# PARAMAX SECURITIES, LLC X-17A-5 (2019-02-25) — Broker-dealer annual report - Company: PARAMAX SECURITIES, LLC - Form: X-17A-5 - Filed: 2019-02-25 - Period: 2018-12-31 - Accession: 0001435414-19-000001 - CIK: 1435414 - File #: 8-67902 - Material weakness: No - Auditor: Weintraub & Associates, LLP - Auditor location: White Plains, NY - Contact: Russell D'Alba - Phone: 716-626-1200 - Signed by: Russell D'Alba (Member) Original filing: https://www.sec.gov/Archives/edgar/data/1435414/000143541419000001/2018auditparamax-PTRA6.pdf --- {0}------------------------------------------------ UNITEDST ATES SECURITIES AND EXCHANCECOMMISSION Was hington, O.C. 20549 ## **ANNUAL AUDITED REPORT FORM X-17A-5 PART Ill** | | 0 MB APPROVAL | |--------------------------|-----------------| | 0MB Number: | 3235-0123 | | Expires: | August 31, 2020 | | Estimated average burden | | | hours per resoonse | 12.00 | | SEC FILE NUMBER | |-----------------| | 8-67902 | **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 BEGI N ING 01/01/2018
AND ENDI G 12/31/2018 | | | | |---------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------|-------------------------------------|------------------------------------|--| | | -
MM/DD/ Y Y | | MM/ODNY | | | | A. REGISTRANT IDENTIFICATION | | | | | NAME OF BROKER-DEALER: Paramax Securities, LLC
ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | OFFICIAL USE ONLY
FIRM 1.0. NO. | | | | | | | | | 333 International Drive, STE A | | | | | | | {No. and S1reet) | | | | | Williamsville | NY | | 14221 | | | {City) | (State) | | (Zip Code) | | | NAME AND TELEPHO
E NUMBER OF PERSO
Russell D" Alba | | TO CONTACT IN REGARD TO THIS REPORT | 716-626,1200 | | | | | | (Area Code - Telephone Number) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | DEPE lDENT PUBLIC ACCOU TA T whose opinion is contained in this Report* | | | | | | Weintraub & Associates | | | | | | | (Name - if indi1•id11al. s101e las,. firs I. middle name) | | | | | 200 Manaroneck Avenue, STE 502 White Plains | | NY | 10601 | | | (Address) | (Ci1y) | (S1a1e) | (Zip Code) | | | CH ECK ONE: | | | | | | ! / I
Certified Public Accountant | | | | | | DPublic Accountant | | | | | | Accountant not resident in Un ited States or any of its possessions.
D | | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | | | | | | *\*Claims/or exemption from the requirement that the annual report be covered by the opinion of an independent public accountant 11111st be supported by a statement of facts 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 0MB control number. {1}------------------------------------------------ #### **OATH OR AFFIRMATION** 1, Russell D'Alba , swear (or affirm) that, to the best of my knowledge and belief the accompanying financial statement and supporting schedu les pertaining to the firm of Paramax Securities, LLC s --------------------------------------------' a of December 31 are true and correct. I further 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 fol lows: Member ALEXANDRA ROEHL Title NOTARY PUBLIC, State of New York Qualified in Erie Cpunt,v Commission Expires S? *f l&,* 0ol.D;)..">-- This report \*\* contains (check all applicable boxes): !xi (a) Facing Page. llil (b) Statement of Financial Condition. lfil (c) Statement of Income (Loss). 0 (d) Statement of Changes in Financial Condition. 00 (e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital. D (f) Statement of Changes in Liabilities Subordinated to Claims of Creditors. IE (g) Computation of Net Capital. 00 (h) Computation for Determination of Reserve Requirements Pursuant to Rule I 5c3-3. 00 (i) Information Relating to the Possession or Control Requirements Under Rule I 5c3-3 . 00 G) A Reconciliation, including appropriate explanation of the Computation of et Capital Under Rule I 5c3- I and the Computation for Determination of the Reserve Requirements Under Exhibit A of Rule I 5c3-3. D (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of consolidation. !!l (I) An Oath or Affirmation. D (m) A copy of the S IPC Supplemental Report. D (n) A report describing any materia l 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 fl ling, see section 2./0. l 7a-5(e){3).* )( {2}------------------------------------------------ #### PARAMAX SECURITIES, LLC #### FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES YEAR ENDED DECEMBER 31, 2018 {3}------------------------------------------------ #### **PARAMAX SECURITIES, LLC** #### **FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES** #### **YEAR ENDED DECEMBER 31, 2018** #### **TABLE OF CONTENTS** | Report of Independent Registered Public Accounting Firm | | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----| | FINANCIAL STATEMENTS: | | | Statement of Financial Condition | 2 | | Statement of Operations | 3 | | Statement of Changes in Member's Equity | 4 | | Statement of Cash Flows | 5 | | Notes to Financial Statements | 6-8 | | SUPPLEMENTAL INFORMATION PURSUANT TO SEC RULE l 7a-5 | | | Computation and Reconciliation of Net Capital
Under Rule l 5c3-l of the Securities and Exchange Commission | 9 | | Reconciliation of Computation of Net Capital | 9 | | Statement of Changes in Liabilities
Subordinated to Claims of General Creditors | l 0 | | Computation for Determination of Reserve Requirements
And Information Relating to Possession or Control Requirements
For Broker Dealers Pursuant to Rule l 5c3-3 | l l | | Report of Independent Registered Public Accounting Firm
On Exemption Report | 12 | | Paramax Securities, LLC's Exemption Report | 13 | {4}------------------------------------------------ # **Weintraub** & **Associates, LLP** Certified Public Accountants 200 Mamaroneck Avenue Suite 502 White Plains. Ne\.\ York 1060 I #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Board of Directors and Member of Paramax Securities, LLC #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of Paramax Securities, LLC as of December 31, 2018, the related statements of operations, changes in member's capital, and cash flows for the year then ended, and the related notes (and schedules] (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Paramax Securities, LLC as of December 31, 2018, 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 Paramax Securities, LLC's management. Our responsibility is to express an opinion on Paramax Securities, LLC's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to Paramax Securities, LLC in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and 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. #### **Auditor's Report on Supplemental Information** The Computation and Reconciliation of Net Capital Under Rule 15c3-1 of the Securities and Exchange Commission, Reconciliation of Computation of Net Capital, Statement of Changes in Liabilities Subordinated to Claims of General Creditors, and Computation for Determination of Reserve Requirements and Information Relating to Possession of Control Requirements for Broker Dealers Pursuant to Rule 15c3-3 has been subjected to audit procedures performed in conjunction with the audit of Paramax Securities, LLC's financial statements. The supplemental information is the responsibility of Paramax Securities, LLC's management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 C.F.R. §240.17a-5. In our opinion, the Computation and Reconciliation of Net Capital Under Rule 15c3-1 of the Securities and Exchange Commission, Reconciliation of Computation of Net Capital, Statement of Changes in Liabilities Subordinated to Claims of General Creditors, and Computation for Determination of Reserve Requirements and Information Relating to Possession of Control Requirements for Broker Dealers Pursuant to Rule 15c3-3 is fairly stated, in all material respects, in relation to the financial statements as a whole. **Weintraub** & **Associates, LLP** Certified Public Accountants We have served as Paramax Securities, LLC's auditor since 2012. White Plains, New York February 15, 2019 {5}------------------------------------------------ ## PARAMAX SECURITIES, LLC STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2018 | Assets | | |-----------------------------------------|--------------| | Current assets | | | Cash | 44,311
\$ | | Prepaid expenses | 8,306 | | Total current assets | 52,617 | | Total Assets | 52,617 | | Liabilities and Member's Equity | | | Current liabilities: | | | Accounts payable-trade | 2,455 | | Total cmrent liabilities | 2,455 | | Member's Equity: | | | Contnbuted capital & retained surpluses | 50,162 | | Total Liabilities & Member's Equity | 52,617
\$ | See Accompanying Notes to Financial Statements. {6}------------------------------------------------ ## P ARAMAX SECURITIES, LLC STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 2018 | Revenues: | | |-------------------------------------------------------|-----------------| | Success Fees | \$
2,308,583 | | Consulting Fees | 22,925 | | Interest and dividends | 38 | | Total Revenues | 2,331,546 | | Cosls & Expenses: | | | Cormnunication and data processing | 6,079 | | Occupancy | 1,320 | | Professional fees | 35,940 | | Taxes, licenses and registration fees | 14,300 | | Other admini<;trative expenses | 692,127 | | Total Costs & Expenses | 749,766 | | Income from continuing operations before income taxes | 1,581,780 | | Income taxes | | | Net Income | \$
1,581,780 | See Accompanying Notes to Financial Staterrents. {7}------------------------------------------------ ## PARAMAX SECURITIES, LLC STATEMENT OF MEMBER'S EQUITY YEAR ENDED DECEMBER 31, 2018 | | Class I | | | |-------------------------------|---------|-------------|-----------------| | | Shares | Amount | Total | | Balance at December 31, 2017 | 100 | 57,860 | 57,860 | | Contnbutions | | 4,022 | 4,022 | | Distnbutions | | (1,593,500) | ,593,500)
(1 | | Net Income December 31, 2018 | | 1,581,780 | 1,581,780 | | Balance at December 3 1, 2018 | 100 | 50,162 | 50,162 | See Accompanying Notes to Financial Statements. {8}------------------------------------------------ ## PARAMAXSECURITIES, LLC STA1EMENT OF CASH FWW YEAR ENDED DECEMBER 31, 2018 | Cash fuws from operating activities: | | |------------------------------------------------|-----------------| | Net Income | \$1,581,780 | | Adjust:rrents required to reconcile net income | | | to cash provided by in operating activities: | | | (Increase) decrease in operating assets: | | | Receivable from clients | 2,330 | | Prepaid expenses | 1,520 | | Increase (decrease) in operating liabilities: | | | Accomts payable trade | 2,405 | | Net cash provided by operating activities: | 1,588,035 | | Cash flows from financial activities: | | | Capital contributions | 4,022 | | Distributions to members | ,593,500)
(1 | | Net cash used in financing activities | ,589,478)
(1 | | Net increase (decrease) in cash | (1,443) | | Cash-beginning of period | 45,754 | | Cash-end of period | 44,311 | | | | See Accompanying Notes to Financial Statements. {9}------------------------------------------------ #### **PARAMAX SECURITIES, LLC NOTES TO FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2018** #### **Note (1) - Nature of business:** Paramax Securities, LLC (the "Company"), a New York Limited Liability Corporation is a broker-dealer registered with the Securities and Exchange Commission ("SEC"), and member of Financial Industry Regulatory Authority, Inc. ("FINRA") and the Securities Investor Protection Corp. ("SIPC"). The Company operates as (a) an advisor providing transaction structuring and assistance to early stage and growth stage entities, and (b) an advisor for mergers and acquisitions. ### **Note (2) - Summary of significant accounting policies:** ### **(A) Fee income:** On January l , 2018, the Company adopted ASU 2014-09 Revenue from Contracts with Clients and all subsequent amendments to the ASU (collectively, "ASC 606"), which creates a single framework for recognizing revenue from contracts with clients that fall within its scope. The Company recognizes fee income pursuant to the terms of each respective agreement executed for their services. Management has adopted ASC 606 and the Company believes that the implementation of ASC 606 d id not have a material impact on its financial condition, results of operations or cash flows. ### **(B) Income taxes:** The Company files income tax returns on the accrual basis as a company for federal and state income tax purposes. As such, the Company will not pay any income taxes, as any income or loss will be included in the income tax returns of the individual members. Accordingly, no provision is made for income taxes in the financial statements. The Company has adopted the uncertainty in income tax accounting standard. Adoption of this standard had no effect on the Company's financial statements. As a limited liability company, the member's liability is limited to amounts reflected in their respective member account. The Company remains subject to U.S. Federal and State income tax audits for all periods subsequent to and including 2015. #### **(C) Cash and cash equivalents:** For purposes of the Statement of Cash Flows, the Company considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents. As of December 31, 2018, there were no cash equivalents. #### **(D) Use of estimates:** The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and d isclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could vary from those estimates. {10}------------------------------------------------ #### **PARAMAX SECURITIES, LLC NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED DECEMBER 31, 2018** #### **Note (2)** - **Summary of significant accounting policies** - **cont'd:** #### **(E) Concentration of credit risk:** The Company maintains its c ash in a ccounts that, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant c redit risk on cash and cash equivalents. ### **(F) Receivable from Clients** Client receivables are recorded at amounts billed and presented on the statement of financial condition net of allowance for doubtful accounts, if applicable. The allowance is determined by a variety of factors, including the a ge of the receivables, c urrent economic condition, historical losses and other information management obtains regarding the financial condition of its clients. The policy for determining the p ast due status of receivables is based on how recently payments have been received. Receivables are charged off when they are deemed uncollectable, which may arise w hen the client is deemed unable to pay the amount owed to the Company. At December 31, 2018, the Company determined that an a llowance for doubtful accounts was not required. #### **(G) Subsequent events evaluation:** Management has evaluated subsequent events through February 21, 201 9, the date the financial sta tements w ere a vailable to be issued. #### (H) **Recently Issued Accounting Pronouncements** In February 2016, the FASB issued ASU 2016-02, Leases, whic h replaces the existing guidance in ASC 840, Leases. The new standard establishes a right-of-use model that requires a lessee to record a right-of-use a sset and a lease liability on the balance sheet for a ll leases with terms longer than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statem ent of income. The guidance will be effective for annual reporting periods beginning after December 15, 20 18, and early adoption is permitted. M anagement of the Company is currently evaluating the impact ASU 2016-02 will have on its financial statements and related disclosures. #### **Note (3)** - **Related party transactions:** The Company has an administrative services agreement in which they paid rent, utilities, occupancy costs along with administrative expenses to a company solely owned by the managing member. The total amount paid and expensed during the year ended December 31, 2018 w as \$48,257. The Company made distributions of \$1,593,500 to its Parent and received c ontributions of \$4,022 from its Parent during the year. {11}------------------------------------------------ #### **NOTES TO FINANCIAL STATEMENTS (CONTINUED) YEAR ENDED DECEMBER 31, 2018** #### **Note ( 4) - Net capital requirement:** As a registered broker-dealer, the Company is subject to the SEC's Uniform Net Capital Rule 15c3-l. The Rule requires that the Company maintain minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to l (and that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed l O to l). At December 31, 2018, the Company had net capital of \$41 ,856, which exceeded its requirement of \$5,000 by \$36,856. The Company had a ratio of aggregate indebtedness to net capital of .06 to 1 at December 31, 2018. {12}------------------------------------------------ #### **SCHEDULE** I ### **PARAMAX SECURITIES, LLC COMPUTATION OF NET CAPITAL UNDER RULE 15C3-1 OF THE SECURITIES AND EXCHANGE COMMISSION DECEMBER 31, 2018** | Member's Capital | \$
50,162 | | |-------------------------------------------------------------|--------------|--| | Non-allowable assets: | | | | Prepaid expenses | 8,306 | | | Total non-allowable assets | 8,306 | | | Net capital before haircuts on proprietary position | 41,856 | | | Haircuts | | | | Net capital | 41,856 | | | the greater of \$5,000
Minimwn net capital requirement - | | | | or 6 2/3% of aggregate indebtedness | \$
5,000 | | | Excess net capital | \$
36,856 | | | Ratio of aggregate indebtedness to net capital | 0.06 to 1 | | | Scheduel of aggregate indebtedness: | | | | Accounts payable and accrued expenses | 2,455 | | | Total aggregate indebtedness | \$
2,455 | | ### **Reconciliation of Computation of Net Capital** The above computation does not differ from the computation of net capital under Rule 15c3-1 as of December 31, 2018 as filed by Paramax Securities, LLC on Form X-17A-5. Accordingly, no reconciliation is deemed necessary. {13}------------------------------------------------ ### **PARAMAX** SECURITIES, LLC **STATEMENT OF CHANGES IN LIABILITIES SUBORDINATED TO CLAIMS OF GENERAL CREDITORS YEAR ENDED DECEMBER 31, 2018** No statement is required as no subordinated liabilities existed during the year. {14}------------------------------------------------ ### **PARAMAX SECURITIES, LLC COMPUTATION FOR DETERMINATION OF RESERVE REQUIREMENTS AND INFORMATION RELATING TO POSSESSION OR CONTROL REQUIREMENTS FOR BROKERS AND DEALERS PURSUANT TO RULE 15c3-3** #### **DECEMBER 31, 2018** The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934 in that the Company's activities are limited to those set forth in the conditions for exemption appearing in Paragraph (k) (2) (i) of that rule. {15}------------------------------------------------ **Weintraub & Associates, LLP** Certified Public Accountants 200 Mamaroneck A venue Suite 502 White Plains, Ne"' York 10601 ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON EXEMPTION REPORT** To the Board of Directors and Member of Paramax Securities, LLC We have reviewed management's statements, included in the accompanying Paramax Securities, LLC's Exemption Report, in which (1) Paramax Securities, LLC identified the following provisions of 17 C.F.R. §15c3-3(k) under which Paramax Securities, LLC claimed an exemption from 17 C.F.R. §240.15c3-3: (k)(2)(i) (exemption provisions) and (2) Paramax Securities, LLC stated that Paramax Securities, LLC met the identified exemption provisions throughout the most recent fiscal year without exception. Paramax Securities, 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 Oversight Board (United States) and, accordingly, included inquiries and other required procedures to obtain evidence about Paramax Securities, LLC's compliance with the exemption 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. **Weintraub & Associates, LLP** Certified Public Accountants . . White Plains, New York-February 15, 2019 {16}------------------------------------------------ ![](_page_16_Picture_0.jpeg) WlLLIAMSVII.I.E, NEW YORK 14221 (716) 626-1200 {716) 626-4800 FAX ### **Paramax Securities, LLC Assertions** **Paramax Securities, LLC** (the "Company") is a registered broker-dealer subject to Rule 17a-5 promulgated by the Securities and Exchange Commission (17 C.F.R. §240.17a-5, " Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R. § 240. **l** 7a-5(d)( 1) and (4). To the best of its knowledge and be lief, the Company states the following: - (l) The Company claimed an exemption from 17 C.F.R. § 240. l 5c3-3 under the following provisions of 17 C.F.R. § 240.15c3-3(k)(2)(i). - (2) The Company met the identified exemption provision in 17 C.F.R. § 240. l 5c3-3(k)(2)(i) throughout the most recent fiscal year without exception. ### **Paramax Securities, LLC** I, Russell D' Alba, swear (or affirm) that, to my best knowledge and belief, this Exemption Report is true and correct. **R~ .---------** January 4, 20 19 Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.