# LIVINGSTON SECURITIES, LLC X-17A-5 (2020-02-28) — Broker-dealer annual report - Company: LIVINGSTON SECURITIES, LLC - Form: X-17A-5 - Filed: 2020-02-28 - Period: 2019-12-31 - Accession: 0001435253-20-000001 - CIK: 1435253 - File #: 8-67901 - Material weakness: No - Auditor: Spicer Jefferies LLP - Auditor location: Denver, CO - Contact: Scott B. Livingston - Phone: 2125208481 - Website: spicerjeffries.com - Signed by: Scott B. Livingston (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1435253/000143525320000001/lsecpublic19.pdf --- {0}------------------------------------------------ # LIVINGSTON SECURITIES LLC ## STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2019 {1}------------------------------------------------ | | | | UNJTEDSTATES | | | | |-------------------|----------------------------------|---------------------------------------------------------------------------------------|----------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------|--| | | | SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
ANNUAL AUDITED REPORT | | | OMS APPROVAL
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3235-0123
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. 12.00 | | | | | | | | | | | | | | FORM X-17A-5 | | SEC FILE NUMBER | | | | | | PART Ill | | 8-67901 | | | | | | FACLNG PAGE | | | | | | | | loformation Required of Brokers and Dealers Pursuant to Section 17 of the | | | | | | | | Securities Exchange Act of 1934 and Rule 17a-5 Thereunder | | | | | | REPOJ n FOR THE PERJOD BEGINNlNG | | /01/2019
01 | AND ENDING | 12/31
/2019 | | | | | | MM/DD/YY | | MM/DD/YY | | | | | | A. REGISTRANT lDENTIFICATION | | | | | | NAME OF BROKER-DEALER: | | Livingston Securities, LLC | | OFFICIAL USE ONLY | | | | | | ADDR ESS OF PRJNCIPAL PLACE OF BUSINESS: (Do DOI use P.O. Box. No.) | | FIRM l.D. NO. | | | | | | 626 RexCorp Plaza, 6th floor, West Tower | | | | | | | | (No. and Street) | | | | | | Uniondale | | NY | | 801
11 | | | | (City) | | (State) | | (Zip Code) | | | SoollB, ivingston | | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT | | 212-520-8481 | | | | | | | | (Arca Code - Telcphooc Number) | | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | | rNDEF IENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report• | | | | | | | | Spicer Jeffries LLP | | | | | | | | (Name - if individual, state last, first, middle name) | | | | | | rno1 OTC Blvd, Suite 700 | | Denver | co | 80237 | | | | (l\ddrc&s) | | (City} | (SUllC) | (Zip Code) | | | | | | | | | | | | CHEC KONE:
I/' I | | | | | | | | certified Public Accountant | | | | | | | | B
Pubhc Accouotant | | | | | | | | | | Accountant not resident in United States or any of its possessions. | | | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | | | | | | | | | | | | | | | | | | Potential persons who are to respond to the collection of Information contained In this form are not reiulred to respond unleas the form dis plays a currently valid OM control number. SEC '1410 (11-05) {2}------------------------------------------------ #### **OA TB OR AFFIRMATION** | I, ---+ | ---
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Livingston Securities, LLC | my kn wledge and belief the accompanying financial s1atement and supporting schedu.les pertaining to lhe firm of
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as | | | | | | of | December 31 | 20 19
are true and correcL 1 further swear (or affirm) that | | | | | | neithe | --+------------------~
classifi d solely as that of a customer, except as follows: | the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account | | | | | | | | Tit e
JONATHAN PAUL SHAHABIAN | | | | | | | | NOTARY PUBLIC -STATE OF NEW YORK | | | | | | This re
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ort ** contains (check all applicable boxes):
My commmron Expues Dec emb er 16. 38'f ~•'t \
Facing Page.
Statement of Financial Condition.
D Cc) Statement oflncome {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.
Compu1ation of Net Capital.
Computation for Determination of Reserve Requirements Pursuant to Ruic l 5c3-3.
(i) Information Relating to the Possession or Control Requirements Under Rule 15c3-3.
0 U) A Reconciliation, including appropriate explanation of the Computation ofNet Capital Under Rule I 5c3-J and the
Computation for Determination of the Reserve Requirements Under Exhibit A of Ruic 15c3-3.
0 (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of
conso lidation.
§ (I) An Oath or Affirmation
(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 onditions of confidential treatment of certain portions of this filing, see section 240. J 7a-5(e)(3). | | | | | {3}------------------------------------------------ ## LIVINGSTON SECURITIES, LLC #### DECEMBER 31, 2019 #### TABLE OF CONTENTS | | Page | |------------------------------------------------------------|------| | Report of Independent Registered Public Accounting Firm 1 | | | Statement of Financial Condition 2 | | | Notes to the Financial Statement 3-8 | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) 4601 DTC BOULEY ARD • SUITE 700 DENVER, COLORADO 80237 TELEPHONE: (303) 753-1959 FAX: (303) 753-0338 www.spicerjeffries.com #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Member of Livingston Securities LLC #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of Livingston Securities LLC (the "Company") as of December 31, 2019 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 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 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 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 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. We have served as the Company's auditor since 2008. Denver, Colorado February 15, 2020 ![](_page_4_Picture_12.jpeg) {5}------------------------------------------------ #### LIVINGSTON SECURITIES, LLC STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2019 #### ASSETS | Cash
Clearing deposit
Commission receivable
Due from related parties (Note 4)
Fee receivable
Other assets | \$
205,805
100,000
23,493
63,200
120,000
307,024 | |--------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------| | Total assets | \$
819,522 | | LIABILITIES AND MEMBER'S EQUITY
Liabilities: | | | Accounts payable
Deferred revenue
Due to related parties (Note 4) | \$
40,419
120,000
13,447 | | Total liabilities | 173,866 | | Commitment and Contengencies (Note 5) | | | Member's equity | 645,656 | | Total liabilities and member's equity | \$
819,522 | {6}------------------------------------------------ ## **1. Organization and Significant Accounting Policies** #### **Orpnjzation and busjness** Livingston Securities, LLC (the "Company") is a New York Limited Liability Company formed on February 21, 2008. The Company conducts a securities investment banking business in which it purchases and sells securities on behalf of its clients. The Company is registered with the U.S. Securities and Exchange Commission ("SEC") under the Securities Exchange Act of 1934 and is a member of both the Financial Industry Regulatory Authority, Inc. ("FINRA"). The Company is a wholly owned subsidiary of the Livingston Group of Companies, LLC (the "Parent''). In addition, the Company is affiliated with Livingston Services, LLC (the "Related Entity") which is also a wholly owned subsidiary of its Parent. #### **Revenue reco&nition** The Company records securities transactions and related revenue and expenses on a settlement date basis. Transactions recorded on a trade date basis would not be materially different. Investment banking revenue is recorded based on the terms of the respective agreements and deferred until earned by the Company. In accordance with ASU No. 2014-09, "Revenue from Contracts with Customers" ("ASC Topic 606") 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. {7}------------------------------------------------ ## **1. Organization and Significant Accounting Policies (con't)** ## **,Ureement with clearine broker** The Company under Rule 15c3-3(k)(2)(i) and (k)(2)(ii) is exempt from the reserve and possession or control requirements of Rule 15c3-3 of the Securities and Exchange Commission. The Company does not carry or clear customer accounts. Accordingly, all customer transactions are executed and cleared on behalf of the Company by its clearing broker on a fully disclosed basis. The Company's agreement with its clearing broker provides that as clearing broker, that firm will make and keep such records of the transactions effected and cleared in the customer accounts as are customarily made and kept by a clearing broker pursuant to the requirements of Rule 17a-3 and 17a-4 of the Securities and exchange Act of 1934, as amended (the "Act"). It also performs all services customarily incident thereon, including the preparation and distribution of customer's confirmations and statements and maintenance margin requirements under the Act and the rules of the Self Regulatory Organizations of which the Company is a member. ## **Cash and cash equivalents** For the purposes of the statement of cash flows, the Company considers money market funds with original maturities of three months or less to be cash equivalents. ## **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** The financial statements do not include a provision for income taxes because the Company is not a taxable entity and its member is taxed on its respective share of the Company's earnings. {8}------------------------------------------------ #### **LIVINGSTON SECURITIES, LLC NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2019** ## **1. Organization and Significant Accounting Policies (con't)** #### **Income Taxes (con't)** The company is required to determine whether a tax position is more likely than not to be sustained upon examination by the applicable taxing authority. Including resolution of any tax related appeals or litigation processes, based on the technical merits of the position. The Company files an income tax return in the U.S. federal jurisdiction, and may file income tax returns in various U.S. states. The Company is not subject to income tax return examinations by major taxing authorities for years before 2015. The tax benefit recognized is measured as the largest amount of benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement De-recognition of a tax benefit previously recognized results in the Company recording a tax liability that reduces net assets. However, the Company's conclusions regarding this policy may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analysis of and changes to tax laws, regulations and interpretations thereof. The Company recognizes interest accrued related to unrecognized tax benefits and penalties related to unrecognized tax benefits in income taxes payable, if assesses. No interest expense or penalties have been recognized as of and for the year ended December 31, 2019. #### **Furnjture and eggjpmept** Furniture and equipment is stated at cost and depreciated using the straight line method over the estimated useful lives of three years. ## **Basjs of Ac:couptin& apd Tradin& apd valuatiop of Securjties** The Company values its securities in accordance with Accounting Standards Codification 820 - Fair Value Measurements ("ASC 820"). Under ASC 820, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches. ASC 820 establishes a fair value hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. {9}------------------------------------------------ ## **1. Organization and Significant Accounting Policies (con't)** ## **Basjs of Accountin& apd Iradjn& apd Yaluatiop of Securjties (continued)** Observable inputs are those that market participants would be use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company's assumption about the inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy is categorized into three levels based on the inputs as follows: Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and blockage discounts are not applied to Level 1 securities. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment. Level 2 - Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable. Either directly or indirectly. Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. #### **2. Fair Value of Financial Instruments** The fair values of financial instruments appearing on the Statement of Financial Condition have the following valuation approaches defined by U.S. accounting rules under Fair Value Measurement: There are no assets or liabilities utilizing level 1 inputs. Assets utilizing level 2 inputs include equities which have been deemed worthless. Assets utilizing level 3 inputs include \$293,210 in non-marketable equities received for services rendered by the Company and are included in "Other assets" in the Statement of Financial Condition. For a more detailed discussion regarding the fair value hierarchy, see Note 1 Significant Accounting Policies. {10}------------------------------------------------ ## **LIVINGSTON SECURITIES, LLC NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2019** #### **3. Net Capital Requirements** Pursuant to the net capital provisions of Rule 15c3-1 of the Securities Exchange Act of 1934, the Company is required to maintain a minimum net capital, as defined under such provisions. At December 31, 2019, the Company had net capital of\$275,432 and net capital requirement of \$100,000. The Company's net capital ratio (aggregate indebtedness to net capital) was 0.20 to 1. According to Rule 15c3-1, the Company's net capital ratio shall not exceed 15 to 1. #### **4. Commitments and related Party Transactions** The Company is provided office space and facilities from its Related Entity under as expense sharing agreement. Under the agreement the Company is required to reimburse the Related Entity 90% of the costs to utilize common office space, personnel and administrative services. The Company incurred a total of \$43,515 to this related entity for the year ended December 31, 2019. The Company has a receivable of \$63,200 from the related Entity and has a payable of \$13,44 7 to its Parent as of December 31, 2019. The parent provided \$800,000 of capital contributions to the Company during the year 2019. #### **5. Financial Instruments, Off-Balance Sheet Risk and Contingencies** In the normal course of business, the Company's client activities, through its clearing broker, involve the execution, settlement and financing of various client securities transactions. These activities may expose the Company to off- balance sheet risk. In the event the client fails to satisfy its obligations, the Company may be required to purchase or sell financial instruments at prevailing market prices in order to fulfill the client's obligations. The Company has receivables from and deposits with its clearing broker as shown on the accompanying statement of financial condition. These amounts are not covered by SIPC and are subject to loss should the clearing broker cease business. The Company's financial instruments, including cash, clearing deposit, comm1ss1on receivable, due from related parties, other assets, accounts payable, due to related parties and deferred revenue are carried at amounts that approximate fair value due to the shortterm nature of those instruments. The Company maintains its cash in one financial institution. At times, the amount on the deposit at this institution may exceed the maximum balance insured by the Federal Deposit Insurance Corporation ("FDIC"). {11}------------------------------------------------ #### 6. Recent Account Pronouncements #### Leases In February 2016, the FASB issued (ASU) 2016-02, "Leases (Topic 842)". This update includes a lease accounting model that recognizes two types of leases - finance leases and operating leases. The standard requires that a lessee recognize on the statement of financial condition relating to leases with terms of more than twelve months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend on its classification as a finance or operating lease. There was no effect on the Company's financial statements for the year ending December 31, 2019. ## 7. SubsequentEvents The Company has performed an evaluation of subsequent events through the date the financial statements were issued. The evaluation did not result in any subsequent events that required disclosures and/or adjustments. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.