# HATTERAS CAPITAL DISTRIBUTORS, LLC X-17A-5 (2020-02-28) — Broker-dealer annual report - Company: HATTERAS CAPITAL DISTRIBUTORS, LLC - Form: X-17A-5 - Filed: 2020-02-28 - Period: 2019-12-31 - Accession: 0001390423-20-000001 - CIK: 1390423 - File #: 8-67555 - Material weakness: No - Auditor: GOLDMAN & COMPANY, CPAs P.C. - Auditor location: MARIETTA, GA - Contact: WILLIAM CRAPPS - Phone: 404-579-0747 - Signed by: WILLIAM CRAPPS (CHIEF FINANCIAL OFFICER/FINOP) Original filing: https://www.sec.gov/Archives/edgar/data/1390423/000139042320000001/hatterasaudit2.pdf --- {0}------------------------------------------------ UNITED ST A TES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OMB APPROVAL OMB Number: 3235-0123 Expires: August 31, 2020 Estimated average burden hours per response 12.00 ### ANNUAL AUDITED REPORT FORM X-17A-5 PART Ill | SEC FILE NUMBER | |-----------------| | 8-67555 | 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 1 | /1
/2019 | AND ENDING 12/31 | /2019 | |--------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------|------------------|--------------------------------| | | MM/DDiYY | | ---
MM/DD/YY | | | A. REGISTRANT IDENTIFICATION | | | | NAME or BROKER-DEALER: Hatteras | Capital
Distributors, | LLC | OFFICIAL USE ONLY | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | FIRM I.D. NO. | | 851
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Accountant not resident in United States or any of its possessions. | | | | | | FOR OFFICIAL USE·ONLY | | | | | | | | | | | | | | | | | | *"Claimsfor exemption from therequirement that the a111111al report be covered by the opinion of an independent public accountant must besupported by a statement of facts and circumstances relied on as the basis/or the exemption. See Section 240. /7a-5(e)(2)* > Potential persons who are to respond to the collectlon of Information contained In this form are not required to respond unless the form displays a currently valid OMB control number. SEC 1410 (11-05) {1}------------------------------------------------ #### OATH OR AFFIRMATION | 1, William Crapps
----------------------- | | , swear (or affirm) that, to the best of | | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------|--| | Hatteras Capital Distributors, LLC | | my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of | | | of December 31 | ____ __, 20� | --------------------------------------------' as
_, arc 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, proprietor, principal officer or director has any proprietary interest in any account | | | - --------
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(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.
(h) Computation for Determination of Reserve Requirements Pursuant to Rule I 5c3-3.
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(m) A copy of the SIPC Supplemental Report.
(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. J 7a-5(e)(3). | | | {2}------------------------------------------------ Financial Statements and Supplemental Schedules For the Year Ended December 31, 2019 ![](_page_2_Picture_3.jpeg) {3}------------------------------------------------ Financial Statements and Supplemental Scheduleand Report of Independent Registered Public Accounting Firm for the Year Ended December 31, 2019 {4}------------------------------------------------ #### Hatteras Capital Distributors, LLC Contents | Facing Page to Form X-17A-5 | | 2a | |-----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------|----| | | Affirmation of Officer | 2b | | | Independent Registered Public Accounting | 3 | | | Firm Financial Statements | 4 | | | Statement of Financial Condition | 5 | | | Statement of Operations | 6 | | | Statement of Changes in Member's Equity | 7 | | | Statement of Cash Flows | 8 | | | Notes to Financial Statements | 9 | | | Independent Registered Public Accounting Firm Report on Exemption | 11 | | | Management's Report on Exemption | 12 | | | Supplementary Information | | | | Schedule I - Computation of Net Capital Pursuant to Rule 15c3-l and Statement
Pursuant to Rule 1 7a-5(d)(4) | 14 | | | Schedule II - Computation for Determination of Reserve Requirements Under Rule
15c3-3 of the Securities and Exchange Commission | 15 | | | Schedule III - Information Relating to the Possession or Control Requirements
Under Rule 15c3-3 of the Securities and Exchange Commission | 16 | | | Independent Accountants Report on Agreed Upon Procedures SIPC 7 Report | 17 | | | SIPC 7 Report | 18 | {5}------------------------------------------------ #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ## Hatteras Capital Distributors, LLC>- #### Opinion on the Financial Statements Z We have audited theaccompanying statement of financial condition of Hatteras Capital Distributors, LLC as < of December 31, 2019, therelated statements of operations, changes in member's equity and cash flowsfor the C... year then ended and therelated notes and schedules 1, 2 and 3 (collectively referred to as the 'financialu::;; statements"). In our opinion, the financial statements present fairly, in all material respects, the financial O position of Hatteras Capital Distributors, LLC as of December 31, 2019, and theresults of its operations and its cash flowsfor theperiod then ended in conformity with accounting principles generally accepted in the� #### Basis for Opinion United States of America. Po� D[j Thesefinancial statements are theresponsibility of Hatteras Capital Distributors, LLC 's management. Our responsibility is to express an opinion on Hatteras Capital Distributors, 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 thecompany in accordance with the U.S Federal securities laws and theapplicablerules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with thestandards of the PCAOB. Those standardsrequire that we plan and perform theaudit to obtain reasonableassurance about whether the financial statements arefree of material misstatement, whether due to error or fraud. Our 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 theamounts 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 theoverall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. #### Auditor's Report on Supplemental Information The Schedule's 1- Computation of Net Capital Under SEC Rule 15c3-1, Schedule 2-Computation for Determination of Reserve Requirements Pursuant to SEC Rule 15c3-3 (exemption) and Schedule 3- Information Relating to Possession or Control Requirements Pursuant to SEC Rule 15c3-3 (exemption) have been subjected to audit procedures performed in conjunction with theaudit of Hatteras Capital Distributors, LLC's financial statements. Thesupplemental information is theresponsibility of Hatteras Capital Distributors, LLC's management. Our audit procedures included determining whether thesupplemental information reconciles to the financial statements or theunderlying accounting and other records, as applicable, and performing procedures to test thecompleteness and accuracy of the information presented in thesupplemental information. In forming our opinion on thesupplemental information, we evaluated whether thesupplemental information, including its form and content, ispresented inconformity with 17 C.F.R. §240.1 ?a-5. In our opinion, theschedule's 1, 2. and 3 arefairly stated, in all material respects, in relation to the financial statements as a whole. We have served as the Company's auditor since2015. Goldman & Company, CPA's, P.C. Marietta, Georgia February 25, 2020 {6}------------------------------------------------ Financial Statements {7}------------------------------------------------ #### Hatteras Capital Distributors, LLC Statement of Financial Condition | Decem her 31. | 2019 | |--------------------------------------|---------| | | | | Assets | | | Cash and Cash Equivalents | 69,833 | | Due From Affiliate | 177,481 | | Prepaid expenses and other assets | 29,750 | | Total Assets | 277,064 | | Liabilities | | | Accrued expenses and account payable | 10,210 | | Total Liabilities | 10,210 | | Equity | 266,854 | | Total Liabilities and Equity | 277,064 | *Theaccompanying notes are an integral part of these financial statements.* {8}------------------------------------------------ #### Statement of Operations | Year ended December 31 | 2019 | |---------------------------------|------------| | | | | | | | Revenues: | | | Service fees | 1, 122,076 | | 12(b)-1 Revenues | 10,459 | | Total Revenues | 1,132,535 | | Expenses: | | | Payroll and Related Expenses | 491,835 | | Marketing events and Materials | 66,203 | | Travel, meals and entertainment | 174,510 | | 12(b)-1 expenses | 8,808 | | Professional fees | 32,215 | | Regulatory fees and expenses | 23,352 | | Office expenses | 49,974 | | Rent | 70,314 | | Depreciation | 40,546 | | Sub-distributor fees | 8,333 | | Other expenses | 26,334 | | Insurance | 20,752 | | Total Expenses | 1,013,176 | | Net Income: | 119,359 | | | | *Theaccompanying notes are an integral part of these financial statements.* {9}------------------------------------------------ #### Hatteras Capital Distributors, LLC Statement of Changes in Member's #### Equity | Beginning equity, December 31, 2018 | | |-------------------------------------|--| | Net Income | | | Ending equity, December 31, 2019 | | *The accompanying notes are an integral part of these financial statements.* 147,495 119,359 266,854 {10}------------------------------------------------ #### Statement of Cash Flows | Year ended December 31, | 2019 | |-------------------------|------| | | | | Operating Activities | | |------------------------------------------------------------------------|-----------| | Net Income | 119,359 | | Adjustments to reconcile net income to net cash provided by operations | | | Change in receivable from 12(b )-1 plan | 3,657 | | Change in due from affiliate | (208,216) | | Change in prepaid and other assets | (281) | | Change in accounts payable and accrued expenses | (1,456) | | Net Cash Used by Operating Activities | (86,937) | | Cash and Cash equivalents, beginning of year | 156,770 | | Cash and Cash Equivalents, end of year | 69,833 | *The accompanying notes are an integral part of these financial statements.* {11}------------------------------------------------ #### Hatteras Capital Distributors, LLC Notes to Financial Statements #### 1. Summary of Business Activities and Significant Accounting Policies Hatteras Capital Distributors, LLC (the "Company" or "HCD") was organized on January 4, 2007, as a limited liability company under the laws of the state of North Carolina, and is a wholly owned subsidiary of Hatteras Funds, LP (the "Advisor"). The Advisor provides investment advisory services to various affiliated funds and general partnerships. On January 5, 2016, the Company, along with the Advisor, was purchased by Raleigh Acquisition Corporation, an LLC formed by members of the Company's management to acquire the assets of the Company and Hatteras Funds from RCS Capital Corporation. The Advisor was subsequently renamed Hatteras Funds, LP. HCD serves as the distributor for investment company products and limited partnerships. HCD operates as a limited-use broker dealer pursuant to SEC Rule I 5c3-3(k)(2)(i) and does not hold customer funds or safekeep customer securities. #### *Basis of Presentation* The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair statement of results. #### *Use of Estimates* The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates, and these differences could be material. #### *Cash and Cash Equivalents* The Company maintains cash deposits with a financial institution. At times, these balances may exceed the amount insured by the Federal Deposit Insurance Corporation (the "FDIC"). The Company did not have cash balances as of December 31, 2019 that were in excess of the FDIC insured limits. There were no restrictions placed on the Company's cash deposits at December 31, 2019, nor at any point during the twelve-months ended December 31, 2019. The Company defines Cash and Cash Equivalents as highly liquid instruments with original maturities of less than 90 days. #### *Service Fees Receivable and Due from Affiliates* The Company records service fee receivables by providing services to various funds managed and advised by Hatteras Funds. As provided in the fund servicing agreements, the Company will assist with investor communications, maintenance of fund records, and provide various other services related to the funds' operations: The Company records service fees receivable when fees have been earned but not yet paid on services provided to unrelated parties. The Company also provides services to Hatteras Funds under terms of a written agreement between the Company and Hatteras Funds. The Company records fees receivable from Hatteras Funds when earned but not yet paid as Due from Affiliate in the Company's financial statements. When applicable, amounts owed for services provided by Hatteras Funds and service fees to be received from Hatteras Funds are presented net in the Company's Statement of Financial Position. At December 3 1, 2019, \$177,481 was due from Hatteras Funds. #### *Revenue Recognition* On January 1, 2018, the Company adopted ASU 2014-09 Revenue from Contracts with Customers and all subsequent amendments to the ASU (collectively, "ASC 606"), which creates a single framework for {12}------------------------------------------------ recognizing revenue from contracts with customers that fall within its scope. Revenue is measured based on a consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over goods or service to a customer. Services within the scope of ASC 606 include, Fund Servicing Agreements and a 12b-l Plan. Refer to Revenue Recognition Note: Revenue from Contracts with Customers for further discussion on the Company's accounting policies for revenue sources within the scope of ASC 606. #### *Revenue from Contracts with Customers:* #### *Fund Servicing Agreements:* The Company recognizes revenue generally when it is earned and realized or realizable, when persuasive evidence of an arrangement exists, services have been rendered, and collectability is reasonably assured. The Company earns service fees by providing fund services to the various Hatteras Funds (the "Funds") through Fund Servicing Agreements. Service fees are calculated monthly or quarterly, as applicable, as a percentage of the aggregate net assets of the Funds, which is reported by each fund's administrator. #### *12(b)-l Plan:* The Company is the distributor for certain affiliated funds which maintain a 12(b)-1 Plan. The Company has engaged Quasar, a division of US Bank Fund Services, as sub-distributor to administer the 12(b)-1 Plan. The Company maintains an account at the various funds which offer shares under the 12(b )-1 Plan, which are used to pay expenses related to the marketing and selling of fund shares, such as compensating brokers and others who sell fund shares, and paying for advertising, the printing and mailing of prospectuses to new investors, and the printing and mailing of sales literature. The Company recognizes revenue as earned from the assets under management in the share classes under the plan and expenses under the 12(b)-1 plan as the Company remits 12(b)-l plan fees to third party selling brokers. Commissions and other direct variable distribution costs are paid to unrelated distributors by the Company in connection with the sales of certain investment products that entitle the Company to collect 12(b )-1 plan revenues and contingent deferred sales charges. Such deferred acquisition costs are capitalized by the Company and amortized over the term of the contingent deferred sales charge period, which is typically twelve months from the date of investment. During 2018, there were no capitalized deferred acquisition costs or amortization expense for CDSC costs. The Company's distribution relationship with the affiliated funds ended in March 2019. #### *Expenses* The Company recognizes expenses in its Statement of Income as expenses are incurred. The Company is party to a written expense sharing agreement with Hatteras Funds, with whom the Company shares office facilities. The expense sharing agreement results in the Company incurring certain expenses within its Statement of Income based upon a percentage of time, space and equipment used by Hatteras Funds in conducting activities of the Company. The Company and Hatteras Funds review the specific expense sharing percentages and estimates included within the expense sharing agreement annually to ensure such expense sharing percentages and estimates remain reasonable. No changes in those expense sharing percentages and estimates have occurred throughout 2019. #### *Income Taxes* The Company is a single member limited liability company that is treated as a disregarded entity for income tax purposes. As a result of the Company's designation as a disregarded entity for income tax purposes, no income taxes have been recognized within the Company's financial statements. The Company has adopted the provisions ofFASB Accounting Standards Codification 740-10 Accounting for Uncertainty in Income Taxes. Under FASB ASC 740- I 0, the Company is required to evaluate each of its tax position to determine if they are more likely than not to be sustained if the taxing authority examines the respective posit ion. A tax position includes an entity's status and the decision not to file a return. The Company has evaluated each of its tax positions and has determined that it has no uncertain tax positions for which a provision or liability for income taxes is necessary. The Company is evaluating new accounting standards and will implement as necessary. {13}------------------------------------------------ #### Notes to Financial Statements #### 2. Related Party Transactions Included in the Statement of Income are service fees from affiliated entities. In addition, the Statement of Income includes operating expenses resulting from the expense sharing agreement in place with Hatteras Funds. At December 31, 2019, \$177,481 was due from affiliated entities. The foJiowing table sets forth the Company's related party revenues and expenses for the year ended December 31, 2019: | Revenues: | | |---------------------------------|------------| | Service fees | 1,122,076 | | 12(b)-1 Revenues | 10,459 | | Total Revenues | 1, 132,535 | | Expenses: | | | Payroll and Related Expenses | 491,835 | | Marketing events and Materials | 52,100 | | Travel, meals and entertainment | 195,457 | | Professional fees | 6,988 | | Office expenses | 33,976 | | Rent | 70,315 | | Depreciation | 40,545 | | Other expenses | 17,332 | | Insurance | 10,600 | | Total Expenses | 919,148 | | Net Income: | 213,387 | #### 3. Net Capital The Company is subject to the SEC's Uniform Net Capital Rule, Rule l 5c3-l, which requires the Company to maintain minimum net capital, us defined, as the greater of \$5,000 or 6 2/3% of aggregate indebtedness, as defined. At December 31, 2019, the Company had regulatory net capital of\$59,623 which is \$54,623 in excess of the Company's net capital requirement of \$5,000. The Company's ratio of aggregate indebtedness to net capital is 0.1712 tol.0. The Company does not carry customer accounts and does not otherwise hold funds or securities for, or owe money to, customers and, accordingly, claims exemption from SEC Rule 15c3-3, under the provision in section k(2)(i). #### 4. Subsequent Events The Company has evaluated subsequent events through February 25, 2020, the date the financial statements were issued, and determined that there were no subsequent events that required disclosure. {14}------------------------------------------------ #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Member of E Hatteras Capital Distributors, LLC >- We have reviewed management's statements, included in the accompanying Hatteras Capital Distributors, LLC's Annual Exemption Report, in which (1) Hatteras Capital Distributors, LLC < identified the following provisions of 17 C.F.R. § 15c3-3(k) under which Hatteras Capital a.. Distributors, LLC claimed an exemption from 17 C.F.R. §240.15c3-3: (k)(2)(i) (the provisions") and (2) Hatteras Capital Distributors, LLC stated that Hatteras Capital Distributors, O LLC met the identified exemption provisions throughout the most recent fiscal year without U exception. Hatteras Capital Distributors, LLC's management is responsible for compliance with the; � exemption provisions and its statements. Our review was conducted in accordance with the standards of the Public Company Accounting 0 � Oversight Board (United States) and, accordingly, included inquiries and other required procedures to obtain evidence about Hatteras Capital Distributors, LLC's compliance with the exemption YJ[j 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, we do not express such an opinion. Based on our review, we are 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. Goldman & Company, CPA's, P.C. Marietta, Georgia February 25, 2020 {15}------------------------------------------------ ![](_page_15_Picture_0.jpeg) HATIERASFUNDS.COM / T: *(919)* 846-2324 / F: (919} 846-3433 8510 COLONNADE CENTER DRIVE *I* SUITE 150 *I* RALEIGH, NC 21615-3050 #### Hatteras Capital Distributors, LLC's Exemption Report Hatteras Capital Distributors, LLC ("Company") is a registered broker-dealer subject to SEC rule 17a-5 ("Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by Rule 17-a-S(d)(l) and (4). To the best of its knowledge and belief the company states the following: Throughout the fiscal year ended December 31, 2019 the Company claimed an exemption to SEC Rule 15c3-3 pursuant to paragraph k(2)(i)("independent exemption provision"}. The Company has met the identified exemption provision throughout the most recent fiscal year without exception. Hatteras Capital Distributors, LLC I, William Crapps, affirm that to my best knowledge and belief, the Exemption Report is true and correct. . /?. ..... \_ ./ (Signature} *lJ*�*'V"I* � Chief Financial Officer February 20, 2020 {16}------------------------------------------------ #### Supplementary Information {17}------------------------------------------------ #### Schedule I Computation of Net Capital Pursuant to Rule 15c3-1 and Statement Pursuant to Rule 17a-5(d)(4) | December | 2019 | |--------------------------------------------------------------------|---------------| | Computation of Net Capital Pursuant to Rule 15c3-1 | | | Computation of Net Capital: | | | Total member's equity from statement of financial condition | \$
266,854 | | Less: Non allowable assets: | | | Other assets | 207,231 | | Net Capital | 59,623 | | Computation of Basic Net Capital Requirement: | | | 6-2/3% of \$10,210, aggregate indetedness | 681 | | Minimum net capital required, pursuant to Rule 15c3-1 | 5,000 | | Minimum dollar net capital requirements of reporting broker/dealer | 5,000 | | Excess net capital | 54,623 | | Computation of Aggregate Indebtedness | | | Accounts payable and accrued expenses | 10,210 | | Total Aggregate Indebtedness | 10,210 | | Percentage of Aggregated Indebtedness to Net Capital | 17.12% | #### Statement Pursuant to Rule 17a-5(d)(4) A Reconciliation of the Company's computation of net capital as reported in theunaudited Part IIA of Form X-17 A-5 as of December 31, 2018 was not prepared as there are no material differences between the Company's computation of net capital and thecomputation contained herein. {18}------------------------------------------------ #### Schedule II Computation for Determination of Reserve Requirements Under Rule 15c3-3 of the Securities Exchange Commission The Company isexempt form theprovisions of Rule l 5c3-3 under the Securities Exchange Act of 1934 pursuant to paragraph (k)(2)(i) of therule. The Company does not carry security accounts for customers orperform custodial functions relating to customer securities. Under thisexemption, the Company is not required to maintain a reserve account for the benefit of its customers. {19}------------------------------------------------ #### Schedule III #### Information Relating to the Possession or Control Requirements Under Rule 15c3-3 of the Securities and Exchange Commission The Company is exempt from the provisions of Rule l 5c3-3 under the Securities and Exchange Act of 1934 pursuant to paragraph (k)(2)(i) of the rule. The Company did not maintain possession or control of any customer funds or securities. {20}------------------------------------------------ #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON APPL YING AGREED-UPON PROCEDURES **---11110..** #### To the Member of Hatteras Capital Distributors, LLC We have performed theprocedures included in Rule 17a-5(e)(4) under the Securities Exchangere :;;E of 1934 and in the Securities Investor Protection Corporation (SIPC) Series 600 Rules, which areO enumerated below and were agreed to by Hatteras Capital Distributors, LLC and the SIPC, solely to assist you and SIPC in evaluating Hatteras Capital Distributors, LLC's compliance with the "' *U* applicable instructions of the General Assessment Reconciliation (Form SIPC-7) for theyear ended; **o'** December 31, 2019. Hatteras Capital Distributors, LLC's management isresponsible for its Form SIPC- 7 and for its compliance with those requirements. Thisagreed-upon procedures engagement eel was conducted in accordance with standards established by the Public Company Accounting A O m ve e r r s i i c g a h n t I B n o st a i r t d ute (U o n f it C ed ert S ifi ta e t d es) Pu a b n l d ic in Ac a c c o c u o n rd ta a n n t c s e . T w h it e h su at ffi te c st i a e t n io cy n o st f an th d e a s r e ds pr e o s c t e a d bli u s re h s ed is b s y ole th ly eDfJ theresponsibility of those parties specified in thisreport. Consequently, we makeno representation regarding thesufficiency of theprocedures described below either for thepurposeforwhich this report has been requested or forany otherpurpose. Theprocedures we performed and ourfindings are as follows: - 1) Compared the listed assessment payments in Form SIPC- 7 with respective cash disbursement records entries, noting no differences; - 2) Compared the Total Revenue amounts reported on the Annual Audited Report Form X-17A-5 Part III for theyear ended December 31, 2019 with the Total Revenue amount reported in Form SIPC- 7 for theyear ended December 31, 2019, noting no differences; - 3) Compared any adjustments reported in Form SIPC- 7 with supporting schedules and working papers, noting no differences; - 4) Recalculated thearithmetical accuracy of thecalculations reflected in Form S IPC- 7 and in the related schedules and working papers supporting the adjustments, noting no differences; and - 5) Compared the amount of any overpayment applied to thecurrent assessment with the Form SIPC- 7 on which it was originally computed, noting no differences. We were not engaged to and did not conduct an examination or review, theobjective of which would be the expression of an opinion or conclusion, respectively, on Hatteras Capital Distributors, LLC's compliance with theapplicable instructions of the Form SIPC-7 for theyear ended December 31, 2019. Accordingly, wedo not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. Thisreport is intended solely for the information and use of Hatteras Capital Distributors, LLC and the SIPC and is not intended to beand should not beused by anyone other than these specified parties. *JL/.-1-r*�*:J d4'r1C* Goldman& Company, CPA's, P.C. Marietta, Georgia February 25, 2020 {21}------------------------------------------------ | SIPC-7 | |----------------| | (36-REV 12118) | #### SECURITIES INVESTOR PROTECTION CORPORATION P 0. Box 92t85 Washington. D.C. 20090·2185 202·371 ·8300 | General
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ACH .J
Total (must be same as F above)
\$
H. Overpayment carried lorward
\$(
3. Subsidiaries (S) and predecessors (P) included in this form (give name and 1934 Act registration number): | _
_ | The SIPC member submitting this form and the person by whom it is executecJ represent rhereby lhar all information contained herein is true. correct and complete. Dated thel.S.:\_day of £.eycde.t\1. 20�. 4h ' This form and the assessment payment Is due 60 days after the end of the fiscal year. Retain the Working Copy of this form for a period of not less than 6 years, the latest 2 years in an easily accesslbfe place. | ffi
3: | Dates· | Postmarked | Received | Reviewed | | |---------------------|---------------------|-------------------------------|----------|--------------------|-------------------| | LU
>
LU
a: | Calculations
--- | | | Documentation
_ | Forward Copy ---- | | | c.:, Exceptions: | | | | | | CL. | | en Disposition ot exceptions· | | | | {22}------------------------------------------------ #### **DETERMINATION OF "SIPC NET OPERATING REVENUES" AND GENERAL ASSESSMENT** | Item No. | Eliminate cents | |-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------| | 2a. Total revenue [FOCUS Line 12/Parl IIA Line 9, Code 4030) | 5!2�
\) )32
\$
, | | 2b. Additions:
( 1) Total revenues from the securities business ol subsidiaries (except foreign subsidiaries) and
predecessors not included above. | | | (2) Net loss lrom principal transactions in securities in Jrading accounls. | | | (3) Ne! loss from principal transactions in commodilies in trading accounts. | | | (4) Interest and dividend expense deducted in deJermining item 2a. | | | (5) Net loss lrom management of or participation in lhe underwriting or distribution ol securities. | | | 16) Expenses olher than advertising, prinling. regist,ation lees anti legal lees deducled in de1ermining nel
prolit lrom management ol or participatiou in Linderwnting or distribution ol securilies. | | | (7) Net loss lrom securities in investment accounts. | | | Toial additions | | | 2c. DedL1ctions:
(1) Revenues from 1he dislrlbu!ion ol shares of a registered open end investment company or unit
investment trust. from !he sale ol variable annuities. horn the business of insurance, from investment
advisory services rendered to registered investment ccmpanlss or insurance company separate
accounts. and lrorn transactions in security rutures products, | qo(
)
q
, | | (2) Revenues from commodity transactions. | | | [3) Commissions, floor brckerage and clearance paid to other Sf PC members in connection wilh
securltles transactions. | | | (4) Reimbursements lor posJage in connection with proxy solicitation. | | | (5) Net gain lrom securities in investment accounts. | | | (6) 100% ol commissions and markups earned lrom transactions m [i) certificates ol deposit and
(ii) Treasury bills, bankers acceptances or commercial paper that mature nine months or less
lrom Issuance date. | | | 17) Direct expenses al printing adverlis1119 ana legal lees mcurred in connection wilh ether revenue
related lo the securities business (revenue delined by Section l6(9llll or the Act). | | | (8) Other ,evenue not related either di,ectly or indirectly lo the securities business,
(See lnstruction C): | | | (Deductions in excess ol S 100.000 require documentation) | | | (9) (i) Tola! interesl and dividend expense (FOCUS Line 22/PART IIA Line 13,
Code 4075 plus line 2hl4l above) but not in excess
s
of Iola! interest and dividend income.
__ | | | (ii) 40% of margin interest earned on customers securities
accounts (40% o! FOCUS line 5. Code 3960).
s
_ | | | Enter the greater of line (i) or (ii) | | | Total deductions | | | 2d. SIPC Nel Operatinq Revenues | t'
U;
k3S
L
\$, | | 2e. General Assessment@ .0015 | l
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(to page 1, line 2.A.) | Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.