# MCP SECURITIES, LLC X-17A-5 (2022-03-31) — Broker-dealer annual report - Company: MCP SECURITIES, LLC - Form: X-17A-5 - Filed: 2022-03-31 - Period: 2021-12-31 - Accession: 0001479459-22-000003 - CIK: 1479459 - File #: 8-68473 - Type: Broker-dealer - Material weakness: No - Auditor: TPS Thayer - Auditor location: Sugar Land, TX - Contact: Angela Hajek - Phone: 404-841-1010 - Signed by: James McCarvill (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1479459/000147945922000003/mcpaudit2021.pdf --- {0}------------------------------------------------ | UN
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(
2) | *applicable.* {2}------------------------------------------------ # **MCP SECURITIES, LLC** ### **FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES** With Report of Independent Registered Public Accounting Firm December 31, 2021 For the Year Ended {3}------------------------------------------------ # **TABLE OF CONTENTS** For the Year Ended December 31, 2021 | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM … | 1 | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------| | 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 THE FINANCIAL STATEMENTS … | 6-12 | | SUPPLEMENTAL SCHEDULES | | | Schedule 1:
Computation of Net Capital under Rule 15c3-1 of the Securities
and Exchange Commission … | 13 | | Schedule II:
Computation of Determination of Reserve Requirements for Brokers
and Dealers Pursuant to Rule 15c3-3 under the Securities and
Exchange Commission … | 14 | | Schedule III:
Information Relating to the Possession or Control Requirements
under the Securities and Exchange Commission Rule 15c3-3 … | 15 | {4}------------------------------------------------ #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Director and Member MCP Securities, LLC #### Opinion on The Financial Statements We have audited the accompanying statement of financial condition of MCP Securities, LLC (the "Company") as of December 31, 2021, and the related statements of operations, changes in members' equity, and statement of cash flows for the year then ended, December 31, 2021, and the related notes ( collectively referred to as "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the year ended December 31, 2021, in accordance with accounting principles generally accepted in the United States of America. #### Restatement of Member's Equity As discussed in Note 10 to the financial statements, the Company has restated its opening member's equity balance. #### Basis for Opinion These financial statements are 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 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 from material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risk 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 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. #### Auditors Report on Supplementary Information The supplemental schedule has been subjected to the auditing procedures performed in conjunction with the audit of Dunes Securities Corporation's financial statements. The supplemental information is the responsibility of Dunes Securities Corporation's management. Our audit procedures included determining whether the suppleinental 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 schedule. In forming our opinion on the supplemental schedule, we evaluated whether the supplemental schedule, including its form and content, is presented in conformity with 17 C.F.R. §240. 17a-5. In our opinion, the supplemental schedule is fairly stated, in all material respects, in relation to the financial statements as a whole. -16s *1wapwrC* TPS Thayer, LLC We have served as MCP Securities, LLC's auditor since 2021. Sugar Land, TX March 31, 2022 {5}------------------------------------------------ ### **STATEMENT OF FINANCIAL CONDITION** As of December 31, 2021 | ASSETS | | | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|------------------------------------------------------| | Cash | \$ | 1,090,763 | | Accounts receivable, net | | 5,582,851 | | Due from related parties | | 520 | | Prepaid expenses | | 53,394 | | Deposits | | 76,406 | | Right of use asset | | 422,519 | | Fixed assets, net | | 31,738 | | Intangible assets | | 8,750 | | TOTAL ASSETS | \$ | 7,266,941 | | LIABILITIES AND MEMBER'S EQUITY
LIABILITIES
Accounts payable & accrued liabilities
Lease liability
Paycheck protection program loan
Unearned revenue
TOTAL LIABILITIES | \$
\$ | 303,594
484,512
235,086
50,000
1,073,192 | | | | | | MEMBER'S EQUITY | \$ | 6,193,749 | | TOTAL LIABILITIES AND MEMBER'S EQUITY | \$ | 7,266,941 | {6}------------------------------------------------ ### **STATEMENT OF OPERATIONS** For the Year Ended December 31, 2021 #### **REVENUES** | Investment banking fees | \$
86,583,716 | |------------------------------------|------------------| | Success fees | 1,628,627 | | Retainers | 120,000 | | TOTAL REVENUES | 88,332,343 | | EXPENSES | | | Compensation & benefits | 88,058,415 | | Professional Fees | 109,003 | | Regulatory Fees | 376,737 | | Technology, data, & communications | 152,673 | | Travel & entertainment | 48,471 | | Occupancy & equipment | 260,124 | | Other expenses | 40,578 | | TOTAL EXPENSES | 89,046,001 | | OTHER INCOME | | | PPP Loan Forgiveness | 180,300 | | Interest Income | 102,798 | | NET LOSS | \$
(430,561) | | | | {7}------------------------------------------------ ### **STATEMENT OF CHANGES IN MEMBER'S EQUITY** For the Year Ended December 31, 2021 | BALANCE AT DECEMBER 31, 2020 (Originally Stated) | \$
2,412,810 | |--------------------------------------------------|--------------------------| | Prior period adjustment (see Note 10) | 5,295,500 | | BALANCE AT JANUARY 1, 2021 (restated) | 7,708,310 | | Distributions
Net Loss | (1,084,000)
(430,561) | | BALANCE AT DECEMBER 31, 2021 | \$
6,193,749 | {8}------------------------------------------------ ### **STATEMENT OF CASH FLOWS** For the Year Ended December 31, 2021 | CASH FLOWS FROM OPERATING ACTIVITIES | | |-----------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------| | Net Income | \$
(430,561) | | Forgiveness of paycheck protection program loan | (180,300) | | Adjustments to reconcile net income to net cash provided by | | | operating activities | | | Depreciation of fixed assets | 5,123 | | Prepaid expenses | (30,487) | | Accounts receivable | 1,681,082 | | Deposits | 26,789 | | Right of use asset | 218,878 | | Accounts payable & accrued expenses | 203,268 | | Lease liability | (169,656) | | Unearned revenue | 50,000 | | Net Cash Provided by Operating Activities | 1,374,136 | | CASH FLOWS FROM INVESTING ACTIVITIES
CRD Deposit
Purchase of Fixed Assets
Intangible Assets
Net Cash Used in Investing Activities | 861
(4,673)
(8,750)
(12,562) | | CASH FLOWS FROM FINANCING ACTIVITIES | | | Payroll protection program loan | 235,086 | | Distributions | (1,084,000) | | Net Cash Used in Financing Activities | (848,914) | | NET INCREASE IN CASH | 512,660 | | CASH AT BEGINNING OF YEAR | 578,103 | | CASH BALANCE AT DECEMBER 31, 2021 | \$
1,090,763 | {9}------------------------------------------------ ### **NOTES TO THE FINANCIAL STATEMENTS** For the Year Ended December 31, 2021 #### **1. Organization and Nature of Business** MCP Securities, LLC (the Company) was organized as a Delaware Limited Liability Company in December 2009 and is a registered broker-dealer with the Securities and Exchange Commission (SEC) and member with the Financial Industry Regulatory Authority (FINRA). The Company is a wholly owned subsidiary of McCarvill Capital Partners, LLC (Parent). The Member purchased the Company in April 2016. The Company's primary purpose is to provide funding for private placement of securities. #### **2. Significant Accounting and Reporting Policies** ### **Basis of Presentation** The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (GAAP) as determined by the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). The Company believes that the disclosures in these financial statements are adequate and not misleading. In the opinion of management, the financial statements contain all adjustments necessary for a fair presentation of the Company's financial position as of December 31, 2021, and is not necessarily indicative of the results for any future period. #### **Use of 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 revenue and expenses during the reporting period. Actual results could differ from those estimates. #### **Cash and Cash Equivalents** The Company maintains its cash in bank deposit account(s) which, at times, may exceed federally insured limits. The Company monitors the bank account(s) and does not expect to incur any losses from such account(s). The Company has defined cash and cash equivalents as highly liquid investments with original maturities of less than ninety days that are not held-for-sale in the ordinary course of business. The recorded value of such instruments approximates their fair value. At December 31, 2021, the Company had no cash equivalents. #### **Current Expected Credit Losses** In June 2016, the FASB issued ASU No. 2016-13 (Topic 326) *Measurement of Credit Losses on Financial Instruments*, which significantly changed the way entities recognize and record credit losses on financial instruments such as loans, loan commitments, and other financial assets. The CECL model requires measurement of expected credit losses for financial assets measured at amortized cost, net investments in leases, and off-balance sheet credit exposures based on historical experience, current conditions, and reasonable and supportable forecasts over the remaining contractual life of the financial assets. The Company's accounts receivable consist of trade receivables for the private placement of securities. The Company regularly reviews its accounts receivable for any bed debts. As such, the Company regularly reviews its accounts receivable for any debts based on analysis of the Company's collection experience, and customer worthiness. At December 31, 2021, the Company had \$5,582,851 in net receivable from executed contracts. As of December 31, 2021, there was no balance in the allowance for doubtful accounts. {10}------------------------------------------------ ### **NOTES TO THE FINANCIAL STATEMENTS** For the Year Ended December 31, 2021 #### **2. Significant Accounting and Reporting Policies - Continued** #### **Revenue** The Company recognizes *Revenue from Contracts with Customers* in accordance with ("ASC Topic 606"). This 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. Additionally, the guidance requires the Company to follow a five step model to a) identify the contract with the 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 Company satisfies a performance obligation. In determining the transaction price, the Company may include variable consideration within the transaction price to the extent that it is probable that a significant reversal of revenue will not occur when the uncertainty is subsequently resolved. Services within the scope of ASC Topic 606 include private securities placement, investment banking, and merger and acquisition (M&A) services. Investment banking and M&A services include agreements to provide advisory services to customers for which they will charge the customer fees. The Company provides corporate finance and financial advisory services such as private placements of debt and equity, mergers, and acquisitions (M&A) (sell-side and buy-side), recapitalizations, accessing public debt and equity markets, valuations and fairness opinions, and business and strategic advice. Revenues from fees arising from private securities placement in which the Company acts as agent are recorded pursuant to the terms of the Company's agreements with the respective offering parties. Fees are recorded based upon the capital commitments obtained as of the closing for the respective placement when all performance obligations to the client have been completed. In certain engagements, clients are assessed nonrefundable retainer fees. These retainer fees are either up front payments paid solely in consideration of the engagement by the client or fees which are in relation to a defined period, which could range from a single payment to recurring payments for the duration of the contract. Such periods vary in length depending on the engagement, and the fees are apportioned over the period covered by the retainer fee and are considered earned when the performance obligations are satisfied. Nonrefundable retainer fees which are not linked to a specific period of time are recognized when all performance obligations are satisfied. The Company has evaluated its nonrefundable retainer payments to ensure the fees relate to a transfer of a good or service, as a direct distinct performance obligation in exchange for the retainer. Success fees are owed to the Company on the closing of a M&A transaction, fairness opinion or similar transaction. The amount of the fee is stipulated in the Company's engagement contract with the client and is generally calculated as a percentage of the size of the relevant transaction or as a fixed fee. Success fees are recognized when the relevant investment banking transaction is closed. For the year ended December 31, 2021, success fee of \$998,627 was recognized. {11}------------------------------------------------ # **NOTES TO THE FINANCIAL STATEMENTS** For the Year Ended December 31, 2021 ### **2. Significant Accounting and Reporting Policies - Continued** #### **Income Taxes** The Company is a single member limited liability company that is treated as a disregarded entity for income tax purposes as all income or loss flows through to the Parent. Therefore, no income tax expense or liability is recorded in the accompanying financial statements. The Company follows the FASB Accounting Standards Codification (ASC) 740-10, Accounting for the Uncertainty in Income Taxes. Under FASB ASC 740-10, the Company is required to evaluate each of its tax positions to determine if they are "more likely than not" of being sustained "when challenged" or "when examined" by the applicable taxing authority. Tax positions not deemed to meet the "more likely than not" threshold would be recorded as a tax expense and liability in 2021. A tax position includes any entity's status, including its status as a pass-through entity, and the decision to not file a tax return. Management has evaluated the Company's tax positions and concluded that the Company has taken no uncertain tax positions that require adjustment to the financial statements to comply with the provisions of this guidance as of December 31, 2021. The Company is not currently under audit by any tax jurisdiction. ### **Coronavirus** In the second year of the COVID-19 coronavirus pandemic, the adverse impacts to global commercial activity has continued to contribute to significant volatility in the financial markets. Government imposed responses and other related recovery measures intended to control the spread of the disease have created a variety of unintended challenges and risks. As such, economic uncertainty, changes in consumer demand, disrupted supply chains, staffing shortages, and hybrid working patterns all continue to have a negative impact on many industries. The continued development and fluidity of this situation precludes any prediction as to the ultimate material adverse impact of the COVID-19 coronavirus. Nevertheless, the COVID-19 coronavirus presents material uncertainty and risk with respect to the Company, its performance, and its financial results. At present, the extent to which the coronavirus may impact the Company's financial condition or results of operations in future periods is uncertain. ### **PPP Loan** In 2020, the Company borrowed \$180,300 under the Paycheck Protection Program (PPP) established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The Company used the entirety of the proceeds of this loan to pay expenses covered by the PPP as of December 31, 2020. The loan of \$180,300 was forgiven in full on March 4, 2021. In 2021, the Company borrowed an additional \$235,086 under the CARES Act through a second loan offered by the PPP. No determination has been made as to whether the Company will be eligible for forgiveness of this loan. The loan bears interest at a rate of 1% and is payable in monthly installments of principle and interest over twenty four months beginning six months from the date of the note. The loan may be paid at any time with no prepayment penalty. As of December 31, 2021, the Company has used the entirety of the proceeds of this loan to pay expenses covered by the PPP. {12}------------------------------------------------ ### **NOTES TO THE FINANCIAL STATEMENTS** For the Year Ended December 31, 2021 ### **3. Fixed Assets, net** Fixed assets are recorded at cost less accumulated depreciation and amortization. Useful life of the website is three (3) years, computer & equipment is five (5) years, and the furniture is seven (7) years. Additions, improvements, renewals, and expenditures that add materially to productive capacity or extend the life of an asset are capitalized. Maintenance and repairs are charged to expense as incurred. Upon retirement or disposal of an asset, the asset and related accumulated depreciation or amortization are eliminated. Any gain or loss on such transactions is charged to operations. The provision for depreciation and amortization is computed on the straight line method over the estimated useful life of each depreciable asset. A summary of Fixed Assets at December 31, 2021, is as follows: | Computer & Equipment | \$
37,650 | |--------------------------|--------------| | Furniture | 22,353 | | Total Fixed Assets | 60,004 | | Accumulated Depreciation | (28,264) | | Total Fixed Assets | \$
31,740 | A summary of Intangible Assets at December 31, 2021, is as follows: | Website | \$
8,750 | |--------------------------|-------------| | Accumulated Amortization | - | | Total Intangible Assets | \$
8,750 | Based on the carrying value of the intangible asset as of December 31, 2021, we estimate our amortization expense for the next five years will be as follows: | Year end | Amortization | |--------------|--------------| | December 31, | Expense | | 2022 | 2,916 | | 2023 | 2,916 | | 2024 | 2,917 | | Thereafter | - | | | 8,749 | Depreciation and amortization expense for 2021 was \$10,525. #### **4. Net Capital Requirements** The Company is subject to the SEC's Uniform Net Capital Rule (SEC Rule 15c3-1) of the Securities Exchange Act of 1934 which requires maintenance of minimum net capital. Under the Rule, the Company is required to maintain minimum net capital, as defined, equal to the greater of \$5,000 or 6 2/3% of aggregate indebtedness. The ratio of aggregated indebtedness to net capital cannot exceed 1500% or 15:1. At December 31, 2021, the Company had net capital of \$675,175 which was \$651,602 in excess of its required net capital of \$23,573. The ratio of aggregate indebtedness to net capital was 52.37%. {13}------------------------------------------------ # **NOTES TO THE FINANCIAL STATEMENTS** For the Year Ended December 31, 2021 ### **5. Operating Lease Obligations** The Company is required to record a right-of-use asset and a corresponding lease liability on the balance sheet for all leases with terms greater than twelve months. All such leases are to be classified as either finance or operating. The Company has obligations as a lessee for office space with initial noncancelable terms in excess of one year. This lease is classified as an operating lease. Leases generally contain renewal options for periods ranging from two to five years. Because the Company is not reasonably certain to exercise these renewal options, the optional periods are not included in determining the lease term, and associated payments under these renewal options are excluded from lease payments. The Company's lease does not include termination options for either party to the lease or restrictive financial or other covenants. Payments due under the lease contract include fixed payments plus, for the Company's lease, variable payments. The Company's office space lease requires it to make variable payments for the Company's proportionate share of the building's property taxes, insurance, and common area maintenance. These variable lease payments are not included in lease payments used to determine lease liability and are recognized as variable costs when incurred. During the period of January 2021 through May 2021, the lessor granted the Company payment deferral of \$5,358 per month. This will be paid back during the period of January 2022 through May 2022 in the amount of \$5,358 per month. | Amounts reported on the Balance Sheet as of December 31,
2021 were as follows: | | |-----------------------------------------------------------------------------------|---------------| | Operating
Lease -
Right of Use Asset | \$
422,519 | | Operating
Lease -
Lease Liability | \$
484,512 | Rent paid under this lease agreement was \$203,595 for the year ended December 31, 2021. Future minimum rental payments under the office lease are as follows: | 2022 | \$
290,125 | |-------|---------------| | 2023 | 200,320 | | Total | \$
490,445 | ### **6. Subordinated Liabilities** The Company had no liabilities subordinated to the claims of general creditors as of the beginning of 2021, end of 2021, and during 2021. #### **7. Commitments and Contingencies** The Company does not have any commitments or contingencies including arbitration or other litigation claims that may result in a loss or a future obligation. #### **8. Accounts Receivable** As of December 31, 2021, the Company had accounts receivable of \$5,582,851, due from two customers, the Company has no allowance for bad debt as they believe the amounts are collectable. {14}------------------------------------------------ # **NOTES TO THE FINANCIAL STATEMENTS** For the Year Ended December 31, 2021 ### **9. Fair Value of Financial Instruments** Effective January 1, 2008, the Company adopted Statement of Financial Accounting Standards ("SFAS") ASC 820 "Fair Value Measurements and Disclosures," for assets and liabilities measured at fair value on a recurring basis. The adoption of ASC 820 had no effect on the Company's financial statements. ASC 820 accomplishes the following key objectives: Defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; Establishes a three-level hierarchy (the "Valuation Hierarchy") for fair value measurements; Requires consideration of the Company's creditworthiness when valuing liabilities; and Expands disclosures about instruments measured at fair value. The Valuation Hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. A financial instrument's categorization within the Valuation Hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of the Valuation Hierarchy and the distribution of the Company's financial assets within it are as follows: > Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. > Level 2 – inputs to the valuation methodology included quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement. Certain financial instruments are carried at cost on the balance sheet, which approximates fair value due to their short term, highly liquid nature. These instruments include accrued expenses. {15}------------------------------------------------ ### **NOTES TO THE FINANCIAL STATEMENTS** For the Year Ended December 31, 2021 #### **10. Restatement** The Company is restating its January 1, 2021 member's equity balance due to revenue that was earned and should have been recognized in 2020, but it wasn't recorded in 2020. This adjustment corrects the member's equity balance. ### **11. Subsequent Events** Management has evaluated all events or transactions that occurred after December 31, 2021, through the date of the issued financial statements. During that period, there were no significant subsequent events that required recording or disclosures in the December 31, 2021, financial statements. {16}------------------------------------------------ # **SCHEDULE I** **Computation of Net Capital under Rule 15c3-1 of the Securities and Exchange Commissions** As of December 31, 2021 | As of December 31, 2021
SUPPLEMENTAL | | |-----------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------| | COMPUTATION OF NET CAPITAL | | | TOTAL MEMBER'S EQUITY | \$
6,193,749 | | PLUS:
PPP Loan | 235,086 | | ADJUSTED NET WORTH | 6,428,835 | | LESS:
Non-Allowable Assets
Fixed Assets, net
Prepaid Expenses
Deposits
Accounts Receivable
Total Non-Allowable Assets | (40,489)
(53,395)
(76,406)
(5,583,370)
(5,753,660) | | TENTATIVE NET CAPITAL | \$
675,175 | | HAIRCUTS ON SECURITIES | - | | NET CAPITAL | \$
675,175 | | Minimum dollar net capital requirement of reporting broker dealer
(greater of \$5,000 or 6-2/3% of AI) | 23,573 | | EXCESS NET CAPITAL | \$
651,602 | | TOTAL AGGREGATE INDEBTEDNESS | 353,594 | | MINIMUM NET CAPITAL BASED ON AI | 23,573 | | PERCENTAGE OF NET CAPITAL TO AI | 52.37% | There are no material differences between net capital in Part IIA of Form X-17A-5 and net capital above. See accompanying report of independent registered public accounting firm. {17}------------------------------------------------ # **SCHEDULE II** ### **Computation for Determination of Reserve Requirements for Brokers and Dealers Pursuant to Rule 15c3- 3 under the Securities and Exchange Act of 1934** For the Year Ended December 31, 2021 ### **SUPPLEMENTAL** The Company is not required to file the above schedule as it is exempt from SEC Rule 15c3-3 under paragraph (k)(2)(i) of the rule and does not hold customers' monies or securities. {18}------------------------------------------------ # **SCHEDULE III** **Information Relating to the Possession or Control Requirements under the Securities and Exchange Commission Rule 15c3-3** For the Year Ended December 31, 2021 ### **SUPPLEMENTAL** The Company is not required to file the above schedule as it is exempt from SEC Rule 15c3-3 under paragraph (k)(2)(i) of the rule and does not hold customers' monies or securities. {19}------------------------------------------------ ![](_page_19_Picture_0.jpeg) #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Director and Member of MCP Securities, LLC We have reviewed management's statements, included in the accompanying Rule 15c3-3 Exemption Report pursuant to SEC Rule 17a-5, in which MCP Securities, Inc (the Company) - 1) did not claim an exemption under paragraph (k) of 17 C.F.R. §240.15c3-3, and - 2) is filing this Exemption Report relying on Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5 because the business activities are exclusively to participating in distributions of securities (other than firm commitment underwritings) in accordance with the requirements of paragraphs (a) or (b)(2) of Rule 15c2-4. In addition, the Company did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers, and did not carry accounts of or for customers; and did not carry PAB accounts (as defined in Rule 15c3-3) throughout the most recent fiscal year without exception. The Company'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 the Company'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 upon the Company's business activities contemplated by Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5, and related SEC Staff Frequently Asked Questions. TPS Thayer, LLC Sugar Land, Texas March 31, 2022 {20}------------------------------------------------ ### **MCP Securities LLC Exemption Report** **MCP 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. §240.17a-5(d)(l) and (4). To the best of its knowledge and belief, the Company states the following: (1) The Company does not claim an exemption under paragraph (k) of 17 C.F.R. § 240. 15c3-3, and (2) The Company is filing this Exemption Report relying on Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5 because the Company limits its business activities exclusively private placements of securities (excluding EB-5 and Regulation A+) and the Company ( 1) did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers, (other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) ofRule 15c2-4 and/or funds received and promptly transmitted for effecting transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company); (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts (as defined in Rule 15c3-3) throughout the most recent fiscal year without exception. I, James J. McCarvill, Jr., swear (or affirm) that, to my best knowledge and belief, this Exemption Report is true and correct. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_ **By: James J. McCarvill, Jr.** Title: MCP Securities, LLC **2/17/22** {21}------------------------------------------------ Report Oflndependent Registered Public Accounting Firm On Applying Agreed Upon Procedures Director and Member MCP Securities, LLC We have performed theprocedures included in Rule l 7a-5(e)(4) under the Securities Exchange Act of 1934 and in the Securities Investor Protection Corporation (SIPC) Series 600 Rules, which are enumerated below, and were agreed to by MCP Securities, LLC(Company) and the SIPC, solely to assist you and the SIPC inevaluating the Company's compliance with theapplicable instructions of the General Assessment Reconciliation (Form SIPC-7) for theyear ended December 31, 2021. Management of the Company has agreed to and acknowledged that theprocedures performed are appropriate to meet the intended purpose of assisting you and SIPC inevaluating the Company's compliance with theapplicable instructions on Form SIPC-7 for the year ended December 31, 2021. Additionally, SIPC has agreed to and acknowledged that theprocedures performed are appropriate for their intended purpose. This report may not besuitable for any otherpurpose. Theprocedures performed may not address all the items of interest to a user of thisreport and may not meet theneeds of all users of thisreport and, as such, users are responsible for determining whether theprocedures performed are appropriate for theirpurposes. Thesufficiency of these procedures is solely theresponsibility of those parties specified in thisreport. Consequently, we makeno representation regarding thesufficiency of theprocedures described below either for thepurposeforwhich thisreport has been requested or forany otherpurpose. Theprocedures we performed and ourfindings are as follows: - Compared the listed assessment payments represented on Form SIPC 6 & 7 with therespective cash disbursements record entries, including check amount for \$0.00. - 2 Compared audited Total Revenuefor theperiod of January 01, 2021 through December 31, 2021 (fiscal year-end) with the amounts reported on Forms SIPC-7, noting no differences. - 3 Compared any adjustments reported on Form SIPC-7 with supporting schedules and work papers, to the extent such exists, noting no differences. - 4 Proved thearithmetical accuracy of thecalculations reflected on Form SIPC-7, noting no material differences. - 5 If applicable, compared theamount of any overpayment applied to thecurrent assessment with the Form SIPC-7 on which it was originally computed, noting an overpayment. We were engaged by the Company to perform thisagreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the AICPA and in accordance with thestandards of the Public Company Accounting Oversight Board (United States). We were not engaged to and did not conduct an examination or a review engagement, theobjective of which would be theexpression of an opinion or conclusion, respectively, on the Company's Form SIPC-7 and for its compliance with the applicable instructions on Form SIPC-7 for theyear ended December 31, 2021. Accordingly, wedo not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would havebeen reported to you. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with therelevant ethical requirements related to our agreed-upon procedures engagement. Thisreport is intended solely for the information and use of the Company and SIPC and is not intended to beand should not beused by anyone other than these specified parties. TPS Thayer, LLC Sugar Land, TX March 31, 2022 {22}------------------------------------------------ #### **SIPC Reconciliation Pursuant to SEA Rule 17a-5** **Of the Securities and Exchange Act of 1934** As of and for the Year Ended December 31, 2021 **SIPC Reconciliation** | Total revenue | | | | | | 88,615,441 | |-------------------|--------------------------------------------|-----------------|------------------|-----------------------|-----------------------|---------------| | Deductions | | | | | | - | | | SIPC net operating revenues | | | | | 88,615,441 | | | Amount due per general assessment @ 0.0015 | | | | | \$
132,923 | | Form | Filing date | Check
number | Filed/paid
to | Date Cleared | Amount
paid | | | SIPC 6
SIPC 7 | 7/22/2021 Wire
1/21/2022 | 292 | SIPC
SIPC | 7/30/2021
2/3/2022 | 6,045\$
\$ 134,821 | | | Total amount paid | | | | | | \$
140,866 | | | Overpayment (Underpayment) | | | | | \$
7,943 | #### **Statement Related to SIPC Reconciliation** SEA Rule 17a-5(e)(4) requires a registered broker-dealer that is a member of SIPC with revenues in excess of \$500,000 to file a supplemental report (Agreed Upon Procedures Report) related to the broker-dealers SIPC annual general assessment reconciliation, or if the registered broker-dealer is exempt from SIPC membership an Exclusion from Membership, SIPC Form 3 with appropriate schedules shall be included in this supplemental section below. Broker-dealers that are members of SIPC with revenues that do not exceed \$500,000 are not required to file the Agreed Upon Procedures Report in this supplemental section. {23}------------------------------------------------ | _J | | |----|--| | | | # SECURITIES INVESTOR PROTECTION CORPORATION **SIPC-7 SIPC-7** Mail Code: 8967 P.O. Box 7247 Philadelphia, PA 19170-0001 (36-REV 12/18) (36-REV 12/18) **General Assessment Reconciliation** 12/31/21 For the fiscal year ended **\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_** (Read carefully the instructions in your Working Copy before completing this Form) ### **TO BE FILED BY ALL SIPC MEMBERS WITH FISCAL YEAR ENDINGS** 1. Name of Member, address, Designated Examining Authority, 1934 Act registration no. and month in which fiscal year ends for purposes of the audit requirement of SEC Rule 17a-5: | | l
SEC 8-68473 | FINRA | December | 7 | Note: If any of the information shown on the
mailing label requires correction, please e-mail
any corrections to form@sipc.org and so
indicate on the form filed. | O
C
G
N | |-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------|----------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------| | | MCP Securities, LLC | | | | Name and telephone number of person to | KI
R | | | 777 Third Ave, 25th Floor | | | _J | contact respecting this form. | O
W | | | New York, New York 10017 | | | | _
Angela Hajek 404-841-1010 | | | 2. A. | General Assessment (item 2e from page 2) | | | | 140,866
\$ | | | B. | Less payment made with SIPC-6 filed (exclude interest)
7/30/21 | | | | 6,045
( | ) | | C. | Date Paid
Less prior overpayment applied | | | | ( | ) | | D. | Assessment balance due or (overpayment) | | | | 134,821 | | | E. | | | | Interest computed on late payment (see instruction E) for______days at 20% per annum | | | | F. | | | Total assessment balance and interest due (or overpayment carried forward) | | 134,821
\$ | | | G. | √ the box
PAYMENT:
Check mailed to P.O. Box q
Total (must be same as F above) | □ | □
Funds Wired q
ACH q | □
✔
134,821
\$ | | | | H. | Overpayment carried forward | | | \$( | ) | | | | | | | 3. Subsidiaries (S) and predecessors (P) included in this form (give name and 1934 Act registration number): | | | | | The SIPC member submitting this form and the
person by whom it is executed represent thereby
that all information contained herein is true, correct
and complete. | | | MCP Securities, LLC | (Name of Corporation, Partnership or other organization) | | Dated the day of , 20 . (Authorized Signature) (Title) **This form and the assessment payment is due 60 days after the end of the fiscal year. Retain the Working Copy of this form for a period of not less than 6 years, the latest 2 years in an easily accessible place.** | WER | Dates: | Postmarked | Received | Reviewed | | |------------|--------------|----------------------------|----------|---------------|--------------| | SIPC REVIE | Calculations | | | Documentation | Forward Copy | | | Exceptions: | | | | | | | | Disposition of exceptions: | | | | L {24}------------------------------------------------ ### **DETERMINATION OF "SIPC NET OPERATING REVENUES" AND GENERAL ASSESSMENT** Amounts for the fiscal period beginning and ending 01/01/2021 12/31/21 | 2b. Additions:
(1) Total revenues from the securities business of subsidiaries (except foreign subsidiaries) and
predecessors not included above. | | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------| | | | | (2) Net loss from principal transactions in securities in trading accounts. | | | (3) Net loss from principal transactions in commodities in trading accounts. | | | (4) Interest and dividend expense deducted in determining item 2a. | | | (5) Net loss from management of or participation in the underwriting or distribution of securities. | | | (6) Expenses other than advertising, printing, registration fees and legal fees deducted in determining net
profit from management of or participation in underwriting or distribution of securities. | | | (7) Net loss from securities in investment accounts. | | | Total additions | | | 2c. Deductions:
(1) Revenues from the distribution of shares of a registered open end investment company or unit
investment trust, from the sale of variable annuities, from the business of insurance, from investment
advisory services rendered to registered investment companies or insurance company separate
accounts, and from transactions in security futures products. | | | (2) Revenues from commodity transactions. | | | (3) Commissions, floor brokerage and clearance paid to other SIPC members in connection with
securities transactions. | | | (4) Reimbursements for postage in connection with proxy solicitation. | | | (5) Net gain from securities in investment accounts. | | | (6) 100% of commissions and markups earned from transactions in (i) certificates of deposit and
(ii) Treasury bills, bankers acceptances or commercial paper that mature nine months or less
from issuance date. | | | (7) Direct expenses of printing advertising and legal fees incurred in connection with other revenue
related to the securities business (revenue defined by Section 16(9)(L) of the Act). | | | (8) Other revenue not related either directly or indirectly to the securities business.
(See Instruction C): | | | (Deductions in excess of \$100,000 require documentation) | | | (9) (i) Total interest and dividend expense (FOCUS Line 22/PART IIA Line 13,
Code 4075 plus line 2b(4) above) but not in excess
\$
of total interest and dividend income. | | | (ii) 40% of margin interest earned on customers securities
\$
accounts (40% of FOCUS line 5, Code 3960). | | | Enter the greater of line (i) or (ii) | | | Total deductions | | | 2d. SIPC Net Operating Revenues | 93,910,941
\$ | | 2e. General Assessment @ .0015 | 140,866
\$ | Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.