# GEORGE K. BAUM CAPITAL ADVISORS, INC. X-17A-5/A (2020-01-02) — Broker-dealer annual report - Company: GEORGE K. BAUM CAPITAL ADVISORS, INC. - Form: X-17A-5/A - Filed: 2020-01-02 - Period: 2019-10-31 - Accession: 0001527312-20-000001 - CIK: 1527312 - File #: 8-68927 - Material weakness: No - Auditor: BKD LLP - Auditor location: Kansas City, MO - Contact: Dana Bjornson - Phone: 8162835240 - Signed by: Dana L Bjornson (VP & Treasurer) Original filing: https://www.sec.gov/Archives/edgar/data/1527312/000152731220000001/Public3.pdf --- {0}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGECOMNilSSION Wllshington , D.C. 20549 0MB APPROVAL 0MB Number: 3235-0123 Expires: August 31, 2020 Estimated average burden hours oer response .. .. .. 12.00 ## **ANNUAL AUDITED REPORT FORM X-17A-5 PART Ill** | SEC FILE NUMBER | |-----------------| | | | 8-68927 | FACING PAGE Information Required of Brol--
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M M 1)0 YY | | MM/DD YY | | | | | A. REGISTRANT IDENTIFICATION | | | | | | | NAME OF BROKER-DEALER: George K. Baum Capital Advisors, Inc. | | | OFFICIAL USE ONLY | | | ADDRESS OF PRfNCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.)
Plaza Colonnade, 4801 Main Street, Suite 520 | | | | FIRM 1.0. NO. | | | | (No. and Str:cl) | | | | | | Kansas City | Missouri | | 64112 | | | | (City) | (State ) | | (Zip Code) | | | | Dana L. BJOfOSOn, VP & Treasurer | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT | | 816-474-1100
(Arca Code - Tck1>hon< !':umber) | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | BKD, LLP | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report*
(Nam, - if i11dind11al, s/(lle las/, fir\$1, middle 110111e) | | | | | | | 1201 Walnut Street, Suite 1700 Kansas City | | Missouri | 64106 | | | (Address) | (City) | (State) | | (Zip C'ock> | | | CHECK ONE:
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Cenified Public Accountant
Public Accountant
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D | Accounrant nol n:~idt:nt in United States or any or its possessions. | | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | | | | | | | | | | | | | | | | *\*Claims for exe111ptio11.from 1he require111e1111ha11he am111al report* b<' *covered* bv *1he opi11io11 of a11 independent public t1cco11111t1111 11111s1 be supported by a s/a/emenl offacls and circ11111slc111ces relied 011 as the basis for 1/ie exe111plio11. See Sec1ion 240.* / *7(1 -5(e)( l )* > 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 (11-05) {1}------------------------------------------------ #### **OATH OR AFFIRMATION** | I, Dana L Bjornson | , swear (or affirm) tlrnl, to the hc,t 11f | | |-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------| | George K. Baum Capital Advisors, Inc. | my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the Jirm o r | , "" | | of October 31 | , arc true and correct. I further swear (or affirm) 1hat
, 20 19 | | | | neithi:r 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: | | | | Notary Public·. Notary Seal
State of Missouri
Commissioned for Jackson County
Wr/ Commission Expires: July 17, 2023
~lssion Number: 15114359
~ | VP & Treasurer
Titk | | | This report ** contains (check all applic11ble boxes): | | | | 0 (a) Facing Page.
[2] (b) Statement of Financial Condition.
of Compre hensive fncome (as defined in §210.1-02 of Regulation S-X). | D (c) Statement of Income (Loss) or, if there is other comprehensive income in the period(s) presented,
11 Statc;:mcnt | | | § (d) Statement of Changes in Financial Condition.
(t) Statement of Clrnnges in Liabilities Subordinated to Claims of Cred
r Net Capital. | (e) Statement of Clrnnges in Stockholders' Equity or P11rrners' or Sok Proprietors' Capita I.
itors. | | | § (g) Computation o
(h) Compullltion for Determination of Reserve Requirements Pursuant tn Rule I 5c3-3.
(i) Information Relating to the Possession or Control Requirements Under Rule I 5c3-3. | D (i) A Reconciliation, including appropriate explanation of the Compurnrion ofNet C<1piwl U11d1.:1 Ruic I 5cJ-1 and the | | | como lidation. | Computation for Determination of the Reserve Requirements Under Exhibit A o f Ruic l Sd-.1.
0 (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods 1)f | | | §
(I) An Oath o r A ffirmation.
(m) A copy of the SIPC Supplemental Report. | ( n) A report uescribing any material inadequacies found to exist or found to have ex isted since the date of the previous audit. | | | | **For co11di1ions of co11f,de11tial /rea1111e11/ of certain portions ().f this filing, see sect ion 240. J 7 a-5(e}(3). | | {2}------------------------------------------------ ## STAT E M E NT OF FI NANCIAL CONDITION George K. Baum Capital Advisors, Tnc. October 31 , 2019 With Report of Independent Registered Public Accounting Firm {3}------------------------------------------------ George K. Baum Capital Advisors, Inc. Statement of Financial Condition October 31, 2019 # **Contents** | Report of Independent Registered Public Accounting Firm 1 | | |------------------------------------------------------------|--| | Statement of Financial Condition .2 | | | Notes to Financial Statements 3 | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) #### **Report of Independent Registered Public Accounting Firm** Board of Directors and Stockholder George K. Baum Capital Advisors, Inc. Kansas City, Missouri #### *Opinion* **0 11***the Finllncilll Statements* We have audited the accompanying statement of financial condition of George K. Baum Capital Advisors, Inc. (the "Company") as of October 31 , 2019, including 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 October 31, 2019, in conformity with accounting principles generally accepted in the United States of America. #### *Bllsis for Opinion* This financial statement is the responsibility 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. 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 supporting 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 financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We have served as the Company's auditor since 2013. Kansas City, Missouri December 20, 2019 ![](_page_4_Picture_12.jpeg) {5}------------------------------------------------ # George K. Baum Capital Advisors, Inc. Statement of Financial Condition October 31, 2019 | Assets | | |--------------------------------------------|-----------------| | Cash and cash equivalents | 4,578,567
\$ | | Other assets | 17,266 | | Total assets | 4,5951833
\$ | | Liabilities and stockholder's equity | | | Accrued compensation and benefits | 1,439,485 | | Other liabilities and accrued expenses | 14,313 | | Total liabilities | 1,453,798 | | Stockholder's equity | 3,142,035 | | Total liabilities and stockholder's equity | 4 595 833
\$ | | | | {6}------------------------------------------------ # George K. Baum Capital Advisors, Inc. Notes to Statement of Financial Condition October 31, 2019 #### **1. Organization** George K. Baum Capital Advisors, Inc. (tbe Company) is a wholly owned subsidiary of George K. Baum Holdings, Inc. (the Parent). The Company is a registered broker-dealer under the Securities Exchange Act of 1934 and is a member of the Financial Industry Regulatory Authority (FINRA), which serves as the Company's self-regulatory organization. The Company provides merger and acquisition and private placement investment banking services. On November 15, 2019, the Company filed to withdraw its broker-dealer registration with FINRA, and the termination will become effective when notice bas been received from FINRA. #### **2. Significant Accounting Policies** #### **Revenue Recognition** On November 1, 2018, the Company adopted Accounting Standards Update (ASU) 2014-09 *Revenue from Contracts with Customers: Topic 606,* which created a single framework for recognizing revenue from contracts with customers that fall within its scope. The Company adopted the standard using the modified retrospective transition method. There were no cumulative effect adjustments as a result of adoption, as the Company's previous revenue recognition policies generally conformed to the Topic 606. The Company provides financial advisory services on mergers and acqms1t10ns and private placements. Revenue for advisory arrangements is generally recognized at the point in time that performance under tbe arrangement is completed (the closing of tbe transaction) or the contract is cancelled. Success fees generated from the closing of transaction are a variable form of consideration that is constrained until an acquisition or sale closes, as that is the point in at which management believes the performance obligation has been met and collection of revenue is probable. For certain contracts, revenue is recognized over time for advisory arrangements in which the performance obligations are simultaneously provided by the Company and consumed by the client. For these arrangements, the Company has a contractual right to consideration from a client in an amount that corresponds directly with the value to the client of the Company's performance completed to date. Tbe Company recognizes this revenue to the extent that they have a contractual right to invoice. Clients are billed as services are rendered, which can be either based on a stated hourly rate or a specified monthly charge in the contract. In both cases, the invoiced amount is commensurate with the value being provided to the client, and therefore, this recognition method provides an accurate depiction of the transfer of these services. {7}------------------------------------------------ # George K. Baum Capital Advisors, Inc. Notes to Statement of Financial Condition October 31, 2019 #### **Cash and Cash Equivalents** Cash and cash equivalents represent amounts on deposit with various financial institutions and investments in money market mutual funds. At October 31, 2019, the Company's cash accounts exceeded federally insured limits by approximately \$3,829,000. #### **Other Assets** Other assets represent deposits with FINRA for future regulatory fees and expenses. #### **Income Taxes** The Parent is an S corporation for income tax purposes, and the Company filed an election to be treated as a Qualified Subchapter S Subsidiary. As an S corporation, the income tax due on the taxable income of the Company is the obligation of the stockholders of the Parent. ### **Use of Estimates** The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) 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 reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. #### **Subsequent Events** The Company has evaluated subsequent events and transactions that have occurred after the statement of financial condition date through December 20, 2019, which is the date the financial statements were issued, for potential recognition or disclosure. The Company filed to withdraw its registration as a broker-dealer with FINRA on November 15, 2019 and will no longer be conducting any new business going forward. No other events or transactions were identified requiring further recognition or disclosure. #### **Fair Value Measurements** Accounting Standards Codification (ASC) 820-1 0, *Fair Value Measurements and Disclosures,* defines fair value as the price that would be received to sell an asset or paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date. ASC 820- l O also requires expanded disclosure of instruments carried on the statement of financial condition at fair value. These disclosures define a hierarchy based on the nature and observability {8}------------------------------------------------ # George K. Baum Capital Advisors, Inc. Notes to Statement of Financial Condition ## October 31, 2019 of inputs used and require a fair valuation that maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs are those that market participants use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company's own assumptions about the inputs market participants would use in pricing the asset or liability based on the best information available under the circumstances. The hierarchy is categorized into three levels based on the inputs as follows: - Level **1** Valuations are based on quoted prices (unadjusted) in active markets for identical assets or liabilities. The types of assets and liabilities that are categorized by the Company as Level 1 generally include money market mutual funds. - Level 2 Valuations are based on quoted prices for identical or similar instruments in lessthan-active markets and valuation techniques for which significant assumptions are observable, either directly or indirectly. The observable assumptions for the valuation techniques can include contractual cash flows, benchmark yields, and credit spreads to determine fair value. - Level 3 Valuations are based on valuation techniques whereby significant assumptions and inputs are unobservable and reflect the Company's best estimate of assumptions it believes market participants would use in pricing the asset or liability. Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, when market assumptions are not readily available, the Company's own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. The Company uses prices and inputs that are current as of the measurement date, including during periods of market dislocation. See Note 5 for further discussions and disclosures related to fair value measurements. #### **3. Employee Benefits** George K. Baum & Company, an affiliate of the Company, provides a defined contribution 40I(k) profit-sharing plan for all full-time employees, aod the Company participates in the profit-sharing plan. The Company's matching contribution is comprised of both formula-based and discretionary amounts. The Company is allocated its proportionate share of the expense associated with this plan. ## **4. Commitments and Contingencies** In the ordinary course of business, the Company is examined by its self-regulatory organization regarding the Company's business. These reviews do not currently involve any actual or threatened direct claims against the Company. {9}------------------------------------------------ # George K. Baum Capital Advisors, Inc. Notes to Statement of Financial Condition # October 31, 2019 #### **5. Fair Value of Financial Instruments** The following table presents information about the Company's financial instruments measured at fair value in accordance with ASC 820-10, as of October 31, 2019: | | Level 1 | Level 2 | Level
3 | |---------------------------|---------------------|---------|------------| | Cash equivalents: | | | | | Money market mutual funds | \$
3,235,
134 | \$ | \$ | There were no transfers of assets or liabilities between levels for the year ended October 31 , 2019. There were no purchases or sales of Level 3 assets or liabilities for the year ended October 31, 2019. The fair value of all other financial instruments reflected in the statement of financial condition, consisting primarily of receivables, approximates their carrying value. #### **6. Related-Party Transactions** George K. Baum & Company, an affiliate of the Company, provides certain administrative services for the Company under a Management Services Agreement. The Company also shares personnel and other services with Baum Capital Partners Management LLC, an affiliate of the Company, under a Cost Allocation Agreement. #### 7. **Net Capital Requirements and Other Regufatory Matters** As a registered broker-dealer with the U.S. Securities and Exchange Commission (SEC), the Company is subject to the SEC Uniform Net Capital Rule (Rule 15c3-1). The Company computes its net capital requirements under the aggregate indebtedness method provided for in Rule 15c3 l, which requires that the Company maintain net capital equal to the greater of 6 2/3% of aggregate indebtedness, as defined, or \$5,000. At October 31 , 2019, the Company bad net capital of \$3,060,066 which was \$2,963,146 in excess of the required net capital. Advances to affiliates, dividend payments, and other equity withdrawals are subject to certain notification and other provisions of the Uniform Net Capital Rule of the SEC and other regulatory bodies. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.