# CAPELLA SECURITIES LLC X-17A-5 (2021-03-30) — Broker-dealer annual report - Company: CAPELLA SECURITIES LLC - Form: X-17A-5 - Filed: 2021-03-30 - Period: 2020-12-31 - Accession: 0001627419-21-000006 - CIK: 1627419 - File #: 8-69567 - Material weakness: No - Auditor: YSL & Associates - Auditor location: New York, NY - Contact: Kathy Efrem - Phone: 212-897-1686 - Signed by: Kathy Efrem (FINOP) Original filing: https://www.sec.gov/Archives/edgar/data/1627419/000162741921000006/Cap20s.pdf --- {0}------------------------------------------------ Statement of Financial Condition December 31, 2020 {1}------------------------------------------------ | 11 Broadway, Suite 700
(Address)
CHECKONF; | B. ACCOUNTANT IDENTIFICATION
INDEPENDENT PUBLlCACCOUNTANT whose opinion is contained in this Report*
YSL & Associates
(Name -- if individual, state last, first, middle name)
New York
NY
(City)
(State) | 10004
(Zip Code) | |--------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------| | | | | | | | | | | | | | | | | | | | | | | | | | | | (Area Code -- Telephone No.) | | Kathy Efrem | NAMEANDTELEPHONENUMBEROF PERSONTOCONTACTINREGARD TOTHJSREPORT | 212-897-1686 | | (City) | (::ilate) | (Zip Code) | | New York | NY | 10004 | | | 42 Broadway, Suite 12-129 | | | ADDRESS OF PRINCIPAL PLACE OF BUSINF.SS: (Do not use P.O. Box No.) | | FlRM ID. NO. | | Capella Securities LLC | | OFFICTAL USE ONLY | | NAME OF BROKER-DEALER: | | | | | A. REGISTRANT IDENTIFICATION | | | | MM/DD IYY | MM/DDIYY | | REPORT FOR THE PERIOD BEGrNNING | 1/1/2020
AND ENDING
~~~~~~~~~~~~ | 12/31/2020
-~~~~~~~~~- | | | Infonnation Required of Brokers and Dealers Pursuant to Section 17 of the
Securities Exchange Act of 1934 and Rule 17a-5 Thereunder | | | | FACING PAGE | | | | PART Ill | | | | FORM X-17 A-5 | 8-
69626 | | | ANNUAL AUDITED REPORT | SEC FILE NUtv'BER | | | Washington, U.C 20549 | Estirrated average burden
hours per response 12.00 | | | SECURfIIES AND EXCHANGECOMMISSION | Expires: October 31, 2023 | | | UNITFD STA TES | Otv'B NJrrber:
3235-0123 | *mus/ be suppon ed by a statement of/acts and circumstances relied on as the basis for the exemption. See section 240.l 7a-5(e)(2).* SEC 1410(06-02) *Pote11tial perso11s who are lo respond lo the collectio11 of i1ifor111ation contained i11 tliisfor111 are 1101 required to respond 1111/ess tl1efor111 displays a c11rre11tly 1>alid OMB co11trol 1111111ber.* {2}------------------------------------------------ ### **AFFIRMATION** I, Kathy Efrem, affirm that, to the best of my knowledge and belief. the accompanying financial statements and supplemental schedules pertaining to Capella Securities, LLC for year ended December 31, 2020, are true and correct. I further affirm that neither the Company nor any officer or director has any proprietary interest in any account classified sole ly as that of a customer. FINOP Title JENNIFER BEATRICE GUMBS Notary Publ·c - State of New Yor~ NO. 01GU6045048 Q1.alifled in Queens County My Commission Expire~ Jut 11, *zozz* ..,. 5*d* sf>f ~**1-1** *Af!-.C1f-*P"b *:J-* 1 J {3}------------------------------------------------ ### This report\*\* contaiins (check all applicable boxes): - [x] Independent Auditors' Report. - [x] Facing Page. - [ x] Statement of Financial Condi ti on. - [ ] Statement of Operations. - [ ] Statement of Changes in Member's Equity. - [ ] Statement of Cash Flows. - [] Statement of Changes in Liabilities Subordinated to Claims of General Creditors (not applicable). - [ ] Computation of Net Capital for Brokers and Dealers Pursuant to Rule l 5c3-l under the Securities Exchange Act of 1934. - [ ] Computation for Determination of Reserve Requirements for Brokers and Dealers Pursuant to Rule J 5c3-3 under the Securities Exchange Act of 1934. - [ ] Information Relating to the Possession or Control Requirements for Brokers and Dealers Pursuant to Rule l 5c3-3 under the Securities Exchange Act of 1934 (not applicable). - [ ] A Reconciliation, including appropriate explanations, of the Computation of Net Capital Pursuant to Rule J 5c3-l (included with item (g)) and the Computation for Determination of Reserve Requirements Under Rule 15c3-3 (included in item (g)). - [] A Reconciliation Between the Audited and Unaudited Statements of Financial Condition With Respect to Methods of Consolidation (not applicable). - [x] An Affirmation. - [ ] A copy of the SIPC Supplemental Report. - [ ] A report describing any material inadequacies found to exist or found to have existed since the date of the previous audit (Supplemental Report on Internal Control). - [ ] Independent Auditors' Reporlf: Regarding Rule 15c3-3 exemption - [ ] Rule 15c3-3 Exemption Report - \*\* *For conditions of confidential treatment of certain portions of this filing, see section 240. 17a-5(e)(3).* {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) 11 Broadway, Suite 700, New York, NY 10004 Tel: (212) 232-0122 Fax: (646) 218-4682 # REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Member of Capella Securities LLC # Opinion on the Financial Statement We have audited the accompanying statement of financial condition of Capella Securities LLC (the "Company") as of December 31, 2020, and the related notes (collectively referred to as the "financiaJ statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of December 31, 2020 in conformity with accounting principles generally accepted in the United States of America. # Basis for Opinion This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statement 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 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 statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a 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 overarn presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. We have served as Capella Securities LLC's auditor since 2016. New York, NY March 29, 2021 {5}------------------------------------------------ # STATEMENT OF FINANCIAL CONDITION # DECEMBER 31, 2020 ### ASSETS | Cash | \$
238,076 | |---------------------------------------|---------------| | Accounts receivable | 114,009 | | Prepaid expenses | 9,993 | | Total assets | \$
362,078 | | LIABILITIES AND MEMBER'S EQUITY | | | Liabilities: | | | Accounts payable | \$
333,273 | | Due to affiliate | 1,100 | | Total liabilities | 334,373 | | r's Equity
Membe | 27,705 | | Total liabilities and member's equity | \$
362,078 | The accompanying notes are an integral part of these financial statements. {6}------------------------------------------------ # **NOTES TO FINANCIAL STATEMENTS** ### **DECEMBER 31, 2020** #### NOTE 1. DESCRIPTION OF ORGAN1ZA TION AND BUSINESS Capella Securities LLC (the "Company") is a broker dealer registered with the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority ("FINRA") formed for the purpose of providing broker dealer services including financial advisory services, mergers and acquisition services and to engage in private placement of securities and similar services. The Company's current parent is Capella Partners, LLC. #### NOTE2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ### Basis of Presentation These financial statements were prepared. in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. ### Income Taxes The Company is a limited liability company, treated as a disregarded entity for federal, state and city income tax purposes; it therefore does not incur income taxes at the Company level. Instead its earnings and losses are passed through to the member and included in the calculation of the member's tax liability. Accordingly, no provision for income taxes has been made in the accompanying financial statements. Management has analyzed the Company's tax positions and has concluded that no liability for unrecognized tax benefits should be recorded as of December 31, 2020. ### New Accounting Pronouncement In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends the F ASB 's guidance on the impairment of financial instruments. The ASU adds to GAAP, an impairment model (known as the current expected credit loss ("CECL") model) that is based on expected losses rather than incll.lrred losses. Under the new guidance, the Company recognizes as an allowance, its estimate of lifetime expected credit losses, which the FASB believes will result in more timely recognition of such losses, if any. The ASU is also intended to reduce the complexity of GAAP by decreasing the number of credit impairment models that entities use to account for debt instruments. Further, the ASU makes targeted changes to the impairment model for available-for-sale debt securities. The new CECL standard became effective on January 1, 2020, and the Company applied the modified retrospective method of adoption which resulted in no adjustment to member's equity as of the effective date. {7}------------------------------------------------ # **NOTES TO FINANCIAL STATEMENTS** ### **DECEMBER 31, 2020** ### NOTE 3. RELATED PARTY TRANSACTIONS In accordance with a services agreement, the Company's affiliate pays for various specified expenses for which the Company compensates the affiliate in the form of a management fee and for various other expenses, such as sundry professional services, for which the Company does not reimburse the affiliate. During the year ending December 31, 2020, the Affiliate agreed to pay expenses of approximately \$139 ,000 on behalf of the Company without seeking reimbursement. As a result, these financial statements do not necessarily reflect the results of operations and financial condition that would have been the result of dealing with unrelated entities. During the year ended December 31, 2020, the Company incurred \$1,200 for management fees. The affiliate agreed to pay other expenses on behalf of the Company without seeking reimbursement. #### NOTE4. NET CAPITAL REQUIREMENTS The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule 15c3-1. This Rule requires the maintenance of minimum net capital and that the ratio of aggregate indebtedness to net capital both as defined shall not exceed 15 to **1** and that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to 1. At December 31, 2020 the Company's net capital was \$10,586 which was \$(4,580) below its minimum requirement of\$15,166. NOTE 5. COMPLIANCE WITH RULE 15C3-3 > The Company does not handle cash or securities on behalf of customers and accordingly has no obligation under SEC Rule 15c3-3. #### NOTE6. CONCENTRATIONS All of the Company's cash is maintained in a single financial institution. The Company does not consider itself to be at risk with respect to this concentration. 100% of accounts receivable is from one customer. 84 % of the revenue was earned from two customers. {8}------------------------------------------------ ### **NOTES TO FINANCIAL STATEMENTS** ### **DECEMBER 31, 2020** #### NOTE 7. COVID-19 During the 2020 calendar year, the World Health Organization has declared! COVID-19 to constitute a "Public Health Emergency of International Concern". This pandemic has disrupted economic markets and the economic impact, duration and spread of the COVID-19 virus is uncertain at this time. The financial performance of the Company is subject to future developments related to the COVID-19 outbreak and possible government advisories and restrictions placed on the financial markets and business activities. The impact on financial markets and the overall economy, all of which are highly uncertain, cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period the Company's results may be materially affected. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.