# INNOVATION ADVISORS LLC X-17A-5 (2021-03-01) — Broker-dealer annual report - Company: INNOVATION ADVISORS LLC - Form: X-17A-5 - Filed: 2021-03-01 - Period: 2020-12-31 - Accession: 0001271545-21-000001 - CIK: 1271545 - File #: 8-66255 - Material weakness: No - Auditor: Sanford Becker & Co, PC - Auditor location: New York, NY - Contact: Alexander Mack - Phone: 917-923-1478 - Signed by: Eric Gebaide (Managing Director) Original filing: https://www.sec.gov/Archives/edgar/data/1271545/000127154521000001/iasofc2020.pdf --- {0}------------------------------------------------ **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** 0MB APPROVAL 0MB Number: 3235-0123 Expires: October 31, 2023 Estimated average burden hours per response ...... 12.00 SEC FILE NUMBER 8-66255 # **ANNUAL AUDITED REPORT FORM X-17A-5 PART Ill** **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 01/01/2020 | AND ENDING 12/31/2020 | | | |--------------------------------------------------------------------|------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--| | MM/DD /Y Y | | MM/DD/YY | | | | | | | | | | OFFICIAL USE ONLY | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No .) | | FIRM I.D. NO. | | | | | | | | (No. and Street) | | | | | NY | | 10119 | | | (State) | | (Zip Code) | | | | | 917-923-1478 | | | | | (Area Code - Telephone Number) | | | | | | | | | | | | | | | | | | | | | | | New York | NY | 10018 | | | (City) | (State) | (Zip Code) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | NAME OF BROKER-DEALER: Innovation Advisors LLC | -----------
A. REGISTRANT IDENTIFICATION
NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
B. ACCOUNTANT IDENTIFICATION
INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report*
(Name - if individual, state last, first, middle name)
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 0MB control number.** {1}------------------------------------------------ #### **OATH OR AFFIRMATION** | 1, Eric Gebaide | , swear (or affirm) that, to the best of | |--------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------| | my knowledge and belief the accompanying
Innovation Advisors LLC
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pertaining to the firm of | | -
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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: | | | | | | | | | | | | | | | | | | | | | | Signature | | | | | | ,·01r2e~
/J1ft(IJfr~1fVf | | | Title | | | | | | | | | | | This report ** contains (check all applicable
boxes):
0 | | | (a) Facing Page.
[a
(b) Statement of Financial Condition. | | | D
(c) Statement oflncome (Loss) or, if there | is other comprehensive income in the | | of Comprehensive Income (as defined | period(s) presented, a Statement
in §210.1-02 ofRegulation S-X). | | (d) Statement of Changes in Financial
Condition. | | | 8
□ (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 Net Capital. | | | (h) Computation for Determination of | Reserve Requirements Pursuant to Rule l 5c3-3. | | (i) Information Relating to the Possession
0 | or Control Requirements Under Rule 15c3-3. | | U) A Reconciliation, including appropriate | explanation of the Computation of Net Capital
Under Rule l 5c3-l and the | | Computation for Determination of the Reserve
O | Requirements Under Exhibit A of Rule 15c3-3 | | (k) A Reconciliation between the audited | and unaudited Statements of Financial
Condition with respect to methods of | | consolidation.
(a
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(I) An Oath or Affirmation. | | | D
(m) A copy of the SIPC Supplemental
Report. | | | 0
(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 240.17 a-5(e)(3). | {2}------------------------------------------------ Statement of Financial Condition ### **YEAR** ENDED DECEMBER 31, 2020 {3}------------------------------------------------ ### **CONTENTS** | Report of Independent Registered Public Accounting Firm | | |---------------------------------------------------------|-----| | Financial Statements | | | Statement of Financial Condition | 2 | | Notes to Financial Statements | 3-5 | {4}------------------------------------------------ #### SANFORD BECKER & CO., P.C. CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS ADVISORS GEORGES. GETZ, CPA SANFORD BECKER, CPA 1922-1994 SANFORD E. BECKER, CPA 1957-2008 1430 BROADWAY, SUITE 605 NEW YORK, N.Y. 10018 TELEPHONE (212) 921 - 9000 FACSIMILE (212) 354-1822 #### **Report of Independent Registered Public Accounting Firm** To the Members of Innovation Advisors LLC #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of Innovation Advisors LLC, as of December 31, 2020 and the related notes ( collectively referred to as the "financial statement"). In our opinion, the financial statement present fairly, in all material respects, the financial position of the Company, as of December 31, 2020 in conformity with the accompanying principles generally accepted in the United States of America. #### **Basis for Opinion** This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company'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 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 is free of material misstatements, 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 overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion. We have served as the Company's auditors since 2014. *-~1~ ~,1~* **"c:./** ✓ **c\_ .** New York, NY February 25, 2021 {5}------------------------------------------------ ## **STATEMENT OF FINANCIAL CONDITION** | | December 31, 2020 | |------------------------------------------------------|-------------------| | | | | ASSETS | | | Cash | \$
64,495 | | Prepaid expenses and other assets | 9,603 | | TOT AL ASSETS | \$
74 098 | | LIABILITIES AND MEMBER'S EQUITY | | | Liabilities
Accounts payable and accrued expenses | \$
13,896 | | Total liabilities | 13,896 | | Member's equity | 60,202 | | TOTAL LIABILITIES AND MEMBER'S EQUITY | \$
74 098 | {6}------------------------------------------------ **Notes to Statement of Financial Condition December 31, 2020** ## **NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION** Innovation Advisors, LLC (the "Company") is a single member limited liability company. The single member is Innovation Advisors Holdings LLC, a Delaware limited liability Company. The Company was organized under the laws of the State of New York on June 9, 2003. The Company is a broker-dealer in securities registered with the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority ("FINRA") and the Securities Investor Protection Corporation ("SIPC"). The Company provides investment banking services to middle-market technology companies. It also provides strategic advisory services related to merger and acquisitions as well as assisting IT companies' efforts to raise capital through private placements. ### **NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** #### Revenue Recognition The Company's revenue from investment banking and service fees is based on established agreements between the Company and its clients. Revenue is recognized at a point in time based on identified performance obligations in the contract, a determined transaction price for each performance obligation, and the satisfaction of each performance obligation. # 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 reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates. #### Treatment of Leases The Company does not apply the recognition requirements of ASC 842 to short-term leases. A short-term lease has a term at commencement of twelve months or less and does not include a purchase option. ## **NOTE 3. CONCENTRATION OF CREDIT AND MARKET RISK** The Company maintains its cash in a bank account that, at times, may exceed the federal insurance limit of \$250,000. {7}------------------------------------------------ # **NOTE 4. RELATED-PARTY TRANSACTIONS** The Company has an expense sharing agreement with its member whereby certain overhead expenses, are allocated to the Company. The Company has paid the member in advance for these costs, and maintains a prepaid balance with the member, which totals \$5,800 at December 31, 2020, reflected in Prepaid Expenses and other Assets on the Statement of Financial Condition. During the year \$7,200 was charged to the Company as follows: | Rent | \$3,000 | |------------------------|---------| | Miscellaneous services | 4,200 | | Total | \$7 200 | # **NOTE 5. INCOME TAXES** The Company is a single-member limited liability company and is treated as a "disregarded entity" for federal and New York State income tax purposes. The Company's assets, liabilities, and items of income, deduction, and tax credits are treated as those of its member owner, who is responsible for any taxes thereon. The Company's allocated share of local taxes, if any, is included in the accompanying statement of operations. The Company recognizes and measures its unrecognized tax benefits in accordance with F ASB ASC 740, *Income Taxes.* Under that guidance, the Company assesses the likelihood, based on their technical merit, that tax positions will be sustained upon examination based on the facts, circumstances and information available at the end of each period. With few exceptions, the measurement of unrecognized tax benefits is adjusted when new information is available, or when an event occurs that requires a change. ### **NOTE 6. NET CAPITAL REQUIREMENTS** The Company is subject to the SEC's Uniform Net Capital Rule ("SEC Rule 15c3-1"), which requires the maintenance of minimum net capital and that the ratio of aggregate indebtedness to net capital, both as defined, not exceed 15 to **1.** At December 31, 2020, the Company had net capital of \$50,562, which exceeded the Company's minimum net capital requirement of \$5,000 by \$45,562. The Company's percentage of aggregate indebtedness to net capital was 0.27 to 1 at December 31, 2020. # **NOTE 7. NEW ACCOUNTING PRONOUNCEMENT** In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments related to ASC Topic 326 ("ASC 326"), requiring the immediate recognition of management's estimates of current expected credit losses. ASC 326 is effective for fiscal years beginning after December 15, 2019, and has been adopted by the Company for fiscal year ended December 31, 2020. {8}------------------------------------------------ **Notes to Statement of Financial Condition December 31, 2020** The Company currently has no assets on its balance sheet that require measurement of credit losses. As such, the Company has determined that there is no material impact on the Company's financials resulting from the adoption of ASC 326. # **NOTE 8. CONTINGENCIES** In March 2020, the outbreak of COVID-19 (coronavirus) caused by a novel strain of the virus was recognized as a pandemic by the World Health Organization, and the outbreak has become increasingly widespread in the Unites States, including in each of the areas in which the Company operates. The Company has continued its operations throughout this pandemic and management expects business operations to continue as is for the foreseeable future. The extent to which the outbreak has impacted the Company's operations has not been significant and the Company expects this to remain the case. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.