# ANKURA CAPITAL ADVISORS, LLC X-17A-5 (2020-02-28) — Broker-dealer annual report
- Company: ANKURA CAPITAL ADVISORS, LLC
- Form: X-17A-5
- Filed: 2020-02-28
- Period: 2019-12-31
- Accession: 0001144526-20-000001
- CIK: 1144526
- File #: 8-53403
- Material weakness: No
- Auditor: Plante & Moran, PLLC
- Auditor location: Chicago, IL
- Contact: Fredric Obsbaum
- Phone: 212-897-1694
- Signed by: Brian Lenart (cco)
Original filing: https://www.sec.gov/Archives/edgar/data/1144526/000114452620000001/anca19s4.pdf
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
0MB APPROVAL 0MB Nwnber. 3235-0123 Expires; August 31, 2020 Estimated average burden hours per response ... 12.00
8-53403
I SEC FlLE NUMBER I
| ANNUAL AUDITED REPORT |
|-----------------------|
| FORM X-17 A-5 |
| PARTill |
## **FAClNGPAGE**
**Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder**
| _,aO=lffi~l~/1~9~
~
MM/DDNY | ANDENDING | 12/31/19
MM/DD/YY |
|-------------------------------------|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| | | |
| | | OFFICIAL USE |
| | | ONLY |
| | | FIRM ID. NO. |
| 485 Lexin!?ton Avenue-
10m Floor | | |
| (No. and Street) | | |
| NY | | 10017 |
| | | (Zip Code) |
| | | |
| | | (212) 897-1694 |
| | | (Area Code -
Telephone
o.) |
| | | |
| | | |
| | | |
| | | |
| | | |
| Chicago | IL | 60606 |
| | | (Zip Code) |
| | | |
| | | |
| | | |
| | | |
| | | |
| | (State)
(City) | ~-
A. REGISTRANT IDE.~TIFICATION
ADDRESS OF PRINCIPAL PLACE OF BUSTNESS: (Do not use P.O. Box No.)
NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
B. ACCOUNTANT IDE~TIFICATIO~
INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report*
if individual, state last, first, middle name)
(State)
Accountant not resident in United States or any of its possessions. |
*\*Claims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis for the exemption. See sec/ion 240.17a-5(e){2). SEC* 1410 (3-91)
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# Ankara Capita l Advisors, LLC
# TABLE OF CONTENTS
#### This report\*\* contains (check all applicable boxes):
- LxJ Report oflndependenr Registered Public Accounting Firm.
- [x] Facing Page.
- **[x]** Statement of Financial Condition.
- [x] Statement of Operations.
- rxl Statement of Changes in Member's Equity.
- **[x]** Statement of Cash Flows.
- [ ] Statement of Changes in Liabilities Subordinated ro Claims of General Creditors (nor applicable).
- **[x]** Computation of Net Capital for Brokers and Dealers Pursuant to Rule J 5c3-J under the Securities Exchange Acr of 1934.
- **[x]** Computation for Determination of Reserve Requirements for Brokers and Dealers Pursuant to Rule l5c3-3 under the Securities Exchange Act of 1934.
- Ix] Information Relating to the Pos:s:es:s:ion or Conanl Requirement~ for Brokers and Dealers Pursuant to Rule l 5c3-3 under the Securities Exchange Act of 1934 (not applical;>le).
- [x] A Reconciliation, including appropriate explanations, of the Computation of Net Capital Pursuant to Ruic l 5c3-1 and the Computation for Determination of Reserve Requirements Under Rule l 5c3-3.
- [ ] A Reconciliarion Between the Audited and Unaudited Statements of Financial Condition With Respect to Methods of Consolidation (not applicable).
- [x) An Affirmation.
- [ ] A report describing any material inadequacies found to exist or found to have existed since the date of the previous audit (Supplemental Report on Internal Control).
- lx] Lndependent Auditors' Report regarding R.ule 15c3-3 e~<:mption report.
- rx] Rule l 5c3-3 exemption rcpon.
- \*\* *For conditions of confidential treatment of certain portions of this filing, see section 240. 17a-5(e)(3).*
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#### **AFFIRMATION**
I, Brii.n Len11ri, affirm that, to the best of my knowledge and belief, the accompanying financial statements and supplemental schedules pertaining to Anknra Capi~l Advisors, LLC for the year ended December 31, 2019, are true and correct [ further affirm that neither the Company nor any officer or director bas any proprietary interest in any account classified solely as that of a customer. ~ cco
HEATHER A INGEVALDSON Official Seal Notary Public - State of llllnols My Commission Expires Feb 28, 2021
Subscribed and sworn \_\_{f;:A l~J~
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# **Ankura Capital Advisors, LLC**
Financial Statements and Supplementary Schedules Pursuant to Rule 17a-5(d) under the Securities Exchange Act of ll934 December 31, 2019 (Confidential Treatment Requested)
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# Report of Independent Registered Public Accounting Firm
To the Sole Member Ankura Capital Advisors, LLC
#### **Opinion on the Financial Statements**
We have audited the accompanying statement of financial condition of Ankura Capital Advisors, LLC as of December 31, 2019 and the related statements of operations, changes in member's equity, and cash flows for the year then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Ankura Capital Advisors, LLC as of December 31 , 2019 and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United states of America.
#### **Basis for Opinion**
These financial statements are the responsibility of Ankura capital Advisors, LLC's management. Our responsibility is to express an opinion on Ankura Capital Advisors, 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 Ankura Capital Advisors, 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 induded performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
#### **Supplemental Information**
The accompanying supplemental information in schedules I and 11 has been subjected to audit procedures performed in conjunction with the audit of Ankura Capital Advisors, LLC's financial statements. The supplemental information is the responsibility of Ankura Capital Advisors, LLC's management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the under1ying 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, induding 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 Ankura Capital Advisors, LLC's auditor since January 2018. Chicago, Illinois February 27, 2020
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# **ANKURA CAP IT AL ADVISORS, LLC Statement of Financial Condition December 31, 2019**
| Assets | |
|--------------------------------------------------------------------------|-------------|
| Cash | S 1,223,350 |
| net of allowance for doubtful accounts \$10,000
AccoW1ts receivable - | 9,290 |
| Receivable &om related party | 44,031 |
| Deferred contract costs | 167,454 |
| Prepaid expenses and other assets | 53,521 |
| Total assets | \$1,497,646 |
| Liabilities and Member's Equity
Liabilities: | |
| Accrued expenses and other liabiliteis | S
16,049 |
| Deferred revenue | 248,815 |
| Total liabilities | 264,864 |
| Member's equity | |
| Member's equity | 1,232,782 |
| Total liabilities and member's equity | \$1,497,646 |
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# **ANKURA CAP IT AL ADVISORS, LLC Statement of Operations For the year ended December 31, 2019**
# **Revenues**
| Success fees | s
865,921 |
|-----------------------------------------------|---------------|
| Fees | 24,095 |
| Reimbursement revenues | l,088 |
| l revenues
Tota | 1,104
89 |
| Expenses | |
| Cost of services before reimbursable expenses | l 78,601 |
| Professional fees | 154,261 |
| Insun.1m.:e | 97,343 |
| Regula Lory fees and expenses | 37,344 |
| Rent expense | 25,278 |
| Other expenses | 20,025 |
| Total expenses | 5 12,852 |
| l'iet income | 378,252
\$ |
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# **ANKURA CAP IT AL ADVISORS, LLC Statement of Changes in Members' Equity For the year ended December 31, 2019**
| Balance, January 1, 2019 | 854,530
\$ | | |
|----------------------------|---------------|-----------|--|
| Net income | | 378,252 | |
| Balance, December 31, 2019 | \$ | 1,232,782 | |
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# **Cash Oon'S from operating activities**
| Ne1 income | \$
378,252 |
|----------------------------------------------------------------------------------|-----------------|
| Adjustments lo reconcile net income to net cash provided by operating activitjes | |
| Qncrease) decrease in operating assets | |
| Accounts receivable, net | 115,921 |
| Deferred contract costs | (26,173) |
| Prepaid expenses and others | (33,566) |
| Receivable from related party | (44,031) |
| Increase (decease) in operating liabilities | |
| Accrued expenses and other liabilities | 16,049 |
| Related party payable | (310,093) |
| Def erred revenue | 9,401 |
| Net cash provided by operating activities | 105,760 |
| Cash | |
| Beginning of period | 1,117,590 |
| End of period | \$
1,223,350 |
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# **1. Organization and Business**
Ankura Capital Advisors, LLC (the "Company") is a wholly owned subsidiary of Thoreau HoldCo, LLC ("Thoreau»). The Company, is a broker-dealer registered with the Securities and Exchange Commission (tbe "SEC") and a member of tbe Financial Industry Regulatory Authority ("FINRA").
The Company provides financial advisory services in connection with mergers, acquisitions and divestitures and placement agent services in connection with the private placement of securities.
# 2. Summary of Significant Accounting Policies
#### **Basis of Presentation**
These financial statements were prepared in conformity with accounting principles generaJJy accepted in the United States of America which requires management to make estimates and assumptions chat affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
# **Basis of Accounting**
Revenues and expenses are recorded on the accrual basis of accounting.
#### **Cash**
All cash deposits arc held by one financial institution and therefore arc subject to the credit risk at that financial institution. The Company has not experienced any losses in such accounts and does not believe there to be any significant credit risk with respect to these deposits.
#### **Account.,;; Receiv ahle**
Accounts receivable consists of retainers and reimbursable expenses billed to customers but not yet paid. Management determines an allowance for doubtful accounts based on its assessment of the current status of individual accounts.
#### **De ferred Contracts**
Deferred contract costs consist of wages and other costs related to the fulfillment of a contract. Such costs are capitalized to the extent they are explicitly reimbursable by the customer and expensed when the related revenue is recognized.
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#### **Income Taxes**
The Company is a single-member limited liability company and is treated as a disregarded entity for income tax reporting purposes. The Internal Revenue Code provides that any income or loss is passed through to the ultimate beneficial individual members for federal, state, and certain local income truces. Accordingly, the Company has not provided for federal and stare income taxes. There are no uncertain tax positions to be accounted for in accordance with Financial Accounting Standards Board guidance on income taxes as of December 31 , 2019.
# **Revenue Recognition**
The Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that refleccs the consideration **to** which the entity expeccs to be entitled in exchange for those goods or services. The guidance requires an entity to follow a five-step model co (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) detennine the transaction price, (d) allocate the transaction price to the perfonnance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In detennining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved.
The Company provides financing and mergers and acquiitions advisory services. Revenue for advisory arrangements is generally recognized at the point in time that performance under the arrangement is completed (closing date of the transaction) or the contract is cancelled. However, for certain contracts, revenue is recognized ove time for advisory arrangements in which the performance obligations are simultaneously provided by the Company and consumed by the customer.
# **Significant Judgments**
Revenue from contracts with customers includes CO[ll[Il]SS1on income and fees from invesbnent banking and asset management services. 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 rime; how to a llocate transaction prices where multiple performance obligations are idenLified; when to recognize revenue based on the appropriate measure of the Company's progress under the contract; and whether constraints on variable consideration shouJd be applied due to uncertain future events.
# Contract Assets and Contract Liabilities
The Company bad contract assets in the amount ofS14 l ,281 and \$167,454 at January I, 2019 and December 3 ll 2019 respectively. It bad contract liabilities in the amount of \$239.414 and \$248,8 15 at January I , 2019 and December 31, 2019 respectively.
# **3. Regulatory Requirements**
The Company is subject to SEC Uniform Net Capital Rule 15c3-l under the Securities Exchange Act of 1934, 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 I. At December 31, 2019, the Company had net capital of approximately \$958,000 which exceeded the required net capital by approximately \$940,000.
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The Company does not hold customers' cash or securities; therefore, it is not affected by SEC Rule 15c3-3.
# 4. Related-Party Transadions
The Company has a service agreement with Ankura Consulting Group, LLC ("AGC"), an entity related through common ownership. Under the Agreement, the Company is provided with consulting personnel; office space; office-related equipment; administrative support such as technical, accounting, and bookkeeping; and such other services as the parties may agree to from time to time. Some of the personnel are registered with FJNRA as representatives and principals of the Company to the extent required under FTNRA rules. During 2019, \$223,904 of expenses were allocated pursuant to the Agreement and included consulting services at cost plus fringe benefits S 178,60 I, facilities \$25,278 and operating expenses \$20,025. Expenses directly attributable to the Company are paid by the Parent and charged to the Company. During 2019, directly attributable expenses were \$288,948 and included reimbursable expenses, audit fees, insurance and compliance service costs.
In addition, the Company has a policy that assigns to ACG revenues for services that do not culminate in a securities transaction. Cash receipts for these services by the Company result in the Company owing ACG for amounts received. ln certain situations, ACG may receive cash receipts on behalf of the Company related to revenue earned by the Company.
The net amount receivable from ACG related to the transactions described above was S44,03 l at December 31 , 2019.
# **5. Subsequent Events**
The Company has performed an evaluation of events that have occurred subsequent to December 3 I, 2019 through the date these financial statements were issued. There have been no material subsequent events during such period that would require recognition or disclosure in this report as of December 31, 2019.
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SUPPLEMENTARY INFORMATION
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# ANKURA CAPITAL ADVISORS, LLC Computation of Net Capital Under Rule 15c3-l of the Securities and Exchange Commission December 31, 2019
Schedule I
| Member's equity | ~ | 1,232,782 |
|---------------------------------------------------------------|-----------|-----------|
| Deductions | | |
| Accowits receivable, net | | 9,290 |
| Receivable from related party | | 44,031 |
| Deferred contract costs | | 167,454 |
| Prepaid expenses and other assets | | 53,521 |
| Total nonallowable assets | | 274,296 |
| et capital | | 958,486 |
| Minimwn capital requirement (the greater of \$5,000 or 6 2/3% | | |
| of aggregate indebtedness) | | 17,650 |
| Excess net capital | \$ | 940,836 |
| Aggregate indebtedness | \$ | 264,864 |
| Ratio of aggregate indebtedness to net capital | 0.28 to I | |
There are no material differences bet\veen the computation of nee capital presented above and the computation of net capital in the Company's unaudited Form X-17 A-5, Part JIA filing as of December 31 , 2019.
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The Company does not hold customer cash or securities; therefore, it is not affected by SEC Rule 15c3-3.
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## Report of Independent Registered Public Accounting Firm
To the Sole Member Ankura Capital Advisors, LLC
We have reviewed management's statements, included in the accompanying Exemption Report, in which (1) Ankura Capital Advisors, LLC indicated that Ankura Capital Advisors, LLC may file an Exemption Report because it had no obligations under 17 C.F.R. §240.15c3-3, and Ankura Capital Advisors, LLC does not handle cash or securities on behalf of customers (the "exemption provisions"), and (2) Ankura Capital Advisors, LLC stated that Ankura Capital Advisors, LLC met the identified exemption provisions throughout the most recent fiscal year without exception. Ankura Capital Advisors, 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 Ankura Capital Advisors, 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 fair1y stated, in all material respects, based on the provisions set forth in 17 C.F.R. §240.15c3-3 under the Securities Exchange Act of 1934.
**~f ~** *1 1'/.LC*
Chicago, Illinois February 27, 2020
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## ANKURA CAPITAL ADVISORS, LLC Exemption Report Regarding Compliance with tle Exemption Provisions for SEC Rule 15c3-3
To the best of our knowledge and belief, Ankura Capital Advisors, LLC ("Ankura") states the following:
Ankura may file an exemption report because it had no obligations under SEC Rule 15c3-3. An.kura did not handle cash or securities on behalf of customers without any exceptions throughout the year ending December 31, 2019.
The accompanying notes are an integral part of these financial statements.
Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.