# THIRD SEVEN CAPITAL LLC X-17A-5 (2022-02-28) — Broker-dealer annual report - Company: THIRD SEVEN CAPITAL LLC - Form: X-17A-5 - Filed: 2022-02-28 - Period: 2021-12-31 - Accession: 0001174317-22-000003 - CIK: 1537999 - File #: 8-69032 - Type: Broker-dealer - Material weakness: No - Auditor: Raines & Fischer LLP - Auditor location: New York, NY - Contact: Daniel Sakol - Phone: 516 393 5618 - Email: daniel.sakol@janoverllc.com - Website: janoverllc.com - Signed by: Nick Ledger (CFO) Original filing: https://www.sec.gov/Archives/edgar/data/1537999/000117431722000003/tscpublic.pdf --- {0}------------------------------------------------ # **THIRD SEVEN CAPITAL, LLC (A Limited Liability Company)** ## **STATEMENT OF FINANCIAL CONDITION** **DECEMBER 31, 2021** {1}------------------------------------------------ **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** OMB APPROVAL OMB Number: ϯϮϯϱͲϬϭϮϯ Expires: KĐƚ͘ϯϭ͕ϮϬϮϯ Estimated average burden hours per response: ## **ANNUAL REPORTS FORM X-17A-5 PART III** SEC FILE NUMBER 8-69032 **FACING PAGE Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934** FILING FOR THE PERIOD BEGINNING \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ AND ENDING \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ MM/DD/YY MM/DD/YY **A. REGISTRANT IDENTIFICATION** NAME OF FIRM: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ TYPE OF REGISTRANT (check all applicable boxes): ܆ Broker-dealer ܆ Security-based swap dealer ܆ Major security-based swap participant ܆ Check here if respondent is also an OTC derivatives dealer ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (No. and Street) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (City) (State) (Zip Code) PERSON TO CONTACT WITH REGARD TO THIS FILING \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (Name) (Area Code – Telephone Number) (Email Address) **B. ACCOUNTANT IDENTIFICATION** INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing\* \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (Name – if individual, state last, first, and middle name) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (Address) (City) (State) (Zip Code) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (Date of Registration with PCAOB)(if applicable) (PCAOB Registration Number, if applicable) **FOR OFFICIAL USE ONLY** \* Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public 01/01/21 12/31/21 Third Seven Capital LLC 1345 Avenue of the Americas, 33rd floor New York NY 10105 Daniel Sakol 516-393-5618 daniel.sakol@janoverllc.com Raines & Fischer LLP 555 Fifth Avenue, Ste 901 New York NY 10017 10-22-2003 711 - accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-5(e)(1)(ii), if applicable. **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.** {2}------------------------------------------------ #### **OATH OR AFFIRMATION** | I, | swear (or affirm} that, to the best of my knowledge and belief, the
Nick Ledger | |------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | 2~
financial report pertaining to the firm of
as of
Third Seven Capital LLC | | | is true and correct. I further swear (or affirm} that neither the company nor any
December 31 | | | partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely | | | as that of a customer. | | | FAITH LOGA-.i | | | f
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Notary Public | | | Connecticut | | | CFO
My Commission Expires Aug J,
. 2026 !
Title: | | | | | | | | | | | | | | | ing** contains (check all applicable boxes): | | | (a) Statement offinancial condition. | | !!!I | (b) Notes to consolidated statement offinancial condition. | | | 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). | | | D (d) Statement of cash flows. | | | □ (e) Statement of changes in st ockholders' or partners' or sole proprietor's equity. | | | □ (f) Statement of changes in liabilities subordinated to claims of creditors. | | | □ (g) Notes to consolidated financial statements. | | D | (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. | | 0 | (i) Computation of tangible net worth under 17 CFR 240.18a-2. | | | □ (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. | | | D (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or | | | Exhibit A to 17 CFR 240.18a-4, as applicable. | | | D (I) Computation for Determination of PAB Requirements under Exhibit A to§ 240.1Sc3-3. | | | □ (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. | | | D (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR | | | 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable.
(o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net | | D | worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-l, or 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17 | | | CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences | | | exist. | | | D (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. | | | ~ (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. | | D | (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. | | | □ (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. | | !!!I | (t) Independent public accountant's report based on an examination of the statement of financial condition. | | D | (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 | | | CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. | | D | (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 | | | CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. | | | □ (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 | | | CFR 240.18a-7, as applicable. | | | □ (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-1e or 17 CFR 240.17a-12, | | | as applicable. | | D | (y) Report describing any material inadequacies found to exist or found to have exist ed since the date of the previous audit, or | | | a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). | | | D (z) Other: _______
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_ | | | | | | **To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e}(3} or 17 CFR 240.18a-7(d)(2}, as
applicable. | {3}------------------------------------------------ ## **THIRD SEVEN CAPITAL, LLC (A Limited Liability Company)** ## **DECEMBER 31, 2021** ## **TABLE OF CONTENTS** #### **Report of Independent Registered Public Accounting Firm** | Financial Statements: | | |---------------------------------------|--| | Statement of Financial Condition 1 | | | Notes to the Financial Statement 2-5 | | {4}------------------------------------------------ ),)7+\$9(18( 7(/ 7+)/225 )\$; 1(:<25.1< ll #### **5(32572),1'(3(1'(175(\*,67(5('38%/,&\$&&2817,1\*),50** 7RWKH%RDUGRI'LUHFWRUVDQG6ROH0HPEHURI7KLUG6HYHQ&DSLWDO//& #### **2SLQLRQRQWKH)LQDQFLDO6WDWHPHQW** :HKDYHDXGLWHGWKHDFFRPSDQ\LQJVWDWHPHQWRIILQDQFLDOFRQGLWLRQRI7KLUG6HYHQ&DSLWDO//&WKH³&RPSDQ\´ DVRI'HFHPEHUDQGWKHUHODWHGQRWHVFROOHFWLYHO\UHIHUUHGWRDVWKHILQDQFLDOVWDWHPHQW ,QRXURSLQLRQWKH ILQDQFLDOVWDWHPHQWSUHVHQWVIDLUO\LQDOOPDWHULDOUHVSHFWVWKHILQDQFLDOSRVLWLRQRIWKH&RPSDQ\DVRI'HFHPEHU LQFRQIRUPLW\ZLWKDFFRXQWLQJSULQFLSOHVJHQHUDOO\DFFHSWHGLQWKH8QLWHG6WDWHVRI\$PHULFD #### **%DVLVIRU2SLQLRQ** 7KHVH ILQDQFLDO VWDWHPHQWLVWKH UHVSRQVLELOLW\ RIWKH&RPSDQ\¶VPDQDJHPHQW2XU UHVSRQVLELOLW\LVWRH[SUHVVDQ RSLQLRQRQWKH&RPSDQ\¶VILQDQFLDOVWDWHPHQWEDVHGRQRXUDXGLW:HDUHDSXEOLFDFFRXQWLQJILUPUHJLVWHUHGZLWK WKH 3XEOLF&RPSDQ\ \$FFRXQWLQJ 2YHUVLJKW%RDUG 8QLWHG 6WDWHV ³3&\$2%´ DQG DUH UHTXLUHGWR EHLQGHSHQGHQW ZLWK UHVSHFW WR WKH &RPSDQ\ LQ DFFRUGDQFH ZLWK WKH 86 IHGHUDO VHFXULWLHV ODZV DQG WKH DSSOLFDEOH UXOHV DQG UHJXODWLRQVRIWKH6HFXULWLHVDQG([FKDQJH&RPPLVVLRQDQGWKH3&\$2% :HFRQGXFWHGRXUDXGLWLQDFFRUGDQFHZLWKWKHVWDQGDUGVRIWKH3&\$2%7KRVHVWDQGDUGVUHTXLUHWKDWZHSODQDQG SHUIRUP WKH DXGLW WR REWDLQ UHDVRQDEOH DVVXUDQFH DERXW ZKHWKHU WKH ILQDQFLDO VWDWHPHQW LV IUHH RI PDWHULDO PLVVWDWHPHQWZKHWKHUGXHWRHUURURUIUDXG2XUDXGLWLQFOXGHGSHUIRUPLQJSURFHGXUHVWRDVVHVVWKHULVNVRIPDWHULDO PLVVWDWHPHQW RIWKH ILQDQFLDO VWDWHPHQWZKHWKHU GXHWR HUURU RU IUDXG DQG SHUIRUPLQJ SURFHGXUHVWKDW UHVSRQGWR WKRVHULVNV6XFKSURFHGXUHVLQFOXGHGH[DPLQLQJRQDWHVWEDVLVHYLGHQFHUHJDUGLQJWKHDPRXQWVDQGGLVFORVXUHVLQ WKHILQDQFLDOVWDWHPHQW2XUDXGLWDOVRLQFOXGHGHYDOXDWLQJWKHDFFRXQWLQJSULQFLSOHVXVHGDQGVLJQLILFDQWHVWLPDWHV PDGHE\PDQDJHPHQWDVZHOODVHYDOXDWLQJWKHRYHUDOOSUHVHQWDWLRQRIWKHILQDQFLDOVWDWHPHQW:HEHOLHYHWKDWRXU DXGLWSURYLGHVDUHDVRQDEOHEDVLVIRURXURSLQLRQ :HKDYHVHUYHGDVWKH&RPSDQ\¶VDXGLWRUVLQFH 1HZAccounts receivables
Due from Affiliate
Prepaid expenses | \$ | 170,374
149,837
175,858
19,593 | |-------------------------------------------------------------------------------------------------------------|----|-----------------------------------------| | Total assets | \$ | 515,662 | | LIABILITIES AND MEMBER'S EQUITY
Liabilities:
Accounts payable, accrued expenses and other liabilities | | 170,426 | | Member's equity
Total liabilities and member's equity | \$ | 345,236
515,662 | {6}------------------------------------------------ #### **1. ORGANIZATION AND DESCRIPTION OF BUSINESS** Third Seven Capital, LLC (the "Company") is a broker-dealer in securities registered with the Securities and Exchange Commission (SEC) and is a member of the Financial Regulatory Authority (FINRA). The Company was formed as a Delaware limited liability company. On June 19, 2017 the Company submitted a CMA to FINRA and the transaction was approved September 17, 2017. The firm conducts private placements of securities, offers advisory services and market research. As of October 27, 2020, the Firm will not claim an exemption from SEA Rule 15c3-3, in reliance on footnote 74 to SEC Release 34-70073, and as discussed in Q&A 8 of the related FAQ issued by SEC staff. The Firm has represented that it does not and will not, (1) directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers, (2) does not and will not carry accounts of or for customers and (3) does not and will not carry PAB accounts. The firm's business activities are, and will remain as described below. ## **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** The accompanying financial statements are presented in accordance with accounting principles generally accepted in the United States of America. The preparation of 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 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 year. Actual results could differ from these estimates. ## *Leases* In February 2016, the FASB issued (ASU) 2016-02, "Leases (Topic 842)". This update includes a lease accounting model that recognizes two types of leases – finance leases and operating leases. The standard requires that a lessee recognize on the statement of financial condition relating to leases with terms of more than twelve months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend on its classification as a finance or operating lease. There was no effect on net income for the year ending December 31, 2021. {7}------------------------------------------------ #### **THIRD SEVEN CAPITAL, LLC (A Limited Liability Company) NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2021** ## **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** *(continued)* #### *Leases (continued)* Right of use assets ("ROU") represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide implicit rate, we use our incremental borrowing rate based on the information available a commencement date in determining the present value of the lease payments. We use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. ## **3. REVENUE RECOGNITION** The Company records its advisory fees as they are earned based on the services provided or in the case of success fees, upon successful completion of the service or consummation of the related transaction. In accordance with ASU No. 2014-09, "Revenue from Contracts with Customers" ("ASC Topic 606") revenues from contracts with customers is recognized when, or as, the Company satisfies its performance obligations by transferring the promised services to the customers. A service is transferred to a customer when, or as, the customer obtains control of that service. A performance obligation may be satisfied at a point in time or over time. Revenue from a performance obligation satisfied at a point in time is recognized at the point in time that the Company determines the customer obtains control over the promised service. Revenue from a performance obligation satisfied over time is recognized by measuring the Company's progress in satisfying the performance obligation in a manner that depicts the transfer of the services to the customer. The amount of revenue recognized reflects the consideration the Company expects to receive in exchange for those promised services (i.e., the "transaction price"). In determining the transaction price, the Company considers multiple factors, including the effects of variable consideration, if any. ## **4. NET CAPITAL REQUIREMENTS** Pursuant to the net capital provisions of Rule 15c3-1 of the Securities and Exchange Act of 1934, the Company is required to maintain a minimum net capital, as defined under such provisions. Net capital and the related net capital ratio may fluctuate on a daily basis. At December 31, 2021, the Company had net capital, as defined, of \$ 132,014, which exceeded the required minimum net capital requirements of \$5,000 by \$127,014. Aggregate indebtedness totaled \$38,361. The Company's percentage of aggregate indebtedness to net capital was 29.06%. {8}------------------------------------------------ #### **5. POSSESSION OR CONTROL REQUIREMENTS** The Company does not have any possession or control of customer funds or securities. There were no material inadequacies in the procedures followed in adhering to the exemptive provisions and reliance on footnote 74 to SEC Release 34-70073, and as discussed in Q&A 8 of the related FAQ issued by SEC staff. ## **6. INCOME TAXES** The Company changed its tax status from a partnership to a single member LLC in 2018. In as much as the Company now has a single member, it is treated as a disregarded entity for income tax purposes. Consequently, income taxes are not payable by or provided for, the Company. The earnings of the Company are included in the income tax returns filed by the single member, or members prior to the tax status change. Effective January 1, 2009, the Company adopted the authoritative guidance for uncertainty in income taxes included in ASC 740, Income Taxes (formerly FASB Interpretation No. 48), as amended by Accounting Standards Update ("ASU") 2009-06, Implementation Guidance on Accounting for Uncertainty in Taxes and Disclosures Amendments for Nonpublic Entities. This guidance requires the Company to determine whether a tax position of the Company is more likely than not to be sustained upon examination by the applicable taxing authority, including the resolution of any related appeals or litigation processes, based on the technical merits of the position. The Company determined there are no uncertain tax positions that require financial statement recognition. Income tax returns remain open for examination by tax authorities for a period of three years from when they are filed; the 2017, 2018 and 2019 Federal, New York State, and New York City income tax returns of the single member or partnership are currently open for examination. ## **7. RELATED PARTY TRANSACTIONS** An affiliated company has agreed to make available to the Company certain facilities and provide for performance of certain services. The Company has provided funding to a related party. This loan will be repaid as cash flow permits. The balance owed from the related party as of December 31, 2021 was \$175,858. #### **8. CONCENTRATION OF CREDIT RISK** The Company maintains all of its cash in financial institutions, which cash balances at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not subject to any significant credit risk. For the year ended December 31, 2021, one customer accounted for 95% of the Company's revenue. {9}------------------------------------------------ #### **9. COMMITMENT AND CONTINGENCIES** The Company has entered into a month-to-month based occupancy agreement for office space in New York City. On October 15, 2021, The Company entered into a short-term based occupancy agreement for office space in Palm Beach Gardens, Florida. As a regulated securities broker dealer, from time to time the Company may be involved in legal proceedings and investigations. The Company is currently involved in a FINRA investigation and believes the matter will be resolved in the near future. ## **10. SUBSEQUENT EVENTS** Management has reviewed and evaluated all other potential impacts through the date the financial statements are available to be issued, and determined there are no other material events that would require disclosure in the Company's financial statements. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.