# KITTLE CAPITAL MARKETS, LLC X-17A-5 (2021-03-03) — Broker-dealer annual report - Company: KITTLE CAPITAL MARKETS, LLC - Form: X-17A-5 - Filed: 2021-03-03 - Period: 2020-12-31 - Accession: 0001530263-21-000001 - CIK: 1530263 - File #: 8-68967 - Material weakness: No - Auditor: Katz, Sapper & Miller, LLP - Auditor location: Indianapolis, IN - Contact: Jeffrey L. Kittle - Phone: 317-846-3111 - Signed by: Jeffrey L. Kittle (Manager) Original filing: https://www.sec.gov/Archives/edgar/data/1530263/000153026321000001/kittle.pdf --- {0}------------------------------------------------ ## FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT December 31 12020 {1}------------------------------------------------ #### **CONTENTS** | | Page | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------| | FINANCIAL STATEMENTS | | | Facing Page | 1 | | Oath or Affirmation | 2 | | Report of Independent Registered Public Accounting Firm | 3-4 | | Statement of Financial Condition | 5 | | Statement of Operations | 6 | | Statement of Changes in Member's Equity | 7 | | Statement of Cash Flows | 8 | | Notes to Financial Statements | 9-10 | | SUPPLEMENTARY INFORMATION AND REPORTS | | | Computation of Net Capital Pursuant to Uniform Net Capital Rule 15c3-1 of
the Securities and Exchange Commission | 11 | | Computation for Determination of the Reserve Requirements and Information
Relating to Possession or Control Requirements for Brokers and
Dealers Pursuant to Rule 15c3-3 | 12 | | Exemption Report Pursuant to SEA Rule 17a-5(d)(4) | 13 | | Report of Independent Registered Public Accounting Firm on the Exemption Report | 14 | | | | {2}------------------------------------------------ UNITED STATES SECURJTlESAND EXCHANGECOMMJSSION W ashington, D.C. 20549 OMB APPROVAL OMB Number: 3235-0123 Expires: October 31, 2023 Estimated average burden hours per response ..... . 12.00 SEC FILE NUMBER 8-68967 ## **ANNUAL AUDITED REPORT FORM X-17** A-5 **PART Ill** FACING PAGE Info rmation Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 T hereunder | REPORT FOR THE PERIOD BEGINNING 01/01/2020 | ~~~~~~~~ | AND ENDING 12/31/2020
~ | | |--------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------|----------------------------|--------------------------------| | | MM/DD/YY | | MM/DD/YY | | | A. REGISTRANT IDENTIFICATION | | | | NAME oF BROKER-DEALER: Kittle Capital Markets, LLC | | | OFFICIAL USE ONLY | | ADDRESS OF PRINCIPAL PLACE OF BUS INESS: ( Do not use P.O. Box No.) | | | FIRM l.D. NO. | | 310 E 96th Street, Suite 400 | | | | | | (No. and Street) | | | | Indianapolis | Indiana | | 46240 | | (City) | (State) | | (Zip Code) | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT rN REGARD TO THIS REPORT
Jeffrey L. Kijtle | | (317) 846-3111 | | | | | | (Area Code - Telephone Number) | | | B. ACCOUNT ANT IDENTIFICATION | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is conta ined in this Re port* | | | | | Katz, Sapper & Miller, LLP | | | | | | (Name - if individual, state last, firs!, middle name) | | | | 800 E 96th Street, Suite 500 | Indianapolis | Indiana | 46240 | | (Address) | (City) | (State) | (Zip Code) | | CHEC K ONE: | | | | | lvlcertified Pub
li c Accountant
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Public Accountant
Accountant not resident in United States or any of its possessions. | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | | | | | | | | *\*Claims/or exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis for the exemption. See Section 240.17 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 OMB control number. {3}------------------------------------------------ #### **OATH OR AFFIRMATION** | r, Jeffrey L. Kittle | , swear (or affirm) that, to the best of | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------| | my knowledge and belief the accompanying fi
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20 20 | are true and correct. J further swear (or affirm) that | | neither the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account | | | classified sole ly as that of a customer, except as fo
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"0 (b) Statement of Financial Condition. | | | 0 (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). | | | Statement of Changes in Financial Condition.
~ (d) 0
Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capita | l. | | (e)
D Cf)
Statement of Changes in Liabilities Subordinated to Claims of Creditors. | | | Computation of Net Capital.
(g) | | | Computation for Determination of Reserve Requirements Pursuant to Rule I 5c3-3.
(h)
(i)
Information Relating to the Possession or Control Requirements Under Rule 15c3-3.
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| | | 0 U) | A Reco nciliation, including appropriate explanation of the Computation of Net Capital Under Rule l 5c3-l and the | | Computation for Determination of the Reserve Requirements Under Exhibit A of Rule I 5c3 | -3. | | D (k) A Reconci | liation between the audited and unaudited Statements of Financial Condition with respect to methods of | | consolidatio n.
0 (I) An Oath or Affirmation. | | | D (m) A copy of the SIPC Supplemental Report. | | | D (n) A report describing any material inadequacies found to exist or found to have existed since the date of the prev | ious a udit. | | **For conditions of confidential treatment of certain portions of this.filing, see section 240. l 7a-5(e)(3). | | {4}------------------------------------------------ ![](_page_4_Picture_1.jpeg) ## Opinion on the Financial Statements ## Basis for Opinion {5}------------------------------------------------ ### Supplemental Information {6}------------------------------------------------ #### STATEMENT OF FINANCIAL CONDITION December 31, 2020 ### ASSETS | \$
Cash
Prepaid expenses and other
TOTAL ASSETS
\$
LIABILITIES AND MEMBER'S EQUITY
LIABILITIES
\$
Accounts payable and accrued expenses (related party)
MEMBER'S EQUITY | | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------| | | 160,992 | | | 10 805 | | | 171 797 | | | | | | | | | | | | 140 | | | 171 657 | | | | | TOTAL LIABILITIES AND MEMBER'S EQUITY
\$ | 171.797 | {7}------------------------------------------------ ### **STATEMENT OF OPERATIONS Year Ended December 31, 2020** | REVENUE | | |--------------------------|----------------| | Commission Income | \$
93,000 | | Total Revenue | 93,000 | | EXPENSES | | | Salary and benefits | 57,000 | | Professional services | 115,701 | | Commissions and Fees | 14,000 | | Rent | 936 | | Internet | 2,115 | | Insurance | 926 | | Licenses and permits | 7,220 | | Education/Seminars | 0 | | Office Expenses | 46 | | Travel and Entertainment | 761 | | Total Expenses | 198 705 | | | | | OTHER INCOME | 96556 | | Debt Forgiveness | | | Total Other Income | 96556 | | NET LOSS | \$
{9, 149) | | | | {8}------------------------------------------------ #### STATEMENT OF CHANGES IN MEMBER'S EQUITY Year Ended December 31, 2020 | MEMBER'S EQUITY AT JANUARY 1, 2020 | \$
180,806 | |--------------------------------------|---------------| | NET LOSS | (9, 149) | | MEMBER'S EQUITY AT DECEMBER 31, 2020 | \$
171,657 | {9}------------------------------------------------ #### **STATEMENT OF CASH FLOWS Year Ended December 31, 2020** | OPERATING ACTIVITIES | | |----------------------------------------------------------------------------|----------------| | Net Loss | \$
(9, 149) | | Debt forgiveness | \$
(96,556) | | Adjustments to reconcile net Loss to net cash used by operating activities | | | Changes in certain current assets and liabilities: | | | Prepaid Expenses | (1,805) | | Accounts payable and accrued expenses (related party) | 58 077 | | Net Cash Used by Operating Activities | 47123 | | NET DECREASE IN CASH | 47,123 | | CASH | | | Beginning of Year | 210 425 | | End of Year | \$
160.992 | {10}------------------------------------------------ ## NOTES TO FINANCIAL STATEMENTS December 31, 2020 ### NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Kittle Capital Markets, LLC (the Company) is organized as an Indiana limited liability company. The Company is a broker-dealer registered with the Securities and Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority, Inc. (FINRA). The Company was approved by FINRA on July 11, 2013. The Company was formed to engage primarily in the distribution of private placements of real estate products as well as to a lesser extent, the public offering of unlisted shares of Real Estate Investment Trusts ("REITs"). The private placements will typically consist of Regulation D offerings. The offerings will be structured by the Firm's parent company, Herman & Kittle Properties, Inc., or one of its affiliates, together with outside legal counsel. Once structured, the offerings will be marketed by the Company. The securities will be offered on a best-efforts basis to investment advisors, accredited investors that are known to the Company's registered personnel. The Company, for the year ended December 31, 2020 had commission income, however, operations still resulted in a loss. The managing member has stated he has the intent and ability to fund any future losses either individually or through the parent company. Estimates: The Company uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingencies and the reported revenues and expenses. Accordingly, actual results could vary from those estimates. #### Revenue from Contracts with Customers Performance Obligations: Revenue from contracts with customers is recognized when, or as, the Company satisfies its performance obligations by transferring promised goods or services performed to customers. A good or service is transferred to or performed for a customer when, or as, the customer obtains control of that good or service performed. A performance obligation may be satisfied over time or at a point in time. Revenue from a performance obligation satisfied at a point in time is recognized at the point in time that the Company determines the customer obtains control over the promised good or service performed. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for those promised goods or services performed. Private Placement: Performance obligations in these arrangements vary dependent on the contract, but are typically satisfied upon completion of the arrangement. Placement fees are recognized upon completion of a deal and are generally classified as Commission Income. *Cash* is maintained in bank deposit accounts which, at times, may exceed federally insured limits of \$250,000. To date, there have been no losses in such accounts. Income Taxes: The Company is a limited liability company whereby taxable income, losses, credits, etc. are recognized for federal and state income tax reporting purposes by its member. Accordingly, no provision or liability for federal or state income taxes has been reflected in the accompanying financial statements. {11}------------------------------------------------ ## **NOTES TO FINANCIAL STATEMENTS December 31, 2020** #### **NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)** The Company's member files federal and various state income tax returns. The Company's member is no longer subject to U.S. federal and state income tax examinations by tax authorities for all years before 2017. **Subsequent Events:** The Company has evaluated the financial statements for subsequent events occurring through February 12, 2021, the date the financial statements were available to be issued. #### **NOTE 2 - NET CAPITAL REQUIREMENT** As a broker-dealer registered with the SEC and FINRA, the Company is subject to the SEC Uniform Net Capital Rule 15c3-1, which requires the maintenance of minimum Net Capital and requires that the ratio of Aggregate Indebtedness to Net Capital, both as defined, shall not exceed 15 times Net Capital. At December 31, 2020, the Company had Net Capital of \$160,852, which was \$155,852 in excess of the required Net Capital of \$5,000. #### **NOTE 3 - CONCENTRATION** Approximately 100% of Commissions Income is from Kittle Funding, LLC an affiliate of the Parent company. #### **NOTE 4 - RELATED PARTY TRANSACTIONS** The Company incurs expenses pursuant to an expense sharing arrangement with its Parent Company for expenditures such as salaries and rent. Expenses related to this arrangement totaled \$57 ,936 in 2020. During the year \$93,000 of commission income was transacted with Kittle Funding, LLC .. During 2020 the Company's Parent forgave expenses incurred in 2018 and 2019 totaling \$38,620 and expenses incurred during 2020 of \$57,936. The total forgiveness by the Company's Parent was \$96,556. #### **NOTE 6 - IMPACT OF PANDEMIC** The Company does not believe that the COVID-19 19 Pandemic has had an adverse impact on its operations. The Company will continue monitoring the situation closely. {12}------------------------------------------------ SUPPLEMENTARY INFORMATION AND REPORTS {13}------------------------------------------------ #### COMPUTATION OF NET CAPITAL PURSUANT TO UNIFORM NET CAPITAL RULE 15c3-1 OF THE SECURITIES AND EXCHANGE COMMISSION December 31, 2020 | CREDITS | | |---------------------------------------------------------------------------------------------|------------------| | Total Member's Equity | \$
171,657 | | DEBITS
Non-allowable Assets:
Prepaid expenses and other
Total Non-allowable Assets | 10 805
10 805 | | NET CAPITAL COMPUTED | 160,852 | | MINIMUM NET CAPITAL REQUIRED | 5 000 | | NET CAPITAL IN EXCESS OF REQUIREMENT | \$
155,852 | | AGGREGATE INDEBTEDNESS -Accounts payable and accrued expenses | \$
140 | | RATIO OF AGGREGATE INDEBTEDNESS TO NET CAPITAL | 0.001 | | RECONCILIATION OF NET CAPITAL
Net Capital Per Form X-17A-5, Part II A (FOCUS Report) | \$
160.852 | | Net Capital Per Above | \$
160,852 | {14}------------------------------------------------ #### **COMPUTATION FOR DETERMINATION OF THE RESERVE REQUIREMENTS AND INFORMATION RELATING TO POSSESSION OR CONTROL REQUIREMENTS FOR BROKERS AND DEALERS PURSUANT TO RULE 15c3-3 Year Ended December 31, 2020** (1) The Company does not claim an exemption under paragraph (k) of 17 C.F.R. § 240. 15c3-3, and is relying on Footnote 74 ofthe SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a· 5 because the Company limits its business activities exclusively to: (1) mergers and acquisitions advisory services; (2) private placement of securities, and (3) wholesale and/or retail distribution of publicly registered non-traded real estate investment trusts (REITS), 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) of Rule 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. {15}------------------------------------------------ ## **Exemption Report Pursuant to SEA Rule 17a-5(d)(4)** Kittle Capital Markets 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-S(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 to: (1) mergers and acquisitions advisory services; (2) private placement of securities, and (3) wholesale and/or retail distribution of publicly registered non-traded real estate investment trusts (REITS), 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) of Rule 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. Kittle Capital Markets LLC I, Jeff Kittle, affirm that, to my best knowledge and belief, this Exemption Report is true and correct. Manager Title February \_L, 2021 {16}------------------------------------------------ Our People: Your Success ![](_page_16_Picture_1.jpeg) ## Report of Independent Registered Public Accounting Firm on the Exemption Report ## To the Member and Board of Directors of Kittle Capital Markets, LLC We have reviewed management's statements, included in the accompanying Exemption Report pursuant to SEA Rule 17a-5(d)(4), in which (1) Kittle Capital Markets, LLC identified the following: Kittle Capital Markets, LLC does not claim an exemption under paragraph (k) of 17 C.F.R.§ 240. 15c3-3, and (2) Kittle Capital Markets, LLC is filing the Exemption Report relying on Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5 because Kittle Capital Markets, LLC limits its business activities exclusively to: (1) mergers and acquisitions advisory services; (2) private placement of securities, and (3) wholesale and/or retail distribution of publicly registered nontraded real estate investment trusts (REITS), and Kittle Capital Markets, LLC (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) of Rule15c2-4 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 Kittle Capital Markets, LLC); (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. Kittle Capital Markets, LLC'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 Kittle Capital Markets, LLC'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 on the conditions set forth in Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5. Indianapolis, Indiana February 12, 2021 14 Katz, Sapper & Miller, LLP Certified Public Accountants 800 East 96th Street. Suite 500 Indianapolis, IN 46240 Tel 317.580.2000 Web ksmcpa.com Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.