# BLUEROCK CAPITAL MARKETS LLC X-17A-5 (2021-02-26) — Broker-dealer annual report - Company: BLUEROCK CAPITAL MARKETS LLC - Form: X-17A-5 - Filed: 2021-02-26 - Period: 2020-12-31 - Accession: 0001337052-21-000001 - CIK: 1337052 - File #: 8-67058 - Material weakness: No - Auditor: Plante Moran, PLLC - Auditor location: Auburn Hills, MI - Contact: Chad Kirschenblatt - Phone: 516 222 9111 - Signed by: Paul Dunn (Executive Vice President) Original filing: https://www.sec.gov/Archives/edgar/data/1337052/000133705221000001/bcmpublic.pdf --- {0}------------------------------------------------ # **BLUEROCK CAPITAL MARKETS, LLC** FINANCIAL REPORT **December 31, 2020** {1}------------------------------------------------ UNITEDSTATES SECURITIES ANDEXCHANGE COMMISSION Washington, D.C. 20549 # ANNUAL AUDITED REPORT FORM X-17A-5 PART III | OMB Number:
3235-0123 | |------------------------------| | October 31, 2023
Expires: | | Estimated average burden | | hours per response 12.00 | | | OMB APPROVAL | | | SEC FILE NUMBER | |--|---------|-----------------| | | 3-67058 | | FACING PAGE Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder | A. REGISTRANT IDENTIFICATION
Bluerock Capital Markets, LLC
NAME OF BROKER-DEALER:
ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.)
1345 Avenue of the Americas, 32nd floor
(No. and Street)
10105
New York
NY
(Zip Code)
(State)
(City)
NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
516-222-9111
Chad Kirschenblatt
B. ACCOUNTANT IDENTIE CATION
INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report*
Plante Moran, PLLC
(Name - if individual, state last, first, middle name)
2601 Cambridge Ct., Ste 500 Auburn Hills
MI
(City)
(State)
(Address)
CHECK ONE:
Certified Public Accountant
Public Accountant
Accountant not resident in United States or any of its possessions. | report for the period beginning 01/01/2020 | AND ENDING
MM/DD/YY | 12/31/2020
MM/DD/Y Y | | |-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------|------------------------|-------------------------------|--| | | | | | | | | | | OFFICIAL USE ONLY | | | | | FIRM I.D. NO. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (Area Code - Telephone Number | | | | | | | | | | | | | | | | | | 48626 | | | | | | (Zip Code) | | | 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 OMB control number. {2}------------------------------------------------ #### OATH OR AFFIRMATION | Paul Dunn | , swear (or affirm) that, to the best of | |-------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------| | Bluerock Capital Markets, LLC | my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of
ઘણ | | of December 31 | 20 20 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, principal officer or director has any proprietary interest in any account | RIMA NARER Commission # 2301354 Notary Public - California ORANGE County Comm. Expires SEP 11, 202 Signature CCU Title This report \*\* contains (check all applicable boxes): - V (a) Facing Page. - V (b) Statement of Financial Condition. - (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) Statement of Changes in Financial Condition. - (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 15c3-3. - (i) Information Relating to the Possession or Control Requirements Under Rule 15c3-3. - (i) A Reconciliation, including appropriate explanation of Net Capital Under Rule 15c3-1 and the Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3. - (k) A Reconciliation between the audited Statements of Financial Condition with respect to methods of consolidation. - (I) An Oath or Affirmation. - (m) A copy of the SIPC Supplemental Report. - (n) A report describing any material inadequacies found to have existed since the date of the previous audit. - (o) Exemption Report \*\* For conditions of confidential treatment of certain portions of this filing, see section 240.17a-5(e)(3). {3}------------------------------------------------ | Independent
Auditors'
Report | 1 | |----------------------------------------|-----| | Financial
Statements | | | Balance
Sheet | 2 | | Notes
to
Financial
Statements | 3Ͳ7 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) ## **Report of Independent Registered Public Accounting Firm** To the Members Bluerock Capital Markets, LLC #### *Opinion on the Financial Statement* We have audited the accompanying balance sheet of Bluerock Capital Markets, LLC as of December 31, 2020 and the related notes (collectively referred to as the "financial statement"). In our opinion, the balance sheet presents fairly, in all material respects, the financial position of Bluerock Capital Markets, 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 Bluerock Capital Markets, LLC's management. Our responsibility is to express an opinion on Bluerock Capital Markets, 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 Bluerock Capital Markets, 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 statement. 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 statement. We believe that our audit provides a reasonable basis for our opinion. We have served as Bluerock Capital Markets, LLC's auditor since 2013. Auburn Hills, Michigan February 19, 2021 ![](_page_4_Picture_11.jpeg) {5}------------------------------------------------ **ASSETS** | Cash
Accounts receivable (Note 2)
Prepaid expenses and other assets
Due from related party (Note 4)
Fixed Assets - net (Note 5)
Total Assets | \$
\$ | 2,544,678
271,92
367,045
60,350
130,253
3,374,247 | |-------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|------------------------------------------------------------------| | LIABILITIES AND MEMBER'S EQUITY | | | | Liabilities
Accounts payable, accrued, and other liabilities
Due to related party (Note 4)
Payable to commissioned employees | \$ | 796,933
145,740
581,857 | | Total liabilities | \$ | 1,524,530 | | Members' Equity | \$ | 1,849,717 | | Total Liabilities and Member's Equity | \$ | 3,374,247 | {6}------------------------------------------------ # **Note 1 – Nature of Business and Significant Accounting Policies** #### ORGANIZATION AND NATURE OF BUSINESS Bluerock Capital Markets, LLC (the "Company"), is a Massachusetts limited liability company that is registered with the Securities and Exchange Commission, for the purpose of conducting business as a broker-dealer in securities. The Company does 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 Company was formed on August 5, 2005 as Sunbelt New England Equities. It was then sold to Halcyon Holdings on June 15, 2009 and the name changed to Halcyon Capital Markets, LLC. BR Capital Markets, LLC (currently the Company's sole Series A member) purchased 20 percent of the Company's LLC units on December 23, 2010. BR Capital Markets, LLC purchased the remaining LLC units in 60 percent and 20 percent increments on April 5, 2011 and October 21, 2011, respectively. Upon completion of these purchases, the Company's name was changed to Bluerock Capital Markets, LLC. BR Capital Markets, LLC admitted Interval Management, LLC, and Interval Management II, LLC, as Series B members and controlled by common ownership on December 11, 2019, and September 30, 2020, respectively. #### SIGNIFICANT ACCOUNTING POLICIES ARE AS FOLLOWS: #### BASIS OF ACCOUNTING The Company maintains its accounting records and prepares its financial statements on an accrual basis, which is in accordance with accounting principles generally accepted in the United States of America ("GAAP"). #### BUSINESS CYCLE The financial affairs of the Company generally do not involve a business cycle since the realization of assets and the liquidation of liabilities are usually dependent on the Company's circumstances. Accordingly, the classification of current assets and current liabilities is not considered appropriate and has been omitted from the balance sheet. #### CASH For financial statement purposes, the Company considers all investments purchased with a maturity of three months or less to be cash equivalents. The Company periodically holds cash in excess of federally insured limits. The Company has not incurred any losses in connection with these deposits. #### ACCOUNTS RECEIVABLE Accounts receivable are based on current contracts and stated at estimated net amounts due. The Company considers all accounts receivable to be fully collectible; accordingly, no allowance for doubtful accounts is required. If amounts are determined to be uncollectible, they are charged to operations at the time of such determination. ϯ {7}------------------------------------------------ # FIXED ASSETS Fixed Assets are recorded at cost. Depreciation is computed using straight-line methods for all assets over a period of three to five years. ## IMPAIRMENT OF LONG-LIVED ASSETS The Company reviews long-lived assets, including Fixed Assets, for impairment whenever events or changes in business circumstances indicate that the carrying amount of an asset may not be fully recoverable. An impairment loss would be recognized when the estimated future cash flows from the use of the asset are less than the carrying amount of that asset. To date, there have been no such impairment losses. #### MANAGING BROKER DEALER AND MARKETING DUE DILIGENCE FEES AND EXPENSES The Company recognizes managing broker dealer and marketing and due diligence fees on the trade-date as securities transactions occur. The company acts as principal as it relates to these fee given it is primarily responsible for fulfilling all marketing and due diligence functions related to its offerings. The company in turn pays a portion of these fees to third party dealers. #### INCOME TAXES Income or loss of the Company is allocated wholly to its controlling Series A member. No income tax provision has been included in the financial statements since income or loss of the Company is required to be reported by the members on its income tax returns. # ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. # **Note 2 – Commission Financing Agreement** On May 2, 2018, the Company entered into a Commission Financing Agreement with Total Income+ Real Estate Fund, a Delaware Statutory Trust (the "Fund") and ALPS, a wholly owned subsidiary of Kansas City based DST Systems, Inc (the "Distributor") The Fund is a closed-end registered investment company under the Investment Company Act of 1940, as amended, and in the case of certain share classes of the Fund, an investor pays no commission on its purchase, but the Distributor has agreed to pay commissions to the selling broker-dealer pursuant to the Fund's prospectus ("Advanced Commissions"). The Distributor is entitled to receive distribution and shareholder servicing plan fees ("Plan Fees") for a period of time, and contingent deferred sales charges ("CDSCs") as repayment of the Advanced Commissions. Pursuant to the terms of the Commission Financing Agreement, the Company is to assist the Distributor in its efforts by providing for the Advanced Commissions, and the Distributor has assigned its recoupment rights to the Company, such recoupment in the form of Plan Fees and CDSCs payable proportionally over the 12-month period succeeding each Advanced Commission payment. The Plan Fees are based on Fund Net Asset Value ("NAV") and can fluctuate from month to month. ϰ {8}------------------------------------------------ The Company carries the balance of Advanced Commissions net of any recoupment related thereto as a component of "Accounts receivable" on the balance sheet. The Advance Commissions are payable monthly on an arrearage basis but are not included as a component of Accounts Payable, accrued, or other liabilities as of the balance sheet date because the Advanced Commissions do not meet the true definition of a liability as it is the liability of ALPS, and not the liability of the Company. As of December 31, 2020, the Company paid total Advanced Commissions of \$5,657,443, of which \$5,392,752 has been recouped through Plan Fees, resulting in \$264,691 in future recoupment, which is presented as a component of Prepaid expenses and other assets on the balance sheet. # **Note 3 – Net Capital Requirements** The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (Rule 15c3- 1), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. The Rule also provides that equity capital may not be withdrawn, or cash dividends paid if the resulting net capital ratio would exceed 10 to 1. As of December 31, 2020, the Company had net capital of \$1,173,173, and net capital requirements of \$95,387. The Company's ratio of aggregate indebtedness to net capital as of December 31, 2020 was 1.22 to 1. # **Note 4 – Related Party Transactions** For the year ended December 31, 2020, substantially all of the Company's revenues, were earned from investors' transactions in various investment funds related to the Company by common control. As of December 31, 2020, the Company is due reimbursable expenses in the amount of \$60,350 from a related entity through common ownership and owes expenses in the amount of \$145,740 to a related entity through common ownership. For the year ended December 31, 2020, the Company expensed \$499,358 to Bluerock Real Estate Holdings, LLC, an entity related by common control, for shared office space in Southfield, Michigan, use of personnel, and certain overhead expenses. These costs are included in general and administrative expenses on the statement of operations. For the year ended December 31, 2020, the Company's member, BR Capital Markets, LLC, made contributions of cash in the amount of \$10,550,000 to the Company. These transactions are conducted in the normal course of business and are measured at their exchange value, which is the amount established and agreed to by the related parties. ϱ {9}------------------------------------------------ # **Note 5 – Fixed Assets** Major classes of Fixed Assets are as follows: | Asset Type | Amount | | Depreciable Life
- Years | |--------------------------------------------|--------|-----------|-----------------------------| | | | | | | Computer and equipment | 8 | 120,166 | 3 - 5 | | Furniture and fixtures | | 31,090 | 5 | | Leasehold imporvements | | 12,327 | 5 | | Computer software | | 24,259 | 5 | | Right of use asset for leased office space | | 93,727 | 4 | | Total Cost | 5 | 281,569 | | | Accumulated Depreciation | 69 | (151,316) | | | Fixed Assets - net | | 130,253 | | Depreciation expense was \$24,172 for the year ended December 31, 2020. Repairs and maintenance costs are charged to expense as incurred. All repairs or maintenance that increases the value, capacity, or lives of assets are capitalized and depreciated over their estimated useful lives. #### **Note 6 – Leases** The Company occupies office space at 4100 Newport Place, Suite 710 and 720 in Newport Beach, California under lease agreement through January 31, 2022. Minimum future rental payments under non-cancelable operating leases are as follows: | Year Ending | Total | | |------------------------------------------------------|-------|-------------------| | 12/31/2021
12/31/2022 | 4 | 106,389
8,887 | | Total Future Lease Payments
Less Imputed Interest | 6 | 115,276
21,549 | | Lease Liability | | 93,727 | # **Note 7 – Economic Dependency** The Company is dependent on related entities, properties, and equity offerings, for revenue and equity contributions that are essential and critical, including but not limited to commission income, reimbursed costs, and member contributions. In the event that these related entities and properties are unable to provide substantial income and equity contributions, the Company would be required to seek revenue from other sources. {10}------------------------------------------------ # **Note 8 – Company Sponsored Plan** The Company sponsors a 401(k) plan for substantially all employees. The plan provides for the Company to make a discretionary matching contribution. There were no contributions in 2020. # **Note 9 – Liabilities Subordinated to Claims of General Creditors** The Company had no liabilities subordinated to the claims of general creditors during the year. Therefore, no statement of changes in liabilities subordinated to the claims of general creditors is presented in these financial statements. # **Note 10 – Subsequent Events** The financial statements and related disclosures include evaluation of events up through and including February 19, 2021, which is the date the financial statements were available to be issued. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.