriting fees*. The Company underwrites securities for business entities and governmental entities that want to raise funds through a sale of securities. Revenues are earned from fees arising from securities offerings in which the Company acts as an underwriter. Revenue is recognized on the trade date (the date on which the Company purchases the securities from the issuer) for the portion the Company is contracted to buy. The Company believes that the trade date is the appropriate point in time to recognize revenue for securities underwriting transactions as there are no significant actions which the Company needs to take subsequent to this date and the issuer obtains the control and benefit of the capital markets offering at that point. Underwriting costs that are deferred under the guidance in FASB ASC 940-340-25-3 are recognized in expense at the time the related revenues are recorded. In the event that transactions are not completed, and the securities are not issued, the Company immediately expenses those costs. *M&A advisory fees.* The Company provides advisory services on mergers and acquisitions (M&A). Revenue for advisory arrangements is generally recognized at the point in time that performance under the arrangement is completed (the closing date of the transaction) or the contract is cancelled. However, for certain contracts, revenue is recognized over time for advisory arrangements in which the performance obligations are simultaneously provided by the Company and consumed by the customer. In some circumstances, significant judgment is needed to determine the timing and measure of progress appropriate for revenue recognition under a specific contract. Retainers and other fees received from customers prior to recognizing revenue are reflected as contract liabilities. At December 31, 2021, contract assets related to investment banking deals amount to \$540,000. {12}------------------------------------------------ Fees received in stock. As part of its compensation the company may receive restricted stock in a publicly traded entity. Stock received is shown as revenue on the statement of income and reflected on the balance sheet of the company at lower of cost or market. For tax purposes the stock is reflected as a book to tax adjustment until they become unrestricted at which point, they will be recognized as income by the company. The company may also receive restricted warrants which have no value until exercised. As such, they are not included in income and are not reflected on the balance sheet. 3. Leases The Company accounts for leases is accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2016-02, Leases ("ASC 842"). The Company has measured the lease liabilities at the present value of the unpaid lease payments, discounted using the rate established at commencement. The lease liabilities are included in Lease Liabilities in the accompanying Statement of Financial Condition. The Company recognizes the following amounts in earnings each period of the lease term: - x A single lease cost calculated so that the remaining cost of the lease is allocated over the remaining lease term on a straight-line basis. The remaining lease cost equals the total lease payments for the lease term, plus total initial direct costs incurred, less the periodic lease cost previously recognized. If an operating lease ROU asset has been impaired, for each period from the date of impairment through the end of the lease term, the single lease cost is calculated as the sum of the accretion of the lease liability and the amortization of the ROU asset. - x Any variable lease payments, in the period in which the obligation is incurred, or achievement of the target that triggers the variable payments becomes probable. - x Any impairment of the ROU asset. We have included the costs of the operating leases in Occupancy Expenses in the accompanying Statement of Income in the amount of \$151,774. #### Impairment Testing We subject ROU assets to impairment testing in a manner consistent with other long-lived assets. If the ROU asset is impaired, we amortize the remaining ROU asset evenly over the remaining lease term, except that in periods after the impairment, we continue to present a single lease cost in earnings. In January 2019, the Company entered into a six-year sublease for office space in New York, NY. At January 1, 2019, the effective date of the lease, the Company recorded a ROU asset of \$472,470 and an operating lease liability of \$472,470. Our calculations were based on a six-year non-cancelable term ending December 31, 2024 assuming a discount rate of 4.5%, our estimated incremental borrowing rate. {13}------------------------------------------------ As a broker-dealer registered with the SEC and Financial Industry Regulatory Authority ("FINRA"), the Company is subject to SEC Rule 15c3-1, the Net Capital rule, under which the lease asset would be recorded as a non-allowable asset and the associated liability would be recorded as aggregate indebtedness, both of which could have a materially negative effect on Net Capital computed under SEC Rule 15c3-1. On May 31, 2016, the Securities Industry and Financial Markets Association ("SIFMA") requested relief from the SEC from the net capital impact of the lease capitalization required under ASC 842. On November 8, 2016, the SEC issued a "no action" letter permitting broker-dealers to add back to Net Capital the operating lease asset to the extent of the associated operating lease liability. If the value of the operating lease liability exceeds the value of the associated operating lease asset, the amount by which the liability's value exceeds the associated lease asset must be deducted for net capital purposes. The Company believes that the relief provided by the SEC "no action" letter will substantially negate the effect of the application of ASC 842 on the Company's Net Capital position. The guidance provided by ASC 842 may not materially impact the Company's presentation of assets and liabilities, however, management notes changes to the disclosures based on the additional requirements prescribed by ASC 842. These disclosures include information regarding the judgments used in determining the present value of lease payments and the corresponding value of the right-of-use asset. The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is determined by comparing the forecasted undiscounted net cash flows of the operation to which the assets relate to the carrying amount. If the operation is determined to be unable to recover the carrying amount of its assets, then assets are written down first, followed by other long-lived assets of the operation to fair value. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the assets. As of December 31, 2021, there were no impairment losses recognized for long-lived assets. #### 4. Property and Equipment | Assets | December 31, 2021 | |------------------------------------|------------------------------------| | Furniture and Fixtures
Software | \$
32,397
130,254
162,651 | | Accumulated Depreciation | 62,090 | | Net Property and Equipment | \$
100,561 | Depreciation expenses related to property and equipment was \$33,661 in 2021. {14}------------------------------------------------ #### 5. Indemnification In the normal course of its business, the Company indemnifies and guarantees certain service providers against specified potential losses in connection with their acting as an agent of, or providing services to, the Company. The maximum potential amount of future payments that the Company could be required to make under these indemnifications cannot be estimated. However, the Company believes that it is unlikely it will have to make material payments under these arrangements and has not recorded any contingent liability in the financial statements for these indemnifications. The Company provides representations and warranties to counterparties in connection with a variety of commercial transactions and occasionally indemnifies them against potential losses caused by the breach of those representations and warranties. These indemnifications generally are standard contractual terms and are entered into in the normal course of business. The maximum potential amount of future payments that the Company could be required to make under these indemnifications cannot be estimated. However, the Company believes that it is unlikely it will have to make material payments under these arrangements and has not recorded any contingent liability in the financial statements for these indemnifications. #### 6. Net Capital Requirements The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (15c3-1), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. At December 31, 2021, the Company had net capital of \$1,404,276 which was \$387,245 in excess of its required net capital of \$1,017,031. The Company's aggregate indebtedness to net capital ratio percentage was 1,086%. #### 7. Related Party Transactions The related party payable at December 31, 2021 consists primarily of expenses paid by the Company on behalf of the Company's affiliates and related parties. As of December 31, 2021, the Ccompany has accrued fees payable to EF Hutton, an Office of Supervisory Jurisdiction of the Company in accordance with that certain Services and Expense Sharing Agreement dated January 1, 2020 made between the Company and Platinum ARC, LLC, in the amount of \$11,908,617. In addition, the Company has accrued management fees payable of \$828,638 due to two members or their affiliates. {15}------------------------------------------------ #### 8. Contingencies and Concentration of Credit Risk Pursuant to a clearing agreement, the Company introduces all of its securities transactions to a clearing broker on a fully disclosed basis. Therefore, all of the customer's money balances and long and short securities positions are carried on the books of the clearing broker. Under certain conditions, as defined in the clearing broker agreement, the Company has agreed to indemnify the clearing broker for losses, if any, which the clearing broker may sustain from carrying securities transactions introduced by the Company. In accordance with industry practice and regulatory requirements, the Company, and the clearing broker, monitor collateral on the securities transactions introduced by the Company. The Company is subject to arbitration and litigation in the normal course of business. The Company has no litigation in progress at December 31, 2021. Amounts disclosed for ROU assets obtained in exchange for lease liabilities and reductions to ROU assets resulting from reductions to lease liabilities include amounts added to or reduced from the carrying amount of ROU assets resulting from new leases, lease modifications or reassessments. Maturities of lease liabilities under operating leases as of December 31, 2021 are as follow: | 2022 | 102,839 | |-----------------------------------|---------------| | 2023 | 102,839 | | 2024 | 102,839 | | Total undiscounted lease payments | \$
308,517 | | Less interest | (21,557) | | Total Lease liabilities | \$
286,960 | #### 9. COVID-19 In March 2021, the World Health Organization has declared COVID-19 to constitute a "Public Health Emergency of International Concern." This pandemic has disrupted economic markets and the economic impact, duration, and spread of the COVID-19 virus remains uncertain at this time. This may have an effect on the Company's business, but it cannot be estimated at this time. #### 10. Subsequent Events Events of the Company subsequent to December 31, 2021 have been evaluated through March 31, 2022 which is the date the financial statements were available to be issued, for the purpose of identifying events that would require recording or disclosures in the financial statements in the year ended December 31, 2021. No subsequent events were identified that require disclosure. {16}------------------------------------------------ SUPPLEMENTAL INFORMATION {17}------------------------------------------------ ## **BENCHMARK INVESTMENTS, LLC SCHEDULE I – COMPUTATION OF NET CAPITAL PURSUANT TO RULE 15C3-1 DECEMBER 31, 2021** | Net Capital | | |-----------------------------------------------------------------------------------------------------------------------------------|------------------| | Total Member's
equity | \$
2,706,142 | | Deductions and/or charges: | | | Non-allowable assets: | | | Prepaid expenses | 325,489 | | Haircuts on securities | 39,505 | | Other non-allowable assets | 936,872 | | Total deductions and/or charges | 1,301,866 | | Net Capital | \$
1,404,276 | | Aggregate Indebtedness | | | Items included in statement of financial condition | | | Accounts payable and accrued expenses | 254,224 | | Commissions payable | 1,898,060 | | Payable to related parties | 12,737,255 | | Deferred clearing incentive fee | 350,724 | | Excess lease liability | 15,192 | | Total aggregate indebtedness | \$
15,255,455 | | Minimum net capital required (6 2/3% of aggregate indebtedness) | \$
1,017,031 | | Excess net capital | \$
387,245 | | Excess net capital of the greater of 10 percent of total aggregate indebtedness
Or 120 percent of minimum net capital required | \$
183,839 | | Ratio of aggregate indebtedness to net capital | 1,086% | #### Statement pursuant to Paragraph (d)(4) of Rule 17a-5 There are no material differences between the above computation and the computation in the Company's corresponding unaudited Form X-17a-5 Part IIA as of December 31, 2021, as amended. {18}------------------------------------------------ # **BENCHMARK INVESTMENTS, LCC SCHEDULE II – DETERMINATION OF RESERVE REQUIREMENTS PURSUANT TO RULE 15C3-3 DECEMBER 31, 2021** The Company is exempt from the provision of Rule 15c3-3 as of December 31, 2021, under the Securities Exchange Act of 1934, under paragraph (k)(2)(ii) of that Rule. {19}------------------------------------------------ ![](_page_19_Picture_0.jpeg) #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Member of Benchmark Investments, LLC: We have reviewed management's statements, included in the accompanying Exemption Report, in which (1) Benchmark Investments, LLC identified the following provision of 17 C.F.R. §15c3- 3(k) under which Benchmark Investments, LLC claimed the following exemption from 17 C.F.R. §240.15c3-3: (k)(2)(ii) and (2) Benchmark Investments, LLC stated that Benchmark Investments, LLC met the identified exemption provisions throughout the most recent fiscal year without exception. The Company is also filing this Exemption Report because the Company's other business activities contemplated by Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5 are limited to (1) commissions and fees earned on mutual funds, annuities, equities, REITs, and other financial instruments, as well as fees earned from arranging the sale of annuities, and (2) fees earned for private placements and investment banking deals. In addition, the Company did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers; did not carry accounts of or for customers; and did not carry PAB accounts (as defined in Rule 15c3-3) throughout the most recent fiscal year without exception. Benchmark Investments, 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 Benchmark Investments, 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)(ii) of Rule 15c3-3 under the Securities Exchange Act of 1934 and the Company's other business activities contemplated by Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5, and related SEC Staff Frequently Asked Questions. Hauppauge, New York March 31, 2022 {20}------------------------------------------------ {21}------------------------------------------------ ![](_page_21_Picture_0.jpeg) #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON APPLYING AGREED-UPON PROCEDURES** To the Member of Benchmark Investments, LLC: We have performed the procedures included in Rule 17a-5(e)(4) under the Securities Exchange Act of 1934 and in the Securities Investor Protection Corporation (SIPC) Series 600 Rules, which are enumerated below on the accompanying General Assessment Reconciliation (Form SIPC-7) for the year ended December 31, 2021. Management of Benchmark Investments, LLC (Company) is responsible for its Form SIPC-7 and for its compliance with the applicable instructions on Form SIPC-7. Management of the Company has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of assisting you and SIPC in evaluating the Company's compliance with the applicable instructions on Form SIPC-7 for the year ended December 31, 2021. Additionally, SIPC has agreed to and acknowledged that the procedures performed are appropriate for their intended purpose. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures we performed and our findings are as follows: - 1) Compared the listed assessment payments in Form SIPC-7 with respective cash disbursement records entries, noting no differences; - 2) Compared the Total Revenue amounts reported on the Annual Audited Report Form X-17A-5 Part III for the year ended December 31, 2021 with the Total Revenue amount reported in Form SIPC-7 for the year ended December 31, 2021, noting no differences; - 3) Compared any adjustments reported in Form SIPC-7 with supporting schedules and working papers, noting no differences; - 4) Recalculated the arithmetical accuracy of the calculations reflected in Form SIPC-7 and in the related schedules and working papers supporting the adjustments, noting no differences; and - 5) Compared the amount of any overpayment applied to the current assessment with the Form SIPC-7 on which it was originally computed, noting no differences. We were engaged by the Company to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the AICPA and in accordance with the standards of the Public Company Accounting Oversight Board (United States). We were not engaged to and did not conduct an examination or a review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the Company's Form SIPC-7 and for its compliance with the applicable instructions on Form SIPC-7 for the year ended December 31, 2021. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement. This report is intended solely for the information and use of the Company and SIPC and is not intended to be and should not be used by anyone other than these specified parties. Hauppauge, New York March 31, 2022 {22}------------------------------------------------ ## BENCHMARK INVESTMENTS, LLC *Schedule III-Reconciliation of "SIPC Net Operating Revenues" and General Assessment* Year ended DECEMBER 31, 2021 | | FOCUS Part IIA Line 9
(unaudited), as amended | Statement of Income | |-----------------------------|--------------------------------------------------|---------------------| | | | (audited) | | Total revenue | 163,143,170 | 163,143,170 | | Additions | | | | Deductions | 2,464,027 | 2,464,027 | | SIPC Net Operating Revenues | 160,679,143 | 160,679,143 | | General Assessment @ .0015 | 241,019 | 241,019 | | | | | Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.