# DUNN RUSH & CO. LLC X-17A-5 (2021-02-17) — Broker-dealer annual report - Company: DUNN RUSH & CO. LLC - Form: X-17A-5 - Filed: 2021-02-17 - Period: 2020-12-31 - Accession: 0001466476-21-000001 - CIK: 1466476 - File #: 8-68293 - Material weakness: No - Auditor: Knight Rolleri Sheppard CPAS, LLP - Auditor location: Fairfield, CT - Contact: Gregory Rush - Phone: 617-451-0001 - Signed by: Gregory Rush (Partner) Original filing: https://www.sec.gov/Archives/edgar/data/1466476/000146647621000001/DRPublic.pdf --- {0}------------------------------------------------ # **FINANCIAL STATEMENT** **December 31, 2020** {1}------------------------------------------------ #### **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** | | 0MB APPROVAL | | | |--------------------------------|------------------|-----------|--| | 0MB Number: | | 3235-0123 | | | Expires: | October 31, 2023 | | | | Estimated average burden | | | | | Hours per response. •
12.00 | | | | SEC FILE NUMBER 8- **68293** | ANNUAL AUDITED REPORT | | | | |-----------------------|--|--|--| | FORM X-17 A-5 | | | | | PART Ill | | | | #### **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 | ----------
01/01/2020
MM!DDIYY | AND ENDING | 12/31/2020
MM/DD/YY | | |---------------------------------------------------------------------------|--------------------------------------|-------------------------------|------------------------|--| | | A. REGISTRANT IDENTIFICATION | | | | | NAME OF BROKER-DEALER: | | | OFFICIAL USE ONLY | | | Dunn Rush & Co. LLC | | | FlRM I.D. NO. | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | | | | 339 Wellesley Street | | | | | | | (No. and Street) | | | | | Weston | MA | 02493 | | | | (City) | (State) | | (Zip Code) | | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT | | | | | | Gregory R. Rush | | | 617-451-0001 | | | | | (Area Code- Telephone Number) | | | | | B. ACCOUNTANT IDENTIFCATION | | | | | INDEPENDENT PUBLIC ACCOUNT ANT whose opinion is contained in this Report* | | | | | | Knight Rolleri Sheppard CP AS, LLP | | | | | | (Name - if individual, state last, first, middle name) | | | | | | 1499 Post Road, Suite 1040 | Fairfield | CT | 06824 | | | (Address) | (City) | (State) | (Zip Code) | | | CHECK ONE: | | | | | | ~ Certified Public Accountant | | | | | | D
Public Accountant | | | | | | D 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 2 40. I* 7 *a-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 0MB control number.** SEC 1410 (06-02) #### CONFIDENTIAL TREATMENT REQUESTED {2}------------------------------------------------ # **OATH OR AFFIRMATION** I, **Gregory R. Rush** , swear ( or affirm) that, to the best of my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of # **Dunn Rush** & **Co. LLC** 'as ----------------------------------------- of **December 31** , 20 **20**, 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: None Signature **Partner** Title This report\*\* contains (check all applicable boxes): ~ (a) Facing page. 181 (b) Statement of Financial Condition. 0 ( c) Statement oflncome (Loss). - m·~ **RENUGOYAL l\al,** }jNotary Pubtic, Commonwealth of Massachus&tts **~w** My CommissiOn Expires December 26. 2025 - Statement of Changes in Financial Condition. 0 (d) - D (e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietor's Capital. - 0 ( f) Statement of Changes in Liabilities Subordinated to Claims of Creditors. - 0 (g) Computation of Net Capital. - 0 (h) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3. - □ (i) Information Relating to the Possession or Control Requirements under Rule 15c3-3. - □ (j) A Reconciliation, including appropriate explanation, of the Computation of Net Capital Under Rule 15c3-l and the Computation for Detennination of the Reserve Requirements Under Exhibit A of Rule 15c3-3. - 0 (k) A Reconciliation between the audited and unaudited statements of Financial Condition with respect to methods of consolidation. - ~ ( l) 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 co,ifidential treatment of certain portions of this filing, see section 240.17a-5(e)(3).* {3}------------------------------------------------ # **TABLE OF CONTENTS** | | Page No. | |---------------------------------------------------------|-------------| | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 1 | | FINANCIAL STATEMENT | | | Statement of Financial Condition | 2 | | Notes to Financial Statement | 3
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7 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) # **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Members of Dunn Rush & Co., LLC # **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of Dunn Rush & Co., LLC as of December 31, 2020, and the related notes (collectively referred to as the "financial statement"). In our opinion, the statement of financial condition presents fairly, in all material respects, the financial position of Dunn Rush & Co., LLC as of December 31, 2020 in confonnity with accounting principles generally accepted in the United States of America. ## **Basis for Opinion** This financial statement is the responsibility of Dunn Rush & Co., LLC's management. Our responsibility is to express an opinion on Dunn Rush & Co., LLC's financial statement based on our audit. We are a public accounting finn registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to Dunn Rush & Co., 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 perfonn 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 perfonning procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and perfonning 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. tr£.J (',.i),1-..J ,~~~ Knight Rolleri Sheppard CPAS, LLP We have served as Dunn Rush & Co., LLC's auditor since 2016. Fairfield, Connecticut February I 4, 2021 1 ... {5}------------------------------------------------ # **STATEMENT OF FINANCIAL CONDITION December 31, 2020** # **ASSETS** | Cash | \$
315,236 | |---------------------------------------|---------------| | Prepaid expenses | 35,657 | | Deposits | 8,246 | | | \$
359,139 | | LIABILITIES AND MEMBERS' EQUITY | | | Accounts payable and accrued expenses | \$
8,425 | | PPP Loan | 68,100 | | | 76,525 | | Members' equity | 282,614 | | | \$
359,139 | {6}------------------------------------------------ # **NOTES TO FINANCIAL STATEMENT December 31, 2020 (See Report of Independent Registered Public Accounting Firm)** # Note 1 **Organization and nature of business** Dunn Rush & Co. LLC (the "Company") was formed in 2009 and is a Massachusetts limited liability company. The Company offers merger and acquisition, financial advisory, and private placement services in accordance with the management agreement with the Financial Industry Regulatory Authority ("FINRA"). The Company is a registered broker dealer under the Securities Exchange Act of 1934 and is a member of FINRA and the Securities Investor Protection Corporation ("SIPC"). All member units are restricted from transfer, unless transferred to permitted transferee's as defined in the agreement, without the Company and members being offered the first right to repurchase the units. If the Company and the other members do not exercise their right, the units may be sold to a bona fide third party. # Note 2 **Summary of significant accounting policies** # **Revenue recognition** Effective January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers ("ASC Topic 606"). The new revenue recognition guidance requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires an entity to follow a five-step model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. Revenue from contracts with customers includes fees from investment banking and financial advisory services. The recognition and measurement of revenue is based on the assessment of individual contract terms. Significant judgement is required to determine whether performance 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. Revenue from investment banking success fees are generally recognized at the point in time that performance under the arrangement is completed (the closing date of the transaction). {7}------------------------------------------------ # **NOTES TO FINANCIAL STATEMENT (CONTINUED) December 31, 2020 (See Report of Independent Registered Public Accounting Firm)** ## Note 2 **Summary of significant accounting policies (continued)** # **Revenue recognition (continued)** Revenue from financial advisory retainer fees are generally recognized over time in which the performance obligations are simultaneously provided by the Company and consumed by the customer. Revenue from financial advisory valuation fees are generally recognized at the point in time that performance under the arrangement is completed. Retainers and other fees received from customers prior to recognizing revenue are reflected as contract liabilities. At December 31, 2020, contract liabilities were \$0. Disaggregation can be found on statement of operations for the year ended December 31, 2020. ## **Income taxes** The members of the Company have elected to have the Company taxed as a partnership for income tax purposes. Accordingly, the Company is not subject to federal or state income taxes. All taxable income/loss and tax credits are reflected on the income tax returns of the members. # **Income tax positions** The Financial Accounting Standards Board ("FASB") has issued a standard that clarifies the accounting and recognition of income tax positions taken or expected to be taken in the Company's income tax returns. The Company has analyzed tax positions taken for filing with the Internal Revenue Service and all state jurisdictions where it operates. The Company believes that income tax positions will be sustained upon examination and does not anticipate any adjustments that would result in a material adverse affect on the Company's financial condition, results of operations or cash flows. Accordingly, the Company has not recorded any reserves or related accruals for interest and penalties for uncertain income tax positions. If the Company incurs interest or penalties as a result of unrecognized tax positions the policy is to classify interest accrued with interest expense and penalties thereon with operating expenses. The Company is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. # **Fair value of financial instruments** The carrying amounts of financial instruments, including cash, prepaid expenses, deposits, and accounts payable and accrued expenses, approximates fair value due to the short term maturities of these assets and liabilities. {8}------------------------------------------------ # **NOTES TO FINANCIAL STATEMENT (CONTINUED) December 31, 2020 (See Report of Independent Registered Public Accounting Firm)** # Note 2 **Summary of significant accounting policies (continued)** # **Use of estimates** Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. # **Advertising** The Company expenses the cost of advertising as it is incurred. Advertising expense amounted to \$8,600 for the year ended December 31, 2020. # **Property and equipment** Property and equipment is stated at cost. Depreciation is calculated on the straight-line method over the estimated useful life of the related asset. | Description | Estimated
Useful Life | |---------------------------|--------------------------| | Property
and equipment | 5 years | ## **Subsequent events** The Company has evaluated subsequent events through February 14, 2021, which is the date the financial statements were available to be issued. # Note 3 **Net capital requirements** The Company is subject to the Securities and Exchange Commission's Uniform Net Capital Rule (Rule 15c3-1), which requires the maintenance of a minimum net capital balance and requires that the Company's aggregate indebtedness to net capital, as defined, shall not exceed 15 to 1. At December 31, 2020 the Company's net capital was \$306,811 which was \$301,811 in excess of its required net capital of \$5,000. The Company's aggregate indebtedness to net capital was .03 to 1. # Note 4 **Concentrations** ## **Customers** For the year ended December 31, 2020, two customers represented 96% of the Company's revenue. # **Cash** The Company maintains its cash at financial institutions in bank deposits, which may exceed federally-insured limits. The Company has not experienced any losses in such accounts and the Company believes it is not exposed to any significant risk with respect to cash. {9}------------------------------------------------ # **NOTES TO FINANCIAL STATEMENT (CONTINUED) December 31, 2020 (See Report of Independent Registered Public Accounting Firm)** #### Note 5 **Leases** On November 1, 2020, the Company leased its virtual premises under a month to month agreement for \$355/month. Rent expense was \$42,424 for the year ended December 31, 2020. ## Note 6 **Defined Benefit Pension Plan** On December 29, 2016 the Company adopted a defined benefit pension plan (the Plan) with an effective date of January 1, 2016. The Plan covers all employees and members of the Company meeting certain eligibility requirements. As of December 31, 2020 only the two members of the Company met the criteria for eligibility. The Company's funding policy is to contribute an amount equal to or greater than the minimum funding requirements of the Employee Retirement Income Security Act of 1974, as determined under actuarial assumptions based upon percentage of payroll or self-employment income costs. The contributed amounts will not exceed the maximum tax deductible limit. The Plan will invest primarily in publicly traded securities including equities and fixed income instruments. The amount funded for the year ended December 31, 2020 is \$300,000 and is recorded as pension expense for the year. The Company's share of the actuarially determined projected benefit obligation at December 31, 2020 is \$1,241,361 and the accumulated benefit obligation is \$1,241,361. This is based upon end of year valuations. These amounts were calculated using the following assumptions: | Pre-retirement interest rate | 5% | |-------------------------------|----| | Post retirement interest rate | 5% | The total benefits payable as monthly annuities are expected to be as follows: | From 2021
through 2024 | \$58,182 | |---------------------------|-----------| | From 2025
through 2030 | \$261,587 | | Lump sum payments at 2021 | \$663,470 | # Note 7 **Defined Contribution Retirement Plan** In 2016 the Company adopted a defined contribution plan. The plan is a 401K/profit sharing plan and is eligible to all employees and members of the Company meeting certain eligibility. Eligible employees can elect to defer a portion of their salary or guaranteed payment to the 401k plan, while the Company can contribute a discretionary amount for profit sharing. For the year ended December 31, 2020, the Company contributed \$34,200 to the plan. {10}------------------------------------------------ # **NOTES TO FINANCIAL STATEMENT (CONTINUED) December 31, 2020 (See Report of Independent Registered Public Accounting Firm)** ## Note 8 **Commitments and Contingencies** The Company does not have any commitments, guarantees or contingencies including arbitration or other litigation claims that may result in a loss or future obligation. The Company is not aware of any threats or other circumstances that may lead to the assertion of a claim at a future date. # Note 9 **Paycheck Protection Program Loan** The Company received a loan under the Paycheck Protection Program for \$68,100 on April 21, 2020. As of December 31, 2020, the Company expects to 100% of the loan to be forgiven. # Note 10 **Exemption from Rule 15c3-3** The Company amended its membership agreement with FINRA on October 6, 2020 and will not claim exemption from the provisions of Rule 15c3-3 of the SEC, in reliance on footnote 74 to SEC Release 34-70073. ## Note 11 **Risk and uncertainties** In March 2020, the World Health Organization (WHO) declared COVID-19 a global pandemic. This pandemic event has resulted in significant business disruption and uncertainty in both global and U.S. markets. While management believes the Company is in an appropriate position to weather the potential short-term effects of these world-wide events, the direct and long-term impact to the Company and its financial statements is undetermined at this time. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.