# APPLIED CAPITAL, LLC X-17A-5 (2022-03-01) — Broker-dealer annual report - Company: APPLIED CAPITAL, LLC - Form: X-17A-5 - Filed: 2022-03-01 - Period: 2021-12-31 - Accession: 0001563236-22-000001 - CIK: 1563236 - File #: 8-69199 - Type: Broker-dealer - Material weakness: No - Auditor: Katz, Sapper & Miller - Auditor location: Indianapolis, IN - Contact: Loren Heger - Phone: 888-580-2588 - Email: lheger@fnex.com - Website: fnex.com - Signed by: Loren Heger (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1563236/000156323622000001/ac.pdf --- {0}------------------------------------------------ UNITED STATES. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OMB APPROVAL OMB Number: 3235-0123 Expires: Oct. 31, 2023 Estimated average burden hours per response: 12 # ANNUAL REPORTS FORM X-17A-5 PART Ill | SEC FILE NUMBER | |-----------------| | 8-69199 | FACING PAGE Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 FILING FORTHEPERIODBEGINNING 1/1/21 AND ENDING 12/31 /21 ~~~~~~~~- MM/DD/YY MM/DD/ Y Y A. REGISTRANT IDENTIFICATION # NAME OF FIRM: APPLIED CAPITAL, LLC TYPE OF REGISTRANT (check al l applicable boxes): l!i!!ii Broker-dealer D Security-based swap dealer D Major security-based swap participant 0 Check here if respondent is also an OlC derivatives dealer ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) # One Indiana Square, Suite 2252 | lnianapolis
IN
(State)
PERSON TO CONTACT W ITH REGARD TO THIS FILING
888-580-2588 | | 46204
(Zip Code)
lheger@fnex.com | |-----------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------| | | | | | | | | | | | | | | | | | (Area Code -Telephone Number) | (Email Address) | | | | | | | | | | | | IN | 46240 | | (City) | (State) | (Zip Code) | | | 2804 | | | | | | | of ,,.;,tcofoo w;th PCAOB )(ff oppl;oobl•I | | | | | B. ACCOUNTANT IDENTIFICATION
KATZ, SAPPER & MILLER
800 EAST 96TH ST., SUITE 500 INDIANAPOLIS | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
(Name - if individual, state last, first, and middle name) | \*Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-5(e)(1)(ii), if applicable. 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. {1}------------------------------------------------ #### OATH OR AFFIRMATION | I, Loren Heger | swear (or affirm} that, to the best of my knowledge and belief, the | |-----------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------| | financial report pertaining to the firm of APPLIED CAPrTAL, LLc | as of | | December31 | 2~ is true and correct. I further swear (or affirm} that neitlherthe company nor any | | partner, officer, director, or equivalent person, as t | he case may be, has any proprietary Interest in any account classlfled solely | | Stete
of Indiana
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Johnson
County
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Title:
/ | | | CEO | | | | | | | #### Notary Public #### This filing\*\* contains (check all applicable boxes}: - Ii (a) Statement of financial condition. - 0 (b) Notes to consolidated statement offinancial condition. - Ii (c) Statement of income' (lossr 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). - !!!ii (d) Statement of cas~ flows. - Ii (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - 0 (f} Statement of changes in liabilities subordinated to clalms of creditors. - Ii (g) Notes to consolidated financial statements. - !!!ii (h) Computation of net capital under 17 CFR 240.15c3-1 or17 CFR 240.18a-1, as applicable. - 0 (I) Computation of tangible net worth under 17 CFR 240.lBa-2. - D (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - D (k) Computation for determination of security-based swap reserve requirement s pursuant to Exhibit B to 17 CFR 240.1Sc3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable. - 0 (I) Computation for Determination of PAB Requirements under Exhibit A to§ 240.1Sc3-3. - 0 (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - 0 (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.lBa-4, as applicable. - Ii (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3-1, 17 CFR 240.lBa-1, or 17 CFR 240.18a-2, as appltcable, and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.lBa-4, as applicable, if material differences exist, or a statement that no material differences exist. - 0 (p) Summary of financial data for subsidiaries not consolfdated In the statement of financial condition. - Ii (q) Oath or affirmation In accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. - 0 (r) Compliance report in accordance with 17 CFR 240.17a-5or17 CFR 240.lBa-7, as applicable. - !!!ii (s) Exemption report in accordance with 17 CFR 240.17a-S or 17 CFR 240.18a-7, as appltcable. - 0 (t) Independent public accountant's report based on an examination of the statement of financial condition. - !!!ii (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. - 0 (v) Independent public accountant's report based on an examination of certain statements In the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.lSa-7, as applicable. - Iii (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5or17 CFR 240.18a-7, as applicable. - Iii (x) Supplemental reports on applying agreed-upon procedures, In accordance with 17 CFR 240.1Sc3-1e or 17 CFR 240.17a-12, as applicable. - 0 (y) Report describing any material inadequacies found to exist or found to have existed since the date of t he previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). 0(z)Other: \_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_ \_\_\_\_\_\_\_\_\_\_ \_ - \*&quot;'To request confident/al treatment of certain portions of this filing, see 17 CFR 240.17a-5(e)(3} or 17 CFR 240.18a-7{d}(2}, as applicable. {2}------------------------------------------------ # **APPLIED CAPITAL, LLC** Financial Statements and Supplemental Schedules For the Fiscal Year End December 31 , 2021 With Report of Independent Registered Public Accounting Firm {3}------------------------------------------------ ![](_page_3_Picture_0.jpeg) Report of Independent Registered Public Accounting Firm To the Member and Management of Applied Capital, LLC #### Opinion on the Financial Statements We have audited the accompanying statement of financial condition of Applied Capital, LLC as of December 31 , 2021 , 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 Applied Capital, LLC as of December 31 , 2021, and the results of its operations and its cash flows for the year ended December 31 , 2021 , in conformity with accounting principles generally accepted in the United States of America. #### Basis for Opinion These financial statements are the responsibility of Applied Capital, LLC's management. Our responsibility is to express an opinion on Applied Capital, 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 Applied Capital, 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. 1 {4}------------------------------------------------ #### **Supplemental Information** The accompanying information contained in the Schedules of Computation of Net Capital Pursuant to Rule 15c3-1 of the Securities and Exchange Commission Act of 1934 and Computation for Determination of Reserve Requirements and Information Relating to the Possession or Control Requirements Under Rule 15c3-3 of the Securities and Exchange Commission have been subjected to audit procedures performed in conjunction with the audit of Applied Capital, LLC's financial statements. The supplemental information is the responsibility of Applied Capital, 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 tihe 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 supplemental information contained in the Schedules of the Computation of Net Capital Pursuant to Rule 15c3-1 of the Securities and Exchange Commission Act of 1934 and Computation for Determination of Reserve Requirements and Information Relating to the Possession or Control Requirements Under Rule 15c3-3 of the Securities and Exchange Commission are fairly stated, in all material respects, in relation to the financial statements as a whole. We have served as Applied Capital, LLC's auditor since 2014. Indianapolis, Indiana February 28, 2022 {5}------------------------------------------------ #### Applied Capital, LLC Statement of Financial Condition December 31 , 2021 #### Assets | Cash and cash equivalents
Accounts receivable - allowable
Accounts receivable
Prepaid expenses and deposits | \$
1,102,561
264,234
26,517
30,689 | |----------------------------------------------------------------------------------------------------------------------|------------------------------------------------| | Total assets | \$
1 424 001 | | Liabilities and Member's Equity | | | Liabilities | | | Accounts payable | \$
37,934 | | Commissions payable | 559,613 | | Due to affiliate | 69,832 | | Total liabilities | 667,379 | | Member's equity | 756,622 | | Total liabilities and member's equity | \$
1,424,001 | {6}------------------------------------------------ #### Applied Capital, LLC Statement of Operations For The Year Ended December 31, 2021 | Revenues | | |--------------------------------------------|-------------------| | Mutual fund referral f;ees | \$
5,501 ,581 | | Investment banking fees | 11,557,531 | | Referral fees | 9,460,567 | | Consulting fees | 13,000 | | Other - reimbursed expenses | 223,665 | | Total revenues | 26,756,344 | | Expenses | | | Commission expense | 23,044,232 | | Compensation and benefits | 207,603 | | Referral fees paid to other broker-dealers | 592,167 | | Other referral fees | 490,349 | | Licenses and registration | 91 ,042 | | Professional services | 87,411 | | Occupancy | 16,618 | | IT, data and communications | 20,223 | | Other operating expenses | 22,543 | | Total expenses | 24,572, 188 | | Net Income | \$
2, 184, 156 | {7}------------------------------------------------ Applied Capital, LLC Statement of Changes in Member's Equity For The Year Ended December 31, 2021 | Balance at January 1, 2021 | \$
392,466 | |------------------------------|---------------| | Net income | 2,184,156 | | Member's distribution | (1,820,000) | | Balance at December 31, 2021 | \$
756.622 | {8}------------------------------------------------ #### Applied Capital, LLC Statement of Cash Flows For The Year Ended December 31 , 2021 | Cash Flows From Operating Activities: | | |-----------------------------------------------------------------------------------|------------------| | Net income | \$
2, 184,156 | | Adjustments to reconcile net income to net cash provided by operating activities: | | | Change in operating assets and liabilities | | | Change in accounts receivable | (9,566) | | Change in prepaid expenses and deposits | 4,879 | | Change in accounts payable | 17,693 | | Change in commissions payable | 305,055 | | Due to affiliate | 38,979 | | Net Cash Provided By Operating Activities | 2,541 ,196 | | Cash Flows from Financing Activities: | | | Member's distributions | (1,820,000) | | Net Cash Used By Financing Activities | (1 ,820,000) | | Net Increase In Cash and Cash Equivalents | 721 , 196 | | Cash and Cash Equivalents, Beginning of Year | 381 ,365 | | Cash and Cash Equivalents, End of Year | \$
1 102,5611 | {9}------------------------------------------------ #### **Applied Capital, LLC Notes to Financial Statements December 31 , 2021** #### **NOTE '1 -NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** Nature of Business: Applied Capital, LLC (the "Company") is an Indiana Limited Liabiility Company which organized in Jlune of 2012 and was approved to begin operations as a broker-dealer in January of 2014. The Company is an independent registered broker-dealer and subject to regulation by the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, Securities Investor Protection Corporation and various states. The Company engages in the business of private placements, investment banking, and mutual funds referrals. The Company is a wholly-owned subsidiary of FNEX, LLC ("Parent" or "Member"). Income Taxes: The Company has elected to be a Limited Liability Company taxed as a partnership under Internal Revenue Code regulations and is treated as a disregarded entity. Therefore, the income or losses of the Company flow through to and are taxable to its Parent, and no liability for income taxes is reflected in the accompanying financial statements. The Company has adopted the provisions of FASB ASC 740-10, Accounting for Uncertainty in Income Taxes. Under this provision, the Company is required to evaluate each of its tax positions to determine if they are more likely than not to be sustained if the taxing authority examines the respective position. A tax position includes an entity's status, including its status as a pass-through entity, and the decision not to file a return. The Company has evaluated each of its tax positions and has determined that no provision or liability for income taxes is necessary. The Company's Member filed federal and various state income tax returns. The Company's Member is no longer subject to US Federal and State income tax examinations by tax authorities for years before 2018. Basis Presentation: The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States ("GAAP"). The Company complies with the accounting and reporting requirements under ASC Topic 940, Financial Services-Broker and Dealers. Estimates: The preparation of financial statements in accordance with GAAP requires the use of estimates in determining assets, liabilities, revenues and expenses. Actual results may differ from these estimates. Cash and Cash Equivalents: The Company considers deposits with maturities of ninety days or less to be cash and cash equivalents. Concentration of Credit Risk: The Company maintains its cash and cash equivalents in a high credit quality bank. Balances at times may exceed federally insured limits of \$250,000. No loses have been incurred to date. Accounts Receivables and Credit Policies: Accounts receivables, which represents unsecured customer obligations due under normal trade terms generally, requires payment within 30 days. Interest is not charged for receivables unpaid after the expiration of normal terms. Customer account balances with invoices over 90 days old are considered to be delinquent. Payments of accounts receivable are allocated to the specific invoices identified on the customer's remittance advice or, if unspecified, are applied to the earliest unpaid invoices. {10}------------------------------------------------ #### **Applied Capital, LLC Notes to Financial Statements December 31 , 2021** #### **NOTE '1- NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** Accounts Receivables and Credit Policies (continued): The carrying amount of accounts receivable is reduced by a valuation allowance that reflects management's best estimate of the amount that will not be collected. Management individually reviews all accounts receivable balances that exceed 90 days from invoice date and, based on an assessment of the customer's current creditworthiness, estimates the portion, if any, of the balance that will not be collected. Additionally, the creditworthiness of the Company's other customers is considered to estimate a general allowance, if any, covering the remaining accounts receivable. Management believes that all accounts receivable are collectable as of December 31, 2021. Revenue Recognition: The FASS ASC Topic 606 Revenue from Contracts with Customers Standard (ASU 2014-09) core principle is that an entity should recognize revenue when it transfers promised goods or services performed to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 prescribes a fivestep process to accomplish this core principle, including: - · Identification of the contract with the customer; - · Identification of the performance obligation(s) under the contract; - · Determination of transaction price; - ·Allocation of the transaction price to the identified performance obligation(s); and - · Recognition of revenue as (or when) an entity satisfies the identified performance obligation(s). Private Placements of Debt and Equity: The Company as an agent of the issuer presents to prospective investors a private placement memorandum ("PPM") from the issuer and subscription agreement. The Company or other broker-dealers collects consideration from the issuer when 1) an investor executes a subscription agreement, 2) the investor then delivers funds to the issuer, and 3) the issuer accepts the investor. Revenue is based on a percentage of the transaction amount. Revenue is recognized when the capital commitment by the investor has been accepted by the issuer. The performance obligation has been fulfilled at this point in time and is when the risk and rewards has been transferred. Mutual Fund Commissions and Fees: The Company as an agent of the fund presents to prospective investors a prospectus from the fund and subscription agreement. The Company collects consideration from the fund distributor when 1) an investor executes a subscription agreement 2) delivers funds to the transfer agent, and 3) the fund distributor accepts the investor. The Company receives trailing commissions and other fees from mutual fund companies as a way of compensation for distributing interests in particular funds. The fees earned by the Company are variable because the amount paid at that particular point in time, specified in the prospectus, generally is based on the fair market value of the shares at the specified point in time. Hence, at any given point in time, the timing and the amount of any future ongoing fees that might be earned are uncertain. Fees are received in arrears based on the contract payout from the specific funds therefore the Company's performance obligations have been satisfied in a prior period. Cost to Obtaining or Fulfilling a Contract: The Company pays sales commission to its registered representatives for all the services provided above. Management does nott believe that there are costs related directly to the contract with the issuer or that the costs are expected to be recovered. Therefore, sales commission are expensed as incurred. {11}------------------------------------------------ #### **Applied Capital, LLC Notes to Financial Statements December 31 , 2021** #### **NOTE '1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** #### Revenue Recognition (continued): Securities transactions are recorded on the trade date as transactions occur. Investment banking revenue includes fees earned from providing merger and acquisition, private placement, and other advisory services to clients. Securities transactions from mutual funds are recorded in the period the sales occur on a trade date basis and the mutual fund trail fees are recorded in the period the fee is calculated. Referral fees include referring buyers to sellers or vice versa for introduction in private securities transactions. Revenue is recognized when earned, which generally occurs as services are performed or upon consummation of a transaction. Related commissions expense to registered representatives is recognized in the same period in which revenue is recognized. Deferred Revenues: Deferred revenues arising from non-refundable retainers and mutual fund contracts are recognized as revenues when considered earned, which generally occurs upon consummation of a transaction. Subsequent events were evaluated by management through February 28, 2022, the date the financial statements were available to be issued. #### **NOTE 2 - NET CAPITAL REQUIREMENTS** The Company is an introducing broker-dealer subject to the Securities and Exchange Commission Uniform Net Capital Rule (SEC Rule 15c3 1 ), which requires the Company to maintain "net capital" of 6 2/3 percent of "aggregate indebtedness" or \$5,000, whichever is greater, as these terms are defined. In addition, the ratio of aggregate indebtedness to net capital shall not exceed 15 to 1. Net capital and aggregate indebtedness change daily. As of December 31 , 2021, the Company had net capital and net capital requirements of \$699,416 and \$44,492 respectively. The net capital rule may effectively restrict the withdrawal of member's equity. #### **NOTE 3 - RELATED PARTY TRANSACTIONS** The Company entered into an expense sharing agreement with FNEX, LLC, the parent company, to whom it pays certain general and administrative expenses. The Company's share of expenses is calculated based on estimated usage. For the year ended December 31, 2021, allocated expenses under the agreement amounted to \$247,092 and can be found on the accompanying statement of operations under compensation and benefits, IT, data, and communication, occupancy, and operating expenses. The balance due to the affiliate on the accompanying statement of financial condition arose from this services agreement. #### **NOTE 4 -CONTINGENCIES** The Company is subj ect to litigation in the normal course of business. The Company has no litigation in progress at December 31 , 2021 . {12}------------------------------------------------ #### Applied Capital, LLC #### Schedule I Computation of Net Capital Pursuant to Rule 15c3-1 Of The Securities and Exchange Commission Act of 1934 As of December 31, 2021 | Net Capital: | | |---------------------------------------------------------------------------------------------|------------------| | Total member's equity qualified for net capital | \$
756,622 | | Deduction for non-allowable assets:
Accounts receivable
Prepaid expenses and deposits | 26,517
30,689 | | Net capital before haircuts | 699,416 | | Less haircuts | | | Net capital | 699,416 | | Minimum net capital required (greater of \$5,000 or 6 2/3% of aggregate
indebtedness) | 44,492 | | Excess net capital | \$
654,924 | | Aggregate indebtedness | \$
667,379 | | Percentage of aggregate indebtedness to net capital | 95.42% | Reconciliation with the Company's computation of Net Capital Included in Part llA of Form X-17A-5 as of December 31 , 2021 ihere is no significant difference between net capital reported in Part llA of Form X-1 7A-5 as of December 31, 2021 and net capital as reported above. {13}------------------------------------------------ #### Applied Capital, LLC #### Schedule II #### Computation For Determination of Reserve Requirements UJnder Rule 15c3-3 of the Securities and Exchange Commission as of December 31 , 2021 The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934, pursuant to 15c3-3(k) (the "exemption provisions") and of the 2013 Release adopting amendments to Rule 17a-5, including Footnote 74 of the 2013 Release. Schedule Ill Information Relating to the Possesion or Control Requirements Under Rule 15c3-3 of the Securities and Exchange Commission as of December 31 , 2021 The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934, pursuant to 15c3-3(k) (the "exemption provisions ") and of the 2013 Release adopting amendments to Rule 17a-5, including Footnote 74 of the 2013 Release. {14}------------------------------------------------ #### **EXEMPTION REPORT SEA RULE 17a-5(d)(4)** February 28, 2022 Katz, Sapper & Miller 800 East 96th Street Suite 500 Indianapolis, IN 46240 #### To Whom it May Concern: We , as members of management of Applied Capital, LLC. (the "Company") are responsible for complying with Rule 17a-5, "Reports to be made by certain brokers and dealers". We have perfornned an evaluat1ion of the Company's compliance with the requirements of Rule 17a-5 and the exemption provisions in Rule 15c3-3(k) (the "exemption provisions ") and of the 2013 Release adopting amendments to Rule 17a-5, including Footnote 74 of the 2013 Release. We have determined that the Company does not meet any of the exemption conditions of paragraph (k) of Rule I 5c3-3 (i.e., paragraph (k)(I ), (k)(2)(i) or (k)(2)(ii) but also (1) does 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 Exchange Act Rule 15c2-4 ("Rule 15c2-4"); (2) does not carry accounts of or for customers; and (3) does not carry PAB accounts (as defined in Rule 15c3-3) and therefore is covered by Footnote 74 of the 2013 Release. Accordingly, based on our evaluation we make the following statements to the best knowledge and belief of the Company: - 1. We reviewed the provisions of Rule §15c3-3 and related guidance stated in the SEC Staff's FAQ and confirmed that the Company relied on Footnote 74 of the 2013 Release. - 2. The Company conducted business activities involving private placement of securities, broker or dealer selling tax shelters or limited partnerships in primary distributions and the Company may refer investors to unaffiliated third party broker-deals for general securities and investment banking business for which it may receive referral fee activity throughout the year ended December 31, 2021 without exception. - 3. The Company met the identified conditions for such reliance throughout the period January 1, 2021 to December 31, 2021 without exception. Signed: !d/= -'"--+----- Name: Loren Heger Title: CEO {15}------------------------------------------------ ![](_page_15_Picture_0.jpeg) Report of Independent Registered Public Accounting Firm on the Exemption Report To the Member and Management of Applied Capital, LLC We have reviewed management's statements, included in the accompanying Exemption Report pursuant to SEA Rule 17a-5(d)(4), in which (1) Applied Capital, LLC reviewed the provisions of Rule §15c3-3 and related guidance stated in the SEC Staff's FAQ and confirmed that Applied Capital, LLC relied on Footnote 7 4 of the 2013 Release, (2) Applied Capital, LLC conducted business activities involving private placement of securities, broker or dealer selling tax shelters or limited partnerships in primary distributions and may refer investors to unaffiliated third party broker-deals for general securities and investment banking business for which it may receive referral fee activity throughout the year ended December 31 , 2021 , and (3) Applied Capital, LLC met the identified conditions for such reliance throughout the period January 1, 2021 to December 31, 2021 without exception. Applied Capital, 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 Applied Capital, 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 upon the Company's business activities contemplated by Footnote 74 of the SEC Release No. 34- 70073 adopting amendments to 17 C.F.R. § 240.17a-5, and related SEC Staff's FAQ. Indianapolis, Indiana February 28, 2022 {16}------------------------------------------------ ![](_page_16_Picture_0.jpeg) Report of Independent Registered Public Accounting Firm on Applying Agreed-upon Procedures To the Member and Management of Applied Capital, LLC We have performed the procedures included in Rule 17a-5(e)(4) under the Securities Exchange Act of 1934 and in the SecuritiApplied Capital, LLC-DBA FNEX Capital
One Indiana Square, Suite 2252
Indianapolis, IN 46204 | Note: 11 any of the information shown on the
mailing label requires correction, please e-mail
any corrections to form@slpc.org and so
indicate on the form filed.
Name and telephone number of person to
contact respecting this form. | | | |--|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------|--| | | _J
L | | Rick Alvarez 770.407.3459 | | | | 2. A. General Assessment (Item 2e from page 2)
B. Less payment made with S IPC·6 filed (exclude Interest)
7/27/21 | | (
11,614 | | | | Date Paid
C. Less prior overpayment applied
D. Assessment balance due or (overpayment)
E. Interest computed on late payment (see instruction E) for ______ days at 20% per annum | | 19,044
0 | | | | F. Total assessment balance and interest due (or overpayment carried forward)
q
D
D
G. PAYMENT:
/ the box
_______
19,044
Check malled to P.O. Box
Funds Wired
AC
Total (must be same as F above)
_;_ | _ | \$19,044 | | | | ________
H. Overpayment carried forward
\$(_0 | _ | | | | | 3. Subsidiaries (S) and predecessors (P) Included in this form (give name and 1934 Act registration num:ier): | | | | The SIPC member submitting this form and the person by whom i1 is executed represent thereby that all information contained herein is true, correct and complete. Applied Capital, LLC-DBA FNEX Capital Dated the\_f!!\_day of ff}r..7 , 2~. '"'"' This form and the assessment payment is due 60 days after the end of the f seal yeu. Retain the Working Copy of this form for a period 01 not less than 6 years, the latest 2 years In an easily accessible place. | | ~ Dates: | | | | | |----------|-----------------------|-------------------------------|----------|--------------------------|----------------------| | ;s: | | Postmarked | Received | Reviewed | | | LU
LU | > Calculations
--~ | | | __
Documenlation
_ | ----
Forward Copy | | a:
Q | (,:) Exceptions: | | | | | | | | en Disposition of exceptions: | | | | {19}------------------------------------------------ #### **DETERMINATION OF "SIPC NET OPERATING REVENUES" AND GENERAL ASSESSMENT** | Amounts for the fiscal period | | | |-------------------------------|------|-----------| | beginning _,_,,,_21 | ____ | _ | | and endi ng _•213 _ 1_12• | | ____
_ | | Item No.
2a. Total revenue (FOCUS Line 12/Part llA Line 9, Code 4030) | El iminate cents
\$26,756,344 | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------| | | | | 2b. Additions:
(1) Total revenues from the securities business of subsidiaries (except foreign subsidiaries) and
predecessors not included above. | | | (2) Net loss from principal lransactions in securities in trading accounts. | | | (3) Net loss from principal lransactions in commodities in trading accounts. | | | (4) Interest and dividend expense deducted in determining item 2a. | | | (5) Net loss from management of or participation in lhe underwriling or distribution of securities. | | | (6) Expenses other than advertising, printing, registration fees and legal fees deducted in determining net
profit from management of or participation in underwriting or distribution of securities. | | | (7) Net loss from securities in investment accounts. | | | Total additions | 0 | | 2c. Deductions:
(1) Revenues from the distribution of shares of a registered open end investment company or unit
investment trust, from the sa le of variable annu ities, from the business of insurance, from investment
advisory services rendered to registered investment companies or insurance company separat,e
accounts, and fro m transactions in security futures products. | 5,501
,581 | | (2) Revenues from commodity transactions. | | | (3) Commissions, floor brokerage and clearance paid to other SIPC members in connection with
securities transactions. | 592, 167 | | (4) Reimbursements for postage in connection with proxy solicitation . | | | (5) Net gain from securities in investment accounts. | | | (6) 100% of commissions and markups earned from transactions in (i) certificates of deposit and
(ii) Treasury bills, bankers acceptances or commercial paper that mature nine months or less
from issuance date. | | | (7) Direct expenses of printing advertising and legal fees incurred in connection with other revenu e
related to the securities business (revenue defined by Section 16(9)(L) of the Act). | | | (8) Other revenue not related either directly or indirectly to the securities business.
(See Instruction C): | | | dollar for dollar out of pocket expenses | 223,665 | | (Deductions in excess of \$1 00,000 require documentation) | | | (9) (i) Total interest and dividend expense (FOCUS Line 22/PART llA Line 13,
__________
Code 4075 plus line 2b(4) above) but not in excess
\$
_
of total interest and dividend income. | | | (ii) 40% of margin interest earned on customers securities
accounts (40% of FOCUS line 5, Code 3960). | | | Enter the greater of line (i) or (ii) | 0 | | Total deductions | 6,317,413 | | 2d. SIPC Net Operaling Revenues | \$ 20,438,931 | | 2e. General Assessment @ .00 15 | \$ 30,658 | | | (to page 1, line 2.A.) | Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.