# CIM SECURITIES, LLC X-17A-5 (2021-03-31) — Broker-dealer annual report - Company: CIM SECURITIES, LLC - Form: X-17A-5 - Filed: 2021-03-31 - Period: 2020-12-31 - Accession: 0001173387-21-000005 - CIK: 1173387 - File #: 8-65351 - Material weakness: No - Auditor: OHAB & COMPANY - Auditor location: MAITLAND, FL - Contact: GARY CUCCIA - Phone: 732-713-9607 - Signed by: GARY CUCCIA (PRINCIPAL FINANCIAL OFFICER) Original filing: https://www.sec.gov/Archives/edgar/data/1173387/000117338721000005/edgarbs.pdf --- {0}------------------------------------------------ # Statement of Financial Condition As of Decem her 31, 2020 {1}------------------------------------------------ ## **CIM SECURITIES, LLC FINANCIAL STATEMENTS AS OF DECEMBER 31, 2020** #### **TABLE OF CONTENTS** ### **Report oflndependent Registered Public Accounting Firm** #### **Financial Statements** | Statement of Financial Condition | 2 | |----------------------------------|-----| | Notes to Financial Statements | 3-5 | {2}------------------------------------------------ ![](_page_2_Picture_0.jpeg) 100 E. Sybelia **Ave.** Suite 130 Maitland, FL 32751 *Certified Public* Acco11111a111s Email: pam(aJohabco.com Telephone 407-740-7311 Fax 407-740-6441 ## REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ### To the Board of Directors and Member's of CIM Securities, LLC ### **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of CIM Securities, LLC as of December 31, 2020, and the related notes (collectively referred to as the ''financial statement"). In our opinion, the financial statement presents fairly, In all material respects, the financial position of CIM Securities, LLC as of December 31, 2020 in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** This financial statement Is the responsibility of CIM Securities, LLC's management. Our responsibility Is to express an opinion on CIM Securities, 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 CIM Securities, 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. We have served as CIM Securities, LLC's auditor since 2015. Maitland, Florida March 30, 2021 {3}------------------------------------------------ ### **CIM SECURITIES, LLC STATEMENT OF FINANCIAL CONDITION AS OF DECEMBER 31, 2020** #### **ASSETS** #### **Assets** | \$
Cash and cash equivalents | 137,352 | |----------------------------------|---------------| | Clearing deposit | 50,000 | | Commissions receivable | 22,015 | | Receivable from related party | 821 | | Prepaid expenses | 25,510 | | Total assets | \$
235,698 | | | | | LIABILITIES AND MEMBER'S EQUITY | | | Liabilities | | | \$
Accounts payable | 15,942 | | Accrued expenses - related party | 2,053 | | Commissions payable | 31,874 | | Other liabilities | 31,915 | | Total liabilities | 81,784 | | | | | Member's Equity | | | Total liabilities and member's equity | \$
235,698 | |---------------------------------------|---------------| | | | The accompanying notes are an integral part of these financial statements {4}------------------------------------------------ ## **NOTES TO FINANCIAL STATEMENTS** # *NOTE 1- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES* ## *Organization and business* CIM Secmities, LLC (the "Company") was formed on April 1 2002, pmsuant to the laws of the State of Colorado. The Company is a broker-dealer registered with the Securities and Exchange Commission and is a member of the Financial Industry Regulatory Authority, Inc. CIM Secmities, LLC is a wholly owned subsidiary of Choice Investment Management LLC (the "Parent"). The Company is engaged in investment banking for which it raises funding for private placements as well as placement of public securities for which it receives a fee. Additionally, the Company receives commission from securities transactions as well as mutual fund, 12b-l fees and variable annuity trails. The Company supervises a New York City office of independent registered representatives, which is a registered OSJ and does business under the name Collage Partners, LLC ("Collage" or "branch office"). ## *Cash and Cash Equivalent* For purposes of reporting cash flows, the company considers cash and operating bank accounts, cash on hand, demand deposits, and highly liquid debt instruments pmchased with a matmity of three months or less as cash and cash equivalents. ## *Agreement with clearing broker* The Company, under Rule 15c3-3(k)(2)(ii), is exempt from the reserve and possession or control requirements of Rule 15c3-3 of the Securities and Exchange Commission. The Company does not carry or clear customer accounts. Accordingly, all customer transactions are executed and cleared on behalf of the Company by its clearing broker on a fully disclosed basis. The Company's agreement with its clearing broker provides that as clearing broker, that firm will make and keep such records of the transactions effected and cleared in the customer accounts as are customarily made and kept by a clearing broker pursuant to the requirements of Rules 17a-3 and 17a-4 of the Securities and Exchange Act of 1934, as amended (the 'Act"). It also performs all services customarily incident thereto, including the preparation and distribution of customers' confirmations and statements and maintenance margin requirements under the Act and the rules of the Self Regulatory Organizations of which the Company is a member. ## *Estimates* The preparation of financ ial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. {5}------------------------------------------------ ## **NOTES TO FINANCIAL STATEMENTS** #### *NOTE 1- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)* ## *Income taxes* The Company is recognized as a limited liability company by the Internal Revenue Service. The Company's member is liable for federal and state income taxes on its taxable income. The Company is required to determine whether a tax position is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any tax related appeals or litigation processes based on the technical merits of the position. The Company files an income tax return in the U.S. federal jurisdiction, and may file income tax returns in various U.S. states. The Company is not subject to income tax return examinations by major taxing authorities for years before 2016. The tax benefit recognized is measured as the largest amount of benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. De-recognition of a tax benefit previously recognized results in the Company recording a tax liability that reduces net assets. However the Company's conclusions regarding this policy may be subject to review and adjustment at a later date based on factors including, but not limited to on-going analyses of and changes to tax laws, regulations and interpretations thereof. The Company recognizes interest accrued related to unrecognized tax benefits and penalties related to unrecognized tax benefits in income taxes payable, if assessed. No interest expense or penalties have been recognized as of and for the year ended December 31, 2020. # *NOTE 2- NET CAPITAL REQUIREMENTS* Pursuant to the net capital provisions of Rule l 5c3-l of the Securities Exchange Act of 1934 the Company is required to maintain a minimum net capital, as defined under such provisions. At December 31, 2020, the Company had regulatory net capital of \$127,583 which was \$122,131 in excess of its required minimum of \$5,452. The Company's percent of aggregate indebtedness to net capital ratio was 64.10%. According ule 15c3-1, the Company's net capital ratio shall not exceed 15 to 1. ## *NOTE4- LEASE AGREEMENT* The Company adopted ASU 2016-2, Leases - (Topic "842"). ASU 2016-02 recognition of lease assets and lease liabilities on the balance sheet related to the rights and obligations created by lease agreements. Previously, generally accepted accounting principles did not require a lessee to include an asset or liability on its balance sheet with respect to an operating lease. The adoption of Leases - ("Topic 842") requires a lessee to include on its balance sheet an asset arising from an operating lease. The Company has elected not to apply the recognition requirements of Topic 842 relating to its short-term related party office lease and instead has elected to recognize the lease payments as lease costs on a straight-line basis over the lease tem1. {6}------------------------------------------------ # **NOTES TO FINANCIAL STATEMENTS** #### *NOTE 5- FINANCIAL INSTRUMENTS, OFF-BALANCE SHEET RISK AND CONTINGENCIES* The Company is engaged in various trading and brokerage activities in which counterparties primarily include broker-dealers, banks and other financial institutions. In the event that counterparties do not fulfill their obligations the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty or issuer of the instrument. It is the Company's policy to review, as necessary, the credit standing of each counterparty with which it conducts business. The Company bears the risk of financial failure by its clearing broker. If the clearing broker should cease doing business, the Company's receivable from this clearing broker could be subject to forfeiture. The Company's financial instruments, including cash, receivables, payables other assets and accrued expenses are carried at amounts that approximate fair value due to the short-term nature of those instruments. # *NOTE6- COMMITMENTS AND CONTINGENCIES* ## **FINRA** In June 2019 FlNRA commenced a routine examination of the Company's books and records. Their findings indicated repeat violations of certain transactions and procedures. In 2020 FIN RA referred the matter to their Enforcement Division for review. At this time the Company cannot determine if the Company will be subject to a disciplinary action or fine by FINRA. The Company has a Change of Membership (owner) application pending approval by FINRA. ## **Litigation** The Company is the subject of a claim alleging breach of fiduciary duty. The Company had no relationship with the Plaintiff; therefore, management is vigorously defending the claim and anticipates a positive outcome. The Company's potential liability in this case is limited as it was not involved in the sale of the investment. No liability has been accrued for this claim as it is not probable or estimable. ## *NOTE* 7- *SUBSEQUENT EVENTS* The Company has performed an evaluation of subsequent events through the date the financial statements were issued. The evaluation did not result in any subsequent events that required disclosures and/or adjustments Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.