# FIRST CRAFT SECURITIES, LLC X-17A-5 (2021-02-17) — Broker-dealer annual report
- Company: FIRST CRAFT SECURITIES, LLC
- Form: X-17A-5
- Filed: 2021-02-17
- Period: 2020-12-31
- Accession: 0001534667-21-000001
- CIK: 1534667
- File #: 8-69006
- Material weakness: No
- Auditor: AJSH & Co LLP
- Auditor location: New Delhi, K7
- Contact: Daniel Conway
- Phone: 818-272-8890
- Website: craftpartnerslic.com
- Signed by: Daniel Conway (Member)
Original filing: https://www.sec.gov/Archives/edgar/data/1534667/000153466721000001/auditpack_compressed1.pdf
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### UNITEDSTATES SECURITIES ANDEXCHANGE COMMISSION Washington, D.C. 20549
# ANNUAL AUDITED REPORT FORM X-17A-5 PART III
| | OMB APPROVAL | |
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| OMB Number: | | 3235-0123 |
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| SEC FILE NUMBER | |
|-----------------|--|
| 8-69006 | |
FACING PAGE
Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder
1/1/20 REPORT FOR THE PERIOD BEGINNING
unmann
minovi
12/31/20
AND ENDING
| | STATUTER THE CONSTITUTION OF CONSULTION OF CONSULTION OF CONSULTION OF CONSULTION OF CONSULTION OF CONSULTION OF CONSULTION OF CONSULTION OF CONSULTION OF CONSULTION OF CONSU | | ATTATUTATA T. I | |
|-------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------|--|
| | A. REGISTRANT IDENTIELCATION | | | |
| NAME OF BROKER-DEALER: First Craft Securities, LLC
ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | OFFICIAL USE ONLY | |
| | | | FIRM I.D. NO. | |
| PO Box 901 | | | | |
| | (No. and Street) | | | |
| St Michaels | MD | 21663 | | |
| (City) | (State) | (Zip Code) | | |
| NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
Daniel Conway | | | 818-272-8890 | |
| | | | (Area Code - Telephone Number) | |
| | B. ACCOUNT ANT IDEATHEICATION | | | |
| INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report®
AJSH & Co LLP | | | | |
| | (Name - if individual, state last, first, middle name) | | | |
| C-7/227, Sector-7, Rohini | New Delhi | | 110085 | |
| (Address) | (City) | (State) | (Zip Code) | |
| | | | | |
CHECK ONE:
Certified Public Accountant
Public Accountant
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 240.17a-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.
SEC 1410 (11-05)
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### OATH OR AFFIRMATION
| Daniel Conway | to the swear (or affirm) that to the best of |
|---------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------|
| First Craft Securities, LLC | my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of |
| of December 31 | . 20 20 are true and correct. I further swear (or affirm) that |
| | neither the company nor any partner, principal officer or director has any proprietary interest in any account |
| classified solely as that of a customer, except as follows: | |
| None. | |
| Subscribed and sworn before me, a
Notary Public in and for the State of
Maryland, Talbot County this 16 | |
| day of repruguy , di | Signature |
| My commission expires > 15-00 | Membra |
| | ANEN
Title |
| | |
| Notary Public | |
| | |
| this report " " contains (check all applicable boxes):
(a) Facing Page. | PUBLIC |
| (b) Statement of Financial Condition. | |
| | (c) Statement of Income (Loss) or, if there is other compresses in the period s) presented, a Statement |
| | of Comprehensive Income (as defined in §210.1-02 of Regulation S-X). |
| (d) Statement of Changes in Financial Condition. | (e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital. |
| | (f) Statement of Changes in Liabilities Subordinated to Claims of Creditors. |
| (g) Computation of Net Capital. | |
| | (h) Computation for Determination of Reserve Requirements Pursuant to Rule 15e3-3. |
| | (i) Information Relating to the Possession or Control Requirements Under Rule 15e3-3. |
| | (j) A Reconciliation, including appropriate explanation of Net Capital Under Rule 15c5-1 and the |
| | Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3. |
| consolidation. | (k) A Reconciliation between the audited Statements of Financial Condition with respect to methods of |
| (I) An Oath or Affirmation. | |
| (m) A copy of the SIPC Supplemental Report. | |
| | (n) A report describing any material inadequacies found to existed since the date of the previous andit. |
\*\* For conditions of confidential treatment of certain portions of this filing, see section 240.17a-5(e)(3).
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Annual Audit Report
December 31, 2020
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December 31, 2020
### Table of Contents
| Report of Independent Registered Public Accounting Firm | 1 |
|--------------------------------------------------------------------------------------------------------------------------|-----|
| Financial Statements: | |
| Statement of Financial Condition | 3 |
| Statement of Operations | प |
| Statement of Changes in Member's Equity | 5 |
| Statement of Cash Flows | 6 |
| Notes to the Financial Statements | 7-9 |
| Supplemental Information: | 10 |
| Schedule I: | 11 |
| Computation of Net Capital Under Rule 15c3-1
of the Securities and Exchange Commission | |
| Reconciliation with Company's Net Capital Computation | |
| Schedule II: | 12 |
| Computation to Determination of Reserve Requirements
Under Rule 15c3-3 of the Securities and Exchange Commission | |
| Information Relating to Possession or Control Requirements
Under Rule 15c-3 of the Securities and Exchange Commission | |
| Report of the Independent Registered Public Accounting Firm on
Exemption report | 13 |
| SEA 15c3-3 Exemption Report | 14 |
| Report of Independent Registered Public Accounting Firm on Applying
Agreed-Upon Procedures | 15 |
SIPC 7
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#### Report of the Independent Registered Public Accounting Firm
To the Members of First Craft Securities, LLC
#### Opinion on the Financial statements
We have audited the accompanying statement of financial condition of First Craft Securities, LLC (the "Company") as of December 31, 2020, and the related statements of operations, changes in member's equity and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
#### 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 the 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 of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks 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 used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provide a reasonable basis for our opinion.
#### Supplementary Information
The supplementary information contained in Schedule | - Computation of Net Capital to Unitorm Net Capital Rule 15c3-1 of Securities and Exchange Commission has been subjected to audit procedures performed in conjunction with the audit of Company's financial statements. The supplemental information is the responsibility of the Company's management. Our audit procedures included determining whether the supplemental 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 information.
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In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 CFR § 240.17a-5. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.
ATCH & CO UP
AJSH & Co LLP
We have served as the Company's Auditor since 2018.
New Delhi, India February 15, 2021
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### Statement of Financial Condition
## December 31, 2020
| Assets | | | |
|---------------------------------------|----|-----------|--|
| Cash and cash equivalents | S | 1,010,823 | |
| Prepaid expense | 5 | 687 | |
| Total Assets | 5 | 1,011,510 | |
| Liabilities and Member's Equity | | | |
| Liabilities | | | |
| Accounts Payable | 5 | 1,860 | |
| Accrued Payroll Expenses | 5 | 2,222 | |
| PPP Loan | 5 | 18,125 | |
| Total Liabilities | 5 | 22,207 | |
| Member's Equity | \$ | 989,303 | |
| Total Liabilities and Member's Equity | 5 | 1,011,510 | |
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#### Statement of Operations
#### For the Year Ended December 31, 2020
| Revenue | | |
|--------------------------|----|----------|
| lnves ment banking fees | \$ | 62,119 |
| Total Revenue | s | 62,119 |
| Expenses | | |
| Commission expe se | \$ | 62,119 |
| Pay oil expenses | s | 25,280 |
| Accounting fees | \$ | 5,250 |
| Taxes and licenses | \$ | 5,630 |
| Regulatory fees | \$ | 3,766 |
| 0 her operating expenses | \$ | 13,607 |
| Total Expenses | \$ | 115,652 |
| Net Loss | \$ | (53,533) |
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## Statement of Changes in Member's Equity
## For the Year Ended December 31, 2020
| December 31, 2019 | ഗ
1,177,836 |
|-------------------|----------------|
| Net loss | ഗ
(53,533) |
| Withdrawals | 5
(135,000) |
| December 31, 2020 | 5
989,303 |
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### Statement of Cash Flows
### For the Year Ended December 31, 2020
| cash Flows from Operating Activities | | | | | |
|---------------------------------------------------------------------------------------------------------------|----|-----------|-------------------------------------------------------------------------|---------|-----|
| e loss
Adj ust ments o reconcile net income
to net cash LJSed in activities:
(Increase) decrease in: | \$ | (53,533) | | | |
| | | | Prepaid elAcco nts payable
Accrued Payroll Expenses | \$
s | |
| ( ,75 ) | | | | | |
| 1,902 | | | | | |
| Net Cash from Operating Activities | \$ | (55,782} | | | |
| Cash Flows from Financing Actfvities | | | | | |
| Loan Proceeds | \$ | 18,12S | | | |
| Withdrawals | \$ | (135,000) | | | |
| Net Cash from Finandng Activities | s | {116,875} | | | |
| Net Increase in Cash and Cash Equivalents | s | {172,657) | | | |
| Cash and cash equivalents at beginning of year | \$ | 1,183,480 | | | |
| Cash and Cash Equivalents at End of Year | s | 1,010,823 | | | |
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### Notes to the Financial Statements December 31, 2020
#### 1. Organization
First Craft Sec ri ies, LLC (the "Company") was organized as a Dela are limited liabiHty company on May 3, 2011, and as registered with he Securities and Exchange Commission as a securities broker dealer on February 21, 20 3. Effective October 1, 2020, he ownership of e Company was ransferred from Craft Partners, LLC to the managing member of the Company ( e "Member"). The Company mo ed its operations from Encino, California o St ichaels, · aryland in 2020. The Company provides financial advisory and related services.
#### 2. **Significant Accounting Polides**
#### **Basis** of **presentation**
The summary of significant acco nting policies presented below is designed to assist in understanding the Company's mancial statements. These accounting policies conform o accoun ing principles generally accepted in the United States of America. ("GAAP") in all material respects, and have been consistently applied in preparing the accompanying financial statements.
#### Cash and Cash Equivalents
The Company considers all demand deposits held in banks and certain highly liquid inves men s wi original maturities of hree months or less, other t an those held or sale in **t** e ordinary course of business, o be cash equivalents.
#### **Revenue**
The revenue recognition guidance of ASC Topic 606, Revenue from Contracts with Customers, requires hat an entity recognize re enue to depict he ransfer of promised goods or services o cus omers in an amount hat reflec 5 the consideration to whic he enti ye pects o be entitled in exchange for those goods or services. The guidance requires an entity to follo N a five-step model to (a) identify the con ract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transac ion price to the performance obligations in he contract, and (e) recogniz.e revenue when (or as) e en fty satisfies performance obliga ion. In determining he transaction price, an enti may include variable consideration onty o the extent tha it is probable tha a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated vith he ariable considera ion is resolved. The recognition and measurement of revenue is based on he assessment of individual contract terms. Significant judgment is required o determine vhe her
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performance obligations are sa isfied at a point in ime or over time. ln\lestment banking fees are earned from providing financial advisory services to clients. Revenue is recognized when earned either by fee con ract or the s ccess of a prede ermined specified event and collection is reasonably determinable.
### Use of **Estimates**
The preparation of tnancial statemen s in accordance accoun ·ng principles generally accepted in the United States o America requires managemen to ma e estimates and assumptions hat affect the reported amounts of assets and liabilities at the date of the mancial statements and the reported amounts of revenues and expenses during the reporting period. Actual resul s could di er from hose es imates and may have a impact on fu ure periods.
### Fair Value of Financial Instruments
Unless otherwise indicated, the fair values of all reported assets and liabilities hat represen financial instruments (none of which are held for trading purposes) appro imate the carrying values o such amoun s. The adoption of this guidance did not have a material impact on our mancial statements.
#### Income **Taxes**
The Company is a single member limited liabiltty company and is trea ed as a disregarded entity for tax purposes. In lieu of income taxes1 he Company passes 100% of i *s* taxable income and expenses o rts sole member. Therefore~ no provisron or liability or federal or s ate income ta es is included in these mancial sta ements. The Company is ho ever, subject to annual aryland and Dela are LLC taxes.
### Debt
On June 25, 2020, the Company received loan proceeds in he amount of \$18,125 from Ce ic Ban Corporation, pursuan o he Paycheck Protection Program ("PPP'') of the CARES Act, which was enacted March 27, 2020. The loan, which is in he form of a ote da ed June 23, 2020, ma ures on June 23, 2025 and bears interest at a rate o 1% per annum, payable monthly commencing *on* May 23, 2021. The Note rnay be prepaid by the Company at any time prior to maturity ith no prepaymen penalties. Under the erms o the PPP, certain amounts of he loan may be orgiven if they are used for qualifying expenses as described in the CARES Act.
### 3. Recently ,~sued Accounting Pronouncements
There were no new accounting prono ncements during the year ended December 31, 2020 that we believe would ha e a material impact on our mancial position o, results of operations.
### 4. Net Capit..JI Requirements
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The Company is subject o the Securities and Exchange Commission's uniform net capital Rule 1Sc.3-1 of Securities and Exchange Act, which requires he Company to main ain, at all times, a minimum net capi al eq al to or greater than \$5,000 and a ra io of aggregate indebtedness o net capital not exceeding 15 o 1, both as defined. At December 31, 2020, he Company's net capital vas \$988,616 hich exceeded he re-quiremen by \$983,616 Aggregate indebtedness at December 31, 2020 to aled \$22,207. The Company's percen age of aggregate indebtedness o net capi al was 2.2%.
### 5. **Risk** Concentration
For he year ended December 31, 2020, 100% of he Company revenue was earned rom t vo clien s. Ti e Company's cash consists of cash held a o nancial lnsti u ions. he balance a one financial institution may e ceed government ins ranee limits during the year.
### 6. Related Party Transactions
Pursuant o an expense sharing agreemen , effective January 1, 2020, be ween Craft Pa ners, LLC and the Company, Craft Partners, llC pays certain overhead expenses of the Company including ren , office equipment and supplies, insurance, and other adminis rative and overhead expenses. he Company reimburses Craft Partners, UC for such expenses, de ermined to be \$1,000 per month iii 2020. Craft Partners, LC and First Craft Secur" ies, LLC are both owned by e Member.
### **7. SubsequentEvents**
The,e were no subsequent *evens* through February 15, 2021, he da e which he financial statements ere issued.
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### SUPPLEME TAL INFORMATION
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Schedule I
Computation of et Capital Under Rule 1Sc3-1
As of December 31, 2020
| et capital | | |
|---------------------------------------------------------------------------------------------------------------------|----|---------|
| Total member's eq ity | s | 989,303 |
| Less:
on-allowable assets: | | |
| Prepaid expense | | 687 |
| Net Capital | \$ | 988,616 |
| e minimum capital requiremen of 6 2/
3% of aggregate
indebtedness o \$22,207 or \$5,000, whichever is greater | | 5,000 |
| et capital
Excess | s | 983,616 |
Reconciliation **with** Company's Net capital Computation (Included in Part II of Form X-
17A-5 as of December 31, 2020)
There were no ma erial differences noted in he Company's net capital computation at December 31, 2020.
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Schedule II
Computation for De ermination of Reserve Requirements Under Rule 15c3-3 of the Securities and Exchange
Commission
For the Year Ended December 31, 2020
For he year ended December 31, 2020, the Comp<1ny is exemp from the provision of Rule 15c3-3 as supported by oo note 7 to SEC Release 34-70073, and as discussed in Q & A 8 of he rela ed FAQ issued by SEC sta . The Company does not affect transactions for anyone defined as a customer under Rule 15c3-3. Accordingly, there are no ttems to report under he requirem ents of this Rule.
## Information Relating to Possession or Control Requirements Under Rule 15c3-3 of the Securtties and Exchange
## C-Ommission
## For the Year Ended De.cember 31, 2020
For he year ended December 31, 2020, he Company is e empt from the provision of Rule 15c3-3 as suppo ed by ootnote 7 to SEC Release 34-70073, and as discussed in Q & A 8 of he related FAQ issued by SEC sta . The Company does not affect transactions for anyone defined as **a** cus omer under Rule 1Sc3-3. Accordingly, here are no items o report under he requirements of his Rule.
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### Report of Independent Registered Public Accounting Firm
To the Members of First Craft Securities, LLC
We have reviewed management's statements, included in the accompanying First Craft Securities, LC's Exemption Report, in which (1) First Craft Securities, LLC identified the following provisions of 17 C.F.R. under which the Company claimed an exemption from 17 C.F.R. §240.17a-5 under footnote 74 of 17a-5 (the "exemption provisions") and (2) the Company stated that they met the identified exemption provisions 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 on the provisions set forth in SEC Footnote 74 of SEC Rule 17a-5 under the Securities Exchange Act of 1934.
ASCH 26 11
AJSH & Co LLP
New Delhi, India February 15, 2021
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FIRST CRAFT SECURITIES, LLC 103 Mulberry Street PO Box 901 Saint Michaels, MD 21663 818-272-8890 (phone) 818-272-8891 (fax) www.craftpartnerslic.com
FIRST CRAFT SECURITIES, LLC
## SEA 15c3-3 Exemption Report
I, Daniel S. Conway, manager of First Craft Securities, LLC (the "Company") represent the following:
- 1. The Company claims an exemption from 17 C.F.R. §240.15c3-3 in reliance on footnote 74 to SEC Release 34-70073, and as discussed in Q & A 8 of the related FAQ issued by SEC staff. The Company does not fit one of the exemptive provisions. The Company receives fees for mergers and acquisitions advisory and private placements and it does not hold customer funds or securities.
- 2. The Company met the identified exemption provisions in 17 C.F.R. §240.15c3-3 throughout the most recent fiscal year as of December 31, 2020 without exception; and
-
- 3. There were no exceptions during the most recent fiscal year in meeting the identified exemption provisions in 17 C.F.R. §240.15c3-3.
I affirm that, to the best of my knowledge and belief, the Exemption Report is true and correct. Respectfully submitted,
Daniel S. Conway February 8, 2020
Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.