# MOUNTAINSIDE SECURITIES LLC X-17A-5 (2020-02-28) — Broker-dealer annual report - Company: MOUNTAINSIDE SECURITIES LLC - Form: X-17A-5 - Filed: 2020-02-28 - Period: 2019-12-31 - Accession: 0001745742-20-000002 - CIK: 1745742 - File #: 8-70157 - Material weakness: No - Auditor: Sobel & Co - Auditor location: Livingston, NJ - Contact: Ryan Posner - Phone: 908-277-2500 - Signed by: Ryan Posner (Member) Original filing: https://www.sec.gov/Archives/edgar/data/1745742/000174574220000002/MountainsidePublic2019.pdf --- {0}------------------------------------------------ **UNITED ST ATES SECURITIES AND EXCHANGECOMMJSSION Washington, D.C. 20549** # **ANNUAL AUDITED REPORT FORM X-17A-5 PART Ill** | 0MB Number: | 3235-0123 | |-------------|---------------------------| | Expires: | August 31, 2020 | | | Estimated average burden | | | hours per response 12.00 | 0MB APPROVAL | | SEC FILE NUMBER | |--|-----------------| | | | 8- 701 57 **FACING PAGE** **Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder** | ----------
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A. REGISTRANT IDENTIFICATION
NAME OF BROKER-DEALER: Mountainside Securities, LLC
ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.)
(No. and Street) | | -----------
MM/DD/YY
OFFICIAL USE ONLY | | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--| | | | | | | | | | | | | | | | | | | FIRM I.D. NO. | | | | | | | | NJ | 07901 | | | | (State) | | | | | | | (Area Code - Telephone Number) | | | | | | | | Livingston | NJ | 07039 | | | (City) | (State) | (Zip Code) | | | | | | | | | | | | | | | | | | | | (Zip Code)
NAME AND TELEPHONE NUMBER OF PERSON TO CONT ACT IN REGARD TO THIS REPORT
B. ACCOUNTANT IDENTIFICATION
INDEPENDENT PUBLIC ACCOUNT ANT whose opinion is contained in this Report*
(Name - if individual, state last, first, middle name)
nt 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. l 7a-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.** {1}------------------------------------------------ ### **OATH OR AFFIRMATION** | I, Ryan Posner | , swear ( or affirm) that, to the best of | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of
_M_ou_n_t_a_in_s_id_e_S_e_c_u_r_iti_e_s_, _LL_C ____________
_ | _______________________ , as | | of February 18 | 20 20
are true and correct. I further swear (or affirm) that | | 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 | | | | | k
N:tiedr'u,~
Notary Public
This report** contains (check all applicable boxes):
l¼1 (a) Facing Page.
l¼1 (b) Statement of Financial Condition. | Member
Title
DIANE M 1-REDRICKS
Notary Pub l ic, State o f New J ersey
My Commission Expires
December 29, 2023
D (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 (d) Statement of Changes in Financial Condition.
D (e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital.
D (f) Statement of Changes in Liabilities Subordinated to Claims of Creditors.
§ (g) Computation of Net Capital.
(h) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3.
(i) Information Relating to the Possession or Control Requirements Under Rule 15c3-3. | D U) A Reconciliation, including appropriate explanation of the Computation of Net Capital Under Rule l 5c3-l and the | | Computation for Determination of the Reserve Requirements Under Exhibit A of Rule l 5c3-3.
consolidation.
l}d (I) An Oath or Affirmation. | D (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of | | 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 oftbe previous audit. | | ** For conditions of confidential treatment of certain portions of this filing, see section 240. I 7a-5(e)(3). | | {2}------------------------------------------------ ## **MOUNTAINSIDE SECURITIES LLC** ## STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2019 # FILED PURSUANT TO RULE l 7a-5(e)(3) OF THE SECURITIES SECURITIES EXCHANGE ACT OF 1934 AS A PUBLIC DOCUMENT {3}------------------------------------------------ # **MOUNTAINSIDE SECURITIES LLC** DECEMBER 31, 2019 ## CONTENTS | | Page | |------------------------------------------------------------|------| | Report of Independent Registered Public Accounting Firm 1 | | | Statement of Financial Condition 2 | | | Notes to Financial Statements 3-8 | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) 293 Eisenhower Park\\'a\' Livingston, NJ 07039-17 1 i Office: 973.994.9494 Fax: 973.994.1 571 **www.SobelCoLLC.com** # **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Member Mountainside Securities LLC ## **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of Mountainside Securities LLC as of December 31 , 20 I 9, and the related notes ( collectively, referred to as the ·'financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Mountainside Securities LLC as of December 31 , 2019, in conformity with accounting principles generally accepted in the United States of America. ## **Basis for Opinion** These financial statements are the responsibility of Mountainside Securities LLC's management. Our responsibility is to express an opinion on Mountainside Securities LLC'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 Mountainside Securities LLC 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 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. We have served as Mountainside Securities LL C's auditors smce 2018. Livingston, New Jersey February 18, 2020 ![](_page_4_Picture_13.jpeg) ![](_page_4_Picture_14.jpeg) {5}------------------------------------------------ # **MOUNTAINSIDE SECURITIES LLC** STATEMENT OF FINANCIAL CONDITION December 31, 2019 # **ASSETS** | Cash | \$
147,394 | |------------------------------|------------------| | Securities Owned | 10,883,956 | | Interest Receivable | 121,269 | | Deposit with Clearing Broker | 250,000 | | Prepaid Expenses | 22, I 37 | | | \$
11,424,756 | # **LIABILITIES AND MEMBER'S EQUITY** | LIABILITIES: | | |---------------------------------------------|------------------| | Payable to Clearing Broker | \$
7,249,600 | | Accounts Payable and Other Accrued Expenses | 561,606 | | Total Liabilities | 7,81
1,206 | | COMMITMENTS AND CONTINGENCIES | | | MEMBER'S EQUITY: | | | Total Member's Equity | 3,613,550 | | | \$
11,424,756 | | | | *The accompanying notes are an integral part of these financial statements.* **2** {6}------------------------------------------------ # NOTE **1** -ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: ### *Organization:* Mountainside Securities LLC ("Company" or "Mountainside") was formed in June 2018, in the state of Delaware for the purpose of registering as a FINRA broker-dealer. The Company is headqua11ered in Summit, New Jersey. The Company is registered with the Securities and Exchange Commission ("SEC") and is also a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"), the Securities Investor Protection Corporation ("SIPC") and the Municipal Securities Rulemaking Board ("MSRB"). The Company trades with other brokerdealers and predominantly buys from or sells to institutional and high net worth retail investors. The Company was approved by FINRA on November 13, 2018 and began trading operations on January 2, 2019. ### *Basis of Accounting:* The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. ### *Use of Estimates:* The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and asswnptions that affect the reported amount of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. ### *Securities Valuation:* Fair value measurements establish a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level **1** measurements) and the lowest priority to unobservable inputs (level 3 measurements). {7}------------------------------------------------ ## NOTE I - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Continued) The three levels of the fair value hierarchy are described below: **Level 1:** Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the company has the ability to access. **Level 2:** Inputs to the valuation methodology include: - Quoted prices for similar assets or liabilities in active markets; - Quoted prices for identical or similar assets or liabilities in inactive markets; - Inputs other than quoted prices that are observable for the asset or liability; and - Inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified ( contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. **Level 3:** Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Following is a description of the valuation methodology used for assets measured at fair value. There have been no changes in the methodology used throughout the year ended December 31, 2019. *Municipal bonds:* Valued using recently executed transactions, market price quotations and pricing models that factor in, where applicable, interest rates, bond or credit default swap spreads and volatility (Level 2). ## *Cash:* The Company maintains cash accounts with several financial institutions. At times, the balances may exceed the Federal Deposit Insurance Corporation insurance limits. {8}------------------------------------------------ ## NOTE 1 -ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Continued) ### *Income Taxes:* The Company is a single member LLC and as such, federal and state taxes are the responsibility of the member. The Company follows accounting standards that provide clarification on accounting for unce1iainty in income taxes recognized in the Company's financial statements. The guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, and also provides guidance on derecognition, classification, interest and penalties, disclosure and transition. At December 31 , 2019, there are no significant income tax uncertainties that are expected to have a material impact on the Company's financial statements. In addition, no interest or penalties were recorded in 2019. ### *Recent Accounting Pronouncements:* In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lease assets and liabilities to be recorded on the balance sheet. The Company adopted this ASU and related amendments as of January 1, 2019 under the modified retrospective approach and elected certain practical expedients permitted under the transition guidance to retain the historical lease classification as well as relief from reviewing expired or existing contracts to determine if they contain leases. The Company records right-of us ("ROU") assets and lease obligations for its finance and operating leases, which are initially recognized based on the discounted future minimum lease payments over the term of the lease. As the rate implicit in the Company's leases is not easily determinable, the Company's applicable incremental borrowing rate is used in calculating the present value of the sum of the lease payment. As of December 31, 2019, there were no ROU assets or lease liabilities required to be recorded. ### *Subsequent Events:* The Company has evaluated its subsequent events and transactions occun-ing after December 31, 20 l 9 through February 18, 2020, the date that the financial statements were available to be issued. {9}------------------------------------------------ --1 # **MOUNTAINSIDE SECURITIES LLC NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2019** ## NOTE 2 - CLEARING BROKER: The Company has entered into a Fully Disclosed Clearing Agreement with Pershing, LLC, a subsidiary of The Bank of New York Mellon Corporation, ("Clearing Broker"). The Clearing Broker carries cash and margin accounts of the customers introduced by the Company and clears transactions on a fully disclosed basis for such accounts. In addition, the Clearing Broker is responsible for carrying, maintaining and preserving such books and records pertaining to its function as a Clearing Broker pursuant to the requirements of Rules 17a-3 and 17a-4 of the Securities Exchange Act of 1934. The Agreement provides for its termination upon a 90 day notice from either party or default under its terms. Pursuant to the agreement, the Company has a \$250,000 interest earning deposit on account with the Clearing Broker. At December 31 , 2019 the amount due to the Clearing Broker was \$7,249,600. All amounts due to the Clearing Broker are collateralized by the marketable securities held by the Company. The Clearing Broker charges interest monthly at varying rates. Interest expense amounted to \$191,774 for the year ended December 31 , 2019. ## NOTE 3 - SECURITIES OWNED: At December 31, 2019, marketable securities owned and held in the principal trading account of the Company consist of the following: | | 2019 | | | | | |---------------------------------|------|------------|--|--|--| | State and Municipal Obligations | \$ | 10,883,955 | | | | At December 31, 2019, the Company's state and municipal securities owned consist of the following geographic concentrations: | | 2019 | |------------|------------| | Ohio | 19.94% | | Illinois | 13.
16% | | California | 10.81% | | New York | 10.54% | 6 {10}------------------------------------------------ ## NOTE 3 - SECURITIES OWNED: ( continued) At December 31, 2019, the aggregate cost of municipal bonds m inventory exceeded the aggregate fair value which resulted in an unrealized loss of \$36,824. ## NOTE 4 - FAIR VALUE OF SECURITIES: The Company has categorized its investments based on the pnonty of the inputs to the valuation technique, into a three-level, fair value hierarchy. If the inputs used to measure the investments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the investment. ## **FAIR VALUE MEASUREMENTS AS OF DECEMBER 31, 2019** | | | | | | NETTING | | | | | | |---------------------|----|---------|--|----------------|---------|--------|----|------|--|---------------| | | | LEVEL 1 | | LEVEL2 | | LEVEL3 | | ADJ. | | TOTAL | | State and Municipal | | | | | | | | | | | | Obligations | \$ | | | \$ I 0,883,956 | \$ | - | \$ | | | \$ 10,883,956 | ## NOTE 5 - NET CAPITAL REQUIREMENTS: The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (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 I (and the rule of the "applicable" exchange also provides that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to I). {11}------------------------------------------------ ## NOTE 5 - NET CAPITAL REQUIREMENTS: (continued) At December 31, 2019, the Company's net capital is as follows: | | 2019 | |---------------------------------------|-----------------| | Net Capital | \$2,961,648 | | Net Capital Requirement | 100,000 | | Excess Net Capital | \$2,861
,648 | | Aggregate Indebtedness to Net Capital | 18.96% | The Company is not required to furnish the "computation of reserve requirements" under Rule 15c3-3 of the Securities and Exchange Commission due to the fact that it qualifies for, and complies with, the exemptive provision k(2)(ii) of Rule l 5c3-3. This provision exempts brokers or dealers who clear all transactions on behalf of customers with a Clearing Broker on a fully disclosed basis (Note 2) from having to furnish the "computation of reserve requirements." There were no differences between this calculation of net capital and the corresponding computation presented by the Company and included in the Company's unaudited Part IIA FOCUS Report filing as of December 31 , 2019. ## NOTE 6 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK: As a securities broker and dealer, the Company is engaged in various securities trading and brokerage activities servicing a diverse group of institutional and high net worth retail investors. These activities may expose the Company to off-balance-sheet credit risk in the event a customer is unable to fulfill its contracted obligation. The Company trades almost exclusively in municipal bonds and is therefore exposed to risks associated with this market. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.