# EMU SECURITIES LLC X-17A-5 (2021-02-24) — Broker-dealer annual report - Company: EMU SECURITIES LLC - Form: X-17A-5 - Filed: 2021-02-24 - Period: 2020-12-31 - Accession: 0001663189-21-000002 - CIK: 1663189 - File #: 8-69725 - Material weakness: No - Auditor: YSL & Associates LLC - Auditor location: New York, NY - Contact: Fredric Obsbaum - Phone: 2125097800 - Signed by: Fredric Obsbaum (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1663189/000166318921000002/emu20s.pdf --- {0}------------------------------------------------ Financial Statements and Supplementary Schedules Pursuant to Rule 17a-5 under the Securities Exchange Act of 1934 December 31, 2020 {1}------------------------------------------------ UNITED ST A TES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 0MB APPROVAL 0MB Number: 3235-0123 Expires: October 31, 2023 Estimated average burden hours per response . . . 12.00 8-69725 SEC FILE NUMBER ### **ANNUAL AUDITED REPORT FORM X-17 A-5 PART** III #### **FACING PAGE** **Information Required. of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder** | | | Securities Exchange Act of 1934 and Rule 17a-5 Thereunder | | |---------------------------------------------------------------------------|------------------------------------------------|-----------------------------------------------------------|----------------------| | REPORT FOR THE PERIOD BEGINNING | ------=0-=l/_,._0=1/2=0'--
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AND ENDING | 12/31/20
MM/DD/YY | | | A. REGISTRANT IDENTIFICATION | | | | NAME OF BROKER -
DEALER: | | | | | | | | OFFICIAL USE ONLY | | EMU Securities LLC | | | FIRM ID. NO. | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | | | | 42 Broadway-Suite 12-129 | | | | | (No. and Street) | | | | New York | NY | | 10004 | | (City) | (State) | | (Zip Code) | | | B. ACCOUNTANT IDENTIFICATION | | | | INDEPENDENT PUBLIC ACCOUNT ANT whose opinion is contained in this Report* | | | | | | YSL & Associates LLC | | | | (Name - | if individual, state last, first, middle name) | | | | 11 Broadway Suite 700 | New York | NY | 10004 | | (Address) | (City) | (State) | (Zip Code) | | CHECKONE: | | | | | [!] Certified Public Accountant | | | | | D
Public Accountant | | | | | D
Accountant not resident in United States or any of its possessions. | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | | | *\*Claims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis for the exemption. See section 240.17a-*5(e){2).SEC 1410 (3-91) {2}------------------------------------------------ ## **EMU Securities LLC TABLE OF CONTENTS** #### **This report** "'\* **contains (check all applicable boxes):** - [x] Report oflndependent Registered Public Accounting Firm - [x] Facing Page. - [x] Statement of Financial Condition. - [x] Statement of Operations. - [x] Statement of Changes in Member's Equity. - [ x] Statement of Cash Flows. - [ J Statement of Changes in Liabilities Subordinated to Claims of General Creditors (not applicable). - [x] Computation of Net Capital for Brokers and Dealers Pursuant to Rule 15c3-l under the Securities Exchange Act of 1934. - [x] Computation for Determination of Reserve Requirements for Brokers and Dealers Pursuantto Rule 15c3-3 under the Securities Exchange Act of 1934. - [x] Infonnation Relating to the Possession or Control Requirements for Brokers and Dealers Pursuant to Rule l 5c3-3 under the Securities Exchange Act of 1934. - [ ] A Reconciliation, including appropriate explanations, of the Computation of Net Capital Pursuant to Rule 15c3-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 Affinnation. - [ ] 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). - [x] Independent Auditors' Report Regarding Rule 15c3-3 exemption. - [x] Rule 15c3-3 Exemption Report. - \* \* *For conditions of confidential treatment of certain portions of this filing, see section 2 40.17 a-5 (e)(3).* {3}------------------------------------------------ #### AFFIRMATION I, Fredric Obsbaum, affirm that, to the best of my knowledge and belief, the accompanying financial statements and supplemental schedules pertaining to EMU Securities LLC for the 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 solely as that of a customer. CEO Title Subscribed and sw?rn / to before me O *2--/* J..r./. *UJ '1--(* ~TEPHEN R. ELD~IDGE ~OT ARY PUBLIC OF NEW JERSEY 1.D. # 2407355 tr.y Commission Expir.ls 4/27/2.C21 {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 EMU Securities LLC #### **Opinion** on **the Financial Statements** We have audited the accompanying statement of financial condition of EMU Securities LLC (the "Company") as of December 31, 2020, 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 the Company as of December 31, 2020, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** These financial statements are the responsibility of 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 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 perfonning 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. #### **Auditor's Report on Supplemental Information** The supplemental information contained in Schedule I and Schedule II has been subjected to audit procedures perfonned in conjunction with the audit of the Company's financial statements. The supplemental information is the responsibility of the Company's management. Our audit procedures included determining whether the supplemental infonnation 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 fonn and content, is presented in conformity with 17 C.F.R. §240.l7a-5. In our opinion, the supplemental information contained in Schedule I and Schedule 11 is fairly stated, in a11 material respects, in relation to the financial statements as a whole. y *'\$l W..* As. s.,c.~ *l..* 1.. e-- w e have served as EMU Securities LLC's auditor since 2016. NewYork,NY February 23, 2021 {5}------------------------------------------------ ### **Statement of Financial Condition December 31, 2020** | Assets | | |----------------------------------------|--------------| | Cash | \$
42,864 | | Prepaid expenses and other assets | 3,407 | | Total assets | \$
46,271 | | Liabilities and Member's Equity | | | Accrued expenses and other liabilities | \$
2,400 | | Member's equity | 43,871 | | Total liabilities and member's equity | \$
46,271 | {6}------------------------------------------------ ### **Statement of Operations For the Year Ended December 31, 2020** | 24
\$ | |----------------| | 24 | | | | 5,210 | | 4,395 | | 1,200 | | 681 | | 11,486 | | (11,462)
\$ | | | {7}------------------------------------------------ ### Statement of Changes in Member's Equity For the **Year** Ended December 31, 2020 | Balance, January 1, 2020 | \$
55,333 | |----------------------------|----------------| | Net loss | (11,462) | | Balance, December 31, 2020 | \$
4'.3,871 | {8}------------------------------------------------ ## **Statement of Cash Flows For the Year Ended December 31, 2020** | Cash flows from operating activities | | |----------------------------------------------------------------------------|----------------| | Net loss | \$
(11,462) | | Adjustments to reconcile net loss to net cash used in operating activities | | | (Increase) in operating asset | | | Prepaid expenses and others | (657) | | Increase in operating liabilities | | | Accrued expenses and other liabilities | 1,200 | | Net cash used in operating activities | (10,919) | | Cash | | | Beginning of year | 53,783 | | Endofyear | \$
42,864 | {9}------------------------------------------------ ### **Notes to Financial Statements December 31, 2020** #### **1. Organization and Business** EMU Securities LLC (the "Company"), a New York limited liability company, is a broker-dealer registered with the Securities and Exchange Commission (the "SEC") and is a member of the Financial Industry Regulatory Authority ("FINRA"). The primary business of the Company is to act as a broker-dealer selling private placements of securities. #### **2. 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 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. #### **Revenue** The Company earns revenue by way of fees for advisory services and private placements. Revenues from services provided are recognized at the time there is persuasive evidence that the company's performance obligations have been substantially completed pursuant to the terms of an engagement letter, the fee is determinable, and collection of the related receivable is reasonably assured. Expenses directly associated with such transactions are deferred until the related revenue is recognized or the engagement is otherwise concluded. #### **Cash** All cash deposits are held by one financial institution and therefore are subject to the credit risk at that financial institution. The Company has not experienced any losses in such accounts and does not believe there to be any significant credit risk with respect to these deposits. #### **Fees Receivable** Fees receivable are stated at cost less an allowance for doubtful accounts, if any, and represents fees management expects to collect based on each contract. On a periodic basis, the Company evaluates its fees receivable and establishes an allowance for doubtful accounts, based on past history, collections, and current credit conditions. Accounts are written-off as uncollectible once the Company has exhausted its collection means. As of December 31, 2020, there was an allowance for doubtful accounts in the amount \$17,755. #### **Income Taxes** The Company is a single member limited liability company and is treated as a disregarded entity for federal income tax reporting purposes. The Internal Revenue Code ("IRC") provides that any income or loss is passed through to the individual member for federal, state and certain local income taxes. Accordingly, the Company has not provided for federal and state income taxes. {10}------------------------------------------------ ### **Notes to Financial Statements December 31, 2020** #### **2. Summary of Significant Accounting Policies (Income Taxes continued)** At December 31, 2020, management has determined that the Company had no uncertain tax positions that would require financial statement recognition. This determination will be subject to ongoing reevaluation as facts and circumstances may require. Interest and penalties assessed, if any, are recorded as income tax expense. #### **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 (a) identify the contract( s) with a customer, (b) identify the perfonnance obligations in the contract, ( c) detennine the transaction price, ( d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a perfonnance 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. #### **Significant Judgments** Revenue from contracts with customers includes commission income and fees from investment banking and asset management services. The recognition and measurement of revenue is based on the assessment of individual contract terms. Significant judgment is required to determine whether performance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance obligations are identified; when to recognize revenue based on the appropriate measure of the Company's progress under the contract; and whether constraints on variable consideration should be applied due to uncertain future events #### **3. Transactions with Related Parties** The Company maintains an intercompany services agreement (the "Expense Sharing Agreement") with an affiliated company, whereby the affiliate provides accounting, administrative, office space, and other services. Total services charged for the year were \$1,200 and the total fees outstanding as of December 31, 2020 was \$2,400. The terms of these arrangements may not be the same as those that would otherwise exist or result from agreements and transactions among unrelated parties. #### **4. Regulatory Requirements** The Company is subject to SEC Uniform Net Capital Rule l 5c3-l under the Securities Exchange Act of 1934, which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. At December 31, 2020, the Company had net capital of approximately \$40,000 which exceeded the required net capital of \$5,000 by approximately \$35,000. The Company does not hold customers• cash or securities; therefore, it has no obligations under SEC Rule 15c3-3 under the Securities Exchange Act of 1934. {11}------------------------------------------------ ### **Notes to Financial Statements December 31, 2020** #### **5. New Accounting Pronouncements** In June 2016, the Financial Accounting Standards Board ("F ASB") issued Accounting Standards Update ("ASU") 2016-13, *Financial Instruments* - *Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,* which amends the FASB'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 incurred losses. Under the new guidance, the Company recognizes as an allowance, its estimate of lifetime expected credit losses, which the F ASB 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 impainnent 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 adjusnnent to retained earnings as the effective date. #### **6. 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 perfonnance 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. #### 7. **Subsequent Event** On January 29, 2021 the Company filed Fonn BDW with the SEC and FINRA requesting withdrawal as a registered broker-dealer. The requested withdrawal will be effective on March 30, 2021. {12}------------------------------------------------ ## **Schedule 1- Computation of Net Capital Under Rule 15c3-1 of the Securities and Exchange Commission December 31, 2020** | Member's equity | \$
43,871 | |---------------------------------------------------------------------------------------------|--------------| | Deductions
Prepaid expenses | 3,407 | | Net capital | 40,464 | | Minimum capital requirement (the greater of \$5,000 or 6 2/3%
of aggregate indebtedness) | 5,000 | | Excess net capital | \$
35,464 | | Aggregate indebtedness -
accounts payable and accrued expenses | \$
2,400 | | Ratio of aggregate indebtedness to net capital | 0.059 to l | There are no material differences between the computation of net capital presented above and the computation of net capital reported in the Company's unaudited Fonn X-17A-5, Part IIA filing as of December 31, 2020. {13}------------------------------------------------ ## **Schedule** II - **Computation for Determination of Reserve Requirements and Information Relating to Possession or Control Requirements Under Rule 15c3-3 of the Securities and Exchange Commission December 31, 2020** The Company does not hold customers' cash or securities and, therefore, has no obligations under SEC Rule 15c3-3 under the Securities Exchange Act of 1934. {14}------------------------------------------------ ![](_page_14_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 EMU Securities LLC We have reviewed management's statements, included in the accompanying Rule 15c3-3 Exemption Report pursuant to SEC Rule l 7a-5, in which (1) EMU Securities LLC (the "Company") did not claim an exemption under paragraph (k) of 17 C.F.R.§240.15c3-3, and (2) the Company may file an exemption report because it had no obligations under 17 C.F.R.§240.15c3-3 and the Company's business was limited to private placements. In addition, the Company did not hold customers' cash or securities and the Company stated that it had no exceptions under SEC Rule 15c3-3 throughout the most recent fiscal year. The Company's management is responsible for compliance with 17 C.F .R. §240.15c3-3 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 the Company's compliance with SEC Rule 15c3-3. 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. l 7a-5, and related SEC Staff Frequently Asked Questions. *j1;l* Y. *fls.~t-~-1.e.i l..* t, c\_. New York, NY February 23, 2021 {15}------------------------------------------------ **Rule 15c3-3 Exemption Report Year Ended December 31, 2020** To the best of my knowledge and belief, EMU Securities LLC (the "Company") states the following: The Company does not claim an exemption under paragraph (k) of SEC Rule 15c3-3 in reliance upon Footnote 74 of SEC Release No. 34-70073 and as discussed in Question 8 of the related FAQ's released by the SEC staff. The Company does not hold customers' cash or securities on behalf of customers and, therefore has no obligations under SEC Rule l 5c3-3 under the Securities Exchange Act of 1934. In addition, as a result of the Company having no obligations under SEC Rule l 5c3-3, it may file an Exemption Report since its business was limited to private placements. The Company had no exceptions under SEC Rule 15c3-3 throughout the year ending December 31, 2020. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.