# 16 POINTS LLC X-17A-5 (2020-02-27) — Broker-dealer annual report

- Company: 16 POINTS LLC
- Form: X-17A-5
- Filed: 2020-02-27
- Period: 2019-12-31
- Accession: 0001544304-20-000004
- CIK: 1647385
- File #: 8-69648
- Material weakness: No
- Auditor: YSL & Associates LLC
- Auditor location: New York, NY
- Contact: Linda Grimm
- Phone: 212-897-1685
- Signed by: mark overley (General Securities Principal)

Original filing: https://www.sec.gov/Archives/edgar/data/1647385/000154430420000004/16pts19s5.pdf

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UNITED ST A TES SECURJTIES AND EXCHANGE COMMISSION Washington, D.C. 20549

## **ANNUAL AUDITED REPORT FORM X-17A-5**  PART ill

#### **FACING PAGE**

**lnformation Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder** 

| REPORT FOR THE PERIOD BEGTNNTNG                                          | ___<br>_<br>___;;O;;l/"""0=-1/;:;I 9                                          | AND ENDING    | 1/19<br>12/3                                         |  |  |
|--------------------------------------------------------------------------|-------------------------------------------------------------------------------|---------------|------------------------------------------------------|--|--|
|                                                                          | MM/DD/YY                                                                      |               | MM/DDNY                                              |  |  |
|                                                                          | A. REGISTRANT IDENTIFICATION                                                  |               |                                                      |  |  |
| NAME OF BROKER -<br>DEALER:                                              |                                                                               |               |                                                      |  |  |
| 16 Points LLC                                                            |                                                                               |               | OFFICIAL USE ONLY                                    |  |  |
| ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.)        | FIRM ID. NO.                                                                  |               |                                                      |  |  |
|                                                                          | 39 Broadway, Suite 3300, Room 14                                              |               |                                                      |  |  |
|                                                                          | (No. and Street)                                                              |               |                                                      |  |  |
| New Yark                                                                 | NY                                                                            |               | J 0006                                               |  |  |
| (City)                                                                   | (State)                                                                       |               | (Zip Code)                                           |  |  |
| NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT  |                                                                               |               |                                                      |  |  |
|                                                                          |                                                                               |               |                                                      |  |  |
| Linda Grimm                                                              |                                                                               |               | 1?) 897-1685<br>(2<br>(Arca Code -<br>Telephone No.) |  |  |
|                                                                          |                                                                               |               |                                                      |  |  |
|                                                                          | B. ACCOUNTANT IDE~TCA TTON                                                    |               |                                                      |  |  |
| INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report* |                                                                               |               |                                                      |  |  |
|                                                                          |                                                                               |               |                                                      |  |  |
|                                                                          | YSL & Associates LLC<br>(Name - if individual, state last, firsL middle name) |               |                                                      |  |  |
|                                                                          |                                                                               |               |                                                      |  |  |
| New York<br>I I Broadway, Suite 700<br>(Address)                         | (City)                                                                        | NY<br>(State) | 10004<br>(Zip Code}                                  |  |  |
|                                                                          |                                                                               |               |                                                      |  |  |
| CHECK ONE:                                                               |                                                                               |               |                                                      |  |  |
| [!] Cenified Public Accountant                                           |                                                                               |               |                                                      |  |  |
| D<br>Public Accountant                                                   |                                                                               |               |                                                      |  |  |
| D                                                                        |                                                                               |               |                                                      |  |  |
| Accountant not resident in United States or any of its possessions.      |                                                                               |               |                                                      |  |  |
|                                                                          | FOR OFFICIAL USE ONLY                                                         |               |                                                      |  |  |
|                                                                          |                                                                               |               |                                                      |  |  |

*\*Claims for exemplion from !he requiremenl /hat !he annual report be corered by the opinion of an i11depe11de11I public accounlanl must be supported by a statement of facts and circumstances relied 011 as the basis for the exemption. See section* 240. *17a- ){e)(]).SEC* 1410 (3-91)

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SEC FILE NUMBER 8-69648

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Statement of Financial Condition December 31, **2019** 

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#### **TABLE OF CONTENTS**

#### **This report \*\* contains (check all applicable boxes):**

- rx] Report oflndependent Registered Public Accounting Finn.
- lxJ Facing Page.
- [x] Statement of Financial Condition.
- [ ] Statement of Operations.
- [ ] Statement of Changes in Member's Equity.
- [ ] Statement of Cash Flows.
- [ ] Statement of Changes in Liabilities Subordinated to Claims of General Creditors (not applicable).
- [ ] Computation of Net Capital for Brokers and Dealers Pursuant to Rule I 5c3- 1 under the Securities Exchange Act of 1934.
- [ ] Computation for Determination of Reserve Requirements for Brokers and Dealers Pursuant to Rule 15c3-3 under the Securities Exchange Act of 1934.
- [ ] Information Relating to the Possession or Control Requirements for Brokers and Dealers Pursuant to Rule I 5c3-3 under the Securities Exchange Act of 1934 (not

applicable).

- [ ] A Reconciliation, including appropriate explanations, of the Computation of Net Capital Pursuant to Rule 15c3- l (included with item (g)) and the Computation for Detcnnination of Reserve Requirements Under Rule I 5c3-3 (included in item (g)).
- [ ] A Reconciliation Between the Audited and Unaudited Statements of Financial Condition With Respect to Methods of Consolidation (not applicable).
- [x] An Affirmation.
- [ ] Report oflodepcndent Registered Public Accounting Firm Regarding Rule I 5c3-3 Exemption Report.
- [ j Statement of Exemption from Rule I 5c3-3.
- \*\* *For conditions of confidential treatment of certain portions of this fi/;ng, see section 240.* / *la-5(e)(3).*

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#### **AFFIRMATION**

I, Mark Overley, affirm that, to the best of my knowledge and belief, the accompanying statement of financial condition pertaining to 16 Points LLC for the year ended December 31, 2019, is true and correct. I further affirm that neither the Company nor any officer or director has any proprietary interest in any account classified solely as that of a customer.

Sign

General Securities Pr· Title

Notary Public

State of Texas County of Travis This Instrument was acknowledged before me on 2 7 F~ b11v..r.v ,· *'2.ow*  By v,~ ~ ' NOTAR y **~;;;..;....;.:;......,t;.....,.;;.;.;...;;.:;.c\_.** 

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![](_page_4_Picture_0.jpeg)

11 Broadway, Suite 700, New York, NY 10004 Tel: {212) 232-0122 Fax: {646) 218-4682

## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Member of 16 Points LLC

#### Opinion on the Financial Statement

We have audited the accompanying statement of financial condirion of 16 Points LLC (the «Companl') as of December 31. 2019, and the related notes (colleeri\'ely referred to as the "financial statement"). In our opinion, the statement of :financial condition presents fairly, in aJI material respects, tbe fina11cial position of the Company as of December 31 , 2019 in confonnity with accounting principles generally accepted in the United States of America.

#### **Basis for Opinion**

This financial statement is the responsibility of the Company's management. Our responsibility is to ex-press an opinion on the Company's financial statement based on our audit. We arc a public accounting firm registered with the Public Company Accounting Oversight Board (United Scates) (PCAOB) and are required to be independent with respect to the Company iu accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commjssion 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 sfatcment 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 rest basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also mcluded evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion.

We have served as 16 Points LLC's auditor since 2016.

New York, NY

February 25, 2020

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## Statement of Financial Condition **December 31 , 2019**

| Assets                                |    |            |
|---------------------------------------|----|------------|
| Cash                                  | s  | 157,825    |
| Fees receivable                       |    | 102,570    |
| Prepaid expenses                      |    | 80,51 J    |
| Tota I assets                         | s  | 340,906    |
| Liabilities and Member's Equity       |    |            |
| Accrued expenses                      | \$ | 23,25<br>1 |
| Deferred revenue                      |    | 501000     |
| Total liabilities                     |    | 73,251     |
| Member's equity                       |    | 267,655    |
| Total Liabilities and member's equity | \$ | 340,906    |

The accompanying noces are an imegral pan of chis financial sracemem.

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### **1. Nature of Operations**

16 Points LLC, (the "Company"), a New York limited liability company, is registered with the Securities and Exchange Commission (the "SEC") and a member of the Financial industry Regulatory Authority C.flNKA").

The Company serves as an introducing broker for the private placement of securities with both institutional and accredited individual investors, provides advisory solutions related to mergers and acquisitions and refer investors, broker-dealers and hedge funds to unaffiliated broker/dealers for order execution and settlement for which it will receive referral fees.

## 2. **Summary of Significant Accounting Policies**

#### **Basis of Presentation**

This financial statement was prepared in conformity with accounting principles generally accepted in the United States of America which 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 statement Actual results could differ from these estimates.

#### **Cash**

All cash deposits are held by one financial institution and therefore are subject to the credit risk at that financial institution. The Company has not experienced any losses in such accounts and does not believe there to be any significant credjt risk with respect to these deposits.

#### **Revenue Recognition**

The revenue recognition guidance under ASC Topic 606, *Revenue from Contracts with Customers,* requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The gujdance requires an entity to follow a five-step model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and ( e) recognize revenue wben (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration on1y to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved.

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#### **2. Summary of Significant Accounting Policies (continued)**

#### **Revenue Recognition (continued)**

Revenues from commissions are billed and recognized when private placements have been completed and commissions are earned and collectible. Advisory fees are recognized based on the terms of the contracts and are recorded when the services are rendered. Referral fees are recognized when fees are earned and collectible.

The beginning and ending balance of receivables, contract assets and contract liabilities are presented below:

|                            | Receivables |         | Contract<br>Assets |  | Contract<br>Liabilities |        |
|----------------------------|-------------|---------|--------------------|--|-------------------------|--------|
| Balance, January 1, 2019   | \$          | 429,110 | S                  |  | s                       |        |
| Balance, December 31, 2019 | \$          | 102,570 | S                  |  | s                       | 50,000 |

The Company recognized the entire \$429, l l O of receivables that were present on January I , 2019 through revenue during the year ended December 31, 2019.

#### *Significant Judgement*

Revenue from contracts with customers includes co111IDJss1011 income and fees from investment banking and asset management services. The recognition and measurement of revenue is based on the assessment of individual contract tenus. Significant judgment is required to determine whether perfom1ance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance obligations are identified; when to recognize revenue based on the appropriate measure of the Company's progress under the contract; and whether constraint<; on variable consideration should he applied due to uncertain future events.

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#### **2. Summary of Significant Accounting Policies (continued)**

#### **Income Taxes**

The Company is a single member limited liability company for federal, state, and local income tax purposes. As such, the Company is a disregarded entity for tax purposes and does not record a provision for income taxes. The Company's income or loss is included in the tax return of its Member.

As of December 311 20191 management has determined that the company had no uncertain tax positions that would require financial statement recognition. The determination will always be subject to ongoing reevaluation as facts and circumstances may require.

#### 3. **Related Party Transactions**

The Company has a service agreement with its Parent to provide business services at its discretion. Another agreement transfers amounts received from one of its customers directly to the Parent.

The Managing Member of the Company owns 80% of the Parent company.

A fami ly member of the Managing Member of the Company owns 20% of the Parent company.

#### **4. Regulatory Requirements**

The Company is subject to SEC Uniform Net Capital Rule I 5c3-l under the Securities Exchange Act of 1934, 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 to l. At December 31, 2019, the Company had net capital of approximately \$85,000 which exceeded the required net capital by approximately \$80,000.

The Company does not handle cash or securities on behalf of customers. Therefore, it is not affected by SEC Rule 15c3-3.

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### **Notes to Financial Statements December 31 , 2019**

#### **5. ~ew Accounting Pronouncements**

ln June 2016, the Financial Accounting Standards Board ("F ASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends the f ASB's guidance on the impairment of financial instruments. The ASU adds to GAAP an impairment model (known as the current expected credit loss ("CECL") model) that is based on expected Losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate oflifetime expected credit losses, which the F ASB believes will result in more timely recognition of such losses. The ASU is also intended to reduce the complexity of GAAP by decreasing the number of credit impairment models that entities use to account for debt instruments. Funber, the ASU makes targeted changes to the impairment model for available-for-sale debt securities. The new CECL standard is effective for annual reporting periods beginning after December 15, 2019, and interim periods therein. Management is currently evaluating the effect of adopting the new standard and expects that the impact to the Company's financial statements will be minimal.


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