# WALLER CAPITAL SECURITIES LLC X-17A-5 (2019-01-22) — Broker-dealer annual report - Company: WALLER CAPITAL SECURITIES LLC - Form: X-17A-5 - Filed: 2019-01-22 - Period: 2018-12-31 - Accession: 0001252026-19-000001 - CIK: 1252026 - File #: 8-66039 - Material weakness: No - Auditor: MIchael Remus, CPA - Auditor location: Hamilton, NJ - Contact: Ken George - Phone: 6033805435 - Signed by: Kenneth George (CFO/FINop) Original filing: https://www.sec.gov/Archives/edgar/data/1252026/000125202619000001/dec18_auditreport_waller2.pdf --- {0}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSJON Washington, D.C. 20549 0MB APPROVAL 0MB Number: 3235-0123 Expires: August 31, 2020 Estimated average burden hours per response ... 12.00 > SEC FILE NUMBER 8-66039 #### **ANNUAL AUDITED REPORT FORM X-17A-S PARTID** #### **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 PERJOD BEGINNING -----=0'"'"'l/~0=l/-'-1 ~8 | | __
AND ENDING | 12/31
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18 | |--------------------------------------------------------------------------|--------------------------------------------------------|------------------|--------------------------------| | | MM/DD/YY | | MM/DD/YY | | | A. REGISTRANT IDENTIFICATION | | | | NAME OF BROKER -
DEALER: | | | | | Waller Capital Securities, LLC | | | OFFICIAL USE ONLY | | | | | FIRMID. NO. | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | | | 1 Rockefeller Plaza Ste 2322 | | | | | (No. and Street) | | | | | New York NY 10020 | | | | | (City)
(State) | | | (Zip Code) | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT | | | | | Kenneth R. George | | | (603) 380-5435 | | | | | (Area Code -
Telephone No.) | | | | | | | | B. ACCOUNT ANT IDENTIFICATION | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report* | | | | | Michael T. Remus CPA | | | | | | (Name - if individual, state last, ftrst, middle name) | | | | PO Box 2555, Hamilton Square, NJ 08690 | | | | | (Address)
(City) | | (State) | (Zip Code) | | CHECK ONE: | | | | | [!} Certified Public Accountant | | | | | D
Public Accountant | | | | | D
Accountant not resident in United States or any of its possessions. | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | *•ctaimsfor exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a slatement of facts and circumstances relied on as /he basis for the exemplion. See sec/ion 240.17a-5(e)(2).* SEC 1410 (06-02) {1}------------------------------------------------ #### **OATH OR AFFIRMATION** I, Kenneth George, swear ( or affirm) that, to the best of my knowledge and belief the accompanying financial statements and supporting schedules pertaining to the firm of Waller Capital Securities, LLC, as of December 31 , 2018, are true and correct. I further swear ( or affirm) that neither the Company nor any partner, proprietor, principal officer or director has any proprietary interest in any account classified solely as that of a customer, except as follows: None ~0 ~~ /FlNop Notmy Put!Hc. Stat9 of Now **Kampshlra** I t~~~ Notary Publi \-\\-\ **q** Kathryn M Kucharski **This report contains (check all applicable boxes):** - (x) (a) Facing page. - **(x)** (b) Statement of Financial Condition. - (x) (c) Statement of Income (Loss). - **(x)** (d) Statement of Cash Flows. - (x) (e) Statement of Changes in Stockholders' Equity. - ( ) (f) Statement of Changes in Subordinated Liabilities (not applicable) - **(x)** (g) Computation of Net Capital Pursuant to Rule 15c3-1 under the Securities Exchange Act of 1934. - ( ) (h) Computation for Determination of Reserve Requirements for Brokers and Dealers Pursuant to Rule l 5c3-3 under the Securities Exchange Act of 1934. (not applicable) - ( ) (i) Information Relating to the Possession or Control Requirements for Brokers and Dealers Pursuant to Rule I 5c3-3 under the Securities Exchange Act of 1934 (not applicable). - **(x)** (i) A Reconciliation, including Appropriate Explanations, of the Computation of Net Capital Under Rule 15c3-1 and the Computation for Determination of the Reserve Requirements Under Rule I 5c3-3 - ( ) (k) A Reconciliation Between the Audited and Unaudited Consolidated Statements of Financial Condition With Respect to Methods of Consolidation (not applicable). - (x) (I) An Oath or Affirmation. - ( ) (m) A Copy of the SIPC Supplemental Report. - **(x)** (n) Report on management's assertion letter regarding 15c3-3 Exemption Report - (x) (o) Management's assertion letter regarding 15c3-3 Exemption Report ![](_page_1_Picture_23.jpeg) {2}------------------------------------------------ (A Limited Liability Company) Annual Audited Report Form X-17A-5, Part III Year Ended December 31, 2018 This report is deemed PUBLIC in accordance with Rule 17a-5(e)(3) under the Securities Exchange Act of 1934. {3}------------------------------------------------ | Page(s) | |-----------------------------------------------------------------------------------------------------------------------------------------| | Report of Independent Registered Public Accounting Firm 1 | | Financial Statements | | Statement of Financial Condition 2 | | Statement of Operations 3 | | Statement of Cash Flows 4 | | Statement of Changes in Member's Equity 5 | | Notes to Financial Statements 6-8 | | Supplemental Information | | Schedule I
Computation ofNet Capital
Under Rule 15c3-l of the Securities and Exchange Commission 9 | | Schedule II
Computation for Determination of Reserve Requirements
Under Rule 15c3-3 of the Securities and Exchange Commission 10 | | Schedule III
Information relating to Possession or Control Requirements (Exemption) 11 | | Report oflndependent Registered Public Accounting Firm on Exemption Report 12 | | Exemption Report 13 | {4}------------------------------------------------ ## **MICHAEL T. REMUS** ~'P«lfkA~ P.O. Box 2555 Hamilton Square, NJ 08690 **Tel:** 609-540-175 l **Fax:** 609-570-5526 #### Report of Independent Registered Public Accounting Firm To: The Member **Waller Capital Securities LLC** #### **Opinion on the Financial Statements** I have audited the accompanying statement of financial condition ofW aller Capital Securities LLC as of December 31, 2018, and the related statements of operations, changes in member equity and cash flows for the year then ended, that are filed pursuant to Rule 17a-5 under the Securities Exchange Act of 1934 and the related notes [ and schedules] ( collectively referred to as the financial statements). In my opinion, the financial statements present fairly, in all material respects, the financial position of Waller Capital Securities LLC as of December 31, 2018 and its results of 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 Waller Capital Securities LLC' s management. My responsibility is to express an opinion on Waller Capital Securities LLC's financial statements based on my audit. I am a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and I am required to be independent with respect to Waller Capital 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. I conducted my audit in accordance with the standards of the PCAOB. Those standards require that I 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. My 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. My 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. I believe that my audit provides a reasonable basis for my opinion. #### **Supplemental Information** The Schedule I, Computation ofNet Capital Under SEC Rule 15c3-l , Schedule II, Computation for Identification of Reserve Requirements Under SEC Rule 15c3-3 *(exemption)* and Schedule III, Information Relating to Possession or Control Requirements Under SEC Rule l 5c3-3 *(exemption)* has been subjected to audit procedures performed in conjunction with the audit of Waller capital Securities LLC's financial statements. {5}------------------------------------------------ The supplemental information is the responsibility of Waller Capital Securities LLC' s management. My 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 my opinion on the supplemental information, I evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 C.F.R. §240.17a-5. In my opinion, the Schedule I, Computation of Net Capital Under SEC Rule 15c3-l, Schedule II, Computation for Identification of Reserve Requirements Under SEC Rule 15c3-3 *(exemption)* and Schedule ID, Information Relating to Possession or Control Requirements Under SEC Rule 15c3-3 *(exemption)* is fairly stated, in all material respects, in relation to the financial statements as a whole. I have served as Waller Capital Securities's auditor since 2016. Michael T. Remus, CPA Hamilton Square, New Jersey January 18, 2019 {6}------------------------------------------------ ## Statement of Financial Condition December 31 , 2018 #### **ASSETS** | \$
12,703 | |--------------| | | #### **LIABILITIES and MEMBER EQUITY** #### Liabilities | Due to parent company | \$
4,135 | |-----------------------------------|--------------| | Total Liabilities | 4,135 | | Member Equity | 8,568 | | Total Liabilities & Member Equity | \$
12,703 | {7}------------------------------------------------ #### **Revenue** | | \$ | |---------------------------------|----------------| | | | | Expenses | | | Professional fees | 35,214 | | Regulatory fees and assessments | 4,775 | | Rent | 22,908 | | Salary | 25,000 | | Other | 8,883 | | Taxes | 25 | | Total expenses | 96,805 | | Net loss | \$
(96,805) | {8}------------------------------------------------ #### **Waller Capital Securities LLC Statement of Changes in Member Equity Year Ended December 31, 2018** | Balance -
December 31, 2018 | \$
8,568 | |---------------------------------|--------------| | Capital contributions by member | 88,424 | | Net loss | (96,805) | | Balance - January l, 2018 | \$
16,949 | {9}------------------------------------------------ | Cash flows from operating activities | | |-------------------------------------------------------------------------|----------------| | Net loss | \$
(96,805) | | Adjustment to reconcile net loss to net cash used in | | | operating activities | | | Forgiveness of debt by parent company | 38,424 | | Increase (decrease) in cash resulting from changes | | | in operating assets and liabilities | | | Due from parent company | 231 | | Prepaid expenses | 518 | | Accounts payable and accrued expenses | (4,541) | | Due to parent company | 4,135 | | Net cash used in operating activities | (58,038) | | Cash flows from financing activities
Capital contributions by member | 50,000 | | Net cash provided by financing activities | 50,000 | | Net decrease in cash | (8,038) | | Cash | | | Beginning | 20,741 | | Ended | \$
12,703 | | | | | Supplemental disclosure of non-cash financing activity | | | Contributions by member | \$
38,424 | {10}------------------------------------------------ #### **1. General** Waller Capital Securities, LLC (the "Company") was organized on June 13, 2000, and is a registered brokerdealer subject to regulation by the Securities and Exchange Commission ("SEC") and the Financial Industry Regulatory Authority ("FJNRA"). The Company was established to raise capital for customers, primarily in the media industry, through the private placement of equity and debt securities in the United States. #### **2. Summary of Significant Accounting Policies** #### **Use of Estimates** The preparation of financial 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 ofrevenues and expenses during the reporting period. Actual results could differ from those estimates. #### **Capital Contributions** The sole member, Waller Capital Partners (the "Parent"), intends to infuse sufficient working capital to meet any operational shortfalls and to continue compliance with minimum net capital requirements. During the year ended December 31, 2018, the sole member contributed \$88,424 of additional capital, of which \$50,000 was cash and \$38,424 was non-cash contributions. #### **Revenue Recognition** The Company receives retainer and success fee income. Revenue is recognized in accordance with F ASB ASC Topic 606 as services are rendered and the contracts identified performance obligations have been satisfied. There were no unsatisfied performance obligations at December 31, 2018. #### **Income Taxes** As a limited liability company, the Company is not liable for Federal or state income taxes. The member is responsible to report separately the distributive share of member income or loss to tax authorities. The Company is a disregarded entity and files as part of the consolidated New York City Unincorporated Business tax return through its Parent. The Company has adopted the authoritative guidance issued by the Financial Accounting Standards Board on accounting for uncertainty in income taxes. This standard prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken by the Company. As of December 31, 2018, the member determined that the Company had no uncertain tax positions which affected its financial position, its results of operations or its cash flows and will continue to evaluate for uncertain tax positions in the future. The Company is no longer subject to U.S. Federal tax examinations for years before 2015. #### **New Accounting Standards Not Yet Adopted** In February 2016, the F ASB issued a new accounting pronouncement regarding lease accounting for reporting periods beginning after December 31, 2018. A lessee will be required to recognize on the balance sheet, the assets and liabilities for leases with lease terms of more than 12 months. {11}------------------------------------------------ #### **New Accounting Standards Not Yet Adopted -** *continued* Management has assessed the potential impact of accounting standards that have been issued, but not yet effective, and have determined that no such standards are expected to have a material impact to the financial statements. #### **3. Related Party** The Company entered into an expense sharing agreement with its sole member, dated June 9, 2003, and amended most recently February 2018. During 2018, services amounting to \$55,964 were provided under the expense sharing agreement and are included as rent, salary, and other in the accompanying statement of income. During 2018, the sole member contributed capital to the Company in the amount of\$50,000 in addition to the services provided under the expense sharing agreement. #### **4. Commitments and Contingencies** ' Pursuant to Securities and Exchange Commission Rule 15c3-l ( e )(2) the Company may not authorize dividends to its stockholder if such dividends cause the Company's net capital to fall below 120% of the Company's minimum net capital requirement. As of December 31 , 2018, the Company was not in violation of this requirement. The Company had no lease or equipment rental commitments, no underwriting commitments, and no contingent liabilities other than as discussed below at December 31, 2018 or during the year then ended. The Company is co-defendant in a lawsuit by a former employee. The allegations pertain to compensation allegedly owed by the Parent company to the former employee. No contingency has been recorded by the Company. #### **5. Net Capital Requirements** The Company is subject to the net capital requirements of Rule l 5c3-1 of the SEC, which require a brokerdealer to have at all times sufficient liquid assets to cover current indebtedness. In accordance with the rule, the Company is required to maintain minimum net capital of the greater of \$5,000 or 1/15 of aggregate indebtedness, as defined. At no time may the ratio of aggregate indebtedness to net capital exceed 15 to 1. At December 31, 2018, the Company had net capital, as defined, of 8,568 which was \$3,568 above its required net capital of \$5,000. The Company had aggregate indebtedness of \$4,135 and its ratio of aggregate indebtedness to net capital was .48 to 1. #### **6. Fair Value** Cash, receivables (if any), accounts payable and accrued expenses and other short-term obligations (if any) are reflected in the financial statements at carrying value which approximates fair value because of the short-term maturity of these instruments. {12}------------------------------------------------ #### 7. **Subsequent Events** The Company has performed an evaluation of events that have occurred subsequent to December 31 , 2018, and through January 18, 2019, the date of the filing of this report. There have been no material subsequent events that occurred during such period that would require disclosure in this report or would be required to be recognized in the financial statements as of December 31, 2018. {13}------------------------------------------------ Supplementary Information Pursuant to Rule 17a-5 of the Securities Exchange Act of 1934 as of December 31, 2018 {14}------------------------------------------------ **Computation of Net Capital Under Rule 15c3-l of the Securities and Exchange Commission December 31, 2018** | Computation of net capital
Total member equity | \$ | 8,568 | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|-------------------------| | Deductions and/or charges
Non-allowable assets | | | | Net capital before haircuts on securities positions
(tentative net capital) | | 8,568 | | Haircuts on securities | | | | Net capital | \$ | 8,568 | | Computation of basic net capital requirements
Minimum net capital required (greater of\$5,000 or 6 2/3% of aggregate indebtedness)
Excess net capital
Net capital less the greater of I 0% of aggregate indebtedness or
120% of minimum net capital | \$
\$
\$ | 5,000
3,568
2,568 | | Computation of aggregate indebtedness
Accounts payable and accrued expenses
Total aggregate indebtedness | \$
\$ | 4,135
4,135 | #### **Ratio of aggregate indebtedness to net capital** Total Aggregate Indebtedness =\$ \_\_ 4~,=l=-- 35 ~ = .48 to 1 Net Capital \$ 8,568 The ratio of aggregate indebtedness to net capital is .48 to I compared to the maximum allowable ratio of 15 to 1. {15}------------------------------------------------ #### SCHEDULE II COMPUTATION FOR DETERMINATION OF RESERVE REQUIREMENTS UNDER RULE 15c3-3 (EXEMPTION) Year Ended December 31, 2018 Pursuant to Rule 17 a-5( d) ( 4) of the audited computations ofN et Capital pursuant to Rule 15c 3-1 and computation for Determination of Reserve requirements pursuant to Rule 15c 3-3 submitted by Waller Capital Securities, LLC, in my opinion no material differences exist which would materially effect the reserve requirements pursuant to Rule 15c 3-3 or its claim for exemption. {16}------------------------------------------------ #### SCHEDULE III INFORMATION RELATING TO POSSESSION OR CONTROL REQUIREMENTS (EXEMPTION) #### PURSUANT TO RULE 15c 3-3 of the Securities and Exchange Commission #### As of December 31, 2018 #### **"EXEMPT UNDER 15c3-3(k)(2)(i)** Pursuant to rule 15c 3-3 relating to possession or control requirements, Waller Capital Securities LLC has not engaged in the clearing or trading of any securities and did not hold customer funds or securities during the year ended December 31, 2018 and therefore is claiming exemption to this schedule pursuant to paragraph (k)(2)(i) of SEC Rule 15c3-3. The firm's minimum net capital requirement pursuant to paragraph ( a )(2)( vi) of SEC Rule 15c3-l will be \$5,000. {17}------------------------------------------------ ### **MICHAEL T. REMUS** # ~ *'Pee&«-***rt~** P.O. Box 2555 Hamilton Square, NJ 08690 **Tel:** 609-540-1751 **Fax:** 609-570-5526 #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM #### To: The Member **Waller Capital Securities LLC** I have reviewed management's statements, included in the accompanying Management Statement Regarding Compliance with the Exemption Provisions of SEC Rule 15c3-3 (Exemption), in which Waller Capital Securities LLC (the Company) (1) identified the following provisions of 17 C.F.R. §240. 15c3-3(k) under which Waller Capital Securities LLC claimed an exemption from 17 C.F.R. §240.15c3-3: under-k(2)(i), (the "exemption provisions") and (2) the Company stated that the Company met the identified exemption provisions throughout the most recent fiscal year without exception. The Company's management is responsible for compliance with the exemption provisions and its statements. My 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 the Company'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, I do not express such an opinion. Based on my review, I am 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)(i) of Rule 15c3-3 under the Securities Exchange Act of 1934. Michael T. Remus, CPA Hamilton Square, New Jersey January 18, 2019 {18}------------------------------------------------ Waller Capital Securities has claimed exemption from SEC Rule 240.15c3-3 under the provisions of section (k)(2)(i). THE UNDERSIGNED, being a designated principal of Waller Capital Securities, pursuant to SEC Rule 240. l 5c3-3, hereby affirms that the firm met the identified exemption provisions in 240.15c3- 3(k)(2)(i) throughout the most recent fiscal year, without exception. Kenneth R. George, CFO/FINop Waller Capital Securities, LLC Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.