# AVENDUS CAPITAL, INC. X-17A-5 (2021-06-30) — Broker-dealer annual report

- Company: AVENDUS CAPITAL, INC.
- Form: X-17A-5
- Filed: 2021-06-30
- Period: 2021-03-31
- Accession: 0001461556-21-000003
- CIK: 1461556
- File #: 8-68226
- Material weakness: No
- Auditor: Raich Ende Malter & Co. LLP
- Auditor location: New York, NY
- Contact: Puneet Shivam
- Phone: 646-707-0789
- Email: cpa@rem-co.com
- Website: rem-co.com
- Signed by: Puneet Shivam (Executive Director)

Original filing: https://www.sec.gov/Archives/edgar/data/1461556/000146155621000003/Avendus2021Public.pdf

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## AVENDUS CAPITAL INC.

# STATEMENT OF FINANCIAL CONDITION REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

# Filed Pursuant to Rule 17a-5(E)(3) Under the Securities Exchange Act of 1934 as a public document

March 31, 2021

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### UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

| OMB APPROVAL             |                  |  |
|--------------------------|------------------|--|
| OMB Number:              | 3235-0123        |  |
| Expires:                 | October 31, 2023 |  |
| Estimated average burden |                  |  |
| Hours per response       | 12.00            |  |
|                          |                  |  |

# ANNUAL AUDITED REPORT FORM X-17A-5 PART III

SEC FILE NUMBER

68226 8-

### 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                                          | 04/01/2020                  | AND ENDING | 03/31/2021                     |  |  |
|--------------------------------------------------------------------------|-----------------------------|------------|--------------------------------|--|--|
|                                                                          | MM/DD/YY                    |            | MM/DD/YY                       |  |  |
| A. REGISTRANT IDENTIFICATION                                             |                             |            |                                |  |  |
| NAME OF BROKER-DEALER:                                                   |                             |            | OFFICIAL USE ONLY              |  |  |
| Avendus Capital Inc.                                                     |                             |            | FIRM I.D. NO.                  |  |  |
| ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.)        |                             |            |                                |  |  |
| 455 Park Avenue, 19th Floor                                              |                             |            |                                |  |  |
|                                                                          | (No. and Street)            |            |                                |  |  |
| New York                                                                 | NY                          |            | 10022                          |  |  |
| (City)                                                                   | (State)                     |            | (Zip Code)                     |  |  |
| NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT  |                             |            |                                |  |  |
| Puneet Shivam                                                            |                             |            | 646-707-0789                   |  |  |
|                                                                          |                             |            | (Area Code - Telephone Number) |  |  |
|                                                                          | B. ACCOUNTANT IDENTIFCATION |            |                                |  |  |
| INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report* |                             |            |                                |  |  |
| Raich Ende Malter & Co. LLP                                              |                             |            |                                |  |  |
| (Name - if individual, state last, first, middle name)                   |                             |            |                                |  |  |
| 1375 Broadway, 15th floor                                                | New York                    | NY         | 10018                          |  |  |
| (Address)                                                                | (City)                      | (State)    | (Zip Code)                     |  |  |
| CHECK ONE:                                                               |                             |            |                                |  |  |
| ×<br>Certified Public Accountant                                         |                             |            |                                |  |  |
| Public Accountant                                                        |                             |            |                                |  |  |
| Accountant not resident in United States or any of its possessions.      |                             |            |                                |  |  |
|                                                                          | FOR OFFICIAL USE ONLY       |            |                                |  |  |
|                                                                          |                             |            |                                |  |  |
|                                                                          |                             |            |                                |  |  |

\*Claims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis for the exemption. See Section 240.17a-5(e).2).

> Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

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### **OATH OR AFFIRMATION**

| I,      | Puneet Shivam                                                                                                              |            |                    | , swear ( or affirm) that, to the best of                 |
|---------|----------------------------------------------------------------------------------------------------------------------------|------------|--------------------|-----------------------------------------------------------|
|         | my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of            |            |                    |                                                           |
|         | A vend us Capital Inc.                                                                                                     |            |                    | , as                                                      |
|         | ------------<br>-----<br>of March 31<br>, 20<br>-<br>-                                                                     | ----<br>21 | -                  | , 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 follows:                                                                |            |                    |                                                           |
|         |                                                                                                                            |            |                    |                                                           |
|         |                                                                                                                            |            |                    |                                                           |
|         |                                                                                                                            |            |                    |                                                           |
|         |                                                                                                                            |            |                    |                                                           |
|         |                                                                                                                            |            |                    |                                                           |
|         | MARY JOYCE MARTINEZ                                                                                                        |            |                    |                                                           |
|         | Notary Public - State of New York<br>NO. 01MA6264166                                                                       |            |                    |                                                           |
|         | Qualified in New York County                                                                                               |            |                    |                                                           |
|         | My Commission Expires Jun 25, 20                                                                                           |            | Executive Director |                                                           |
|         |                                                                                                                            |            | Title              |                                                           |
|         |                                                                                                                            |            |                    |                                                           |
|         |                                                                                                                            |            |                    |                                                           |
|         |                                                                                                                            |            |                    |                                                           |
|         |                                                                                                                            |            |                    |                                                           |
| IZJ (a) | This report** contains (check all applicable boxes):<br>Facing page.                                                       |            |                    |                                                           |
| IZI (b) | Statement of Financial Condition.                                                                                          |            |                    |                                                           |
| 0 (c)   | Statement of Income (Loss).                                                                                                |            |                    |                                                           |
| 0 ( d)  | Statement of Changes in Financial Condition.                                                                               |            |                    |                                                           |
| 0 (e)   | Statement of Changes in Stockholders' Equity or Patiners' or Sole Proprietor's Capital.                                    |            |                    |                                                           |
|         | 0 ( f) Statement of Changes in Liabilities Subordinated to Claims of Creditors.                                            |            |                    |                                                           |
| D (g)   | Computation of Net Capital.                                                                                                |            |                    |                                                           |
|         | 0 (h) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3.                                       |            |                    |                                                           |
|         | 0 (i) Information Relating to the Possession or Control Requirements under Rule 15c3-3.                                    |            |                    |                                                           |
| D U)    | A Reconciliation, including appropriate explanation, of the Computation of Net Capital Under Rule 15c3-1 and               |            |                    |                                                           |
|         | the Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3.                              |            |                    |                                                           |

- **D** (k) A Reconciliation between the audited and unaudited statements of Financial Condition with respect to methods of consolidation.
- IZI (1) An Oath or Affirmation:
- **0** (m) A copy of the SIPC Supplemental Report.
- **0** (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 240.1 7a-5(e)(3).* 

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# TABLE OF CONTENTS

|                                                         | Page No. |
|---------------------------------------------------------|----------|
| REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |          |
| FINANCIAL STATEMENT                                     |          |
| Statement of Financial Condition                        | 2        |
| Notes to Financial Statement                            | 3 - 6    |

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![](_page_4_Picture_0.jpeg)

1375 Broadway, 15th Floor New York, New York 10018 212.944.4433 212.944.5404 (fax) cpa@rem-co.com

Offices in New York City, Long Island & New Jersey

### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Avendus Capital Inc. New York, New York

### Opinion on the Financial Statement

We have audited the accompanying statement of financial condition of Avendus Capital Inc. as of March 31, 2021, and the related notes (collectively referred to as the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of Avendus Capital Inc. as of March 31, 2021 in conformity with accounting principles generally accepted in the United States of America.

### Basis for Opinion

This financial statement is the responsibility of Avendus Capital Inc.'s management. Our responsibility is to express an opinion on Avendus Capital Inc.'s financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to Avendus Capital Inc. in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion.

RAICH ENDE MALTER & CO. LLP We have served as Avendus Capital Inc.'s auditor since 2018. New York, New York June 30, 2021

![](_page_4_Picture_12.jpeg)

An Association of
Independent Accounting Firms

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# AVENDUS CAPITAL INC. STATEMENT OF FINANCIAL CONDITION MARCH 31, 2021

| ASSETS                                                                   |        |           |
|--------------------------------------------------------------------------|--------|-----------|
| Cash and restricted cash                                                 | S      | 3,407,416 |
| Accounts receivable                                                      |        | 325,792   |
| Due from parent                                                          |        | 2,876,734 |
| Prepaid expenses                                                         |        | 114,000   |
| Property and equipment, net                                              |        | 9,055     |
| Deferred tax asset                                                       |        | 839,725   |
| Security deposits                                                        |        | 169,460   |
| Right-of-use asset                                                       |        | 197,356   |
| Total Assets                                                             | S      | 7,939,538 |
| LIABILITIES AND STOCKHOLDER'S EQUITY                                     |        |           |
| Liabilities                                                              |        |           |
| Accounts payable and accrued expenses                                    | ಲ್ಲಿ ಮ | 878,840   |
| Accrued bonuses                                                          |        | 2,240,000 |
| Due to Parent                                                            |        | 307,677   |
| Income taxes payable                                                     |        | 721,153   |
| Lease liability                                                          |        | 218,526   |
| Total Liabilities                                                        |        | 4,366,196 |
|                                                                          |        |           |
| Stockholder's Equity                                                     |        |           |
| Common stock -1 million shares authorized, \$0.01 par value              |        |           |
| Class A 41,000 shares authorized, issued and outstanding                 |        | 410       |
| Class B 959,000 shares authorized, 698,000 shares issued and outstanding |        | 6,980     |
| Additional paid-in-capital                                               |        | 1,595,410 |
| Retained earnings                                                        |        | 1,970,542 |
| Total Stockholder's Equity                                               |        | 3,573,342 |
| Total Liabilities and Stockholder's Equity                               | S      | 7.939.538 |

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{8}------------------------------------------------

# AVENDUS CAPITAL INC. NOTES TO FINANCIAL STATEMENT FOR THE YEAR ENDED MARCH 31, 2021

### NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

### Leases (continued)

The Company defines a short-term lease as a lease that, at the commencement date; has a lease term of 12 months or less and does not contain an option to purchase the underlying asset that the lease is reasonably certain to exercise. The Company elected to recognize short-term lease payments as an expense on a straight-line basis over the lease term. Related variable lease payments are recognized in the period in which the obligation is incurred.

The Company's lease agreement contains related non-lease components (e.g., utilities, taxes, etc.). The Company separates lease components and non-lease components for all underlying asset classes.

### NOTE 3-RISKS AND UNCERTAINITIES

Risks

The Company is subject to substantial risks from, among other things, changes in the economic climate and its effect on prospective clients and their need for capital or financial advisory services offered by the Company, rapidly changing customer requirements, limited operating history, and the volatility of public markets.

### Contingencies

Certain conditions may exist as of the date the financial statements are issued that may result in an additional loss to the Company but that will only be resolved when one or more future events occur or fail to ocur. The Company's management assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies, there are no legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings. If the assessment of a contingency indicates that it is probable and that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company's financial statements. There are no such accruals on these financial statements.

### NOTE 4 - INCOME TAXES

The Company is a C-corp for tax purposes, and accordingly files federal, state and local income tax returns. The Company is subject to federal, states and local taxes.

The Company has a deferred tax asset of \$839,725 at March 31, 2021 resulting mainly from accrued bonuses of \$2,240,000 which are not deductible for tax purposes for the year ended March 31, 2021.

### NOTE 5-SECURITY DEPOSIT

The security deposits at March 31, 2021 consists of \$169,460 of which \$162,360 is held by the landlord of the office lease. In addition, the Company has two additional security deposits totaling \$7,100. In addition, the Company has restricted cash in the amount of \$92,055 being held for the benefit of the landlord.

### NOTE 6-RELATED PARTY TRANSACTIONS

The Company provides services to its Parent pursuant to an "Intercompany Services Agreement" dated October 10, 2010. The Intercompany Services Agreement calls for the Company to provide support activities to the Parent in relation to preparation, partner identification, prospect qualification and outreach, coordination of information flow and program management support. In addition, advisory and success fees earned by the Company are reimbursed to the Parent.

{9}------------------------------------------------

# AVENDUS CAPITAL INC. NOTES TO FINANCIAL STATEMENT FOR THE YEAR ENDED MARCH 31, 2021

### NOTE 6 - RELATED PARTY TRANSACTIONS (CONTINUED)

At March 31, 2021 the Company has a due from Parent Company of \$2,876,734 for revenue earned and expense reimbursements pursuant to this agreement of \$307,677 which is included in accounts payable and accrued expenses for management fees and expenses payable to Parent.

## NOTE 7 - NET CAPITAL REQUIREMENT

The Company is a member of FINRA , and is a subject to the Securities and Exchange Commission's Net Capital Rule 15c3-1, 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 1. At March 31, 2021, the Company had net capital of \$1,386,521, which exceeded the minimum requirement of \$128,589 by \$1,257,932. At March 31,2021 the Company's ratio of aggregate indebtedness to net capital was 139.11%.

## NOTE 8 - LEASES

The Company has recorded lease liability for the present value of the future lease payments, using a discount rate of 6% which is the Company's estimated incremental borrowing rate for loans with similar terms. A right-of-use asset has been recorded in the amount of the lease liability. Lease costs are being recognized on a straight-line basis over the term of the lease. Future lease payments under a non-cancellable operating lease with initial terms in excess of one year are as follows:

| Years ending March 31,<br>2022        | \$225.173 |
|---------------------------------------|-----------|
| Total future lease payments           | 225,173   |
| Less imputed interest                 | (6,647)   |
| Net liability as of March 31, 2021    | \$218.526 |
| Weighted average remaining lease term | 1.9 years |
| Weighted average discount rate        | 6.0%      |

The lease liability on the statement of financial condition amounts to \$218,526 at March 31, 2021. The Company paid \$238,919 in lease payments during the year.

### NOTE 9 - SUBSEQUENT EVENTS

Subsequent events have been evaluated through June 30, 2021, which is the financial statements were available to be issued.

The World Health Organization characterized the recent outbreak of the novel coronavirus ("COVID-19") as a global pandemic on March 11, 2020. COVID-19 continues to adversely impact global and domestic commercial activity and has contributed to significant volatility in financial markets. The impact of COVID-19 on the Company's financial performance will depend on future developments, including the duration and spread of the outbreak and restrictions. These developments and the impact of COVID-19 on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, the Company's future financial results may be materially adversely affected.


Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.