# JAVCAP SECURITIES LLC X-17A-5 (2021-03-11) — Broker-dealer annual report - Company: JAVCAP SECURITIES LLC - Form: X-17A-5 - Filed: 2021-03-11 - Period: 2020-12-31 - Accession: 0001377278-21-000002 - CIK: 1377278 - File #: 8-67435 - Material weakness: No - Auditor: Kehlenbrink, Lawrence, & Pauckner - Auditor location: Indianapolis, IN - Contact: Jason Segal - Phone: 646-693-9449 - Signed by: Jason Segal (Principal) Original filing: https://www.sec.gov/Archives/edgar/data/1377278/000137727821000002/public.pdf --- {0}------------------------------------------------ ![](_page_0_Picture_0.jpeg) 317-257- 1540 FAX: 317-257-1544 **62% Rucbr Road. Suite G Jndiru:uip.,lis, IN 46220** #### REPORT OF INDEPENDENT REGISlERED PUBLIC ACCOUNTING FIRM To the Board of Directors of JavCap Securities, LLC ### Opinion on the Financ.ial Statements We have audited the accompanying statement of financial condition of JavCap Securities, LLC, as of December 31, 2020, the related statements of operations, changes in member's equity, and cash flows for the year then ended and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of JavCap Securities, LLC as of December 31, 2020, and the results of its 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 JavQ,p Securities, LLC's management. Our responsibility is to express an opinion on JavCap Securities, LLC's financial statements 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 JavCap 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 peiform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement whether due to error or fraud. Our audit inc)Jded peiforming procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and peiforming procedures that respond to those risks. Such procedures included examining, on a te!t 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\_ #### Supplemental Information The supplemental schedule titled Computation of Net Capital, Aggregate Indebtedness, and Basic Net Capital Requirement has been subjected to audit procedures peiformed in conjunction with the audit of JavCap Securities, LLC's financial statements. The supplemental information is the responsibility of JavCap Securities, LLC's management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and peiforming procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 C.F .R- §240. I 7a-S. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole. We have served as JavCap Securities, LLC's auditor since 2007. Kehlenbrink, Lawrence & Pauclmer Indianapolis, Indiana March 9, 2021 {1}------------------------------------------------ ### JAVCAP SECURITIES LLC ### STATEMENT OF F1NANCIAL CONDITION ### DECEl\fflER 31, 2020 ### **ASSETS** | Cash | \$
179,029 | |-----------------------------------------|---------------| | Acco\lllts receivable | 127,649 | | Prepaid expenses | 23,482 | | Security deposits | | | Total Assets | \$
330,160 | | LIABILillES AND l\1El\mER'S EQUITY | | | Liabilities: | | | Acco\lllts payable and accrued expenses | \$
8,485 | | Acco\lllts payable to related parties | 6,106 | | SBA Loan Payable | 104 800 | | Total Liabilities | 119 391 | | Member's equity | 210 769 | | Total Liabilities and Member's Equity | \$
330,160 | The accompanying notes are an integral part of these financial statements. {2}------------------------------------------------ ### **JAVCAP** SECURITIES, **LLC NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER** 31, 2020 # **1. ORGANIZATION AND NATURE OF** BUSINESS JA VCAP SECURITIES, LLC (the "Company") was granted membership in the Financial Industry Regulatory Authority ("FINRA'') on March 6, 2007. It is a registered broker-dealer with the Securities and Exchange Commission ("SEC"), and is a member of the Securities Investor Protection Corporation ("SIPC''). Pursuant to a purchase agreement dated November 29, 2016, 20% of the outstanding membership interests in the Company were sold by Price Holdings, Inc., the 100% owner of the Company to ENR Group LLC (the "Purchaser''). Purchaser had the option to purchase the remaining 80% of the Company's interests subject to FINRA's approval of the change of control of the company. The purchase of the remaining 80% of the interests was approved by FINRA and completed on October 12, 2017. Effective January 10, 2018, the Company name changed to JA VCAP Securities, LLC. ### Recent Issued Accounting Pronouncements The Company does not believe that the adoption of any recently issued, but not yet effective, accounting standards will have a material effect on its financial position and results of operations. # **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** # Basis of Presentation The accompanying financial statements have been prepared in conformity with U.S generally accepted accounting principles ("GAAP") and the rules and regulations of the United States Securities and Exchange Commission (the "Commission"). It is managements opinion, that all material adjustments (consisting of normal recurring adjustments) have been made whichare necessary for a fair financial statement presentation. # Cash and cash equivalents The Company considers all highly liquid investinents with a maturity of three months or less when purchased to be cash equivalents. Cash equivalents are carried at cost, which approximates market value. ### Accounting hasis The Company uses the accrual basis of accounting for financial statement and income tax reporting. Accordingly, revenues are recognized when services are rendered and expenses realized when the obligation is incurred. ### Income Taxes The Company is a limited liability company, for federal income tax ptuposes, and, thus, no federal income tax expense has been recorded in the financial statements. Taxable income of the Company is passed through to the members and reported on their individual tax returns. Pursuant to accounting guidance concerning provision for uncertain income tax provisions contained in Accounting Standards Codification ("ASC") 740-10, there are no uncertain income tax positions. The federal and state income tax returns are subject to examination by the IRS and state taxing authorities, generally for three years after they were filed. {3}------------------------------------------------ ### **JAVCAP SECURITIES, LLC NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEl\IBER 31, 2020** # **2. SUMMARY OF SIGNIF1CANT ACCOUNTING POLICIES (continued)** ## Use of Estimates The preparation of financial statements in confomut)• 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. ## Fair Values of Financial Instruments Financial Accounting Standards Board Accounting Standards Codification ("ASC") 825, "Financial Instruments," requires the Company to disclose estimated fair values for its financial instruments. Fair value estimates, methods, and assumptions are set forth below for the Company's fmancial instruments: The canying amount of cash, accounts receivable, prepaid expenses and accounts payable and accrued expenses, approximate fair value because of the short maturity of those instrun1ents. # Concentrations of Credit Risk The Company places its cash with a high credit quality financial institution. The Company's account at this institution is insured by the Federal Deposit Insurance Corporation ("FDIC") up to \$250,000. To reduce its risk associated with the failure of suc1i fmancial institution, the Company evaluates at least annually the rating of the financial institution in which it holds deposits. ### Revenue Recognition The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. No cUDlulative adjustment to accUDlulated deficit was required, as no material arrangements prior to the adoption were impacted by the new pronouncement. The Company typically enters into contracts with clients calling for periodic retainer fees to be paid during the term of the arrangement, and a variable consideration if a success fee is to be paid out once the merger or acquisition advisory services, or private placement of securities (the " transaction") is successfully completed. This success fee is typically based on a percentage of the total consideration of the transaction, although in certain cases it may be a flat fee. Accordingly, the Company recognizes retainer fees in the period the service obligation is performed. Success fees are only recognized if a transaction is fmalized. The Company considers total retainer fees to be the only performance obligation in contracts with customers. These fees are recognized over time as the services are delivered. Success fees are considered to be variable consideration which are not estimated at the time services are delivered because it is not probable that a significant reversal of those revenues would not occur in a future period. Success fees of \$2,130,630 recognized in the current year are from performance obligations partially satisfied in a prior period. ### Subsequent Events Subsequent events were evaluated through the date of the consolidated financial statements were filed. {4}------------------------------------------------ # **JAVCAP** SECURITIES, **LLC NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER** 31, 2020 ### 3. **l'-'ET CAPITAL** The Company is subject to the SEC Uniform Net Capital Rule (Rule 15c3-l), which requires the maintenance of roinironm net capital of \$5,000, and requires that the ratio of aggregate indebtedness to net capital, both as defined, not exceed 15 to 1. The rule also provides that equity capital may not be withdrawn, cash dividends paid or the Company's operations expanded, if the resulting net capital ratio would exceed 10 to 1. At December 31, 2020, the Company had net capital of\$167,533 which was \$162,533, in excess of the FINRA minimum net capital requirement of \$5,000. ### **4. RELATED PARTY TRANSACTIONS** The Company has an Expense Sharing Agreement (the "Agreement") in place with the Parent (the "Parent"), ENR Group, LLC for services that are shared and paid or received by the Parent. As of December 31, 2020, amounts reimbursable to the Parent have been included in Accounts Payable to Related Parties ion the accompanying statement of financial condition in the amount of\$6,106. ### 5. **CONCENTRATION OF CUSTOMER REVENUES** For the year ended December 31, 2020, two customers accounted for 78% of the Company's revenue. One of the customers accounted for 41 % of accounts receivable as of December 31, 2020. # **6. COVID-19** During the year of 2020, Coronavirus Disease (COVID-19) has begun causing major disruptions to the economy. The financial impacts to the Company will likely result in significantly reduced revenues for at least the first quarter of 2021, and possibly beyond. Management is monitoring the situation closely and expects to make needed changes to its operations should circumstances warrant in order to mitigate any negative long-term financial impacts on the Company. The Company received a loan under the Paycheck Protection Program (PPP) from the Small Business Administration Management in the amount of \$104,800 on April 25, 2020. Under the terms of this loan, if certain provisions are met part or all of this loan will be forgiven. Management expects that all of this loan will be forgiven by meeting those provisions. Management is monitoring the situation closely and expects to make needed changes to its operations should circumstances warrant in order to mitigate any negative long-term financial impacts on the Company. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.