# DESTINY CAPITAL SECURITIES CORPORATION X-17A-5 (2021-03-02) — Broker-dealer annual report - Company: DESTINY CAPITAL SECURITIES CORPORATION - Form: X-17A-5 - Filed: 2021-03-02 - Period: 2020-12-31 - Accession: 0001130991-21-000001 - CIK: 1130991 - File #: 8-53069 - Material weakness: No - Auditor: Spicer Jeffries LLP - Auditor location: Denver, CO - Contact: Mabel Pirner - Phone: 7207157890 - Website: spicerjeffries.com - Signed by: Mabel Pirner (Financial Options Principal/CFO) Original filing: https://www.sec.gov/Archives/edgar/data/1130991/000113099121000001/financialcondition2.pdf --- {0}------------------------------------------------ #### **STATEMENT OF FINANCIAL CONDITION** **YEAR ENDED DECEMBER 31, 2020** The report is filed in accordance with Rule 17a-5(e)(3) under the Securities Exchange Act of 1934 as a **PUBLIC DOCUMENT** {1}------------------------------------------------ LJNITEDSTATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 0MB APPROVAL 0MB Number: 3235-0123 Expires: October 31, 2023 Estimated average burden hours per response .. . ... 12.00 SEC FILE NUMBER 8-53069 # **ANNUAL AUDITED REPORT FORM X-17A-5 PART** Ill FACING PAGE Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-S Thereunder | REPORT FOR THE PERIOD BEGINNING 01/01/2020 | | | ___
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AND ENDING_1_2/_3_1_/2_0_2_0 | |---------------------------------------------------------------------------------------------------------|--------------------------------------------------------------|---------|------------------------------------------| | | MM/DD/YY | | MM/DD/YY | | | A. REGISTRANT IDENTIFICATION | | | | NAME oF BROKER-DEALER: Destiny Capital Securities Corporation . | | | OFFICIAL USE ONLY | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | FIRM 1.0. NO. | | 13922 Denver West Parkway, Suite 150 | | | | | | (No. and Street) | | | | Golden | co | | 80401 | | {City) | (State) | | (Zip Code) | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
Mabel A. Pirner 720-715-7890 | | | | | | | | (Arca Code - Telephone Number) | | | B. ACCOUNT ANT IDENTIFICATION | | | | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report*
Spicer Jeffries LLP | | | | | | { Name - if i11dil'id11al. state last. firs,. middle 11m11e) | | | | 4601 OTC Blvd., Ste 700 | Denver | co | 80237 | | { Addn:ss) | (City) | (State) | (Zip Code) | | CHECK ONE: | | | | | lcertified Public Accountant | | | | | Public Accountant | | | | | B
Accoun1an1 not resident in United States or any of its possessions. | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | | | | | | | | *\*Claims for exem111ion ji-01111he req11ire111e111 that the annual report be covered by the opinion r?f an independent public accountant must be supported hy a stalement **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. {2}------------------------------------------------ #### **OATH OR AFFIRMATION** | | Mabel A. Pirner | | |--|-----------------|--| | | | | 1. Mabel A. Pirner \_\_\_\_\_\_ . swear (or affirm) that . 10 the bes t of my kno, ledge and belief the accompanying financial statement and supporting schedules pertaining 10 the firm of Destiny Capital Securities Corporation \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ . as # of December 1 . *20* 20 \_\_\_ . are true and correct. I further swear (or af'lirm) that neither the company nor any partner. proprietor. principal oflicer or director has any proprietary interest in any account classified so lely as that or a customer. except as follows: **ERIN** O O'NEILL **NOTARY** PUBLIC STATE OF COLORADO NOTARY ID 20104020536 MY COMMISSION EXPIRES JULY 9. 2022 Financial Operations Principal/CFO Title This report \*\* co ntains (check all applicable boxes): - 0 (a) Fac in g Page. - 0 (b) Statem ent or Financial Co ndi tion. - D (c) Statement or Income (Loss) or, ifthere is other comprehensive income in the period{s) presented, a Statement of Comprehens ive Income (as defined in §2 l 0.1-02 of Regulation S-X). - **D** (d) Statement or Changes in Financial Cond iti on. - **D (e)** St atement or Changes in Stockholders ' Eq uity or Partner· or So le Propriet ors' Cap ital. - **D** (f) Statement or Changes in Liabilities Subordinated to Cla im s or Cred itors. - - § (g) Co mputat ion or Net Capita l. (h) Com put ation for Determination of Reserve Requirements Pursuant 10 Rule I 5c3-3. - (i) In formation Relating 10 the Possession or Control Requirements Under Rule I 5c3 -J. - **D** U) A Reconciliation. including appropriate explanation ot'the Computation of'Net Capital Under Ruk I 5c3- I and the Computation for Determination 01'1he Reserve Rt-:quin:menl · Under Exhibit A of Rule I ScJ-3. - D (k) f\ Reconc il iation between the audi ted and unaudited S1a1emen1s or Financial Condi ti on with respect 10 methods of consolidation. - - § (I) An Oath or Affirmation. (m) A copy of'the SIPC Supplemental Report. - (n) A report describing any material inadequacies found 10 c:xist or found 10 have FAX: (303) 753-0338 www.spicerjeffries.com #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Board of Directors and Shareholder of Destiny Capital Securities Corporation #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of Destiny Capital Securities Corporation (the "Company") as of December 31 , 2020 and the related notes (the "financial statements"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of December 31 , 2020 in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** The financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the 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. **~llllr"~'-"** *LLfl* We have served as Destiny Capital Securities Corporation's auditor since 2000. Denver, Colorado February 21 , 2021 ![](_page_4_Picture_12.jpeg) {5}------------------------------------------------ #### **STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2020** #### **ASSETS** | Cash | 494,521
\$ | |-----------------------------------------------|---------------| | Due from clearing broker | 37,147 | | Prepaid expenses | 8,374 | | Commissions receivable | 4,000 | | Other Receivables | 15,087 | | Due from related entity(s) (Note 2) | 7,479 | | TOTAL ASSETS | 566,608
\$ | | LIABILITIES AND SHAREHOLDER'S EQUITY | | | LIABILITIES: | | | Accounts payable and accrued expenses | 8,739
\$ | | Due to Related entity (Note 2) | | | Total liabilities | 8,739 | | COMMITMENTS AND CONTINGENCIES (Notes 2 and 4) | | | SHAREHOLDER'S EQUITY (Note 3): | | | Common stock, no par value; 1,000 shares | | | authorized, issued and outstanding | 364,261 | | Retained earnings | 193,608 | | Total shareholder's equity | 557,869 | | TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY | 566,608
\$ | {6}------------------------------------------------ # **NOTES TO FINANCIAL STATEMENTS** #### *NOTE 1- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES* #### *Organization and Business* Destiny Capital Securities Corporation ( the "Company") was incorporated in Colorado on September 28, 2000 and is a securities broker-dealer registered with the Securities and Exchange Commission and is a member of the Financial Industry Regulatory Authority, Inc. The Company is a wholly-owned subsidiary of Destiny Holdings, Inc. (the "Parent"). #### *Clearing Agreement* The Company, under Rule 15c3-3(k)(2)(ii), is exempt from the reserve and possession or control requirements of Rule 15c3-3 of the Securities and Exchange Commission. The Company does not carry or clear customer accounts. Accordingly, all customer transactions are executed and cleared on behalf of the Company by its clearing broker on a fully disclosed basis. The Company's agreement with its clearing broker provides that as clearing broker, that firm will make and keep such records of the transactions effected and cleared in the customer accounts as are customarily made and kept by a clearing broker pursuant to the requirements of Rules 17a-3 and 17a-4 of the Securities and Exchange Act of 1934, as amended (the "Act"). It also performs all services customarily incident thereto, including the preparation and distribution of customer's confirmations and statements and maintenance margin requirements under the Act and the rules of the Self Regulatory Organizations of which the Company is a member. #### *Revenue Recognition* The Company records securities transactions and related revenue and expense on a trade date basis. # *Statement of Cash Flows* For purposes of the statement of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. #### *Income Taxes* The Company is recognized as an S-Corporation by the Internal Revenue Service, therefore the Company's shareholder is liable for federal and state income taxes on the Company's taxable income. The Company is required to determine whether a tax position is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any tax related appeals or litigation processes, based on the technical merits of the position. The Company files an income tax return in the U.S. federal jurisdiction, and may file income tax returns in various U.S. states. The Company is not subject to income tax return examinations by major taxing authorities for years before 2017. {7}------------------------------------------------ # **NOTES TO FINANCIAL STATEMENTS** *(continued)* #### *NOTE 1- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (concluded)* ## *Income Taxes (concluded)* The tax benefit recognized is measured as the largest amount of benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. De-recognition of a tax benefit previously recognized results in the Company recording a tax liability that reduces net assets. However, the Company's conclusions regarding this policy may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analyses of and changes to tax laws, regulations and interpretations thereof. The Company recognizes interest accrued related to unrecognized tax benefits and penalties related to unrecognized tax benefits in income taxes payable, if assessed. No interest expense or penalties have been recognized as of and for the year ended December 31 , 2020. # *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 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. # *NOTE2- OPERATING AGREEMENT AND RELATED PARTY TRANSACTIONS* The Company has an operating agreement (the "Agreement") with an affiliated company, Destiny Capital Corporation ("DCC"). Under the Agreement, the Company pays DCC a monthly amount to cover a portion of expenses incurred by DCC, such as office space, equipment, telephone and other operational services. DCC utilizes the services of the Company's employees and pays a portion of those payroll related expenses such as salary, payroll taxes, 401(k) match, health care costs, etc. Beginning in July 2013, the Agreement was amended to include two additional payments to the Company by DCC. The first additional payment is to reimburse the Company for services provided by Pershing LLC and charged to the Company. The second payment is to compensate the Company for brokerage services provided on behalf of DCC. During the year ended December 31 , 2020, the Company paid DCC \$67,700 and received \$2,334,752 in connection with the Agreement. The Company has a receivable e due from the related entity in the amount of \$7,214. Actual expenses are reviewed on an annual basis to determine if the cost allocations are accurate. The company manages accounts for certain affiliates. The aggregate value of revenue earned by the company from the affiliated accounts was \$0 as of December 31 , 2020. As of December 31 , 2020, the Company has a receivable due from the Parent in the amount of \$265. # *NOTE3- NET CAPITAL REQUIREMENTS* Pursuant to the net capital provisions of Rule 15c3-1 of the Securities Exchange Act of 1934, the Company is required to maintain a minimum net capital, as defined under such provisions. At December 31 , 2020, the Company had net capital and net capital requirements of \$522,929 and \$5,000, {8}------------------------------------------------ # **NOTES TO FINANCIAL STATEMENTS** *(concluded)* #### *NOTE3- NET CAPITAL REQUIREMENTS (concluded)* respectively. The Company's net capital ratio (aggregate indebtedness to net capital) was 0.02 to 1. According to Rule 15c3-1 , the Company's net capital ratio shall not exceed 15 to 1. ## *NOTE4- FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONTINGENCIES* In the normal course of business, the Company's client activities through its clearing broker involve the execution, settlement and financing of various securities transactions. These activities may expose the Company to off-balance sheet risk. In the event the client fails to satisfy its obligations, the Company may be required to purchase or sell financial instruments at prevailing market prices in order to fulfill the client's obligations. The Company bears the risk of financial failure by its clearing broker. If the clearing broker should cease doing business, the Company's amount due from this clearing broker could be subject to forfeiture. In addition, during the year the Company may have deposits in banks in excess of the federally insured amount of \$250,000. As of December 31 , 2020, the Company had \$244,521 in excess of the FDIC insured limit. # COVID-19 In March 2020, the outbreak of COVID-19 ( coronavirus) caused by a novel strain of the coronavirus was recognized as a pandemic by the World Health Organization, and the outbreak has become increasingly widespread in the United States, including each of the areas in which the Company operates. The Company has continued its operations throughout the coronavirus pandemic and management expects business operations to continue as is for the foreseeable future. The extent to which the COVID-19 ( coronavirus) outbreak has impacted our operations has not been significant and the Company expects this to remain the case. The Company's financial instruments, including cash, due from clearing broker, prepaid expenses, commissions receivable, accounts payable, and accrued expenses and due to related entity are carried at amounts that approximate fair value due to their short-term nature. # *NOTE* **5-** *SUBSEQUENT EVENTS* The Company has performed an evaluation of subsequent events through February 21 , 2021. The evaluation did not result in any subsequent events that required disclosures and/or adjustments. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.