# FDX CAPITAL LLC X-17A-5 (2019-03-01) — Broker-dealer annual report - Company: FDX CAPITAL LLC - Form: X-17A-5 - Filed: 2019-03-01 - Period: 2018-12-31 - Accession: 0001166453-19-000001 - CIK: 1166453 - File #: 8-65170 - Material weakness: No - Auditor: Morey, Nee, Buck & Oswald, LLC - Auditor location: Bethlehem, PA - Contact: Elizabeth Smith - Phone: 6462019167 - Signed by: Kevin R. Greene (Chairman & CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1166453/000116645319000001/FDX_Public.pdf --- {0}------------------------------------------------ ### **FDX CAPITAL LLC {SEC I.D. No. 8-065170}** FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE FOR THE YEAR ENDED DECEMBER 31, 2018 AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM {1}------------------------------------------------ UNITEDSf ATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 0MB APPROVAL OMBNumber: 3235-0123 Expires: August 31, 2020 Estimated average burden hours per resoonse ...... 12.00 SEC FILE NUMBER S-65170 ### **ANNUAL AUDITED REPORT FORM X-17A-5 PART Ill** **FACI G 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 01/01/2018 | | -----------
AND ENDING 12/31/2018 | | | |--------------------------------------------------------------------------|------------------------------------------------------|--------------------------------------|--------------------------------|--| | MM/DDNY | | MMIDDN Y | | | | | A. REGISTRANT IDENTIFICATION | | | | | AME OF BROKER-DEALER: FOX Capital LLC | | | OFFICIAL USE ONLY | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box
o.) | | | FIRM 1. 0 . NO. | | | 515 Madison Avenue, 24th Floor | | | | | | | (No. and Street) | | | | | New York | NY | | 10022 | | | (City) | (State) | | (Zip Code) | | | NAME AND TELEPHO E NUMBER OF PERSO
Kevin R Greene, CEO | | TO CONTACT TN REGARD TO THTS REPORT | (646) 435-0024 | | | | | | (Area Code - Telephone Number) | | | | B. ACCOUNT ANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report* | | | | | | Morey, Nee, Buck & Oswald, LLC | | | | | | | (Name- if individual. state last.first. middle name) | | | | | 2571 Baglyos Circle Suite B20 Bethlehem | | PA | 18020 | | | (Address) | (City) | (S1a1e} | (Zip Code) | | | CHECK ONE: | | | | | | I/ I
Certified Public Accountant | | | | | | Public Accountant | | | | | | | | | | | | B
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. l 7a-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 currentlyvalld **0MB** control number. SEC 141 0 (11-05) {2}------------------------------------------------ #### **OATH OR AFFIRMATION** | I, Kevin R. Greene, CEO | | , swear (or affirm) that, to the best of | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | FOX Capital LLC | | my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of
, as | | of December 31 | 20 18 | are true and correct. I further swear (or affirm) that | | classified solely as that of a customer, except as follows: | | neither the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account | | | | | | This report** contains (check all applicable boxes):
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D ( 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).
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(e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital.
(f) Statement of Changes in Liabilities Subordinated to Claims of Creditors.
§ (g) Computation of et 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.
Computation for Determination of the Reserve Requirements Under Exhibit A of Rule I 5c3-3. | | D U) A Reconciliation, including appropriate explanation of the Computation of et Capital Under Rule I 5c3-I and the | | consolidation.
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(m) A copy of the SIPC Supplemental Report. | | 0 (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of
(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 sec/ion 240. I 7a-5(e)(3). | | | {3}------------------------------------------------ ### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Members of FOX Capital, LLC #### **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of FOX Capital, LLC as of December 31 , 2018, and the related notes (collectively referred to as the "financial statement"). In our opinion, the statement of financial condition presents fairly, in all material respects, the financial position of FOX Capital, LLC as of December 31 , 2018 in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** This financial statement is the responsibility of FOX Capital, LLC's management. Our responsibility is to express an opinion on FOX Capital, 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 FDX Capital, 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 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. Morey, Nee, Buck & Oswald, LLC We have served as FOX Capital, LLC's auditor since 2017. Bethlehem, Pennsylvania February 28, 2019 > 1120 N. Bethlehem Pike • Suite 107 • PO Box459 • Spring House, PA 19477• Phone: 610-882-1000 2571 Baglyos Circle • Suite B20 • Bethlehem, PA 18020 • Phone: 610-882-1000 27 E. High Street • Suite A • Somerville, NJ 08876 • Phone: 908-393-0549 {4}------------------------------------------------ ### FDX CAPITAL LLC **STATEMENT OF FINANCIAL CONDITION** December 31, 2018 #### ASSETS | Cash | \$
318,947 | |------------------|---------------| | Other receivable | 123,986 | | Prepaid expenses | 23,095 | | Total Assets | \$
466,028 | | | | #### LIABILITIES AND MEMBER'S EQUITY | 127,232 | \$ | |---------|----| | 127,232 | | | 338,796 | | | 466,028 | \$ | | | | The accompanying notes are an integral part of these financial statements. {5}------------------------------------------------ ## FDX CAPITAL LLC NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018 ### 1. ORGANIZATION AND NATURE OF BUSINESS FDX CAPITAL LLC (the Company) was formed on October 10, 2001 in the State of New Jersey as a broker-dealer in securities transactions under the Securities Exchange Act of 1934. The Company is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation. The Company' s income is derived from fees earned by raising money from entities and individuals for placement with money managers and investing by professional managers with whom the Company has agreements. The Company also receives fees from the individuals acting as registered representatives of the firm. The Company acts as a broker-dealer and is exempt from Securities and Exchange Commission Rule 1Sc3-3 under paragraph k(2)(i). The company is not required to have any arrangement with a clearing broker. #### 2. SIGNIFICANT ACCOUNTING POLICIES #### CASH AND CASH EQUIVALENTS The Company considers all highly liquid debt instruments purchased with a maturity of less than three months or less to be cash equivalents. The carrying amount reported in the balance sheet for cash and cash equivalents approximates its fair market value. #### ACCRUAL BASIS OF ACCOUNTING The Company's financial statements are prepared using the accrual method of accounting. The Company's year-end is December 31. #### REVENUES Effective January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers ("ASC Topic 606"). The new revenue recognition guidance requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires an entity to follow a five-step model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining 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 applied the modified retrospective method of {6}------------------------------------------------ ### FDX CAPITAL LLC NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018 adoption which resulted in no adjustment as of January 1, 2018. The new revenue recognition guidance does not apply to revenue associated with financial instruments, interest income and expense, leasing and insurance contracts. #### Significant Judgements Revenue from contracts with customers include commissions income and fees from investment banking, M&A and raising capital. The recognition and measurement of revenue is based on the assessment of individual contract terms. Significant judgement is required to determine whether performance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance obligations are identified; when to recognize revenue based on the approach measurement of the company's process under the contract; and whether constraints on variable consideration should be applied due to uncertain future event. #### Distribution Fees The Company enters into arrangements with managed accounts and other pooled investment vehicles (funds) to distribute shares to investors. The company may receive distribution fees paid up front by the fund or overtime or a combination thereof. The Company believes that its performance obligation is the sale of security to investors and as such this is fulfilled as of trade date. Any fixed amounts are recognized on the trade date and variable amounts are recognized to the extent it is probable that a significant revenue reversal will not occur once the uncertainty is resolved. For variable amounts, as the uncertainty is dependent on the value of the shares at future points in time as well as t he length of time the investor remains in the fund, both which are highly suspectable to factors outside of the Company's influence, the Company does not believe that it can overcome this constraint until the market value of the fund and the investor activity are known, which are usually monthly or quarterly. Distribution fees recognized in the current period are primary related to the performance obligation that have been satisfied in prior periods. ### M&A and Debt Capital Raise The Company provides advisory services on mergers and acquisition and raising of debt capital. Revenue for advisory arrangements is general 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 over time for advisory arrangements in which the performance obligation are simultaneously provided by the Company and consumed by the customer. In some circumstance, significant judgement is needed to determine the timing and measurement of progress appropriate for revenue recognition under a specific contract. Retainers and other fees received from customers prior to {7}------------------------------------------------ ### FDX CAPITAL LLC NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018 recognition of revenues are reflected as contract liabilities. #### INCOME TAXES The Company is a limited liability Company taxed as a partnership and the accompanying financial statements do not include any provision for federal or state income taxes. The Company is responsible for a local unincorporated business tax on income which is calculated at the statutory rate. #### USE OF ESTIMATES The preparation of the Financial Statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of 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 the estimates. #### CONCENTRATION OF RISK The Company maintains its cash in bank accounts, which at times, may exceed federally insured limits. The Company has not experienced any losses in this account and believes it is not exposed to any significant credit risk on cash and cash equivalents. #### 3. NET CAPITAL The Company is a member of FINRA and subject to the Securities and Exchange Commission's Uniform Net Capital Rule (Rule 15c3-1), which requires the maintenance of minimum net capital of \$5,000, and requires that the ratio of aggregate indebtedness to net capital, both as defined, not to exceed 15 to 1. At December 31, 2018 the Company had net capital of \$191,715, which was \$183,233 in excess of the FINRA minimum capital requirements of \$8,482 and the percentage of aggregate indebtedness to net capital was 66%. #### 4. RELATED PARTY TRANSACTIONS FOX Capital currently has an Expense Sharing Agreement and a Service Fee Agreement with James Alpha Advisors LLC, a related entity. FOX Capital pays James Alpha Advisors for certain occupancy, operational, travel, salary and medical expenses. James Alpha Advisors LLC {8}------------------------------------------------ # FOX CAPITAL LLC NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018 reimburses FOX Capital for all Mutual Fund sales related expenses, which include salaries, medical insurance and employee travel expense reimbursements. James Alpha Advisors LLC also pays FOX Capital Mutual Fund distribution fees. FOX Capital also currently has an Expense Sharing Agreement and a Service Fee Agreement with James Alpha Management LLC, a related entity. FOX Capital pays James Alpha Management for certain occupancy and operational expenses. James Alpha Management LLC reimburses FOX Capital for all Hedge Fund sales related expenses, which include salaries, medical insurance and employee travel related expenses s. Concentration and Credit Risk One company accounted for 71% and \$87,761 of other receivables. Management has evaluated the collectability of the receivable and has determined that no allowance for doubtful account is necessary. #### 6. SUBSEQUENT EVENTS The Company has evaluated subsequent events through February 28, 2019, the date on which these financial statements were available to be issued. The Company did not identify any matefial subsequent events requiring adjustment to or disclosure in the financial statements. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.