# SEAPORT GLOBAL SECURITIES LLC X-17A-5 (2022-02-25) — Broker-dealer annual report - Company: SEAPORT GLOBAL SECURITIES LLC - Form: X-17A-5 - Filed: 2022-02-25 - Period: 2021-12-31 - Accession: 0001146140-22-000006 - CIK: 1146140 - File #: 8-53535 - Type: Broker-dealer - Material weakness: No - Auditor: Laporte, A Professional Accounting Corporation - Auditor location: Covington, LA - Contact: Markus Witthaut - Phone: 2126167710 - Signed by: Markus Witthaut (CCO/FINOP) Original filing: https://www.sec.gov/Archives/edgar/data/1146140/000114614022000006/auditedlongform.pdf --- {0}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OMB APPROVAL OMB Number: 3235-0123 August 31, 2020 Expires: Estimated average burden hours per response .. . . . . . 12.00 SEC FILE NUMBER 8-70050 # ANNUAL AUDITED REPORT FORM X-17A-5 PART III FACING PAGE Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder | REPORT FOR THE PERIOD BEGINNING 01/01/20 | | AND ENDING 12/31/20 | | | |----------------------------------------------------------------------------------------------------------|--------------------------------------------------------|---------------------|--------------------------------|--| | | MM/DD/YY | | MM/DD/YY | | | | A. REGISTRANT IDENTIFICATION | | | | | NAME OF BROKER-DEALER: Axegine Securities LLC | | | OFFICIAL USE ONLY | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | FIRM I.D. NO. | | | 360 Madison Avenue, 20th Floor | | | | | | | (No. and Street) | | | | | New York | NY | | 10017 | | | (City) | (State) | (Zip Code) | | | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORTI
Markus Witthaut 212-616-7710 | | | | | | | | | (Area Code - Telephone Number) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report* | | | | | | Laporte, A Professional Accounting Corporation | | | | | | | (Name - if individual, state last, first, middle name) | | | | | 5100 Village Walk, Suite 300 | Covington | IA | 70433 | | | (Address) | (City) | (State) | (Zip Code) | | | CHECK ONE: | | | | | | Certified Public Accountant | | | | | | Public Accountant | | | | | | Accountant not resident in United States or any of its possessions. | | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | | | | | | \*Claims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis for the exemption. See Section 240.17a-5(e)(2) > Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. SEC 1410 (11-05) {1}------------------------------------------------ #### OATH OR AFFIRMATION #### Markus Witthaut -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of Axegine Securities LLC of December 31, are true and correct. I further swear (or affirm) and correct. I further swear (or affirm) that neither the company nor any partner, principal officer or director has any proprietary interest in any account classified solely as that of a customer, except as follows: ![](_page_1_Figure_3.jpeg) This report \*\* contains (check all applicable boxes): - (a) Facing Page. - 7 (b) Statement of Financial Condition. - (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). - (d) Statement of Changes in Financial Condition. - (e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital. - (t) Statement of Changes in Liabilities Subordinated to Claims of Creditors. - V (g) Computation of Net Capital. - (h) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3. - (i) Information Relating to the Possession or Control Requirements Under Rule 15c3-3. - 4 (i) A Reconciliation, including appropriate explanation of Net Capital Under Rule 15c3-1 and the Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3. - 1 (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of consolidation. - (1) An Oath or Affirmation. - (m) A copy of the SIPC Supplemental Report. - (n) A report describing any material inadequacies found to exist or found to have existed since the date of the previous audit. \*\* For conditions of confidential treatment of certain portions of this filing, see section 240.17a-5(e)(3). {2}------------------------------------------------ # **AXEGINE SECURITIES LLC** Audit of Financial Statements December 31, 2020 This report is deemed CONFIDENTIAL in accordance with Rule 17a-5(e)(3) under the Securities Exchange Act of 1934. A statement of financial condition bound separately has been filed with the Securities and Exchange Commission simultaneously herewith as a PUBLIC document. {3}------------------------------------------------ #### **Contents** | Report of Independent Registered Public Accounting Firm | | |---------------------------------------------------------------------------------------------------------------------------------------------------|--------| | Financial Statements | | | Statement of Financial Condition | 3 | | Statement of Operations | 4 | | Statement of Changes in Member's Equity | 5 | | Statement of Changes in Liabilities Subordinated to Claims of General Creditors | 6 | | Statement of Cash Flows | 7 | | Notes to Financial Statements | 8 - 10 | | Supplementary Information | | | Schedule I - Computation of Net Capital Under Rule 15c3-1 of the Securities
and Exchange Commission | 11 | | Schedule II - Computation for Determination of Reserve Requirements
Under Rule 15c3-3 of the Securities and Exchange Commission | 12 | | Schedule III - Information Relating to Possession or Control Requirements
Under Rule 15c3-3 of the Securities and Exchange Commission | 12 | | Schedule IV - Schedule of Segregation Requirements and Funds in
Segregation for Customers' Regulated Commodity Futures
and Options Accounts | 12 | | Exemption Report | 13 | | Review Report of Independent Registered Public Accounting Firm | 14 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) LaPorte, APAC 5100 Village Walk | Suite 300 Covington, LA 70433 985.892.5850 | Fax 985.892.5956 **LaPorte.com** #### **Report of Independent Registered Public Accounting Firm** To the Member and Board of Managers Axegine Securities LLC # **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of Axegine Securities LLC (the Company) as of December 31, 2020, and the related statements of operations, changes in member's equity, changes in liabilities subordinated to claims of general creditors, and cash flows for the year then ended, and the related notes to the financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. # **Basis for Opinion** These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with 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. #### LOUISIANA • TEXAS An Independently Owned Member, RSM US Alliance RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each is separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. {5}------------------------------------------------ # **Supplemental Information** The supplementary information contained in Schedules I, II, III, and IV (the Supplemental Information) has been subjected to audit procedures performed in conjunction with the audit of Axegine Securities LLC's financial statements. The Supplemental Information is the responsibility of Axegine Securities 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 supplementary information contained in Schedules I, II, III, and IV is fairly stated, in all material respects, in relation to the financial statements as a whole. A Professional Accounting Corporation We have served as the Company's auditor since 2018. Covington, LA March 24, 2021 {6}------------------------------------------------ # **AXEGINE SECURITIES LLC Statement of Financial Condition December 31, 2020** | Assets
Cash and Cash Equivalents
Prepaid Expenses | \$
320,935
903 | |---------------------------------------------------------|----------------------| | Total Assets | \$
321,838 | | Liabilities and Member's Equity | | | Liabilities | | | Accounts Payable | 52,930 | | Total Liabilities | 52,930 | | Member's Equity | 268,908 | | Total Liabilities and Member's Equity | \$
321,838 | {7}------------------------------------------------ #### **AXEGINE SECURITIES LLC Statement of Operations For the Year Ended December 31, 2020** | Revenues | | |---------------------------------------|-----------------| | Interest Income | \$
- | | Total Revenues | - | | Expenses | | | Employee Compensation and Benefits | 97,936 | | Technology and Communications Expense | 20,392 | | Professional Fees | 12,465 | | Regulatory Fees and Expenses | 16,677 | | Other Operating Expenses | 182,380 | | Total Expenses | 329,850 | | Net Loss | \$
(329,850) | {8}------------------------------------------------ #### **AXEGINE SECURITIES LLC Statement of Changes in Member's Equity For the Year Ended December 31, 2020** | Balance - December 31, 2019 | \$
298,758 | |-----------------------------|---------------| | Net Loss | (329,850) | | Contributions from Member | 300,000 | | Balance - December 31, 2020 | \$
268,908 | {9}------------------------------------------------ #### **AXEGINE SECURITIES LLC Statement of Changes in Liabilities Subordinated to Claims of General Creditors For the Year Ended December 31, 2020** | Subordinated Liabilities - Beginning of Year | \$
- | |----------------------------------------------|---------| | Increases
Issuances of Subordinated Notes | - | | Decreases
Payment of Subordinated Notes | - | | Subordinated Liabilities - End of Year | \$
- | {10}------------------------------------------------ #### **AXEGINE SECURITIES LLC Statement of Cash Flows For the Year Ended December 31, 2020** | Cash Flows from Operating Activities
Net Loss
Adjustments to Reconcile Net Loss to Net
Cash Used in Operating Activities
(Increase) Decrease in: | \$
(329,850) | |--------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------| | Prepaid Expenses | 150 | | Increase (Decrease) in: | | | Accounts Payable | 26,972 | | Net Cash Used in Operating Activities | (302,728) | | Cash Flows from Financing Activities | | | Contributions from Member | 300,000 | | Net Cash Provided by Financing Activities | 300,000 | | Net Decrease in Cash and Cash Equivalents | (2,728) | | Cash and Cash Equivalents, Beginning of Year | 323,663 | | Cash and Cash Equivalents, End of Year | \$
320,935 | The accompanying notes are an integral part of these financial statements. {11}------------------------------------------------ #### **Note 1. Summary of Significant Accounting Policies** #### **Business of the Company** Axegine Securities LLC (the Company), effective January 25, 2019, is a broker-dealer registered with the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). The Company was formed under the Limited Liability Company laws of the State of Delaware on February 21, 2017 and is a wholly owned subsidiary of Axegine Holdings LLC (Parent). The Company is a non-clearing broker and, as such, will enter an agreement with a third-party clearing organization to carry and clear its customers' margin, cash accounts, and transactions on a fully-disclosed basis. #### **Use of Estimates** The preparation of financial statements in conformity with U.S generally accepted accounting principles 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. #### **Cash and Cash Equivalents** For purposes of the Statement of Cash Flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. #### **Income Taxes** The Company is a disregarded entity for income taxes purposes. Under this election, taxable income or loss of the Company flows to the Parent and is included in the tax returns of the Parent. As of December 31, 2020, the Company had no uncertain tax positions. #### **Risks and Uncertainties** The Company had amounts on deposit at banks as of December 31, 2020 of \$320,935, which exceed the \$250,000 federally insured limits by \$70,935. The Company monitors cash balances, and the quality of the institution that it utilizes, on an ongoing and continuous basis to manage its risk with respect to cash. # **Adopted Accounting Standards** #### *Fair Value Measurement* In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820). The amendment modifies the disclosure requirements on fair value measurements based on the concepts in the Concepts Statement, including the consideration of costs and benefits. The amendments in this Update are effective for all entities for fiscal years beginning after December 15, 2019. The Company adopted the standard in 2020 and it did not have an effect on the financial statements. {12}------------------------------------------------ # **Note 1. Summary of Significant Accounting Policies (Continued)** # **Future Application of Accounting Standards** #### *Financial Instruments - Credit Losses* In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, ("ASU 2016-13"). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking expected loss model that will result in the earlier recognition of allowance for losses. This update is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted for a fiscal year beginning after December 15, 2018, including interim periods within that fiscal year. Entities will apply the standard's provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Company has temporarily delayed measuring credit losses on financial instruments under the new current expected credit losses (CECL) methodology effective January 2023. We have evaluated the impact of this standard on our financial statements, including accounting policies, processes and systems. Based on the nature of the Company's customer base and historical nature of losses, we do not expect the impact to be material upon adoption. #### **Note 2. Related Party Transactions** #### **Services Agreement** The Company has a continuing service agreement with it's Parent. The terms of the agreement grant the Company the benefit of certain employment related and overhead costs incurred by the Parent. In return, the Company pays a servicing fee which is calculated based upon percentage of aggregate revenue that the Company generates and is allocated between the Parent's employment compensation and overhead cost areas. For the year ended December 31, 2020, the Company incurred service agreement expenses included in cost of operations in the amount of approximately \$329,850 in allocated operating expenses. At December 31, 2020, the Company was obligated to its Parent in the amount of approximately \$52,930 which is included in Accounts Payable. #### **Note 3. Net Capital Requirements** The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (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, 2020, the Company reflected net capital of approximately \$268,005, which was in excess of its required net capital of \$100,000. The Company's ratio of Aggregate Indebtedness to Net Capital was .20 to 1. {13}------------------------------------------------ #### **Note 4. Subsequent Events** FASB ASC Topic 855, *Subsequent Events,* establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Specifically, it sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. In accordance with ASC 855, the Company evaluated subsequent events through March 24, 2021, the date these financial statements were available to be issued, and determined that no events occurred that requires disclosure. No subsequent events occurring after this date have been evaluated for inclusion in these financial statements. #### **Note 5. Going Concern** The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. Since inception, the Company has primarily been funded by capital contributions from its member, while it continues in the start-up phase. As shown in the accompanying financial statements, the Company incurred a \$329,850 loss for the year ended December 31, 2020, and as of that date amounts due to parent for direct expenses totaled approximately \$52,930. Together, these factors raised substantial doubt about the Company's ability to continue as a going concern. As of March 16, 2021, management has secured a commitment from a member of the parent to fund the operating expenses through capital contributions for one year after these financial statements are issued while the Company executes an action plan to generate revenues. At the same time, management intends to reduce operating expenses beginning in 2021. These factors alleviate the doubt about the Company's ability to continue as a going concern. {14}------------------------------------------------ #### **AXEGINE SECURITIES LLC Supplementary Information** #### **Schedule I Computation of Net Capital Under Rule 15c3-1 of the Securities and Exchange Commission For the Year Ended December 31, 2020** | Net Capital | | |--------------------------------------------------|---------------| | Total Member's Equity | \$
268,908 | | Deductions and/or Charges
Non-allowed Assets: | | | Prepaid Expenses | 903 | | | 903 | | Net Capital | \$
268,005 | | | | | Computation of Aggregate Indebtedness (A.I.) | | | Accounts Payable | \$
52,930 | | Ratio: Aggregate Indebtedness to Net Capital | .20 to 1 | | Computation of Basic Net Capital Requirement | | | | | | Minimum Net Capital Required | \$
3,529 | | Minimum Dollar Net Capital Requirement | \$
100,000 | | Minimum Net Capital Requirement | \$
100,000 | | Excess Net Capital | \$
168,005 | | Net Capital less 10% of Aggregate Indebtedness | \$
148,005 | Statement Pursuant to 17a-5(d)(4) There were no material differences between the net capital reported in the Company's unaudited From X-17A-5 as of Decemeber 31, 2020 and the Company's audited financial statements as of December 31, 2020. {15}------------------------------------------------ # **AXEGINE SECURITIES LLC Supplementary Information** #### **Schedule II Computation of Net Capital Under Rule 15c3-1 of the Securities and Exchange Commission For the Year Ended December 31, 2020** Axegine Securities LLC is exempt from the reserve requirements and the related computations for the determination thereof under paragraph k(2)(ii) of Rule 15c3-3 under the Securities Exchange Act of 1934, as Axegine Securities LLC carries no margin accounts in connection with its activities as a broker or dealer, does not otherwise hold funds or securities for, or owe money or securities to customers. During the year ended December 31, 2020, Axegine Securities LLC has maintained its compliance with the conditions for exemption specified in paragraph k(2)(ii) of Rule 15c3-3. #### **Schedule III Information Relating to Possession or Control Requirements Under Rule 15c3-3 of the Securities and Exchange Commission** Axegine Securities LLC is exempt from the reserve requirements and the related computations for the determination thereof under paragraph k(2)(ii) of Rule 15c3-3 under the Securities Exchange Act of 1934, as Axegine Securities LLC carries no margin accounts in connection with its activities as a broker or dealer, does not otherwise hold funds or securities for, or owe money or securities to customers. During the year ended December 31, 2020, Axegine Securities LLC has maintained its compliance with the conditions for exemption specified in paragraph k(2)(ii) of Rule 15c3-3. #### **Schedule IV Schedule of Segregation Requirements and Funds in Segregation for Customers' Regulated Commodity Futures and Options Accounts** Axegine Securities LLC is exempt from the reserve requirements and the related computations for the determination thereof under paragraph k(2)(ii) of Rule 15c3-3 under the Securities Exchange Act of 1934, as Axegine Securities LLC carries no margin accounts in connection with its activities as a broker or dealer, does not otherwise hold funds or securities for, or owe money or securities to customers. During the year ended December 31, 2020, Axegine Securities LLC has maintained its compliance with the conditions for exemption specified in paragraph k(2)(ii) of Rule 15c3-3. {16}------------------------------------------------ ![](_page_16_Picture_0.jpeg) #### Axegine Securities LLC's Exemption Report December 31, 2020 Axegine Securities LLC (the "Company") is a registered broker-dealer subject to Rule 17a-5 promulgated by the Securities and Exchange Commission (17 C.F.R. §240.17a-5, "Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R. § 240.17a-5(d)(1) and (4). To the best of its knowledge and belief, the Company states the following: (1) The Company claimed an exemption from 17 C.F.R. § 240.15c3-3 under the following provisions of 17 C.F.R. § 240.15c3-3 (k): (ii) (2) The Company met the identified exemption provisions in 17 C.F.R. § 240.15c3-3(k) throughout the most recent fiscal year without exception. #### Axegine Securities LLC I, Markus Witthaut, affirm that, to my best knowledge and belief, this Exemption Report is true and correct. By: Title: Chief Compliance Officer and FINOP February 8, 2021 {17}------------------------------------------------ ![](_page_17_Picture_0.jpeg) LaPorte, APAC 5100 Village Walk | Suite 300 Covington, LA 70433 985.892.5850 | Fax 985.892.5956 **LaPorte.com** #### **Review Report of Independent Registered Public Accounting Firm** To the Member and Board of Managers Axegine Securities LLC We have reviewed management's statements, included in the accompanying Axegine Securities LLC Exemption Report, in which (a) Axegine Securities LLC identified the following provisions of 17 C.F.R. § 240.15c3-3(k) under which Axegine Securities LLC claimed an exemption from 17 C.F.R. § 240.15c3-3: Paragraph (k)(2)(ii) (the exemption provisions) and (b) Axegine Securities LLC stated that Axegine Securities LLC met the identified exemption provisions throughout the most recent fiscal year without exception. Axegine Securities 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 Axegine Securities 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 17 C.F.R. § 240.15c3-3. A Professional Accounting Corporation Covington, LA March 24, 2021 #### LOUISIANA • TEXAS An Independently Owned Member, RSM US Alliance RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each is separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.