# BCW SECURITIES LLC X-17A-5 (2020-03-16) — Broker-dealer annual report - Company: BCW SECURITIES LLC - Form: X-17A-5 - Filed: 2020-03-16 - Period: 2019-12-31 - Accession: 0001409152-20-000001 - CIK: 1409152 - File #: 8-67685 - Material weakness: No - Auditor: PKF O'Connor Davies, LLP - Auditor location: New York, NY - Contact: Kris Goldbach - Phone: 7047836658 - Website: pkfod.com - Signed by: Mark Bernegger (Managing Member) Original filing: https://www.sec.gov/Archives/edgar/data/1409152/000140915220000001/3bcwfs123119.pdf --- {0}------------------------------------------------ #### BCW SECURTIES, LLC ANNUAL REPORT Pursuant to Rule 17a-5(d) of The Securities Exchange Act of 1934 SEC File No. 8-67685 FOR THE YEAR ENDED DECEMBER 31, 2019 {1}------------------------------------------------ UJ.'l,TJTEDSTATFS SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 | 0MB APPROVAL | | | |--------------------------|-----------------|--| | 0MB Number. | 3235-0123 | | | Expires: | August 31, 2020 | | | Estimated average burden | | | | hours | onse •• 12.00 | | SEC ALE NUMBER s.67685 # **ANNUAL AUDITED REPORT FORM X-17A-5 PART** Ill **FACING PAGE** A. **REGISTRANT IDENTIFICATION** Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder REPORT FOR IBE PERIOD BEGINNING 01 /01 /19 AND ENDING 12/31 /19 MMIDD/YY ---------- MMIDO/YY NAME OF BROKBR·DEALBR: BCW Securities, LLC ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) 55 Green Farms Road, Suite 200 (No. **and** S trcct) | Westport | CT | 06880 | | |----------|-------|------------|--| | (City) | (Swc) | (Zip Code) | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT Kl1s Gotlbedl (704) ~ (Area Code - Telephone Number) OFFICIAL USE ONLY FIRM l.D. NO. #### **B. ACCOUNTANT IDENTIFICATION** INDEPENDENT PUBLIC ACCOl.JNTANT whose opinion is contained in this Repo~ PKF O'Connor Davies, LLP | | (Name - ifmdividual. mm last. first. middle lt4me) | | | |----------------------------------------------------------------------|---------------------------------------------------------------------|---------|------------| | 665 Fifth Avenue | New York | NY | 10022 | | (Address) | (City) | (State) | (Zip Code) | | CHECK ONE:
certified Public Accountant
B
Public Account.ant | Accountant not resident in United States or any of its possessions. | | | | | | | | **FOR OFFICIAL USE OHL Y** *•Claims for exemption from the requirement iJzat the annual report be covered by the opinion of an independent public accounlanl must be supported* by *a statemeru of/acts* ami *circum.rtances relied on as the basis for the exemptio11. See Section 240.17a-5(e)(2}* > Potential persons who are to respond to the collectfon of lnforJ)lation contained in this form are not required to respond unless the form dis plays a currentlyvalld 0MB control number. SEC 1410 (11-05) {2}------------------------------------------------ #### OATH OR AFFIRMATION | I, Marx Bemegger | | , swear ( or affirm) that, to the best of | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------|-------------------------------------------| | my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of
-~-~---------------------------
BCW Securities, LLC | | ----------·~ | | of December 31 | -
2019
are true and correct. I further sweat (or affum) that | | | neither the company nor any partner, proprietor, principal officer or director has any proprietacy intel'est in any account
classified solely as that of a customer, except as follows: | | | | | ~
Signature | | | | Managing Member | | | | Title | | | Notary Public
This report•• contains (check all applicable boxes):
0 (a) Facing Page.
0 (b) Statement of Financial Condition.
[{] (c) Statement oflncome (Loss) or, ifthere 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 Requir=ents Pursuant to Rule l Sc3-3.
(i) lllformation Relating to the Possession or Control Requirements Under Rule 15c3-3.
D (j) A Reconciliation, including appropriate exp1Mation of the Computation ofNct Capital Under Rule 15c3-1 and the
Computation for Determination oftbe Reserve Requirements Under Exh.i"bit A ofR1llc 15c3-3.
D (k) A Reconciliation between the audited and unaudite·d Statements of Financial Condition with respect to methods of
consolidation.
(1) An Oath or Affr.rmation. | ANN KEITH HORN
NOTMY PUBLIC OF CONNECTICUT
comm. fl. 177213
My Conwnlsslon Expires 8/31/2023 | | | §
(m) A copy of the SIPC Supplemental Report.
(n) A report describing any material inadequacies found to exist or found to have existed siDce the date oftheprevious audit. | | | | | | | \*\* *For conditions of confidential treatment of cerlain portions of this filing, see section 240.J 7a-5(e)(3).* {3}------------------------------------------------ ![](_page_3_Picture_0.jpeg) ## REPORT OF INDEPENDENT **REGISTERED PUBLIC ACCOUNTING FIRM** ## To the Managing Member of BCW Securities LLC #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of BCW Securities LLC (the "Company"), as of December 31, 2019, the related statements of operations, changes in member's equity and cash flows for the year then ended, and the related notes to the financial statements (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019, 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 the Company's management. Our responsibility is to express an opinion on the Company'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 the Company in accordance with the U.S. federal securities laws and 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 are 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 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 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. #### **Opinion on Supporting Schedules** The supporting schedules required by Rule 17a-5 under the Securities and Exchange Act of 1934 ("SEA") have been subjected to audit procedures performed in conjunction with the audit of the Company's financial statements. The supporting schedules are the responsibility of the Company's management. Our audit procedures included determining whether the information in the supporting schedules reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supporting schedules. In forming our opinion on the supporting schedules, we evaluated whether the supporting schedules, including their form and content, are presented in conformity with 17 C.F.R. §240.17a-5. In our opinion, the supporting schedules are fairly stated, in all material respects, in relation to the financial statements as a whole. We have served as the Company's auditor since 2014. March 16, 2020 PKF O'CONNOR DAVIES, LLP 665 Fifth Avenue, New Yor1<, NY 10022 I Tel: 212.867.8000 or 212.286.2600 I Fax: 212.286.4080 I www.pkfod.com PKF O'Connor Davies. LLP 1s a member firm of the PKF International Limited network of legally independent firms and does not aeeept any responsibi6ty or r.ab1lity for the actions or inactions on the part of any other individual member firm or firms. {4}------------------------------------------------ #### **ASSETS** | Cash | \$
107,123 | |---------------------------------------|---------------| | Prepaid Expenses | 14,558 | | TOT AL ASSETS | \$
121,681 | | LIABILITIES AND MEMBER'S EQUITY | | | Liabilities | | | Accounts payable and accrued expenses | 72,167 | | Total liabilities | 72,167 | | Member's equity | | | Member's equity | 49,514 | | Total member's equity | 49,514 | | TOTAL LIABILITIES AND MEMBER'S EQUITY | \$
121,681 | {5}------------------------------------------------ # **BCW SECURITIES, LLC STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2019** | Revenue | | |---------------------------|---------------| | Investment banking income | \$1,786,487 | | Finders fees | 1,132,791 | | Advisory fees | 202,717 | | Total Revenue | 3,121
,995 | | Expenses | | | Commissions | 2,185,213 | | Professional fees | 67,455 | | Rent | 23,640 | | Regulatory and compliance | 34,964 | | Communications | 12,137 | | Other operating expenses | 36,732 | | Total Expenses | 2,360,141 | | Net Income | S
761,854 | The accompanying notes are an integral part of these financial statements. -5- {6}------------------------------------------------ # **BCW SECURITIES, LLC STATEMENT OF CHANGES** IN **MEMBER'S EQUITY FOR THE YEAR ENDED DECEMBER 31, 2019** | | Member's
E uity | | |------------------------------|--------------------|--| | Balance at January 1, 2019 | \$
227,4
11 | | | Net Income | 761,854 | | | Capital Distributions | (939,751) | | | Balance at December 31, 2019 | 49,514
\$ | | The accompanying notes are an integral part of these financial statements. -6- {7}------------------------------------------------ # **BCW SECURITIES, LLC STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2019** | Cash flows from operating activities: | | |--------------------------------------------------|---------------| | Net Income | 761,854 | | Adjustments to reconcile net income to net cash | | | flows provided byl(used in) operating activites: | | | (Increase) decrease in operating assets: | | | Accounts Receivable | 278,406 | | Prepaid Expenses | (1,448) | | Increase (decrease) in operating liabilities: | | | Accounts payable and accrued expenses | (237,638) | | Net cash provided by operating activities | 801,174 | | Cash flows from financing activities: | | | Capital Distributions | (939,751
) | | Net cash used in financing activities | (939,751) | | Net decrease in cash | (138,577) | | Cash, beginning of year | 245,700 | | Cash, end of year | \$
107,123 | | | | {8}------------------------------------------------ # **1) NATURE OF OPERA TIO NS AND SUMMARY OF SIGNIFICANT ACCOUNT ING POLICIES** #### *Nature o(Operations* BCW Securities, LLC (the "Company") is a broker-dealer registered with the Securities and Exchange Commission ("SEC") and became a member of the Financial Industry Regulatory Authority ("'FTNRA") on February 5, 2008. The Company was organized on April 24, 2007 in the State of Delaware and engages in the private placement of securities and corporate finance consulting to institutional investors. The Company's office is located in Connecticut and its sole member is Riverside Management Group, LLC ("Management"). The Company is exempt from Rule l 5c3-3 under the Securities Exchange Act of 193-l (''SEA) under paragraph (k)(2)(i) of that rule. #### *Basis o{Accou11ti11g* Revenues and expenses are recorded on the accmal basis of accounting m accordance with accounting principles generally accepted in the United States. #### *Accounts Receivable* Revenues due but not yet received that arc expected to be collected within one year are recorded as accounts receivable at net realizable value. If amounts become uocollectiblc, they will be charged to operations when that determination is made. ## *Revenue Recognition* Effective January 1, 2018, the Company adopted ASC Topic 606, *Revenuefrom Contracts with Customers* ("ASC Topic 606"). The revenue recognition guidance requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires an entity to follow a five-step model to (a) identify the contract(s) with a customer, (b) identify the perfonnance obligations in the contract, ( c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract. and (e) recognize revenue when (or as) the entity satisfies a performance obligation. Investment banking success fees are recognized at the point in time when the Company's performance under the terms of the contractual arrangement is completed, which is typically at the closing of a transaction when all performance obligations have been met and collection is assured. For advisory fees, the Company receives retainers in advance of each transaction's closing or they are paid without a corresponding success fee. In these instances, revenue is recognized over time in which the performance obligations are simultaneously provided by the Company and delivered to and consumed by the customer. {9}------------------------------------------------ # **1) NATU RI!: OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNT ING POLICIES (CONT'D)** ## *Revenue Recognition (cont'd)* For finders' fees the Company works on behalf of a fund to find potential investors for programs such as the U.S. Citizenship and Tm.migration Services (USCIS) EBS Immigrant Investor Program (EB5) or a private equity structure. Once investors are accepted the Company has met its perfom,ance obligations to both types of clients and fees are earned at this point in time. The fees that the Company receives for EB5 program investors are based on a percentage of the administrative fee paid by the investor to users and are billed and recognized when Users receives the deposit. In addition, if an EB5 investor makes additional investments in a qualified investment the Company receives annual interest on the additional funds. Fees for private equity structures, whose life cycles generally range from 7 to 10 years, are received upon liquidation when the investors' principal is returned and profits realized. Deferred revenues are reported when monies are received by the Company for services not yet provided. Revenue is recognized, and the deferred revenue liability eliminated, when the services have been rendered and the performance obligation are deemed satisfied. ## *Income Taxes* The Company is a single member LLC and is treated as a disregarded entity for income tax purposes. The operating results of the Company are included in the tax return of Management and passed through to its partners. Therefore, no provision or liability for federal or state income taxes bas been included in the financial statements. As of December 31, 2019, the member's tax years for 2018, 2017 and 2016 are subject to examination by the tax authorities. The Company has evaluated its t:urrent tax positions and bas concluded that as of December 31, 2019, the Company does not have any significant uncertain tax positions for which a reserve would be necessary. # *Use of Estimates* The preparation of financial statements in confonnity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclose contingent assets and liabilities at the date of the financial statements and the reported amounts ofrevenues and expenses during the reporting period. Actual results could differ from those estimates. # *Date of Management's Review* Management has evaluated subsequent events through March 16, 2020, which is the date the financial statements were available to be issued. {10}------------------------------------------------ # **2) ACCOUNTS RECEIVABLE** The Company uses tbe allowance method to recognize accounts receivable that may not be collectible. Tbe Company regularly reviews all accounts and determines which are past due and may not be collectible. Any amounts that are written off are charged against the allowance. As of December 3 1, 2019, there was no accounts receivable balance or allowance for doubtful accounts. # **3) INTER COMP ANY RECEIVABLE** As of December 31 , 2019, there is no intercompany receivable balance. ## **4) RELATED PARTY TRANSACTIONS** The Company pays a monthly rent fee to Management. For the year ended December 31 , 2019, rent fees paid amounted to \$23,640. These expenses have been reflected in the statement of operations in the appropriate category. ## **5) CONCENTRATIONS OF RISK** The Company maintains its cash balances at a major financial institution. The balances are fully insured by the Federal Deposit Insurance Corporation ("FDIC") up to \$250,000. As of December 3 I , 2019, there were no uninsured balances. The Company engages in various private placement services. In the event customers do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the customers. It is the Company's policy to review, as necessary, the credit standing of each customer. As the Company's revenue is derived from private placement transactions, revenue concentration is not uncommon. In 2019, approximately 66% of the Company's revenue was derived from four clients. Further, in the normal course of business, the Company engages in business relationships with new clients. As private placement transactions are typically event driven (ex., acquisition), the firm's largest clients (measured by Company revenue) will change each year. ## **6) INDEMNIFICATIONS** In the normal course of business, the Company indemnifies and guarantees certain service providers, such as trustees and administrators, against specified potential losses in connection with their acting as an agent of, or providing services to, the Company or its affiliates. The Company also indemnifies some clients against potential losses incurred in the event specified third-party service providers, including sub-custodians and third-party brokers, improperly execute transactions. The maximum potential amount of future payments that the Company could be required to make under these indemnifications cannot be estimated. However, the Company believes that it is unlikely it will have to make material payments under these arrangements and has not recorded any contingent liability in the financial statements for these indemnifications. {11}------------------------------------------------ The Company provides representations and warranties to countcrparties in connection with a variety of commercial transactions and occasionally indemnifies them against potential losses caused by the breach of those representations and warranties. The Company may also provide standard indemnifications to some counterpatties to protect them in the event additional taxes are owed or payments are withheld> due either to a change in or adverse application of certain tax laws. These indemnifications generally are standard contractual terms and are entered into in the normal course of business. The maximum potential amount of future payments that the Company could be required to make under these indemnifications cannot be estimated. However, the Company believes that it is unlikely it will have to make material payments under these arrangements and has not recorded any contingent liability in the financial statements for these indemnifications. # **7) NET CAPITAL REQUIREMENTS** The Company is subject to the Unifom1 Net Capital Rule (SEA Rule 15c3-l), 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 **l.** At December 31, 2019, the Company had net capital of \$34,956 which is \$29,956 in excess of required net capital of \$5,000. The Company's aggregate indebtedness to net capital ratio at December 31, 2019 is 2.06 to 1. {12}------------------------------------------------ #### BCW SECURTIES, LLC #### SUPPORTING SCHEDULES DECEMBER 31 , 2019 {13}------------------------------------------------ #### **BCW SECURITIES, LLC SCHEDULE OF COMPUTATION OF NET CAPITAL FOR BROKERS AND DEALERS PURSUANT TO RULE 15c3-1 UNDER THE SECURITIES AND EXCHANGE ACT OF 1934 ("SEA") FOR THE YEAR ENDED DECEMBER 31, 2019** | Total member's equity | \$ | 49,514 | |----------------------------------------------------------------------------------------------------------------------------------------|--------------|------------------| | Non-allowable assets, deductions and charges:
Prepaid expenses
Total non-allowable assets, deductions and charges
Net capital | 14,558
\$ | 14,558
34,956 | | Computation of basic net capital requirements | | | | Minimum net capital required (6 2/3%
of aggregate indebtedness of \$72,167) | \$ | 4,811 | | Minimum dollar net capital requirement | | 5,000 | | Minimum capital required | | 5,000 | | Excess net capital | \$ | 29,956 | | Net capital less greater of 10% of aggregate indebtedness
or 120% of minimum net capital required | \$ | 27,739 | | Computation of aggregate indebtedness | | | | Total aggregate indebtedness in the statement
of financial condition | \$ | 72,167 | | Percentage of aggregate indebtedness to net capital | | 206.45% | | Ratio of aggregate indebtedness to net capital | | 2.06 to 1 | There are no material differences between the computation of net capita! presented above and the computations of oet capital reported by the Company's unaudited form X-17a-5, Part **II-A,** as filed on January 27, 2020. {14}------------------------------------------------ #### **BCW SECURITIES, LLC INFORMA TJON RELATING TO POSSESSION OR CONTROL REQUIREMENTS PURSUANT TO SF.A RULE 15c3-3 COMPUTATION FOR DETERMINATION OF THE RESERVE REQUIREMENTS PURSUANT TO SEA RULE 1** Sc3-3 **FOR THE YEAR ENDED DECEMBER 31, 2019** The Company carries no customer accounts and