# SHANNON ADVISORS LLC X-17A-5 (2022-02-22) — Broker-dealer annual report - Company: SHANNON ADVISORS LLC - Form: X-17A-5 - Filed: 2022-02-22 - Period: 2021-12-31 - Accession: 0001462624-22-000001 - CIK: 1462624 - File #: 8-68243 - Type: Broker-dealer - Material weakness: No - Auditor: FGMK, LLC - Auditor location: Bannockburn, IL - Contact: Brian T O'Gara - Phone: 312-961-2698 - Email: im.ogara@shannonadvisors.com - Website: shannonadvisors.com - Signed by: Brian T O'Gara (Chief Executive Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1462624/000146262422000001/publicaudit1.pdf --- {0}------------------------------------------------ # *Shannon Advisors LLC* Financial Statement and Independent Auditor Report December 31, 2021 **Filed as a Public Document Pursuant to Rule 17a-5(d) of the Securities Exchange Act of 1934.** \*\*\* **PUBLIC DOCUMENT\*\*\*** {1}------------------------------------------------ ## **TABLE OF CONTENTS** | | | Page | |---------------------------------------------------------|----------------------------------|------| | LETTER OF OATH OR AFFIRMATION | | | | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | | 2 | | FINANCIAL STATEMENT | | | | | Statement of Financial Condition | 3 | | | Notes to the Financial Statement | 4-6 | | | | | {2}------------------------------------------------ ## **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** | ANNUAL REPORTS | |----------------| | FORM X-17A-5 | | PART Ill | | 0MB APPROVAL | |---------------------------| | 0MB Number: 3235-0123 | | Expires: Oct. 31, 2023 | | Estimated average bu rden | | hours per response: 12 | | SEC FILE NUMBER | | |-----------------|---| | 1 8-65803 | 1 | ## **FACING PAGE** **Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934** | FILING FOR THE PERIOD BEGINNING | 01/01/2021 | | AND ENDING --=1=2/---"'3=1/-=2=02=1~--- | | | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|------|-----------------------------------------|--|--| | | MM/DD/YY | | MM/DD/VY | | | | | A. REGISTRANT IDENTIFICATION | | | | | | NAME OF FIRM:
Shannon Advisors LLC | | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
D Security-based swap dealer
D Major security-based swap participant
IZI Broker-dealer
D Check here if respondent is also an OTC derivatives dealer | | | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | | Z72 E. Deerpath Road, Suite 254 | | | | | | | | (No. and Street) | | | | | | Lake Forest | IL | | 60045 | | | | (City) | (State) | | (Zip Code) | | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | Brian Timothy O'Gara | 847-739-3208 | | t im.ogara@shannonadvisors.com | | | | (Name) | (Area Code - Telephone Number) | | (Email Address) | | | | | 8. ACCOUNTANT IDENTIFICATION | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | | | FGMK, LLC | (Name - if individual, state last, first, and middle name) | | | | | | 333 West Wacker Drive, 6th Floor | Ch icago | IL | 60606 | | | | (Address) | (City) | | (State)
(Zip Code) | | | | 12/17/2009 | | 3968 | | | | | rte
of Reglstcatloa with PCAOB) {If appHcable)
{PCAOB Reg,st,atloa Norn bee, ;f a ppllcable) I | | | | | | | | FOR OFFICIAL USE ONLY | | | | | | * Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public
accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 | | | | | | CFR 240.17a-5(e)(l)(ii), if applicable. **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.** {3}------------------------------------------------ ## **OATH OR AFFIRMATION** I, B. Timothy O'Gara , swear (or affirm) that, to the best of my knowledge and belief, the financial report pertaining to the firm of Shannon Advisors LLC, as of December 31, 2021, is true and correct. I further swear {or affirm) that neither the company nor any partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely as that of a customer. PAMELA D. TAYLOR OFFICIAL SEAL. 0 Notary Public, State of Illinois My Commission Expires July 30, 2024 Title: Notary Public ## **This filing\*\* contains (check all applicable boxes):** - ~ (a) Statement offinancial condition. - ~ (b) Notes to consolidated statement of financial condition. - □ (c) Statement of income (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 (d) Statement of cash flows. - □ (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - □ (f) Statement of changes in liabilities subordinated to claims of creditors. - □ (g) Notes to consolidated financial statements. - □ {h) Computation ofnet capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. - D (i) Computation of tangible net worth under 17 CFR 240.18a-2. - D (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - □ (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable. - D (I) Computation for Determination of PAB Requirements under Exhibit A to§ 240.15c3-3. - □ (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - □ (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR - 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable. - D (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-1, or 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences exist. - D (p) Summary offinancial data for subsidiaries not consolidated in the statement offinancial condition. - ~ (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. - D (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - D (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - □ (t) Independent public accountant's report based on an examination of the statement of financial condition. - □ (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. - □ (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - □ (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. | □ (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-le or 17 CFR 240.17a-12, | |----------------------------------------------------------------------------------------------------------------------------| | as applicable. | D (y) Report describing any material inadequacies found to exist or found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). □ (z) Other:-.------------------------------------- *\*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e}(3} or 17 CFR 240.18a-7(d)(2}, as applicable.* {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Management of Shannon Advisors LLC ## **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of Shannon Advisors LLC (the "Company") as of December 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 the Company as of December 31, 2021, in conformity with accounting principles generally accepted in the United States of America . ## **Basis for Opinion** This financial statement is the responsibi lity of the Company's management. Our responsibility is to express an opinion on the Company'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 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 statement is free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. 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. We have served as the Company's auditor since 2012. Chicago, Illinois February 11, 2022 {5}------------------------------------------------ #### **STATEMENT OF FINANCIAL CONDITION** #### **DECEMBER 31, 2021** | ASSETS | | |---------------------------------------|---------------| | Cash and cash equivalents | 117,731
\$ | | Accounts receivable | 4,898,958 | | Prepaid expenses | 9,792 | | | \$ 5,026,481 | | LIABILITIES AND MEMBER'S EQUITY | | | LIABILITIES | | | Accounts payable and accrued expenses | 5,065
\$ | | MEMBER'S EQUITY | 5,021,416 | | | \$ 5,026,481 | The accompanying notes are an integral part of this statement. {6}------------------------------------------------ #### **NOTES TO THE FINANCIAL STATEMENT** #### **NOTE 1** - **DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** *Description of Business.* Shannon Advisors LLC (the "Company") was incorporated in the State of Delaware in March 2009 and is a wholly-owned subsidiary of Shannon Advisors LP (the "Parent"). The Company is registered as a Capital Acquisition Broker ("CAB") with the Securities and Exchange Commission and the Financial Industry Regulatory Authority ("FINRA") and various states, and, in this capacity, it performs brokerage and private placement advisory services to private equity companies globally. *Significant Accounting Policies.* The Company follows accounting principles generally accepted in the United States of America ("GAAP") as established by the Financial Accounting Standards Board ("F ASB") to ensure consistent reporting of financial condition, results of operations, and cash flows. *Management Estimates and Assumptions.* The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Future events and their effects cannot be predicted with certainty; accordingly, accounting estimates require the exercise of judgment. Accounting estimates used in the preparation of these financial statements change as new events occur, as more experience is acquired, as additional information is obtained and as the operating environment changes. *Cash and Cash Equivalents.* All highly liquid investments purchased with an original maturity of three months or less are considered to be cash equivalents. The Company regularly maintains cash balances that exceed Federal Deposit Insurance Corporation limits. *Accounts Receivable and Allowances for Unco/lectible Accounts.* Accounts receivable are reported net of any estimated allowances for uncollectible accounts and contractual adjustments. All receivables are uncollateralized. To provide for receivables that could become uncollectible in the future, the Company may establish an allowance for uncollectible accounts to reduce the carrying amount of such receivables to their estimated net realizable value. The allowance for uncollectible accounts is based upon management's assessment of historical and expected net collections, business and economic conditions, and other collection indicators. No allowance was deemed necessary by management as of December 31, 2021. *Revenue Recognition.* Revenue from contracts with customers includes success fees and retainer fees from placement agent and advisory services. The recognition and measurement of revenue is based on the assessment of individual contract terms. Significant judgment is required to determine whether perfmmance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance obligations are identified; when to recognize revenue based on the appropriate measure of the Company's progress under the contract; and whether constraints on variable consideration should be applied due to uncertain future events. The Company's principal sources ofrevenue are derived from success fees and retainer fees, as more fully described below, as well as reimbursed expenses from customers. *Success Fee.* Success fees are due in accordance with the terms of the executed agreement, typically either a percentage of the capital raised or committed or a fixed dollar amount. Performance obligations are satisfied as these events are completed. *Retainer Fee.* Retainer fees are due in accordance with the terms of the executed engagement agreement, which often includes an immediate up front payment and sometimes involves monthly or quarterly payments thereafter for a set period. Performance obligations in these arrangements vary depending on the contract, but are typically satisfied over time under the anangement. *Interest Income.* Interest income is recorded on the accrual basis. {7}------------------------------------------------ #### **NOTES TO THE FINANCIAL STATEMENT** *Income Taxes.* The Company is organized as a single member limited liability company, which is a disregarded entity for income tax purposes. Accordingly, the Parent's partners are personally responsible for the federal and state income taxes on the Company's taxable income, and therefore no provision for federal and state income taxes has been made in these financial statements. The Company may make distributions to its member in 2022 in connection with such member's respective income tax liability incurred for 2021 as a result of the Company's partnership income tax status. *Leases.* The Company recognizes and measures its leases in accordance with F ASB Accounting Standards Certification ("ASC") 842, Leases. The Company determines if an arrangement is a lease, or contains a lease, at inception of a contract and when the terms of an existing contract are changed. The Company has elected, for all underlying classes of assets, to not recognize right of use assets and lease liabilities for short-tem1 leases that have a lease term of 12 months or less at lease commencement, and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. The Company recognizes lease costs associated with its short-te1m leases on a straight-line basis over the lease te1m. The Company is a lessee in a non-cancellable operating lease for office space. ## **NOTE 2-RELATED PARTY TRANSACTIONS** The Company has an expense sharing agreement with the Parent, whereby the Parent assumes responsibility for, and pays certain overhead and operating expenses and liabilities of the Company, including but not limited to administrative expenses. Such expenses will not be allocated to or reimbursed by the Company, and accordingly, there will be no expense allocation fo1mulated by the Parent. #### **NOTE 3** - **NET CAPITAL REQUIREMENTS** The Company is subject to the Securities and Exchange Commission's Uniform Net Capital Rule (Rule 15c3-l). Under this rule, the Company is required to maintain "minimum net capital" equivalent to \$5,000 or 6 2/3% of "aggregate indebtedness," whichever is greater, and a ratio of "aggregate indebtedness" to "net capital" less than 15 to 1, as these terms are defined. Rule 15c3-l also provides that equity capital may not be withdrawn if the resulting net capital ratio would exceed 10 to 1. At December 31, 2020, the Company had net capital of \$110,311 which was \$105,311 in excess of its required net capital of \$5,000. The Company's aggregate indebtedness to net capital was .0495 to 1. Management anticipates making capital distributions totaling at least \$500,000 during the six months after December 31, 2021. {8}------------------------------------------------ #### **NOTES TO THE FINANCIAL STATEMENT** #### **NOTE 4 - CONCENTRATIONS** As of December 31, 2021, the Company had two clients that accounted for 87% of accounts receivable. The ongoing operation of the Company is economically dependent on its ability to enter into contracts with other parties. #### **NOTE 5 - COMMITMENTS, CONTINGENCIES AND INDEMNIFICATIONS** In the nmmal course of business, the Company enters into contracts that contain a variety of representations and warranties that provide indemnification under certain circumstances. The Company's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. The Company expects the risk of future obligations under these indemnifications to be remote. #### **NOTE6-SUBSEQUENTEVENTS** Management has evaluated all subsequent events through the date of the accompanying fmancial statements were issued. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.