# APPLIED CAPITAL, LLC X-17A-5 (2024-02-29) — Broker-dealer annual report - Company: APPLIED CAPITAL, LLC - Form: X-17A-5 - Filed: 2024-02-29 - Period: 2023-12-31 - Accession: 0001563236-24-000001 - CIK: 1563236 - File #: 8-69199 - Type: Broker-dealer - Material weakness: No - Auditor: Katz, Sapper & Miller - Auditor location: Indianoplis, 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/1563236/000156323624000001/applied.pdf --- {0}------------------------------------------------ | | UNITED STATES | | 0MB APPROVAL | | |-----------------------------------------------------------------------------------------------------------|-----------------------------------------------------------|----------------------|----------------------------------------------------|--| | | SECURITIES AND EXCHANGE COMMISSION | | 0MB Number: 3235-0123 | | | | Washington, D.C. 20549 | | Expires: Nov. 30, 2026
Estimated average burden | | | | | | hours per response: 12 | | | | ANNUAL REPORTS | | SEC FILE NUMBER | | | | FORM X-17A-5 | | 8-69199 | | | | PART Ill | | | | | | | | | | | Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 | FACING PAGE | | | | | FILING FOR THE PERIOD BEGINNING 0 1/01 /23 | | AND ENDING 12/31 /23 | | | | | MM/00/YY | | MM/DD/YY | | | | A. REGISTRANT IDENTIFICATION | | | | | | | | | | | NAME OF FIRM: APPLIED CAPITAL, LLC | | | | | | | | | | | | TYPE OF REGISTRANT (check all applicable boxes): | | | | | | 0 Broker-dealer | D Security-based swap dealer | | D Major security-based swap participant | | | D Check here if respondent is also an OTC derivatives dealer | | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | One Indiana Square, Suite 2252 | | | | | | | (No. and Street) | | | | | | | | | | | lnianapolis | IN | | 46204 | | | (City) | (State) | | (Zip Code) | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | Loren Heger | 888-580-2588 | | lheger@fnex.com | | | | | | | | | (Name) | (Area Code -Telephone Number) | | (Email Address) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | | KATZ, SAPPER & MILLER | | | | | | | (Name- if individual, state last, first, and middle name) | | | | | 800 EAST 96TH ST., SUITE 500 | INDIANAPOLIS | IN | 46240 | | | (Address) | (City) | (State) | (Zip Code) | | | 11/13/2006 | | 2804 | | | | l"'
of R,gl~catloo with PCAOB)(lf appllcabl,J | | | IPCAOB Reg;st,atloo N"mbo,, If appllcabl•I | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | | | | | | CFR 240.17a-S(e)(l)(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 0MB control number. {1}------------------------------------------------ #### OATH OR **AFFIRMATION** | I, | Loren Heger | | |----|-------------|--| | | | | I, Loren Heger swear (or affirm) that, to the best of my knowledge and belief, the financial report pertaining to the firm of APPLIED CAPITAL, LLC as of **\_1\_2\_/\_3\_1 \_\_\_\_\_\_\_\_\_\_ \_\_,** 2~ is true and correct. I further swear (or affirm) that neither the company nor any partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely as that of a customer. ![](_page_1_Picture_4.jpeg) Notary Public #### **This filing\*\* contains (check all applicable boxes):** - **iii** (a) Statement offinancial condition. - D (b) Notes to consolidated statement of financial condition. - **iii** (c) Statement of income (loss) or, if there is other comprehensive income in the period(s) presented, a statement of comprehensive income (as defined in § 210.1-02 of Regulation **S-X).** - iii (d) Statement of cash flows. - **ii** (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - D (f) Statement of changes in liabilities subordinated to claims of creditors. - **iii** (g) Notes to consolidated financial statements. - iii (h) Computation of net capital under 17 CFR 240.1Sc3-1 or 17 CFR 240.18a-1, as applicable. - D (i) Computation of tangible net worth under 17 CFR 240.18a-2. - D (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.1Sc3-3. - D (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.1Sc3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable. - D (I) Computation for Determination of PAB Requirements under Exhibit A to§ 240.15c3-3. - D (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - D (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.18a-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 240.1Sc3-1, 17 CFR 240.18a-l, or 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences exist. - □ (p) Summary of financial data for subsidiaries not consolidated 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. - D (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - **ii** (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - D (t) Independent public accountant's report based on an examination of the statement of financial condition. - iii (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. - □ (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 240.18a-7, as applicable. - **iii** (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - **ii** (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.1Sc3-le or 17 CFR 240.17a-12, as applicable. - D (y) Report describing any material inadequacies found to exist or found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.l 7a-12(k). D (z) Other: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_ - - \*\*To request confidential 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 Information For the Year End December 31, 2023 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 (the "Company") as of December 31, 2023, and the related statements of operations, changes in member's equity and cash flows for the year then ended, and the related notes and schedules (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, 2023, and the results of its operations and its cash flows for the year then ended December 31, 2023, 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 U.S. Securities and Exchange Commission (SEC) 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 accompanying information contained in Schedule I Computation of Net Capital Pursuant to Rule 15c3-1 of the Securities and Exchange Commission Act of 1934, Schedule II Computation for Determination of Reserve Requirements Under Rule 15c3-3 of the Securities and Exchange Commission, and Schedule Ill Information Relating to the Possession or Control Requirements Under Rule 15c3-3 of the Securities and Exchange Commission has 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 the supplemental information, we evaluated whether the supplemental information, including its form and content is presented in conformity with 17 C.F.R. § 240.1 ?a-5. In our opinion, the supplemental information contained in Schedule I Computation of Net Capital Pursuant to Rule 15c3-1 of the Securities and Exchange Commission Act of 1934, Schedule II Computation for Determination of Reserve Requirements Under Rule 15c3-3 of the Securities and Exchange Commission, and Schedule Ill Information Relating to the Possession or Control Requirements Under Rule 15c3-3 of the Securities and Exchange Commission is 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 29, 2024 {5}------------------------------------------------ ## Applied Capital, LLC Statement of Financial Condition December 31 , 2023 #### Assets | Cash and cash equivalents
Accounts receivable -
allowable net
Accounts receivable, net
Prepaid expenses and deposits | \$
1,033,496
924,351
191 ,258
17,439 | |----------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------| | Total assets | \$
2,166,544 | | Liabilities and Member's Equity | | | Liabilities
Accounts payable
Commissions payable
Deferred revenues
Due to affiliate | \$
48,597
1,502,414
70,000
30,807 | | Total liabilities | 1,651 ,818 | | Member's equity | 514,726 | | Total liabilities and member's equity | \$
2,166,544 | {6}------------------------------------------------ ## Applied Capital, LLC Statement of Operations For The Year Ended December 31, 2023 | Revenues | | |--------------------------------------------|------------------| | Investment banking fees | \$
26,846,841 | | Mutual fund referral fees | 2,844,687 | | Referral fees | 4,445,699 | | Interest income | 1,739 | | Other fees & reimbursed expenses | 1,257,959 | | Total revenues | 35,396,925 | | Expenses | | | Commission expense | 32,812,786 | | Referral fees paid to other broker-dealers | 400,831 | | Compensation and benefits | 420,290 | | Licenses and registration | 267,881 | | Professional services | 201,475 | | Other referral fees | 59,848 | | Occupancy | 43,961 | | IT, data and communications | 33,685 | | Other operating expenses | 109,303 | | Total expenses | 34,350,060 | | | | | Net Income | \$
1,046,865 | {7}------------------------------------------------ Applied Capital, LLC Statement of Changes in Member's Equity For The Year Ended December 31, 2023 | Balance at January 1, 2023 | \$
642,861 | |------------------------------|---------------| | Net income | 1,046,865 | | Member's distribution | (1,175,000) | | Balance at December 31, 2023 | \$
514 726 | {8}------------------------------------------------ ## Applied Capital, LLC Statement of Cash Flows For The Year Ended December 31 , 2023 | Cash Flows From Operating Activities: | | |-----------------------------------------------------------------------------------|------------------| | Net income | \$
1,046 ,865 | | Adjustments to reconcile net income to net cash provided by operating activities: | | | Change in operating assets and liabilities: | | | Accounts receivable, net | (54 ,537) | | Prepaid expenses and deposits | 62,233 | | Accounts payable | (61,495) | | Commissions payable | 298 ,647 | | Deferred revenues | 30 ,000 | | Due to affiliate | (80 ,259) | | Net Cash Provided By Operating Activities | 1,241,454 | | | | | Cash used in Financing Activities: | | | Member's distributions | (1 ,175,000) | | | | | Net Increase In Cash and Cash Equivalents | 66,454 | | | | | Cash and Cash Equivalents, Beginning of Year | 967,042 | | | | | Cash and Cash Equivalents, End of Year | \$
1,033,496 | {9}------------------------------------------------ ## **Applied Capital, LLC Notes to Financial Statements For the year ended December 31, 2023** #### **NOTE "I - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** Nature of Business: Applied Capital , LLC (the "Company") is an Indiana Limited Liability Company which organized in June 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 (SEC), the Financial Industry Regulatory Authority (FINRA), Securities Investor Protection Corporation (SIPC) 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"). 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 of America ("GAAP"). The Company complies with the accounting and reporting requirements under the FASB ASC Topic 940, Financial Services-Broker and Dealers. Income Taxes: The Company has elected to be a Limited Liability Company taxed as a partnership under Internal Revenue Code (the "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 complies with the provisions of Financial Accounting Standards Board (FASB) ASC 740 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 **2020.** Use of Estimates: The preparation of financial statements in accordance with **GAAP** requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, if any, at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents: For the purpose of the statement of cash flows , 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 Federal Deposit Insurance Corporation (FDIC) insured limits of \$250,000 per deposit. No losses have been incurred to date. Accounts Receivables and Credit Policies: Accounts Receivable are uncollateralized customer obligations generally requiring payment within 30 days from the invoice date and which do not bear interest. Accounts receivable are recorded at invoiced amounts. The Company has historically experienced minimal credit losses, and management determined there were no expected credit losses at December 31 , 2023. Management monitors the Company's accounts receivable for any changes in credit risk and would record an allowance against accounts receivable if credit losses were expected. {10}------------------------------------------------ ## **Applied Capital, LLC Notes to Financial Statements For the year ended December 31, 2023** ## **NOTE "I - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** Revenue Recognition: ASC Topic 606 Revenue from Contracts with Customers 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. ASC Topic 606 prescribes a five-step 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 not 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. 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. {11}------------------------------------------------ ## **Applied Capital, LLC Notes to Financial Statements For the year ended December 31, 2023** ## **NOTE "I - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** Deferred Revenue: Deferred revenue 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: Subsequent events were evaluated by management through February 29, 2024, 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 , 2023, the Company had net capital and net capital requirements of \$306,029 and \$109,121 respectively and excess net capital of \$196,907.13. 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 the Parent 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 , 2023, allocated expenses under the agreement amounted to \$508,191 and can be found on the accompanying statement of operations under compensation and benefits, IT, data, and communication , occupancy, and operating expenses. \$30,807 of the balance due to the affiliate on the accompanying statement of financial condition arose from this services agreement. #### **NOTE 4 -CONTINGENCIES** The Company is subject to litigation in the normal course of business. The Company has no litigation in progress at December 31 , 2023. {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 , 2023 | Net Capital: | | | |--------------------------------------------------------------------------------------------------|----|--------------------| | Total member's equity qualified for net capital | \$ | 514 ,726 | | Deduction for non-allowable assets:
Accounts receivable, net
Prepaid expenses and deposits | | 191 ,258
17,439 | | Net capital before haircuts | | 306,029 | | Less haircuts | | | | Net capital | | 306,029 | | Minimum net capital required (greater of \$5,000 or 6 2/3% of aggregate
indebtedness) | | 109,121 | | Excess net capital | \$ | 196,908 | | Aggregate indebtedness (ai), net of non-ai liabilities of \$15,000 | | 1,636,817 | | Percentage of aggregate indebtedness to net capital | | 534.86% | Reconciliation with the Company's computation of Net Capital Included in Part IIA of Form X-17A-5 as of December 31 , 2023 There is no significant difference between net capital reported in Part IIA of Form X-17 A-5 as of December 31 , 2023 and net capital as reported above. See report of independent registered public accounting firm {13}------------------------------------------------ #### Applied Capital, LLC #### Schedule II ## Computation For Determination of Reserve Requirements Under Rule 15c3-3 of the Securities and Exchange Commission as of December 31 , 2023 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 , 2023 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. See report of independent registered public accounting firm {14}------------------------------------------------ #### **EXEMPTION REPORT SEA RULE 17a-5(d)(4)** February 22, 2024 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 performed an evaluation 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 7 4 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, 2023 without exception. - 3. The Company met the identified conditions for such reliance throughout the period January 1, 2023 to December 31, 2023 without exception. 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 Rule 15c3-3 Exemption Report pursuant to SEA Rule 17a-5, in which (1) Applied Capital, LLC (the Company) did 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 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, 2023, and (3) the Company met the identified conditions for such reliance throughout the period January 1, 2023 to December 31, 2023 without exception. Applied Capital, LLC's management is responsible for compliance with the provisions contemplated by Footnote 74 of SEC Release No. 34-700073 adopting amendments to 17 C.F.R. § 240.17a-5 and related SEC Staff Frequently Asked Questions 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 Applied Capital, LLC'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 Frequently Asked Questions. Indianapolis, Indiana February 29, 2024 {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 Securities Investor Protection Corporation (SIPC) Series 600 Rules, which are enumerated below on the accompanying General Assessment Reconciliation (Form SIPC-7) for the year ended December 31, 2023. Management of Applied Capital, LLC (Company) is responsible for its Form SIPC-7 and for its compliance with the applicable instructions on Form SIPC-7. Management of the Company has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of assisting you and SIPC in evaluating the Company's compliance with the applicable instructions on Form SIPC-7 for the year ended December 31, 2023. Additionally, SIPC has agreed to and acknowledged that the procedures performed are appropriate for their intended purpose. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures we performed and our findings are as follows: - 1. Compared the listed assessment payments in Form SIPC-7 with respective cash disbursement records entries, noting no differences; - 2. Compared the Total Revenue amounts reported on the Annual Audited Report Form X-17A-5 Part Ill for the year ended December 31, 2023, with the Total Revenue amounts reported in Form SIPC-7 for the year ended December 31, 2023, noting no differences; - 3. Compared any adjustments reported in Form SIPC-7 with supporting schedules and working papers, noting no differences; - 4. Recalculated the arithmetical accuracy of the calculations reflected in Form SIPC-7 and in the related schedules and working papers supporting the adjustments, noting no differences; and - 5. Compared the amount of any overpayment applied to the current assessment with the Form SIPC-7 on which it was originally computed, noting no differences. {17}------------------------------------------------ We were engaged by the Company to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the AICPA and in accordance with the standards of the Public Company Accounting Oversight Board (United States). We were not engaged to and did not conduct an examination or a review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the Company's Form SIPC-7 and for its compliance with the applicable instructions on Form SIPC-7 for the year ended December 31, 2023. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement. This report is intended solely for the information and use of Applied Capital, LLC and SIPC and is not intended to be and should not be used by anyone other than these specified parties. Indianapolis, Indiana February 29, 2024 {18}------------------------------------------------ #### **GENERALASSESSMENTFORM** For the fiscal year ended 12/31/2023 | | Determination of "SIPC NET Operating Revenues" and General Assessment for:
MEMBER NAME | SEC No. | | |---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|------------------| | | APPLIED CAPITAL LLC | 8-69199 | | | | 1/1/2023
and ending
For the fiscal period beginning | 12/31/2023 | | | 1 | Total Revenue (FOCUS Report - Statement of Income (Loss)-
Code 4030) | | \$ 35,396,926.00 | | 2 | Additions: | | | | | a Total revenues from the securities business of subsidiaries (except foreign
subsidiaries) and predecessors not included above. | | | | | b Net loss from principal transactions in securities in trading accounts. | | | | | c Net loss from principal transactions in commodities in trading accounts. | | | | | d Interest and dividend expense deducted in determining item 1. | | | | | e Net loss from management of or participation in the underwriting or
distribution of securities. | | | | | f Expenses other than advertising, printing, registration fees and legal fees
deducted in determining net profit management of or participation in
underwriting or distribution of securities. | | | | | g Net loss from securities in investment accounts. | | | | | h Add lines 2a through 2g. This is your total additions. | | \$ 0.00 | | 3 | Add lines 1 and 2h | | \$ 35,396,926.00 | | 4 | Deductions: | | | | | a Revenues from the distribution of shares of a registered open end investment
company or unit investment trust, from the sale of variable annuities, from the
business of insurance, from investment advisory services rendered to
registered investment companies or insurance company separate accounts
and from transactions in security futures products. | \$2,844,687.00 | | | | b Revenues from commodity transactions. | | | | | c Commissions, floor brokerage and clearance paid to other SIPC members
in connection with securities transactions. | \$ 400,832.00 | | | | d Reimbursements for postage in connection with proxy solicitations. | | | | | e Net gain from securities in investment accounts. | | | | | f 100% 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. | | | | | g Direct expenses of printing, advertising, and legal fees incurred in connection
with other revenue related to the securities business (revenue defined by
Section 16(9)(L) of the Act). | | | | | h Other revenue not related either directly or indirectly to the securities business.
Deductions in excess of \$100,000 require documentation | \$ 623,695.00 | | | 5 | a Total interest and dividend expense (FOCUS Report - Statement
of Income (Loss)- Code 4075 plus line 2d above) but
not in excess of total interest and dividend income | | | | | b 40% of margin interest earned on customers securities accounts
(40% of FOCUS Report- Statement of Income (Loss)-
Code 3960) | | | | | c Enter the greater of line 5a or 5b | \$ 0.00 | | | 6 | Add lines 4a through 4h and 5c. This is your total deductions. | | \$ 3,869,214.00 | {19}------------------------------------------------ | SIPC-7
37 REV 0722 | | | SECURITIES INVESTOR PROTECTION CORPORATION | | SIPC-7
37 REV 0722 | | | | |----------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------|--------------------------------------------|----------------------------------------|-----------------------|--|--|--| | | GENERAL ASSESSMENT FORM
For the fiscal year ended
12/31/2023 | | | | | | | | | 7 | Subtract line 6 from line 3. This is your SIPC Net Operating Revenues. | | | | \$31,527,712.00 | | | | | 8 | Multiply line 7 by .0015. This is your General Assessment. | | | | \$47,291 .00 | | | | | 9 | Current overpayment/credit balance, if any | | | | \$ 0.00 | | | | | 10 | | General assessment from last filed 2023 SIPC-6 or 6A | | \$23,637.00 | | | | | | 11 | b Any other overpayments applied
d Add lines 11a through 11c | a Overpayment(s) applied on all 2023 SIPC-6 and 6A(s)
c All payments applied for 2023 SIPC-6 and 6A(s) | \$ 0.00
\$ 0.00
\$23,637.00 | \$23,637.00 | | | | | | 12 | LESSER of line 10 or 11d. | | | | \$23,637.00 | | | | | | 13 a Amount from line 8
b Amount from line 9
c Amount from line 12 | | | \$47,291 .00
\$ 0.00
\$23,637.00 | \$23,654.00 | | | | | | d Subtract lines 13b and 13c from 13a. This is your assessment balance due. | | | | | | | | | | \$ 0.00
14
Interest (see instructions) for
O
days late at 20% per annum
Amount you owe SIPC. Add lines 13d and 14. | | | | | | | | | 15 | \$23,654.00
\$ 0.00 | | | | | | | | | 16 | | Overpayment/credit carried forward (if applicable) | | | | | | | | SEC No.
8-69199 | | Designated Examining Authority
DEA: FINRA | FYE
2023 | Month
Dec | | | | | | MEMBER NAME
APPLIED CAPITAL LLC
MAILING ADDRESS
ONE IN DIANA SQUARE STE 2252
INDIANAPOLIS, IN 46204
UNITED STATES | | | | | | | | | Subsidiaries (S) and predecessors (P) included in the form (give name and SEC number) [Z] By checking this box, you certify that you have the authority of the SIPC member to sign this form; that all information in this form is true and complete; and that on behalf of the SIPC member, you are authorized, and do hereby consent, to the storage and handling by SIPC of the data in accordance with SI PC's Privacy Policy | APPLIED CAPITAL LLC | LOREN EUGENE HEGER | | |----------------------------|------------------------|--| | (Name of SIPC Member) | (Authorized Signatory) | | | 2/27/2024 | lheger@fnex.com | | | (e-mail address)
(Date) | | | Completion of the "Authorized Signatory" line will be deemed a signature. **This form and the assessment payment are due 60 days after the end of the fiscal year.** Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.