# ANNEXUS SECURITIES, LLC X-17A-5 (2022-03-24) — Broker-dealer annual report - Company: ANNEXUS SECURITIES, LLC - Form: X-17A-5 - Filed: 2022-03-24 - Period: 2021-12-31 - Accession: 0001683672-22-000001 - CIK: 1683672 - File #: 8-69829 - Type: Broker-dealer - Material weakness: No - Auditor: RSM US LLP - Auditor location: Minneapolis, MN - Contact: Kenneth Lepore - Phone: 4803218992 - Email: kenlepore@annexus.com - Website: annexus.com - Signed by: Kenneth Lepore (CCO) Original filing: https://www.sec.gov/Archives/edgar/data/1683672/000168367222000001/docx17.pdf --- {0}------------------------------------------------ ![](_page_0_Picture_0.jpeg) **RSMUSLLP** ### **Report of Independent Registered Public Accounting Firm** Board of Directors and Member Annexus Securities, LLC We have reviewed management's statements, included in the accompanying Exemption Report, in which Annexus Securities, LLC (the Company) stated that: - 1. The Company does not claim an exemption under paragraph (k) of 17 C.F.R. § 240.15c3-3; - 2. The Company is filing an 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 limits its business activities exclusively to participating in distributions of securities (other than firm commitment underwritings) in accordance with the requirements of paragraphs (a) or (b)(2) of 17 C.F.R. § 240.15c2-4; and - 3. The Company (1) did 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 17 C.F.R. § 240.15c2-4 and/or funds received and promptly transmitted for effecting transactions via subscriptions on a subscription-way basis where the funds are payable to the issuer or its agent and not to the Company); (2) did not carry accounts of or for customers; and (3) did not carry proprietary accounts of broker-dealers (as defined in 17 C.F.R. § 240.15c3-3) throughout the most recent fiscal year without exception. The Company's management is responsible for 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 that the Company limited its business activities exclusively to participating in distributions of securities (other than firm commitment underwritings) in accordance with the requirements of paragraphs (a) or (b)(2) of 17 C.F.R. § 240.15c2-4; and/or (1) did 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 17 C.F.R. § 240.15c2-4 and/or funds received and promptly transmitted for effecting transactions via subscriptions on a subscription-way basis where the funds are payable to the issuer or its agent and not to the Company); (2) did not carry accounts of or for customers; and (3) did not carry proprietary accounts of broker-dealers (as defined in 17 C.F.R. § 240.15c3-3) throughout the most recent fiscal year without exception. **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 on the provisions set forth in 17 C.F.R. § 240.17a-5. *9Jl.SN 1).5. UP* Minneapolis, Minnesota March 21 , 2022 **THE POWER OF BEING UNDERSTOOD AUDIT** I **TAX** I **CONSULTING** {1}------------------------------------------------ ![](_page_1_Picture_0.jpeg) ### 2021 Annexus Securities LLC Exemption Report Annexus Securities LLC (the "Company") is a registered broker-dealer subject to Rule 17a-5 promulgated by the Securities and Exchange Commission (17 C.F.R. §240.17a-5, "Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R. §240.17a-S(d)(l) and (4). To the best of its knowledge and belief, the Company states the following: (1) The Company does 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 limits its business activities exclusively to participating in distributions of securities (other than firm commitment underwritings) in accordance with the requirements of paragraphs (a) or (b)(2) of Rule 15c2-4, and the Company (1) did 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 (1) or (b)(2) of Rule 15c2-4 and/or funds received and promptly transmitted for effecting transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company); (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts (as defined in Rule 15c3-3) throughout the most recent fiscal year without exception. An nexus Securities, LLC I, Kenneth Lepore, swear (or affirm) that, to my best knowledge and belief, this Exemption Report is true **::dcorr7~c\_\_** Title: Chief Compliance Officer February 15, 2022 o 480 321 8992 f 480 452 0896 16767 N Perime ler Dr, Sui te 320 Scottsdale, AZ 85260 AN NEXUS.COM {2}------------------------------------------------ #### **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** SEC FILE NUMBER 8-69829 # **ANNUAL REPORTS FORM X-17A-5 PART** Ill **FACING PAGE** **Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934** | FILING FOR THE PERIOD BEGINNING | ___
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MM/DD/YY | __
AND ENDING | --'1=2/'-"3--'-'1/=2=02=-1'----
MM/DD/YY | | | | |-------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------|-----------------------------------------|---------------------------------------------|--|--|--| | A. REGISTRANT IDENTIFICATION | | | | | | | | Annexus Securities LLC
NAME OF FIRM : | | | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
~ Broker-dealer
D Check here if respondent is also an OTC derivatives dealer | □ Security-based swap dealer | □ Major security-based swap participant | | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | | | 16767 N. Perimeter Dr., Suite 300 | | | | | | | | | (No. and Street) | | | | | | | Scottsdale | AZ | | 85260 | | | | | (City) | (State) | | (Zip Code) | | | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | | Kenneth Lepore | (480) 321-8992 | KenLepore@annexus.com | | | | | | (Name) | (Area Code - Telephone Number) | | (Email Address) | | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
RSM US LLP | | | | | | | | | (Name- if individual, state last, first, and middle name) | | | | | | | 801 Nicollet Mall. West Tower. Suite 1100 Minneapolis | | MN | 55402 | | | | | (Address) | (City) | (State) | (Zip Code) | | | | | 09/24/2003 | 49 | | | | | | | | | | [PCAOB Reg;~rntioo N,mbe,, ;f appl;~ble) | | | | | * Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public | FOR OFFICIAL USE ONLY | | | | | | accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-5(e}(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.** {3}------------------------------------------------ #### **OATH OR AFFIRMATION** I, Kenneth Lepore , swear (or affirm) that, to the best of my knowledge and belief, the financial report pertaining to the firm of Annexus Securities LLC as of --------~D~e~c=e~m~b~e-r\_3~1~. 2.Q21.\_, 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. **ASHLEY** MELLOR Notary Public • State of Arizona ~MARICOPA COUNTY Commission # 603375 Expires June 29, 2025 Title: Chief Compliance Officer ### **This filing\*\* contains (check all applicable boxes):** - ~ (a) Statement of financial condition . - D (b) Notes to consolidated statement of financial condition. - ~ (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). - ~ (d) Statement of cash flows. - ~ (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. - ~ (g) Notes to consolidated financial statements. - ~ (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. - □ (i) Computation of tangible net worth under 17 CFR 240.18a-2. - ~ (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - D (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 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. - ~ (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. - ~ (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3-l, 17 CFR 240.18a-1, 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. - D (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - ~ (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. - □ (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - ~ (s) Exemption report in accordance with 17 CFR 240.17a-S or 17 CFR 240.18a-7, as applicable. - □ (t) Independent public accountant's report based on an examination of the statement of financial condition . - ~ (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a-S, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. - D (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. - ~ (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. - □ (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-le or 17 CFR 240.17a-12, as applicable. - ~ (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 240.17a-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. {4}------------------------------------------------ # ANNEXUS SECURITIES, LLC SCOTTSDALE, ARIZONA # DECEMBER 31, 2021 {5}------------------------------------------------ # ANNEXUS SECURITIES, LLC SCOTTSDALE, ARIZONA FINANCIAL STATEMENTS, FORMX-17A-5, PART III, SUPPLEMENTARY INFORMATION AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PURSUANT TO RULE l 7a-5 UNDER THE SECURITIES EXCHANGE ACT OF 1934 DECEMBER 31, 2021 # CONTENTS | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 1 -
2 | | |---------------------------------------------------------|----------|--| | | | | ### FINANCIAL STATEMENTS | Statement of Financial Condition | 3 | |-----------------------------------------|-----------| | Statement of Operations | 4 | | Statement of Changes in Member's Equity | 5 | | Statement of Cash Flows | 6 | | Notes to Financial Statements | 7 -
10 | | SUPPLEMENTARY INFORMATION | | | | | | Computation ofNet Capital Pursuant to Rule 15c3-l of the
Schedule I -
Securities Exchange Commission | 11 | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----| | Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3
Schedule II - | 12 | | Schedule III -
Information Relating to the Possession or Control Requirements Under Rule 15c3-3
Reconciliation, Including Appropriate Explanation, of the Computation of Net Capital
Under Rule 15c3-l and the Computation for Determination of the Reserve | 13 | | Requirements Under Exhibit A of Rule 15c3-3 | 14 | | Reconciliation Between the Audited and Unaudited Statements of Financial Condition
With Respect to Methods of Consolidation | 15 | | Material Inadequacies Found to Exist or Found to Have Existed | 16 | {6}------------------------------------------------ ![](_page_6_Picture_0.jpeg) **RSMUSLLP** #### **Report of Independent Registered Public Accounting Firm** Board of Directors and Member Annexus Securities, LLC #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of Annexus Securities, LLC (the Company) as of December 31 , 2021 , the related statements of operations, changes in members' equity, and cash flows for the year then ended, and the related notes to 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 , 2021 , 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 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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. 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. **THE POWER OF BEING UNDERSTOOD** AUDIT I TAX I CONSULTING {7}------------------------------------------------ ### **Supplemental Information** The supplementary information contained in Schedules I, II and Ill (the Supplemental Information) has been subjected to audit procedures performed 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 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. § 240.17a-5. In our opinion, the supplementary information contained in Schedules I, II and Ill is fairly stated , in all material respects , in relation to the financial statements as a whole. We have served as the Company's auditor since 2017. Minneapolis, Minnesota March 21 , 2022 {8}------------------------------------------------ ### STATEMENT OF FINANCIAL CONDITION ### DECEMBER 31, 2021 ### ASSETS | Cash | \$
850,262 | |------------------------------------|---------------| | Commission Receivable | 299,894 | | Prepaid Expenses | 35,242 | | Due From Related Party | 255 | | TOTAL ASSETS | 1,185,653 | | LIABILITIES AND MEMBER'S EQUITY | | | LIABILITIES | | | Due to Related Parties | \$
115,422 | | Accrued Employee Bonus and Payroll | \$
108,165 | | Accrued Expenses | \$
34,508 | | TOTAL LIABILITIES | \$
258,095 | |---------------------------------------|-----------------| | MEMBER'S EQUITY | 927,558 | | TOTAL LIABILITIES AND MEMBER'S EQUITY | \$
1,185,653 | {9}------------------------------------------------ ### STATEMENT OF OPERATIONS ### FOR THE YEAR ENDED DECEMBER 31, 2021 | Commission Revenue | \$
2,379,952 | |----------------------------------|-----------------| | TOTAL REVENUES | 2,379,952 | | EXPENSES | | | Compensation and Benefits | 1,242,116 | | Management Fees | 360,655 | | Professional and Consulting Fees | 95,269 | | Taxes and Licenses | 30,461 | | IT Software and Miscellaneous | 16,203 | | Trademark Fee | 12,000 | | Occupancy | 3,600 | | Insurance | 1,631 | | TOTAL EXPENSES | 1,761,934 | | NET INCOME | \$
618,018 | {10}------------------------------------------------ ### STATEMENT OF CHANGES IN MEMBER'S EQUITY ### FOR THE YEAR ENDED DECEMBER 31, 2021 | BALANCE -JANUARY 1, 2021 | \$
226,898 | |---------------------------------------------|---------------| | Capital Contributions | 500,000 | | Capital Distributions | (417,358) | | Net Capital Contributions and Distributions | 82,642 | | Net Income | 618,018 | | BALANCE -
DECEMBER 31
, 2021 | \$
927,558 | {11}------------------------------------------------ ### STATEMENT OF CASH FLOWS ### FOR THE YEAR ENDED DECEMBER 31, 2021 | OPERA TING ACTIVITIES | | |-----------------------------------------------------------------------------------|---------------| | Net Income | 618,018
\$ | | Adjustments to reconcile net income to net cash provided by operating activities: | | | (Increase )/Decrease in operating assets: | | | Commission Receivable | (202,067) | | Due from Related Party | (255) | | Prepaid Expenses and Other Assets | (3,954) | | Increase/(Decrease) in Operating Liabilities: | | | Accrued Employee Bonus and Payroll | 105,730 | | Due to Related Parties | 17,705 | | Accrued Expenses | 34,508 | | NET CASH PROVIDED BY OPERA TING ACTIVITIES | 569,685 | | FINANCING ACTIVITIES | | | Capital Contributions | 500,000 | | Captial Distributions | (417,358) | | NET CASH PROVIDED BY FINANCING ACTIVITIES | 82,642 | | NET INCREASE IN CASH | 652,327 | | beginning of year
CASH - | 197,935 | | end of year
CASH - | 850,262
\$ | {12}------------------------------------------------ # ANNEXUS SECURITIES, LLC NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2021 ### NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS Annexus Securities, LLC (the "Company") is an Arizona limited liability company, which is wholly owned by Annexus Holding LLLP ("Holdings"), an Arizona limited liability limited partnership. The Company was formed in 2016 to provide innovative retirement solutions to individuals. The Company is authorized to act as a broker or dealer in securities pursuant to Section l 5(b) of the Securities Exchange Act of 1934 and is a member of the Financial Industry Regulatory Authority ("FINRA"). The Company does not claim an exemption under paragraph (k) of 17 C.F.R. § 240.15c3-3. The Company is considered a non-covered firm and relies on Footnote 74 of the SEC Release No. 34-70073, adopting amendments to 17 C.F.R. § 240. l 7a-5, as the Company limits its business activities exclusively to participating in distributions of securities ( other than firm commitment underwritings) in accordance with the requirements of paragraphs (a) or (b)(2) of Rule 15c2-4, and the Company (1) did 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 (1) or (b)(2) of Rule 15c2-4 and/or funds received and promptly transmitted for effecting transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company); (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts (as defined in Rule 15c3-3). On August 31 , 2020, the Company amended its Membership Agreement to be considered a non-covered firm. The Company operates as a securities broker-dealer, marketing and wholesaling registered annuities and other investment products to its Independent Distribution Companies. The Company is headquartered in Scottsdale, Arizona. ### NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES ### Basis of Accounting The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America ("GAAP") and to general practice within the brokerage industry. The accompanying financial statements are presented on the accrual basis of accounting, in conformity with GAAP. ### Use of Estimates The preparation of financial statements in conformity with GAAP 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 reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. ### Accounts Receivable The Company's accounts receivable are from commission paid by an unaffiliated broker-dealer for marketing, training and wholesaling of their registered products. Commission receivable over 30 {13}------------------------------------------------ # ANNEXUS SECURITIES, LLC NOTES TO FINANCIAL STATEMENTS (CONT.) DECEMBER 31, 2021 # NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) days are considered past due and treated as a nonallowable asset for net capital purposes. As of December 31 , 2021 , there was no allowance for credit losses recorded in the financial statements. Commission receivable from broker-dealers were \$299,894 at December 31 , 2021 and recorded as commission receivable on the statement of financial condition. The Company did not have any other significant commission receivable assets or commission payable balances as of December 31 , 2021. ### Prepaid Expenses Prepaid expenses and other assets are reported at net unamortized cost. Prepaid assets are amortized by the straight-line method over the life of the asset. ### Revenue Recognition The Company recognizes revenues pursuant to FASB's Accounting Standards Update (ASU) 2014- 09, Revenue from Contracts with Customers (Topic 606). The Company's performance obligations under its single customer contract include marketing, training, and wholesaling activities related to the sale of registered annuity products. Commission revenues are earned on the basis of and calculated as a percentage of the initial policy premium at issue date. Under ASC 606, the Company views the marketing, training, and wholesaling activities as a single performance obligation and recognizes revenue at policy issue date consistent with the payments received monthly under the contract. ### Expense Sharing Agreement The Company is part of an expense sharing agreement with Annexus Management Company, LLC ("AMC") such that certain general and administrative expenses are allocated to the Company as a management fee primarily based on the proportion of employee headcount and resources utilized. The expense sharing agreement also requires reimbursement for direct costs incurred by AMC on behalf of the Company. All appropriate allocations have been made for the year ended December 31 , 2021 and are included in the accompanying financial statements. ### Salaries and Benefits The Company has one full-time employee. Except for securities compensation, salaries and benefits for AMC employees working on Company business are allocated to the Company in accordance with the expense sharing agreement. Securities compensation is a direct expense of the Company but is paid through AMC to securities licensed employees and reimbursed by the Company. {14}------------------------------------------------ # ANNEXUS SECURITIES, LLC NOTES TO FINANCIAL STATEMENTS (CONT.) DECEMBER 31, 2021 ### NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) ### Income Taxes The Company is treated as a disregarded entity for federal and state income tax purposes. Consequently, all taxable income, gains and losses of the Company are passed through to the member. The Company's results of operations for the year ended December 31 , 2021 , are included in Holdings federal income tax return. For state income tax purposes, the Company's results of operations are included in Holdings state income tax return. The Company does not have a formal tax sharing agreement in place with Holdings for 2021. Management performs an evaluation of all income tax positions taken or expected to be taken in the course of preparing the Company's income tax returns to determine whether the income tax positions meet a "more likely than not" standard of being sustained under examination by the applicable taxing authorities. AMC has performed its evaluation of all income tax positions taken on all open income tax returns and has determined that there were no positions taken that do not meet the "more likely than not" standard. Accordingly, there are no provisions for income taxes, penalties, or interest receivable or payable relating to uncertain income tax positions in the accompanying financial statements. The Company is subject to federal and state income tax examinations for taxable years 2018 - 2020. ### Events Occurring after Reporting Date The Company has evaluated events and transactions that occurred through the date the Company's financial statements were issued, for possible recognition or disclosure in the financial statements. The only event noted was the capital distribution to Annexus Holding, LLLP made on January 27, 2022 in the amount of \$229,163. ### NOTE 3 - CONCENTRATIONS OF RISK The Company maintains cash balances at financial institutions whose accounts are insured by the Federal Deposit Insurance Corporation ("FDIC") up to statutory limits. The Company's cash balances generally exceed statutory limits. The Company has not experienced any losses in such accounts and management considers this to be a normal business risk. The Company engages in various marketing and wholesaling activities in which counterparties primarily include broker-dealers, banks, and other financial institutions. In the event counterparties do not fulfill their obligations, the Company may be exposed to risk from loss of revenue. The risk of default depends on the creditworthiness of the issuer of the instrument. The Company's policy is periodically to review the credit standing of each issuer. {15}------------------------------------------------ # ANNEXUS SECURITIES, LLC NOTES TO FINANCIAL STATEMENTS (CONT.) DECEMBER 31, 2021 For the year ended December 31 , 2021 , one customer accounted for 100% of commission revenue. This customer accounted for 100% of commissions receivable as of December 31 , 2021. ### NOTE 4 - TRANSACTIONS WITH AFFILIATES During 2021 , AMC paid various expenses on behalf of the Company. Expenses with affiliates include salaries, securities compensation, and benefits of \$1,242,116 for shared employees, \$360,655 of management fees and \$3,600 for allocation ofrent. The management fees are described in detail in Note 2 under the expense sharing agreement and relate to general and administrative expenses. As of December 31 , 2021 , net payable to AMC totaled \$115,422. On January 1, 2017, the Company entered into a cancelable trademark license agreement with The Annexus Group, LLC ("Group"), a related party, to use various names and marketing slogans. The agreement originally required the Company to pay a royalty fee of \$10,000 per month commencing on February 1, 2017 through January 31 , 2018. During 2017, Group waived the licensing fee. Effective January 1, 2018, the agreement was amended for the Company to pay a royalty fee of \$1,000 per month. The agreement will automatically renew for nine additional one-year terms. During the year ended December 31 , 2021 , \$12,000 related to licensing fees were and are included in the statement of operations. ### NOTE 5 - COMMITMENTS AND CONTINGENCIES From time to time the Company is involved or may be involved in legal proceedings, regulatory and arbitration proceedings and claims that may arise in the ordinary course of business, the outcome of which is uncertain, management believes that the disposition of these matters will not have a material adverse effect on the financial position or results of operations of the Company. ### NOTE 6-NET CAPITAL REQUIREMENTS The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (SEC rule 15c3-l), 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. The rule of the "applicable" exchange also provides that equity capital may not be withdrawn if the resulting net capital ratio would exceed 10 to 1. At December 31 , 2021 , the Company had regulatory net capital of \$892,061 , which was \$874,855 in excess of its required net capital of \$17,206. The Company's percentage of aggregate indebtedness to net capital ratio was 29%. ### NOTE 7 - EMPLOYEE BENEFIT PLAN AMC sponsors a 40l(k) plan for the benefit of employees. During the year ended December 31 , 2021 \$18,039 related to matching contributions to the plan were charged to operations and included in compensation and benefits on the statement of operations. {16}------------------------------------------------ # SUPPLEMENTARY INFORMATION {17}------------------------------------------------ # SCHEDULE I - COMPUTATION OF NET CAPITAL PURSUANT TO RULE 15c3-l OF THE SECURITIES AND EXCHANGE COMMISSION ### AS OF DECEMBER 31, 2021 | Net Capital | | |----------------------------------------------------------------------------------------|---------------| | Total member's equity from the Statement of Financial Condition | \$
927,558 | | Nonallowable assets from the Statement of Financial Condition | (35,497) | | Net Capital | \$
892,061 | | Total aggregate indebtedness | \$
258,095 | | Computation of basic net capital requirement | | | Minimum net capital required (greater of 6 2/3 % of aggregate indebtedness or \$5,000) | \$
17,206 | | Minimum dollar net capital requirement | \$
5,000 | | Net capital requirement | \$
17,206 | | Excess net capital | \$
874,855 | | Net capital less greater of 10% of total aggregate | | | indebtedness or 120% of net capital required | \$
866,251 | | Percentage of aggregate indebtedness to net capital | 29% | | | | There are no material differences between the preceding computation and the Company's corresponding unaudited Part II of Form X-l 7A-5 as of December 31 , 2021 , filed on March 11 , 2022, as amended. {18}------------------------------------------------ ### SCHEDULE II - COMPUTATION FOR DETERMINATION OF RESERVE REQUIREMENTS PURSUANT TO RULE 15c3-3 ### DECEMBER 31, 2021 The Company does not claim an exemption under paragraph (k) of 17 C.F.R. § 240.15c3-3. The Company is considered a non-covered firm and relies on Footnote 74 of the SEC Release No. 34- 70073, adopting amendments to 17 C.F.R. § 240.l 7a-5, as the Company limits its business activities exclusively to participating in distributions of securities ( other than firm commitment underwritings) in accordance with the requirements of paragraphs (a) or (b)(2) of Rule 15c2-4, and the Company (1) did 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 (1) or (b)(2) of Rule 15c2-4 and/or funds received and promptly transmitted for effecting transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company); (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts (as defined in Rule 15c3-3). {19}------------------------------------------------ ### SCHEDULE III - INFORMATION RELATING TO THE POSSESSION OR CONTROL REQUIREMENTS UNDER RULE 15c3-3 ### DECEMBER 31, 2021 The Company does not claim an exemption under paragraph (k) of 17 C.F.R. § 240.15c3-3. The Company is considered a non-covered firm and relies on Footnote 74 of the SEC Release No. 34- 70073, adopting amendments to 17 C.F.R. § 240.l 7a-5, as the Company limits its business activities exclusively to participating in distributions of securities ( other than firm commitment underwritings) in accordance with the requirements of paragraphs (a) or (b)(2) of Rule 15c2-4, and the Company (1) did 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 (1) or (b)(2) of Rule 15c2-4 and/or funds received and promptly transmitted for effecting transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company); (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts (as defined in Rule 15c3-3). {20}------------------------------------------------ # RECONCILIATION, INCLUDING APPROPRIATE EXPLANATION, OF THE COMPUTATION OF NET CAPITAL UNDER RULE 15c3-l AND THE COMPUTATION FOR DETERMINATION OF THE RESERVE REQUIREMENTS UNDER EXHIBIT A OF RULE 15c3-3 ### AS OF DECEMBER 31, 2021 Reconciliation with Company's computation (included in Part II of Form X-l 7A-5 as of December 31 , 2021 , filed on March 11 , 2021 , as amended.) | Net capital, as reported in Company's Part IIA (unaudited Focus report) | \$
892,061 | |-------------------------------------------------------------------------|---------------| | Net audit adjustments | | | Net capital per audit | \$
892,061 | {21}------------------------------------------------ ### RECONCILIATION BETWEEN THE AUDITED AND UNAUDITED STATEMENTS OF FINANCIAL CONDITION WITH RESPECT TO METHODS OF CONSOLIDATION ### DECEMBER 31, 2021 No differences were found. {22}------------------------------------------------ # MATERIAL INADEQUACIES FOUND TO EXIST OR FOUND TO HAVE EXISTED # DECEMBER 31, 2021 None {23}------------------------------------------------ ![](_page_23_Picture_0.jpeg) ### **Report of Independent Registered Public Accounting Firm on Applying Agreed-Upon Procedures** **RSMUSLLP** Board of Directors and Member Annexus Securities, 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 , 2021. Management of Annexus Securities, LLC (the 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 , 2021. Additionally, SIPC has agreed to and acknowledged that the procedures performed are appropriate for their intended purposes. 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 appropriateness of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the appropriateness 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 record entries, noting no assessment was due per the Form SIPC-7 and no cash disbursements were recorded. - 2. Compared the Total Revenue amounts reported on the Annual Audited Report Form X-17A-5 Part Ill for the year ended December 31 , 2021 , with the Total Revenue amounts reported in Form SIPC-7 for the year ended December 31 , 2021 , 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. 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 American Institute of Certified Public Accountants 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 , 2021. 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. **THE POWER OF BEING UNDERSTOOD** AUDIT I TAX I CONSULTING {24}------------------------------------------------ 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 the Company and SIPC and is not intended to be, and should not be, used by anyone other than these specified parties. Minneapolis, Minnesota March 21 , 2022 {25}------------------------------------------------ | SIPC-7 | | |-----------------|--| | (36 -REV 12/18) | | # **SECURITIES INVESTOR PROTECTION CORPORATION Mail Code: 8967 P.O. Box 7247 Philadelphia, PA 19170-0001** **SIPC-7** (36-REV 12/18) # **General Assessment Reconciliation** For the fiscal year ended **\_** **2\_0\_2\_1 \_\_\_ \_** (Read carefully the instructions in your Working Copy before completing this Form ) ### **TO BE FILED BY ALL SIPC MEMBERS WITH FISCAL YEAR ENDINGS** 1. Name of Member, address , Designated Examining Authority , 1934 Act registration no. and month in which fiscal year ends for purposes of the audit requirement of SEC Rule 17a-5: | | I CRD # 285198 SEC# 8-69829 | 7
Note: If any of the information shown on the
mailing label requires correction , please e-mail | | |-------------------------|----------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------| | | ANNEXUS SECURITIES, LLC
16767 N. PERIMETER DR. STE 320
I SCOTTSDALE, AZ 85260-1063 | | any corrections to form@sipc.org and so
indicate on the form filed.
Name and telephone number of person to
contact respecting this form. | | | | | _J
Kenneth Lepore 480-321-8992 | | 2. A. | General Assessment (item 2e from page 2) | | | | B. | Less payment made with SIPC-6 filed (exclude interest) | | | | C. | Date Paid
Less prior overpayment applied | | | | D. | Assessment balance due or (overpayment) | | 0 | | E. | Interest computed on late payment (see instruction E) for ______ days at 20% per annum | | 0 | | F. | Total assessment balance and interest due (or overpayment carried forward) | | | | | □
G. PAYMENT:
✓ the box | □ | | | | Check mailed to P.O. Box
Funds Wired
Total (must be same as F above) | AcQ
0 | | | H. | Overpayment carried forward | \$ ( 0 | -----------
----------- | | | 3. Subsidiaries (S) and predecessors (P) included in this form (give name and 1934 Act registration number) :
N/A | | | | | The SIPC member submitting this form and the
person by whom it is executed represent thereby | | | | | that all information contained herein is true , correct | Annexus Securities, LLC | (Name of Corporation, Partnership or other organization) | | | and complete. | | ized Signature) | | | 20~
Dated the!3._ day of February
, | t<:~
Chief Compliance Officer | Lr-t:!-r | | | for a period of not less than 6 years , the latest 2 years in an easily accessible place. | | (Title) | | LL.I | a:: Dates:
Postmarked
Received | Reviewed | This form and the assessment payment is due 60 days after the end of the fiscal year. Retain the Working Copy of this form | | 3:
LL.I
>
LL.I | Calculations | Documentation | Forward Copy | **Cl)** Disposition of exceptions: {26}------------------------------------------------ # **DETERMINATION OF "SIPC NET OPERATING REVENUES" AND GENERAL ASSESSMENT** Amounts for the fiscal period beginning \_0\_1-0\_1\_-20\_2\_1 \_\_\_ \_ and ending\_,2\_-3\_1-2\_02\_, \_\_\_ \_ | Item No. | Eliminate cents
\$2,379,952 | |-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------| | 2a. Total revenue (FOCUS Line 12/Part IIA Line 9, Code 4030) | | | 2b. Additions:
(1) Total revenues from the securities business of subsidiaries (except foreign subsidiaries) and
predecessors not included above. | | | (2) Net loss from principal transactions in securities in trading accounts. | | | (3) Net loss from principal transactions in commodities in trading accounts. | | | (4) Interest and dividend expense deducted in determining item 2a. | | | (5) Net loss from management of or participation in the underwriting or distribution of securities. | | | (6) Expenses other than advertising, printing, registration fees and legal fees deducted in determining net
profit from management of or participation in underwriting or distribution of securities. | | | (7) Net loss from securities in investment accounts. | | | Total additions | 0 | | 2c. Deductions:
(1) Revenues from the distribution of shares of a registered open end investment company or unit
investment trust, from the 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. | \$2,379,952 | | (2) Revenues from commodity transactions. | | | (3) Commissions , floor brokerage and clearance paid to other SIPC members in connection with
securities transactions. | | | (4) Reimbursements for postage in connection with proxy solicitation. | | | (5) Net gain from securities in investment accounts. | | | (6) 100% of commissions and markups earned from transactions in (i) certificates of deposit and
(ii) Treasury bills , bankers acceptances or commercial paper that mature nine months or less
from issuance date. | | | (7) Direct expenses of printing advertising and legal fees incurred in connection with other revenue
related to the securities business (revenue defined by Section 16(9)( L) of the Act). | | | (8) Other revenue not related either directly or indirectly to the securities business.
(See Instruction C): | | | (Deductions in excess of \$100,000 require documentation) | | | (9) (i) Total interest and dividend expense (FOCUS Line 22/PART IIA Line 13 ,
O
Code 4075 plus line 2b (4) above) but not in excess
\$ ___________ _
of total interest and dividend income. | | | (ii ) 40 % of margin interest earned on customers securities
accounts (40% of FOCUS line 5, Code 3960 ). | | | Enter the greater of line (i) or (ii) | 0 | | Total deductions | 0 | | 2d. SIPC Net Operating Revenues | | | 2e. General Assessment@ .0015 | | Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.