# BHA SELECT NETWORK, LLC X-17A-5 (2020-03-02) — Broker-dealer annual report - Company: BHA SELECT NETWORK, LLC - Form: X-17A-5 - Filed: 2020-03-02 - Period: 2019-12-31 - Accession: 0001584711-20-000001 - CIK: 1584711 - File #: 8-69341 - Material weakness: No - Auditor: Knight Rolleri Sheppard, CPAS, LLP - Auditor location: Fairfield, CT - Contact: Daniel McDermott - Phone: 508-786-0480 - Signed by: Daniel McDermott (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1584711/000158471120000001/BHAPublic2019.pdf --- {0}------------------------------------------------ Report Pursuant to Rule 17a-5 of The Securities and Exchange Commission Including Report of Independent Registered Public Accounting Firm As of December 31, 2019 {1}------------------------------------------------ #### UNITED STATES SECURITIES **AND EXCHANGE COMMISSION** Washington, D.C. 20549 | | 0MB APPROVAL | | |-------------------------|--------------|-----------------| | 0MB Number: | | 3235-0123 | | Expires: | | August 31, 2020 | | ~timated average burden | | | | Hours per response | | 12.00 | 8- 69341 SEC FILE NUMBER # ANN UAL AUDITED REPORT FORM X-17A-5 PART Ill #### FACING PAGE Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Role 17a-5 ThereDDder | REPORT FOR THE PERlOD BEGINNING | __
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_ | |--------------------------------------------------------------------------------|------------------------------|------------------|--------------------------------------| | | MM/DD/YY | | MM/DD/YY | | | A. REGISTRANT IDENTIFICATION | | | | NAME OF BROKER-DEALER: | | | OFFICIAL USE ONLY | | HA Select Network, LLC | | | FIRM I.D. NO. | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | | | 745 Atlantic Ave, 7th Floor | | | | | | ( o. and Street) | | | | Boston | MA | | 02111 | | (City) | (State) | | (Zip Code) | | AME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT | | | | | Daniel McDermott | | | 508-786-0480 | | | | | (Area Code-Telephone umber) | | | B. ACCOUNTANT IDENTIFCA TION | | | | | | | | | INDEPENDENT PUBLIC ACCOUNT ANT whose opinion is contained in this Report* | | | | | Knight Rolleri Sheppard, CP AS, LLP | | | | | (Name - if individual, _,rme last. /ml, middle name) | | | | | 1499 Post Road, PO Box 139 | | CT | 06824 | | (Address) | (City) | {State) | (Zip Code) | | CHECK ONE: | | | | | {gl
Certified Public Accountant | | | | | | | | | | Public Accountant | | | | | D
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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 op-inion of an independent public accountant must be supported by a statemenl of facts and circumstances relied on as the basis for the exemption. See Section 240.17a-5(e)(2).* > **Potential persons who are to respond** *to* **the collection of information contained in this form are not required to respond unless the form** displays a currently valid 0MB control number. SEC 1410 (06-02) {2}------------------------------------------------ ### **OATH OR AFFIRMATION** | I, | -----------------------------
Daniel McDermott | , swear ( or affirm) that, to the best of | |-----------|-----------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------| | | | my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of | | | BHA Select Network, LLC | -----------------------------------------
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, are true and correct I further swear (or affinn) that
19 | | | classified solely as that of a customer, except as follows: | neither the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account | | | | CEO
Title | | | This report** contains (check all applicable boxes): | | | ~ (a) | Facing page. | | | !Zl (b) | Statement of Financial Condition. | | | ~ (c) | Statement oflncome (Loss). | | | [?s1 ( d) | Statement of Changes in Financial Condition. | | | [81 ( e) | Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietor's Capital. | | | | D ( f) Statement of Changes in Liabilities Subordinated to Claims of Creditors. | | | [8J (g) | Computation of Net Capital. | | | D (h) | Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3. | | | D (i) | Information Relating to the Possession or Control Requirements under Rule 15c3-3. | | - ~ (j) A Reconciliation, including appropriate explanation, of the Computation of Net Capital Under Rule 15c3-1 and the Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3. - D (k) A Reconciliation between the audited and unaudited statements of Financial Condition with respect to methods of consolidation. - ~ ( 1) An Oath or Affirmation. - D (m) A copy of the SIPC Supplemental Report - D (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. l* 7 *a-5(e)(3).* {3}------------------------------------------------ ## **TABLE OF CONTENTS** | | Page No. | |---------------------------------------------------------|----------| | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 1 | | FINANCIAL STATEMENTS | | | Statement of Financial Condition | 2 | | Notes to Financial Statements | 3 -
5 | {4}------------------------------------------------ ## **BHA SELECT NETWORK, LLC** # **STATEMENT OF FINANCIAL CONDITION December 31, 2019** ### **ASSETS** | Cash | \$
140,078 | |---------------------------------------|---------------| | Accounts receivable | 23,720 | | Deposits and prepaid expenses | 14,061 | | Total Assets | \$
177,859 | | LIABILITIES AND MEMBER EQUITY | | | Accounts payable and accrued expenses | \$
52,831 | | Due to related party | 1,731 | | | 54,562 | | Member equity | 123,297 | | | | | Total Liabilities and Member Equity | \$
177,859 | {5}------------------------------------------------ ## **NOTES TO FINANCIAL STATEMENT December 31, 2019** #### Note 1 **Organization and Nature of Business** BHA Select Network, LLC (the "Company") is a broker-dealer registered with the United States Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority ("FINRA"). The Company was founded in August 2008 under another name (previously known as Parker Point Capital, LLC) under the laws of the State of Massachusetts. The Company registered for broker-dealer status as BHA Select Network, LLC in July 2013 which was granted on March 5, 2014. The Company provides investment banking and related financial advisory services to alternative investment fund managers. It operates out of one office in Boston, Massachusetts. The Company's sole member is Brighton House Associates, LLC (the "Parent"), an investment banking firm located in Boston, Massachusetts. #### Note 2 **Summary of Significant Accounting Policies** ## **Basis of Presentation** The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). All items of income and expense are accounted for on the accrual basis. ### **Use of Estimates** Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. ### **Lease Accounting** The Company has determined that the new lease accounting standard (ASC-842) does not apply to the Company. ### **Revenue Recognition** The Company recognizes 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 (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, ( 4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when ( or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. {6}------------------------------------------------ ## **NOTES TO FINANCIAL STATEMENT (CONTINUED) December 31, 2019** #### Note 2 **Summary of Significant Accounting Policies (continued)** ### **Revenue Recognition (continued)** The Company provides investment banking and advisory services. Revenue for investment banking success fees is generally recognized at the point in time that performance under the arrangement is completed (the closing date of the transaction). For certain contracts, the Company must evaluate the likelihood of significant reversal of revenue due to matters outside company control and only recognize revenue up to the amount that a significant revenue reversal is not probable. Revenue for financial advisory retainer fees is generally recognized over time in which the performance obligations are simultaneously provided by the Company and consumed by the customer. Retainers and other fees received from customers prior to recognizing revenue are reflected as contract liabilities. At December 31, 2019, contract liabilities were \$0. Disaggregation can be found on statement of operations for the year ended December 31, 2019. ### **Accounts Receivable** Accounts receivable represents amount earned but not yet received. Management assesses the need for any allowance for doubtful accounts based on information regarding individual accounts and historical collection experience. An allowance for doubtful accounts is determined based on management's best estimate of probable losses. There was no allowance for doubtful accounts as of December 31, 2019. ### **Cash and Cash Equivalents** The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less from the date of purchase to be cash equivalents. ### **Income Taxes** The Company consolidates its taxable income with its Parent, which files a partnership return for federal, state and city purposes. As a result, no federal or Massachusetts State income taxes are provided as they are the responsibility of the individual members. Tax positions taken or expected to be taken in the course of preparing the Company's tax returns, including the position that the Company qualifies as a pass-through entity, are required to be evaluated to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authorities. There were no uncertain tax positions at December 31, 2019. #### Note 3 **Concentrations** The Company maintains cash balances in one financial institution, which are insured by the Federal Deposit Insurance Corporation (FDIC) for up to \$250,000 per institution. From time to time, the Company's balances may exceed these limits. During 2019, two customers provided 66% of the total revenues. {7}------------------------------------------------ ## **NOTES TO FINANCIAL STATEMENT (CONTINUED) December 31, 2019** #### Note4 **Related Party Transactions** The Company entered into an expense sharing agreement with the Parent, in which the Parent provides office and additional services in exchange for reimbursement of a specified percentage of such expenses. For the year ended December 31, 2019, the Company incurred expenses of \$8,345 related to this agreement. At December 31, 2019, the Company owed \$1, 731 to its Parent for services related to this agreement as shown on the statement of financial condition. Due to the aforementioned related party transactions, the financial statements of the Company may not be indicative of the financial position, results of operations or cash flows that would have been reported if the Company had conducted its operations as an unaffiliated entity. #### Note 5 **Commitments and Contingencies** The Company has pending an Acceptance, Waiver and Consent (A WC) with FINRA regarding certain member rule violations. As part of the pending A WC, the firm has agreed to pay a fine of \$15,000. This amount has been recorded as liability, included in the statement of financial condition as of December 31, 2019. #### Note 6 **Exemption from Rule 15c3-3** The Company is exempt from the provisions of Rule 15c3-3 of the SEC, since the Companies activities are limited to those set forth in the conditions for exemption pursuant to subsection k(2)(i) of the Rule. #### Note 7 **Net Capital Requirements** The Company is subject to the Securities and Exchange Commission's Uniform Net Capital Rule (Rule 15c3-1 ), which requires the maintenance of a minimum net capital, as defined, of the greater of \$5,000 or one-fifteenth of aggregate indebtedness, as defined. At December 31, 2019, the Company had net capital of\$85,516 which was \$80,516 greater than its minimum net capital required of\$5,000. As of December 31, 2019, the ratio of aggregate indebtedness to net capital was .64 to 1. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.