# MOORGATE SECURITIES LLC X-17A-5 (2020-02-28) — Broker-dealer annual report - Company: MOORGATE SECURITIES LLC - Form: X-17A-5 - Filed: 2020-02-28 - Period: 2019-12-31 - Accession: 0001385971-20-000008 - CIK: 1472676 - File #: 8-68393 - Material weakness: No - Auditor: Withum Smith Brown, PC - Auditor location: Whippany, NJ - Contact: Michael Alexander - Phone: 2125543898 - Signed by: Michael Alexander (Partner) Original filing: https://www.sec.gov/Archives/edgar/data/1472676/000138597120000008/moorgatepublic19.pdf --- {0}------------------------------------------------ # MOORGATE SECURITIES LLC # STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2019 {1}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OMB APPROVAL OMB Number: 3235-01 23 Expires: August 31, 2020 Estimated average burden hours per response .. .. . . 1 2.00 # **ANNUAL AUDITED REPORT FORM X-17A-5 PART Ill** | SEC FILE NUMBER | | |-----------------|--| | 8-68393 | | 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 roR THE PERIOD BEGINNING | ____
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MM /DD/YY | |--------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------|------------------|---------------------------------------------------| | | A. REGISTRANT TDENTTFTCATTON | | | | NAM E OF BROKER-DEALER: | Moorgate Securities, LLC | | OFFICIAL USE ONLY | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | FIRM l.D. NO. | | 1 Rockerfeller Plaza, 24th Floor | | | | | | (No. and Street) | | | | New York | NY | | 10020 | | (City) | (State) | | (Zip Code} | | NAM E AND TELEPHONE NUMBER OF P ERSON TO CONTACT IN REGARD TO THIS REPORT
Michael Alexander | | | 212.554.3898 | | | | | (Arca Code - Telephone Number) | | | B. ACCOUNTANT IDENTIFICATION | | | | INDEPENDENT PUBLIC ACCOUNTANT w hose opinion is contained in this Report* | | | | | WithumSmith+Brown, PC | | | | | | (Name - if individual, st Ole last. first. middle name) | | | | 200 Jefferson Park, Suite 400 | Whippany | NJ | 07981 | | (A ddress) | (City) | (State) | (Zip Code) | | CHECK ONE: | | | | | If
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Accountant not re sident in United States or any o f its possessions. | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | | | | | | | | *\*Claims for exemption from the requirement that the annual reporl be covered by the opinion of an independent public accountant must be supported by a statement of f acts and circumstances relied on as the basis for the exemption. See Section 240. I 7a-5(e)(2)* SEC 1410 (06-02) 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 | I, | Michael Alexander | | | , swear (or affirm) that, to the best o f | |-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------|------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | my knowledge and belief the accompanying financia l statement and supporting schedules pertain ing to the firm of
Moorgate Securities, LLC | | | , as | | of | December 31 | 20 19 | | are true and correct. I rurther 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: | | | | | | i=;\r~tX
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''11/''WE.ALi'A ,,,,, | | (i) | (d) Statement of Changes in Financial Condition.
(e) Statement o f Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital.
(f) Statement of Changes in Liabilities Subord
(g) Computation of Net Capital.
(h) Computation for Determi nation of Reserve Requirements Pursuant to Rule 1 Sc3-3.
Information Relating to the Possession or Control Requ irements Under Rule I 5c3-3.
O 0) A Reconcilia
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Computation for Determination of the Reserve Requirements Under Exhibit A of' Rule 15c3-3. | | inated to Claims of Creditors. | '''""''''
et Capital Under Rule 1 Sc3- I and th e | | | 0 (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect lo methods of
consolidation.
0 (1) An Oath or Affirmation.
0 (m) A copy of the SIPC Supplemental Report.
D (n) A report describing any material inadequacies found to exist or found to have existed since the date of the prev | | | ious audit. | *\*\*For conditions of confidential treatment of certain portions of this filing, see section 240. I 7a-5(e)(3).* {3}------------------------------------------------ # **MOORGATE SECURITIES, LLC** #### **DECEMBER 31, 2019** #### **TABLE OF CONTENTS** | Report of Independent Registered Public Accounting Firm 1 | Page | |------------------------------------------------------------|------| | Statement of Financial Condition 2 | | | Notes to the Financial Statement. 3-6 | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Managing Member of Moorgate Securities, LLC #### Opinion on the Financial Statement We have audited the accompanying statement of financial condition of Moorgate Securities, LLC (the "Company"), as of December 31, 2019, and the related notes (collectively referred to as the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of December 31, 2019, in conformity with accounting 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 this 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 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 the Company's auditor since 2014. February 27, 2020 {5}------------------------------------------------ ## MOORGATE SECURITIES, LLC STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2019 #### ASSETS | Cash
Transaction fees receivable
Due from Parent
Prepaid expenses and other assets | \$
60,103
437,501
15,782
51,537 | |---------------------------------------------------------------------------------------------|---------------------------------------------| | Total assets | \$
564,923 | | LIABILITIES AND MEMBER'S EQUITY
Liabilities: | | | Accrued expenses | \$
1,145 | | Total liabilities | 1,145 | | Member's equity | 563,778 | | Total liabilities and member's equity | \$
564,923 | {6}------------------------------------------------ # **1. ORGANIZATION AND DESCRIPTION OF BUSINESS** Moorgate Securities LLC, (the "Company") is a limited liability company organized under the laws of the state of Delaware on April 28, 2009. The Company is wholly-owned by Moorgate Capital Partners LLC (the "Parent"). The Company's operations consist primarily of financial advisory and private capital raises for corporate clients. On April 10, 2010, the Company became a registered broker-dealer with the Securities and Exchange Commission and a member of the Financial Industry Regulatory Authority ("FINRA"). ## **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** #### **Revenue recognitton** 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. #### *Transaction fees* Transaction fee revenues are fees arising from offerings in which the Company acts as an underwriter or agent and generally consist of a nonrefundable up-front fee and a success fee. The nonrefundable fee is recorded as deferred revenue upon receipt and recognized at a point in time when the performance obligation is satisfied, or when the transaction is deemed by management to be terminated. Management's judgment is required in determining when a transaction is considered to be terminated. {7}------------------------------------------------ ## **MOORGATE SECURITIES, LLC NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2019** ## **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** *(continued)* #### **Revenue recogni'ti.on** *(continued)* ## *Transactionfees (continued)* The success related advisory fees are considered variable consideration and recognized when it is probable that the variable consideration will not be reversed in a future period. The variable consideration is considered to be constrained until satisfaction of the performance obligation. The Company's performance obligation is generally satisfied at a point in time upon the closing of a strategic transaction, completion of a financing or underwriting arrangement, or some other defined outcome. At this time, the Company has transferred control of the promised service and the customer obtains control. As these arrangements represent a single performance obligation, allocation of the transaction price is not necessary. The Company has elected to apply the following optional exemptions regarding disclosure of its remaining performance obligations: the Company's performance obligation is part of a contract that has an original expected duration of one year or less. #### *Service fees* Service fee revenues are fees for investment banking services provided to third parties. These services include business development and strategic management Service fee revenues are billed monthly and the Company believes the performance obligation for providing advisory services is satisfied over time because the customer is receiving and consuming the benefits as they are provided by the Company. Disaggregation of revenue can be found on the statement of operations as of December 31, 2019 by revenue stream. The following table provides information about receivables, contract assets and contract liabilities from contracts with customers: | | 1-Jan-19
\$ 275,001 | | 31-Dec-19 | | |------------------------------------------------------|------------------------|--|------------|--| | Receivables, included in transaction fees receivable | | | \$ 437,501 | | | Contract assets | \$ | | \$ | | | Contract liabilities | \$ | | \$ | | {8}------------------------------------------------ #### 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES *(continued)* # *Concentration of risk* The Company maintains cash in bank accounts with a single financial institution. The balances are insured by the FDIC up to \$250,000. From time to time, the balance in this account may exceed the federally insured limits. The Company has not experienced any losses in such accounts and does not believe it is exposed to any significant credit risk on cash balances. For the year ended December 31, 2019, five customers accounted for 100% of the Company's revenues and one customer accounted for 6 7% of the transaction fees receivable at December 31, 2019. # *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 of revenues and expenses during the reporting period. Actual results could differ from those estimates. #### *Income taxes* As a wholly-owned limited liability company, the Company is not subject to Federal, state or local income taxes. All items of income, expense, gains and losses are reportable by the Parent for tax purposes. The Company is considered to be a disregarded entity and is thus not subject to Federal, state and local income taxes and does not file income tax returns in any jurisdiction. The Company has no unrecognized tax benefits at December 31, 2019. At December 31, 2019, the Parent has determined that the Company had no uncertain tax positions that would require financial statement recognition. This determination will always be subject to ongoing reevaluation as facts and circumstances may require. Generally, the Parent is subject to income tax examinations by major taxing authorities during the threeyear period prior to the period covered by these financial statements. {9}------------------------------------------------ #### **3. RELATED PARTY TRANSATIONS** Pursuant to the management and expense sharing agreement, the Parent will pay directly certain operating expenses, which are incurred "in common" by the Company. The Parent will provide to the Company all equipment, furniture, utilities, facilities and administrative support necessary or appropriate to carry on the Company's activities. The Parent agreed that it will apportion to and collect from the Company on a monthly basis 25% of the "common" expenses incurred. At December 31, 2019 the Company's apportioned expenses were \$307,490. The Company has a balance of \$15, 782 due from the Parent and it is expected that this remaining balance will be received in 2020, and it is included in transaction fees receivable on the statement of financial condition. The Company earned \$125,000 in revenue from an entity under common control and at December 31, 2019, the Company had a balance due of \$375,000 from the related entity and is included in transaction fees receivable on the statement of financial condition. # **4. NET CAPITAL REQUIREMENTS** The Company is subject to the uniform net capital requirements of Rule 15c3-1 of the Securities and Exchange Act, as amended, which requires the Company to maintain, at all times, sufficient liquid assets to cover indebtedness. In accordance with the Rule, the Company is required to maintain defined minimum net capital of the greater of \$5,000 or 6 2/3% of aggregate indebtedness. At December 31, 2019, the Company had net capital, as defined, of \$58,958, which exceeded the required minimum net capital of \$5,000 by \$53,958. Aggregate indebtedness at December 31, 2019 totaled \$1,145. The Company's percentage of aggregate indebtedness to net capital was 1.94%. #### **S. SUBSEQUENT EVENTS** Management of the Company has evaluated events and transactions that may have occurred since December 31, 2019 and through date of issuance and determined that there are no material events that would require disclosures in the Company's financial statements. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.