# HARKEN CAPITAL SECURITIES, LLC X-17A-5 (2021-08-20) — Broker-dealer annual report - Company: HARKEN CAPITAL SECURITIES, LLC - Form: X-17A-5 - Filed: 2021-08-20 - Period: 2021-06-30 - Accession: 0001546132-21-000001 - CIK: 1546132 - File #: 8-69077 - Material weakness: No - Auditor: Larry D. Liberfarb - Auditor location: Norwood, MA - Contact: Donald Nelson - Phone: 6178992048 - Email: info@liberfarb.com - Website: liberfarb.com - Signed by: Donald Nelson (Member) Original filing: https://www.sec.gov/Archives/edgar/data/1546132/000154613221000001/Harken2021Audit1.pdf --- {0}------------------------------------------------ **UNITEDSTATES SECURITIESANDEXCHANGECOMMISSION Washington, D.C. 20549** OMB APPROVAL OMB Number: 3235-0123 Expires: 0DUPCFS Estimated average burden **8-** SEC FILE NUMBER 69077 # hours per response.. . . . . 12.00 **ANNUAL AUDITED REPORT FORM X-17A-5 PART III** **FACING PAGE** **Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder** | | 07/01/2020
REPORT FOR THE PERIOD BEGINNING______________________________ | 06/30/2021
AND ENDING______________________________ | | |-------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------|-------------------------------------| | | MM/DD/YY | | MM/DD/YY | | | A.
REGISTRANT IDENTIFICATION | | | | Harken
Capital
Securities,
LLC
NAME OF BROKER-DEALER: | | OFFICIAL USE ONLY | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | FIRM I.D. NO. | | 16
Ann
Vinal
Road | ___________________________________________________________________________________________________________________ | | | | | (No. and Street) | | | | Scituate | MA
___________________________________________________________________________________________ | | 02066
__________________________ | | (City) | (State) | | (Zip Code) | | Donald Nelson
617-899-2048 | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
_____________________________________________________________________________________________________________________ | | | | | | | (Area Code – Telephone Number) | | | B.
ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report* | | | | Larry
D.
Liberfarb,
P.C. | _____________________________________________________________________________________________________________________ | | | | | (Name – if individual, state last, first, middle name) | | | | 11
Vanderbilt
Avenue, | Norwood
Suite
220
_____________________________________________________________________________________________________________________ | MA | 02062 | | (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** SEC 1410 () **unless the form displays a currently valid OMB control number.** {1}------------------------------------------------ ## OATH OR AFFIRMATION | I. Donald Nelson | the best of the may be affirm , swear (or affirm) that, to the best of | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------| | my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of
Harken Capital Securities, LLC | . as | | of June 30 | 2021 2 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: | | | John E. Keohane
Notary Public
OMMONWEALTH OF MASSACHUSETTS
My Commission Expires
May 20, 2027
Notary Public | Signature
Member
Title | | This report ** contains (check all applicable boxes):
(a) Facing Page.
(b) Statement of Financial Condition.
(c) (c) Statement of Income (Loss) or, if there is other comprehensive in the period(s) presented, a Statement
of Comprehensive Income (as defined in §210.1-02 of Regulation S-X).
V (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 Requirments Pursuant to Rule 15c3-3.
(i) Information Relating to the Possession or Control Requirements Under Rule 15c3-3.
() A Reconciliation, including appropriate explanation of Net Capital Under Rule 15c3-1 and the
Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3.
7 (k) A Reconciliation between the audited Statements of Financial Condition with respect to methods of
consolidation.
(I) An Oath or Affirmation.
(m) A copy of the SIPC Supplemental Report.
(n) A report describing any material inadequacies found to exist or found to have existed since the date of the previous audit.
** For conditions of confidential treatment of certain portions of this filing, see section 240.17a-5(e)(3). | | {2}------------------------------------------------ ## REPORTS PURSUANT TO RULES 17a-5(d) ## YEAR ENDED JUNE 30, 2021 {3}------------------------------------------------ # LARRY D. LIBERFARB, P.C. CERTIFIED PUBLIC ACCOUNTANTS AND FINANCIAL ADVISORS 11 Vanderbilt Avenue, Suite 220, Norwood, Massachusetts 02062 Tel. (781) 255-8800 Fax (781) 255-9217 E-Mail: Info@Liberfarb.com ## Report of Independent Registered Public Accounting Firm To the Members of Harken Capital Securities LLC ### Opinion on the Financial Statements We have audited the accompanying statement of financial condition of Harken Capital Securities LLC as of June 30, 2021, the related statements of income, changes in members' 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 Harken Capital Securities LLC as of June 30, 2021, 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 Harken Capital Securities LLC's management. Our responsibility is to express an opinion on Harken Capital Securities LLC'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 Harken Capital Securities LLC 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 provides a reasonable basis for our opinion. {4}------------------------------------------------ #### Auditor's Report on Supplemental Information The computation of aggregate indebtedness and net capital pursuant to SEC Rule 15c3-1, and computation for and information related to possession or control determination of reserve requirements for broker/dealers under SEC Rule 15c3-3 have been subjected to audit procedures performed in conjunction with the audit of Harken Capital Securities LLC's financial statements. The supplemental information is the responsibility of Harken Capital Securities LLC'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. 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 C.F.R. §240.17a-5. In our opinion, the computation of aggregate indebtedness and net capital under SEC Rule 15c3-1, and computation for and information related to possession or control determination of reserve requirements for broker/dealers under SEC Rule 15c3-3 are fairly stated, in all material respects, in relation to the financial statements as a whole. Larry D/Liberfarb, P/C We have served as Harken Capital Securities LLC's auditor since 2012. Norwood, Massachusetts August 11, 2021 {5}------------------------------------------------ ## STATEMENT OF FINANCIAL CONDITION #### JUNE 30, 2021 #### ASSETS | Total assets | | | \$ 1.935.043 | |--------------------------------|--|----|--------------| | Other assets | | | 3,300 | | Receivables from non-customers | | | 1,876,467 | | Cash | | 10 | 55,276 | ## LIABILITIES AND MEMBERS' EQUITY #### LIABILITIES: | Accounts payable and accrued expenses | S
4,141 | |---------------------------------------|--------------| | MEMBERS' EQUITY: | | | Members' capital | 1,930,902 | | Total liabilities and members' equity | \$ 1,935,043 | {6}------------------------------------------------ #### STATEMENT OF OPERATIONS ## FOR THE YEAR ENDED JUNE 30, 2021 #### REVENUES: | Success fees | \$ 3,375,698 | |--------------------------------|--------------| | Retainers | 505,000 | | Reimbursed expenses | 3,067 | | Other income | | | Total income | 3,883,766 | | BXPICNS BS: | | | Compensation | 1,208,922 | | Guaranteed payments to members | 1,216,925 | | General operating | 63,385 | | Marketing | 4,323 | | Professional services | 88,924 | | Regulatory | 23,087 | | Total expenses | 2,605,566 | | NET INCOME | \$ 1,278,200 | {7}------------------------------------------------ # STATEMENT OF CHANGES IN MEMBERS' EQUITY ## FOR THE YEAR ENDED JUNE 30, 2021 | BALANCE, June 30, 2021 | A | 1,930,902 | |-----------------------------|----|---------------------| | Contributions
Net income | | 24,288
1,278,200 | | BALANCE, July 1, 2020 | ಳಿ | 628,414 | {8}------------------------------------------------ ## STATEMENT OF CASH FLOWS ## FOR THE YEAR ENDED JUNE 30, 2021 | CASH FLOWS FROM OPERATING ACTIVITIES: | | | |---------------------------------------------------------------------|---|-------------| | Net income (loss) | | 1,278,200 | | Adjustments to reconcile net income to net cash used by | | | | operating activities: | | | | Changes in operating assets and liabilities: | | | | Increase in other assets | | (1,735) | | Increase in receivables from non-customers | | (1,259,666) | | Increase in accounts payable and accrued expenses | | 4,141 | | Net cash used for operating activities | | 20,940 | | CASH FLOWS FROM FINANCING ACTIVITIES:
Contributions from members | | 24,288 | | Net cash from financing activities | | 24,288 | | NET INCREASE IN CASH | | 45,228 | | CASH, at beginning of year | | 10,048 | | CASH, at end of year | S | 55,276 | {9}------------------------------------------------ # HARKEN CAPITAL SECURITIES LLC NOTES TO FINANCIAL STATEMENTS #### JUNE 30, 2021 ## NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations: The Company was organized in the State of Massachusetts on March 8, 2012 as a 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 identified the provision of Footnote 74 under which the Company is not required to claim an exemption from 17 C.F.R. 240.15c3-3. The Company markets financial products for its clients. #### Revenue Recognition: Effective July 1, 2018 the Company adopted ASC Topic 606 Revenue from Contracts with Customers (ASC Topic 606). The 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. The guidance 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 transactions price (d) allocate the transaction price to the performance obligation in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. #### Accounts Receivable: Accounts receivables are stated at the amount management expects to collect. Management provides for probable uncollectable amounts through a charge to earnings and a credit to an allowance based on the assessment of the current status of individual accounts. At June 30, 2021 management feels that all receivables are collectable. #### Cash and Cash Equivalents: For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. #### Income Taxes: The Company does not record a provision for income taxes because the partners report their share of the partnership's income or loss on their income tax returns. The financial statements reflect the partnership's transactions without adjustment, if any, required for income tax purposes. {10}------------------------------------------------ #### NOTES TO FINANCIAL STATEMENTS, CONTINUED #### JUNE 30, 2021 ## NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) #### 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 dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates #### NOTE 2 - NET CAPITAL REQUIREMENTS The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (SEC 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 to 1 (and the rule of the "applicable" exchange also provides that equity capital may not be withdrawn if the resulting net capital ratio would exceed 10 to 1). At June 30, 2021, the Company had net capital of \$51,135, which was \$46,135 in excess of its required net capital of \$5,000. The Company's aggregate indebtedness to net capital ratio was .08 to 1. #### NOTE 3-RELATED PARTY TRANSACTIONS The Company rents office space from its owners on a tenant at will basis. The Company paid them \$6,432 for the fiscal year ending June 30, 2021. The Company has elected, for all underlying classes of assets, to not recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less at lease commencement. Since these are related party transactions, operating results could differ if the entities were autonomous. #### NOTE 4-CONCENTRATION OF CREDIT RISK Cash held in banks sometimes exceeds the Federal Deposit Insurance Corporation's (FDIC) insurance coverage of \$250,000, and as a result there may be a concentration of credit risk related to the amount in excess of FDIC insurance coverage. The Company has one customer which represents 93% of accounts receivable at June 30, 2021. This customer also represents 64% of revenue for fiscal year 2021. {11}------------------------------------------------ # HARKEN CAPITAL SECURITIES LLC NOTES TO FINANCIAL STATEMENTS, CONTINUED JUNE 30, 2021 #### NOTE 5-COMMITMENTS AND CONTINGENCIES The Company at June 30, 2021 has no unfulfilled contract, commitments, or contingencies. #### NOTE 6-SUBSEQUENT EVENTS Management has evaluated subsequent events through August 11, 2021, the date on which the financial statements were available to be issued. There were no subsequent events that require adjustment or disclosure in the financial statements. {12}------------------------------------------------ ## SUPPLEMENTARY INFORMATION {13}------------------------------------------------ #### SCHEDULE I ### HARKEN CAPITAL SECURITIES LLC ## COMPUTATION OF NET CAPITAL UNDER RULE 15c3-1 OF THE SECURITIES EXCHANGE ACT OF 1934 #### JUNE 30, 2021 | CREDIT: | | |--------------------------------------------------------------------------------------------------------|-------------| | Total member's equity | 1,930,902 | | DIBIRTIS: | | | Nonallowable assets: | | | Receivables from non-customers | 1,876,467 | | Other assets | 3,300 | | Total debits | 1,879,767 | | NET CAPITAL | 51,135 | | Minimum requirement of 6-2/3% of aggregate indebtedness of
\$4,141 or \$5,000, whichever is greater | 5,000 | | Excess net capital | S
46,135 | | AGGREGATE INDEBTEDNESS: | | | Accounts payable and accrued expenses | S
4,141 | | RATIO OF AGGREGATE INDEBTEDNESS TO NET CAPITAL | .08 to 1 | NOTE: There are no material differences between the above computation of net capital and the corresponding computation as submitted by the Company with the unaudited Form X-17A-5 as of June 30, 2021. See Independent Registered Public Accountants Firm's Report. {14}------------------------------------------------ # LARRY D. LIBERFARB, P.C. CERTIFIED PUBLIC ACCOUNTANTS AND FINANCIAL ADVISORS 11 Vanderbilt Avenue, Suite 220, Norwood, Massachusetts 02062 Tel. (781) 255-8800 Fax (781) 255-9217 E-Mail: Info@Liberfarb.com ## Report of Independent Registered Public Accounting Firm To the Members of Harken Capital Securities LLC We have reviewed management's statement, included in the accompanying Exemption Report, in which (1) Harken Capital Securities LLC identified that it was filing the exemption report solely to be in compliance with 17 C.F.R. 240.17a-5 (d)(1) and (4). Harken Capital Securities LLC does not claim an exemption under paragraph (k) of 17 C.F.R. 240. 15c3-3, and is 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 receiving transaction-based compensation for identifying potential merger and acquisition opportunities for clients, referring securities transactions to other broker-dealers, or providing technology or platform services. Harken Capital Securities LLC 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 or subscription way basis where the funds are payable to the issuer or its agent. Harken Capital Securities LLC did not carry accounts of or for customers, nor carry PAB accounts throughout the most recent fiscal year without exception. Harken Capital Securities, 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 Harken Capital Securities 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 provisions set forth in paragraphs 17 C.F.R. 240.17a-5 (d)(1) and (4) of Rule 15c3-3 under the Securities Exchange Act of 1934. {15}------------------------------------------------ #### EXEMPTION REPORT REQUIREMENT FOR BROKER/DEALERS UNDER RULE 17a-5 OF THE SECURITIES EXCHANGE ACT OF 1934 #### June 30, 2021 Harken Capital 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)(1) 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) receiving transaction-based compensation for identifying potential merger and acquisition opportunities for clients, referring securities transactions to other broker-dealers, or providing technology or platform services, 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. I, Donald Nelson, swear (or affirm) that, to my best knowledge and belief, this Exemption Report is true and correct. Aug 7, 2021 14:20 EDT) Signature Managing Member Title See Report of Independent Registered Public Accounting Firm. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.