# COVA CAPITAL PARTNERS LLC X-17A-5 (2022-03-31) — Broker-dealer annual report - Company: COVA CAPITAL PARTNERS LLC - Form: X-17A-5 - Filed: 2022-03-31 - Period: 2021-12-31 - Accession: 0001133087-22-000006 - CIK: 1133087 - File #: 8-53105 - Type: Broker-dealer - Material weakness: No - Auditor: Adeptus - Auditor location: NEW YORK, NY - Contact: Barbara Halpern - Phone: 2032107364 - Email: egibstein@covacp.com - Website: covacp.com - Signed by: Edward Gibstein (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1133087/000113308722000006/public.pdf --- {0}------------------------------------------------ STATEMENT OF FINANCIAL CONDITION STATEMENT OF FINANCIAL CONDITION > DECEMBER 31, 2021 DECEMBER 31, 2021 > > PUBLIC PUBLIC {1}------------------------------------------------ # "N'TED STATES OMBNZXESZSSSXQ; SECURITIES AND EXCHANGE COMMISSION Expires?" 3'1, 2023 Washington, D.C. 20549 Estimated average burden "N'TEDSTATES OMEN'iniZfZ'Sififiés SECURITIES AND EXCHANGE COMMISSION Expiresi'm 3'1, 2023 Washington, DC. 20549 Estimated average burden hours per response: 12 hours per response: 12 # FORM X-17'A-5 PART III ANNUAL REPORTS SEC FILE NUMBER FORM X-17A-5 PART III | | SEC FILE NUMBER | |--|-----------------| | | | FACING PAGE FACING PAGE Information Required Pursuant to Rules 17a--5, 17a-12', and 18a-7 under the Securities Exchange Act of 1934. Information Required Pursuant to Rules 173-5, 173-12, and 183-7 under the Securities Exchange Act of 1934 | FILING
PERIODBEGINNING
FILING
FOR
THE
THE
PERIOD
FOR | 01/01/2021
01/01/2021
BEGINNING | AND
AND
ENDING
ENDING | 12/31/2021
12/31/2021 | | | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------|------------------------------------------------------------------------------------------------------------|--| | | MM/DD/YY
MM/DD/YY | | | MM/DD/YY
MM/DD/YY | | | | A.
REGISTRANT
A.
REGISTRANT | IDENTIFICATION
IDENTIFICATION | | | | | OF
FIRM: COVA
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NAME
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a | | | | | Jericho
Turnpike
Suite
6851
6851
Jericho
Turnpike
Suite | 205
205 | | | | | | | Street)
Street)
(No.
and
and
(NO. | | | | | | Syosset
Syosset | NY
NY | | | 11791
11791 | | | (City)
(City) | (State)
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l
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(Zip | | Code)
Code) | | | | PERSON
TO
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TO
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PERSON | REGARD
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TO
THIS
FILING
FILING
REGARD | | | | | | Edward
T-
Gibstein'
egibstein@covacp.com
516-382-7627
516-382-7627
egibstein@covacp.com
Edward
T- Gibstein | | | | | | | (Name)
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ph | | | | | | | | | Fax-212.826.5039? 'Fa-x,212.826.5057 wmfldfipfusfiilfiflsmmwwwAdgeptusCPAscom- #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Member of COVA Capital Partners, LLC To the Member of COVA Capital Partners, LLC #### Opinion on the Financial Statement Opinion on theFinancial Statement We have audited the accompanying statement of financial condition of the "financial statement"). In our opinion, the statement of financial condition presents fairly, in all material respects, the financial position of COVA Capital Partners, LLC asof December 31, 2021 in conformity with accounting principles generally accepted in the United States of America. We have audited the accompanying statement of financial condition of the "financial statement"). In our opinion, the statement of financial condition presents fairly, in all material respects, the financial position of COVA Capital Partners, LLC as of December 31, 2021 in conformity with accounting principles generally accepted in the United States of America. #### Basis for Opinion Basis for Opinion This financial statement is the responsibility of COVA Capital Partners, LLC's management. Our responsibility is to express an opinion on COVA Capital Partners, LLC's financial statement 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 COVA Capital Partners, LLC in accordance with the US. federal securities laws and the applicable rules and regulations ofthe Securities and Exchange Commission and the PCAOB. This financial statement is the responsibility of COVA Capital Partners, LLC's management. Our responsibility is to express an opinion on COVA Capital Partners, LLC's financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and arerequired to be independent with respect to COVA Capital Partners, LLC in accordance with theUS. federal securities laws and theapplicable 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 statement is 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 statement, 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. 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 statement is free of material misstatement, whether due to error orfraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error orfraud, 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. Adeptus Partners LLC is COVA Capital Partners, LLC's auditor since 2016. Adeptus Partners LLC is COVA Capital Partners, LLC's auditor since 2016. 44/7/19; Aha; d6»; New York, New York March 31, 2022 New York, New York March 31, 2022 {4}------------------------------------------------ #### STATEMENT OF FINANCIAL CONDITION STATEMENT OF FINANCIAL CONDITION #### DECEMBER 31, 2021 DECEMBER 31, 2021 #### ASSETS ASSETS | equivalents
equivalents
Cash
Cash
and
and
cash
cash
Securities
warrants
market
Securities
and
warrants
owned
owned
at
at
market
value
value
and
Receivable
Receivable
from
from
clearing
clearing
broker
broker
Other
Other
assets
assets | \$
\$ | | | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|------------------------|--| | TOTAL
TOTAL
ASSETS
ASSETS | \$
\$ | 860,000
860,000 | | | LIABILITIES
LIABILITIES
AND
AND
MEMBER'S
MEMBER'S
EQUITY
EQUITY | | | | | LIABILITIES
LIABILITIES
Accrued
other
Accrued
expenses
expenses
and
other
liabilities
liabilities
and | \$
\$ | 22,758
22,758 | | | MEMBER'S
EQUITY
MEMBER'S
EQUITY | | 837,242
837,242 | | | TOTAL
LIABILITIES
EQUITY
TOTAL
LIABILITIES
AND
AND
MEMBER'S
MEMBER'S
EQUITY | | \$860,000
\$860,000 | | The accompanying notes are an integral part of this statement. The accompanying notes arean integral part of this statement. {5}------------------------------------------------ #### NOTES TO STATEMENT OF FINANCIAL CONDITION NOTES TO STATEMENT OF FINANCIAL CONDITION #### DECEMBER 31, 2021 DECEMBER 31, 2021 #### NOTE 1: ORGANIZATION NOTE 1: ORGANIZATION Cova Capital Partners, LLC (the "Company") is a broker-dealer registered with the Securities and Exchange Commission (the "SEC",) and is a member of the Financial Industry Regulatory Authority ("FINRA") and the Securities Investor Protection Corporation ("SIPC"). The Company was formed on June 15, 2000 under the laws of the State of New York. The Company is a wholly-owned subsidiary of Avco Capital Corp. (the "Parent"). The Company is engaged in business as a securities broker-dealer, which comprises several classes of services, including private placements and investment banking, under the Securities and Exchange Act of 1934. Cova Capital Partners, LLC (the "Company") is a broker-dealer registered with the Securities and Exchange Commission (the "SEC",) and is a member of the Financial Industry Regulatory Authority ("FINRA") and the Securities Investor Protection Corporation ("SIPC"). The Company was formed on June 15, 2000 under the laws of the State of New York. The Company is a wholly-owned subsidiary of Avco Capital Corp. (the "Parent"). The Company is engaged in business as a securities broker-dealer, which comprises several classes of services, including private placements and investment banking, under the Securities and Exchange Act of1934. #### NOTE 2: SIGNIFICANT ACCOUNTING POLICIES NOTE 2: SIGNIFICANT ACCOUNTING POLICIES #### 8) Accounting estimates and basis 8) Accounting estimates and basis The preparation of these financial statements is on the accrual basis ofaccounting in conformity with US generally accepted accounting principles which require that management make 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 ofrevenues and expenses during the reporting period. Actual results could differ from these estimates. The preparation of these financial statements is on the accrual basis of accounting in conformity with US generally accepted accounting principles which require that management make 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 revenues and expenses during the reporting period. Actual results could differfrom these estimates. #### b) Securities and warrants owned '0) Securities and warrants owned Proprietary securities transactions are recorded on the trade date basis, as if they had settled. Profit and loss arising from all securities and commodities transactions entered into for the account and risk of the Company are recorded on a trade date basis. The Company does not carry customer securities accounts on its books. All trades are on a fully disclosed basis through Vision Financial. Customers' security transactions are reported on a settlement date basis, with related commission income and expenses reported on a trade date basis. The Company maintains one position at its prior Clearing Broker (LEK Securities) since trading was halted in 2017. It is expected the security will begin trading again in 2021. Proprietary securities transactions are recorded on thetrade date basis, as if they had settled. Profit and loss arising from all securities and commodities transactions entered into for the account and risk of the Company are recorded on a trade date basis. The Company does not carry customer securities accounts on its books. All trades are on a fully disclosed basis through Vision Financial. Customers' security transactions are reported on a settlement date basis,with related commission income and expenses reported on a trade date basis. The Company maintains one position at its prior Clearing Broker (LEK Securities) since trading was halted in 2017. It is expected the security will begin trading again in 2021. The Company, from time to time, receives restricted shares and/or warrants as partial compensation for their services. A portion of these securities may be sent from the Company to registered representatives as part of their compensation. The Company, from time to time, receives restricted shares and/or warrants as partial compensation for their services. A portion of these securities may besent from the Company to registered representatives as part of their compensation. Securities owned are reported at fair value in accordance with Accounting Standards Codification (ASC 820). "Fair Value Measurement Disclosures". Securities owned arereported at fair value in accordance with Accounting Standards Codification (ASC 820). "Fair Value Measurement Disclosures". #### Income Taxes Income Taxes The Company is recognized as a single member Limited Liability Company (an "LLC") by the Internal Revenue Service. As such, it is treated as a disregarded entity and is notsubject to income taxes. The Company's income orloss is reportable by its Parent on its tax return. The Company is recognized as a single member Limited Liability Company (an "LLC") by the Internal Revenue Service. As such, it is treated as a disregarded entity and is notsubject to income taxes. The Company's income or loss is reportable by its Parent on its tax return. {6}------------------------------------------------ #### NOTES TO STATEMENT OF FINANCIAL CONDITION NOTES TO STATEMENT OF FINANCIAL CONDITION #### DECEMBER 31, 2021 DECEMBER 31, 2021 ## NOTE 3: REVENUE RECOGNITION FROM CONTRACTS WITH CUSTOMERS NOTE 3: REVENUE RECOGNITION FROM CONTRACTS WITH CUSTOMERS #### Significant Judgements Significant Judgements Revenue from contracts with customers includes fees earned from advisory services, investment banking, and private placements. The recognition and measurement of revenue is based on the assessment of individual contracts terms. Significant judgement is required to determine whether performance obligations are identified; when to recognize revenue based on the appropriate measure of the Company's progress under contract; and whether constraints on variable consideration should be applied due to uncertain future events. Revenue from contracts with customers includes fees earned from advisory services, investment banking, and private placements. The recognition and measurement of revenue is based on the assessment of individual contracts terms. Significant judgement is required to determine whether performance obligations are identified; when to recognize revenue based on the appropriate measure of the Company's progress under contract; and whether constraints on variable consideration should be applied due to uncertain future events. #### Advisory Services Advisory Services The Company principally provides financial advisory services to US. based companies, including mergers and acquisition related services. The Company believes the performance obligation for providing advisory services is satisfied over time because the customer is receiving and consuming the benefits as they are provided by the Company. Fee arrangements are negotiated on both fixed fee and hourly rate arrangements. In the case of non-refundable retainers and fees that are received monthly, they are recognized as revenue at that time as they relate specifically to the services provided in that period. The Company principally provides financial advisory services to U.S. based companies, including mergers and acquisition related services. The Company believes the performance obligation for providing advisory services is satisfied overtime because the customer is receiving and consuming the benefits as they are provided by the Company. Fee arrangements are negotiated on both fixed fee and hourly rate arrangements. In the case of non-refundable retainers and fees that are received monthly, they are recognized as revenue at that time as they relate specifically to the services provided in that period. #### Investment Banking Fees Investment Banking Fees The Company provides investment banking services to US. based companies, including mergers and acquisition related services. The Company believes the performance obligation for providing The Company provides investment banking services to U.S. based companies, including mergers and acquisition related services. The Company believes the performance obligation for providing advisory services is satisfied over time because the customer is receiving and consuming the benefits as they are provided by the Company. Fee arrangements are negotiated on a fixed fees or contingent basis. In the case of non-refundable retainers and fees that are received monthly, they are recognized as revenue at that time when the fees are paid to the Company for the services provided in that period. advisory services is satisfied over time because the customer is receiving andconsuming the benefits as they are provided by the Company. Fee arrangements are negotiated on a fixed fees or contingent basis. In the case of non-refundable retainers and fees that are received monthly, they are recognized as revenue at that time when the fees are paid to the Company for the services provided in that period. #### Placement Fees Placement Fees The Company acts as an agent for equity and debt private placements on behalf of its clients. As additional consideration for the investment advisory services noted above the Company receives fees that vary based on specified performance measures, for example, when a placement or non-securities related success occurs. The Issuer pays the Company as Placement Agent when acting as a Placement Agent for an Issuer. In a private security transaction, the client may pay a commission to the Company which would be fully disclosed prior to paying the Company. Revenues are recognized at the point in time when it is probable that a significant reversal will not occur. The Company acts as an agent for equity and debt private placements on behalf of its clients. As additional consideration for the investment advisory services noted above the Company receives fees that vary based on specified performance measures, for example, when a placement or non-securities related success occurs. The Issuer pays the Company as Placement Agent when acting as a Placement Agent for an Issuer. In a private security transaction, the client may pay a commission to the Company which would be fullydisclosed prior to paying the Company. Revenues are recognized at the point in time when itis probable that a significant reversal will not occur. #### Commission Revenue Commission Revenue Commission revenue represents sales commission generated by advisors for their clients' purchases and sales of securities on exchanges and over-the-counter, as well as purchases of other investment products. The Company views the selling, distribution and marketing, or any combination thereof, of investment products to such clients as a single performance obligation to the product sponsors. Commission revenue represents sales commission generated by advisors for their clients' purchases and sales of securities on exchanges and over-the-counter, as well as purchases of other investment products. The Company views the selling, distribution and marketing, or any combination thereof, of investment products to such clients as a single performance obligation to the product sponsors. {7}------------------------------------------------ #### NOTES TO STATEMENT OF FINANCIAL CONDITION NOTES TO STATEMENT OF FINANCIAL CONDITION #### DECEMBER 31, 2021 DECEMBER 31,2021 #### NOTE 3: REVENUE RECOGNITION FROM CONTRACTS WITH CUSTOMERS (continued) NOTE 3: REVENUE RECOGNITION FROM CONTRACTS WITH CUSTOMERS (continued) The Company is the principal for commission revenue, as it is responsible for the clients' purchases and sales and maintains relationships with the product sponsors. The advisors, if any, assist the Company in performing its obligations. Accordingly, total commission revenues are reported on a gross basis. The Company is the principal for commission revenue, as it is responsible for the clients' purchases and sales and maintains relationships with the product sponsors. The advisors, if any, assist the Company in performing its obligations. Accordingly, total commission revenues are reported on a gross basis. #### Private Security Transactions Private Security Transactions To accommodate private purchases and sales, the Company introduces investors on both sides of the transaction and is paid fees for making the connection between the parties involved. To accommodate private purchases and sales, the Company introduces investors on both sides of the transaction and is paid fees for making the connection between the parties involved. #### Other Income Other Income Other income is generated by interest income from margin accounts, firm account revenue, and other fees charged to customers and is recognized when earned. Other income is generated by interest income from margin accounts, firm account revenue, and other fees charged to customers and is recognized when earned. #### NOTE 4: RECEIVABLE FROM CLEARING BROKEPJSECURITIES HELD AT BROKER NOTE 4: RECEIVABLE FROM CLEARING BROKER/SECURITIES HELD AT BROKER The Company conducts business and clears its proprietary and customer transactions through Vision Financial on a fully disclosed basis. The Company earns commissions as an introducing broker for the transactions of its customers. The clearing and depository operations of the Company's customer accounts are performed by its clearing broker pursuant to a clearing agreement. The Company conducts business and clears its proprietary and customer transactions through Vision Financial on a fully disclosed basis.The Company earns commissions as an introducing broker for the transactions of its customers. The clearing and depository operations of the Company's customer accounts are performed by its clearing broker pursuant to a clearing agreement. #### NOTE 5: NET CAPITAL REQUIREMENTS NOTE 5: NET CAPITAL REQUIREMENTS The Company is subject to the Securities and Exchange Commission's Net Capital Rule 1503-1, 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 \$410,038 which exceeded the minimum requirement of \$5,000 by \$405,038. The Company's ratio of aggregate indebtedness to net capital ratio was .06 to 1. The Company is subject to the Securities and Exchange Commission's Net Capital Rule 1503-1, 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 \$410,038 which exceeded the minimum requirement of \$5,000 by \$405,038. The Company's ratio of aggregate indebtedness to net capital ratio was.06 to 1. #### NOTE 6: RESERVE REQUIREMENT PURSUANT TO RULE 15C3-3 NOTE 6: RESERVE REQUIREMENT PURSUANT TO RULE 1503-3 All customer transactions are cleared through a Clearing Broker on a fully disclosed basis. Therefore, the Company is not required to maintain a separate bank account for the exclusive benefit of customers or to segregate customer securities in accordance with Rule 1503- 3(k)(2)(ii) of the Securities and Exchange Commission. All customer transactions are cleared through a Clearing Broker on a fully disclosed basis. Therefore, the Company is not required to maintain a separate bank account for the exclusive benefit of customers or to segregate customer securities in accordance with Rule 1503- 3(k)(2)(ii) of the Securities and Exchange Commission. #### NOTE 7: FAIR VALUE MEASUREMENTS NOTE 7: FAIR VALUE MEASUREMENTS FASB ASC 820 defines fair value, establishes a frame work for measuring fair value, and establishes a fair value hierarchy which prioritizes the inputs to valuation techniques. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the assets or transfer the liability occurs in the principal market for the asset or liability or,in the absence of a principal market, the most advantageous market. FASB ASC 820 defines fair value, establishes a frame work for measuring fair value, and establishes a fair value hierarchy which prioritizes the inputs to valuation techniques. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the assets or transfer the liability occurs in the principal market for the asset or liability or, in the absence of aprincipal market, the most advantageous market. {8}------------------------------------------------ #### NOTES TO STATEMENT OF FINANCIAL CONDITION NOTES TO STATEMENT OF FINANCIAL CONDITION #### DECEMBER 31, 2021 DECEMBER 31,2021 #### NOTE 7: FAIR VALUE MEASUREMENTS (continued) NOTE 7: FAIR VALUE MEASUREMENTS (Continued) Valuation techniques that are consistent with the market, income or cost approach, as specified by FASB ASC 820, are used to measure fair value. Valuation techniques that are consistent with the market, income or cost approach, as specified by FASB ASC 820, are used to measure fair value. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: Level 1 — Quoted prices in active markets for identical securities. Level 1 — Quoted prices in active markets for identical securities. Level 2 — Observable inputs other than quoted prices included in level 1, such as quoted prices for similar securities in active markets; quoted prices for identical or similar securities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data (Including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) Level 2 — Observable inputs other than quoted prices included in level 1, such as quoted prices for similar securities in active markets; quoted prices for identical or similar securities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data (Including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) Level 3 — Pricing inputs are unobservable that are significant to the fair value measurement and include situations where there is little if any market activity for the investment. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. Level 3 — Pricing inputs are unobservable that are significant to the fair value measurement and include situations where there is little if any market activity for the investment. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. The following tables presents the Company's fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2021: The following tables presents the Company's fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2021: | Assets
Assets | Level
Level
1
1 | Level
Level
2
2 | Level
Level
3
3 | Value
Fair
Fair
Value | | |------------------------------------------------------------|--------------------------|--------------------------|---------------------------|-----------------------------------|--| | Equity-based
Equity-based
instruments
instruments | | | | | | | Unrestricted
Unrestricted | \$66,384
\$66,384 | \$
-
\$
- | \$
-
\$
- | 66,384
66,384
\$
\$ | | | Restricted
Restricted | -
- | -
- | 392,326
392,326 | 392,326
392,326 | | | TOTALS
TOTALS | \$66
\$66,384
384 | -
=
-
= | \$392
\$392,326
326 | 458
458,710
710
\$
\$ | | Securities owned-unrestricted are valued using the latest quoted market prices. Securities owned-unrestricted are valued using the latest quoted market prices. The following table presents a reconciliation of the Partnership's Level 3 investments measured at fair value forthe year ended December 31, 2021: The following table presents a reconciliation of the Partnership's Level 3 investments measured at fair value for the year ended December 31, 2021: | value
of
December
Fair
value
as
ofDecember
2020
2020
Fair
as
31,
31, | 70,269
70,269
\$
\$ | |--------------------------------------------------------------------------------------------------------------|------------------------------| | Acquisitions
Acquisitions | 322.057
322.057 | | value
of
December
Fair
Fair
value
as
of
December
as
31,
2021
2021
31, | \$392
\$392,325
325 | Securities owned-restricted are investments in private companies consisting of direct equity investments in such entities. Generally, the Company acquired direct ownership in interests in the private companies as a result of investment banking or advisory services rendered. Securities owned-restricted are investments in private companies consisting of direct equity investments in such entities. Generally, the Company acquired directownership in interests in the private companies as a result of investment banking or advisory services rendered. {9}------------------------------------------------ #### NOTES TO STATEMENT OF FINANCIAL CONDITION NOTES TO STATEMENT OF FINANCIAL CONDITION #### DECEMBER 31, 2021 DECEMBER 31,2021 #### NOTE 7: FAIR VALUE MEASUREMENTS (continued) NOTE 7: FAIR VALUE MEASUREMENTS (continued) Fair value of the restricted securities was determined by the amount the stock was sold for during the year Fair value of the restricted securities was determined by the amount the stock was sold for during the year by the private companies to third parties multiplied by a discount rate because of the restrictions placed on selling the stock. The discounts applied to the restricted stock at December 31, 2021 ranged from 50% to 75%. by the private companies to third parties multiplied by a discount rate because of the restrictions placed on selling the stock.The discounts applied to the restricted stock at December 31, 2021 ranged from 50% to 75%. #### NOTE 8: COMMITMENTS AND CONTINGENT LIABILITIES NOTE 8: COMMITMENTS AND CONTINGENT LIABILITIES #### 8) Lease commitments a) Lease commitments On April 11, 2016 the Company moved into office space at 6851 Jericho Turnpike, Suite 130, Syosset, NY 11791. The current lease is for \$1,000 per month rent and originally expired on December 31, 2017. The lease was extended on a month to month basis. The monthly rent commitment remains at \$1,700. On April 11, 2016 theCompany moved into office space at 6851 Jericho Turnpike, Suite 130, Syosset, NY 11791. The current lease is for \$1,000 per month rent and originally expired on December 31, 2017. The lease was extended on a month to month basis. The monthly rent commitment remains at \$1,700. #### b) Brokerage activities b) Brokerage activities In the normal course of business, the Company is engaged in various brokerage activities on an agency basis through a clearing broker. In connection with these activities, a customer's unsettled transactions may expose the Company to off-balance sheet risk in the event the customer is unable to fulfill their contractual obligations. Significant credit exposure may result in the event that the Company's clearing broker is unable to fulfill their contractual obligation. In the normal course of business, the Company is engaged in various brokerage activities on an agency basis through a clearing broker. In connection with these activities, a customer's unsettled transactions may expose the Company to off-balance sheetrisk in the event the customer is unable to fulfill their contractual obligations. Significant credit exposure may result in the eventthat the Company's clearing broker is unable to fulfill their contractual obligation. #### Legal matters 0) Legal matters From time to time, the Company may be a respondent in legal actions incidental to its securities business. These cases may allege violations of various securities rules and claim damages plus the recovery of legal fees and other costs. As of December 31, 2021, the Company does not believe that these matters will have a material adverse effect on the Company's financial condition. From time to time, the Company may be a respondent in legal actions incidental to its securities business. These cases may allege violations of various securities rules and claim damages plus the recovery of legal fees and other costs. As of December 31, 2021, the Company does not believe that these matters will have a material adverse effect on the Company's financial condition. #### NOTE 9: CONCENTRATION AND CREDIT RISKS NOTE 9: CONCENTRATION AND CREDIT RISKS Bank Deposits — The Company maintains cash balances at one bank. These accounts are covered by Federal Deposit Insurance Corporation ("FDIC") limits. Bank Deposit — The Company maintains cash balances at one bank. These accounts are covered by Federal Deposit Insurance Corporation ("FDIC") limits. {10}------------------------------------------------ #### NOTES TO STATEMENT OF FINANCIAL CONDITION NOTES TO STATEMENT OF FINANCIAL CONDITION ## DECEMBER 31, 2021 DECEMBER 31,2021 ## NOTE 10: RELATED PARTY TRANSACTIONS AND BAD DEBT EXPENSE NOTE 10: RELATED PARTY TRANSACTIONS AND BAD DEBT EXPENSE Included in private security transactions are fees amounting to \$3,752,347 which were earned by the Company for providing services to an affiliated entity. As of December 31, 2021, the Company had a receivable from this entity in the amount of \$1,590,000. As of March 30, 2022, none of this receivable has been collected and based on the current market conditions and financial position of the entity, there is a strong possibility that this money will never be collected. Based on this, the Company has taken the position to write-off the receivable as of December 31, 2021 since it is more likely than not that this receivable will ever be collected. Included in private security transactions are fees amounting to \$3,752,347 which were earned by the Company for providing services to an affiliated entity. As of December 31, 2021, the Company had a receivable from this entity in the amount of \$1,590,000. As of March 30, 2022, none of this receivable has been collected and based on the current market conditions and financial position of the entity, there is a strong possibility that this money will never be collected. Based on this, the Company has taken the position to write-off the receivable as of December 31, 2021 since it is more likely than not that this receivable will ever be collected. #### NOTE 11: SUBSEQUENT EVENTS NOTE 11: SUBSEQUENT EVENTS The Company has evaluated events subsequent to December 31, 2021 for items requiring recording or disclosure in the financial statements. The evaluation was performed through the date these financial statements were available to be issued. Based upon this review, the Company had determined that there were no events which took place that would have a material impact on its financial statements. The Company has evaluated events subsequent to December 31, 2021 for items requiring recording or disclosure in the financial statements. The evaluation wasperformed through the date these financial statements were available to be issued. Based upon thisreview, the Company had determined that there were no events which took place that would have a material impact on its financial statements. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.