# SOCIAL INVSTR LLC X-17A-5 (2023-06-27) — Broker-dealer annual report - Company: SOCIAL INVSTR LLC - Form: X-17A-5 - Filed: 2023-06-27 - Period: 2023-03-31 - Accession: 0001817775-23-000003 - CIK: 1817775 - File #: 8-70552 - Type: Broker-dealer - Material weakness: No - Auditor: Berry Dunn McNeil & Parker LLC - Auditor location: Waltham, MA - Contact: Kerim Derahlli - Phone: 357-452-4112 - Email: kerim.derhalli@invstr.com - Website: invstr.com - Signed by: Kerim Derhalli (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1817775/000181777523000003/social.pdf --- {0}------------------------------------------------ | mustuarien negative to males transform and and mich me Jechnice Excluding Excluding and of 135 | | | | | | |---------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------|------------|-----------------|---------------------------|--| | FILING FOR THE PERIOD BEGINNING | 9/8/22 | AND ENDING | | 3/31/2023 | | | | MM/DD/YY | | MM/DD/YY | | | | | A. REGISTRANT IDENTIFICATION | | | | | | Social Invstr LLC
NAME OF FIRM: | | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
Broker-dealer
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.) | | | | | | | 3201 Cherry Ridge Rd, Suite 213B | | | | | | | | (No. and Street) | | | | | | San Antonio | | TX | 78230 | | | | (City) | | (State) | | (Zip Code) | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | Kerim Derahlli | (357) 452-4112 | | | kerim.derhalli@invstr.com | | | (Name) | (Area Code - Telephone Number) | | (Email Address) | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | | | Berry Dunn McNeil & Parker, LLC | | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | | 51 Sawyer Road, Suite 610 | Waltham | | MA | 02453 | | | (Address) | (City) | | (State) | (Zip Code) | | | 10/8/2003 | | 136 | | | | {1}------------------------------------------------ ![](_page_1_Picture_0.jpeg) ![](_page_1_Picture_2.jpeg) - - - - - - - - - - - - - - - - - - - - - - - - - - - {2}------------------------------------------------ ### **SOCIAL INVSTR LLC** #### **FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** **MARCH 31, 2023** {3}------------------------------------------------ # SOCIAL INVSTR LLC ## CONTENTS | | Page | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------| | Report of Independent Registered Public Accounting Firm | 1 | | Financial Statements | | | Statement of Financial Condition at March 31, 2023 | 2 | | Statement of Operations for the Period of September 8, 2022 through
March 31, 2023 | 3 | | Statement of Changes in Member's Equity for the Period of
September 8, 2022 through March 31, 2023 | 4 | | Statement of Cash Flows for the Period of September 8, 2022
through March 31, 2023 | 5 | | Notes to Financial Statements | 6-10 | | Supplemental Information | | | Computation of Net Capital Under Rule 15c3-1 of the U.S. Securities and
Exchange Commission (Schedule I) | 11 | | Computation for Determination of Reserve Requirements and Information
Relating to Possession and Control Requirements Under Rule 15c3-3 of the
U.S. Securities and Exchange Commission (Schedule II and III) | 11 | | Report of Independent Registered Public Accounting Firm | 12 | | | | | Exemption Report | 13 | {4}------------------------------------------------ ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Member of Social Invstr LLC #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of Social Invstr LLC (the Company) as of March 31, 2023, the related statements of operations, changes in member's equity, and cash flows for the period of September 8, 2022 through March 31, 2023, 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 the Company as of March 31, 2023, and the results of its operations and its cash flows for the period of September 8, 2022 through March 31, 2023 in conformity with U.S. generally accepted accounting principles. #### **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 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. #### **Auditor's Report on Supplemental Information** The supplemental information contained within Schedules I, II, and III (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 supplemental information 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 2023. Waltham, Massachusetts June 20, 2023 {5}------------------------------------------------ # SOCIAL INVSTR LLC STATEMENT OF FINANCIAL CONDITION MARCH 31, 2023 # ASSETS | ASSETS | | |-----------------------------------|--------------| | Cash | \$
41,783 | | Right-of-use asset | 6,603 | | Prepaid expenses and other assets | 18,525 | | TOTAL ASSETS | \$
66,911 | | | | #### LIABILITIES AND MEMBER'S EQUITY | LIABILITIES
Accounts payable and accrued expenses
Lease liability | \$
19,547
6,603 | |-------------------------------------------------------------------------|-----------------------| | TOTAL LIABILITIES | 26,150 | | MEMBER'S EQUITY | 40,761 | | TOTAL LIABILITIES AND MEMBER'S EQUITY | \$
66,911 | {6}------------------------------------------------ # SOCIAL INVSTR LLC STATEMENT OF OPERATIONS FOR THE PERIOD OF SEPTEMBER 8, 2022 THROUGH MARCH 31, 2023 | REVENUES | \$
- | |---------------------------------------------|-------------------| | EXPENSES | | | Compensation and benefits | 495,489 | | Administrative service fee to related party | 484,509 | | Professional fees | 49,408 | | Regulatory fees | 32,212 | | Occupancy | 14,256 | | Other | 2,578 | | TOTAL EXPENSES | 1,078,452 | | NET LOSS | \$
(1,078,452) | | | | {7}------------------------------------------------ # SOCIAL INVSTR LLC FOR THE PERIOD OF SEPTEMBER 8, 2022 THROUGH MARCH 31, 2023 STATEMENT OF CHANGES IN MEMBER'S EQUITY | MEMBER'S EQUITY, SEPTEMBER 8, 2022 | \$
909,589 | |------------------------------------|---------------| | Member contributions | 209,624 | | Net loss | (1,078,452) | | MEMBER'S EQUITY, MARCH 31, 2023 | \$
40,761 | {8}------------------------------------------------ #### STATEMENT OF CASH FLOWS FOR THE PERIOD OF SEPTEMBER 8, 2022 THROUGH MARCH 31, 2023 SOCIAL INVSTR LLC | CASH FLOWS FROM OPERATING ACTIVITIES: | | |-------------------------------------------|----------------| | Net loss | \$ (1,078,452) | | Adjustments to reconcile net loss to net | | | cash used by operating activities: | | | Changes in assets and liabilities: | | | Prepaid expenses and other assets | 8,318 | | Accounts payable and accrued expenses | 19,548 | | Decrease in right-of-use asset | 13,405 | | Decrease in lease liability | (13,405) | | NET CASH USED BY OPERATING ACTIVITIES | (1,050,586) | | CASH FLOWS FROM FINANCING ACTIVITIES: | | | Member contributions | 197,411 | | NET CASH PROVIDED BY FINANCING ACTIVITIES | 197,411 | | | | | NET DECREASE IN CASH | (853,175) | | CASH, BEGINNING OF PERIOD | 894,958 | | CASH, END OF PERIOD | \$
41,783 | The Company received a non-cash contribution from its Member of \$12,213 in 2023. {9}------------------------------------------------ # Note 1 - Organization Social Invstr LLC (the "Company") is a broker-dealer registered with the U.S. Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority ("FINRA") and the Securities Investor Protection Corporation (SIPC) as of September 8, 2022. The Company was founded in November 2019, under the laws of the State of Delaware. The Company is a single member limited liability company ("LLC"), wholly-owned by Marketspringpad Holdings Ltd. (the "Member"). The Company is a broker retailing corporate equity securities over-the-counter and offering or engaging in on-line trading and electronic trading. The Company is also a non-exchange member effecting transactions in listed securities through an exchange member. The Company does business on a fully disclosed basis and, therefore, does not hold or maintain any customer accounts. The Company is located in San Antonio, Texas. The Company has not yet commenced principal operations. Since becoming a registered broker-dealer, the Company's activities have primarily consisted of developing the infrastructure and processes to support its principal operations, including processes with its clearing broker-dealer. The Company's activities are subject to significant risks and uncertainties, including failing to establish adequate processes with its clearing broker-dealer. The Company has an agreement with a clearing broker-dealer whereby the Company's customers' securities transactions are cleared by the clearing brokerdealer on behalf of the Company on a fully disclosed basis. The terms of this agreement require a deposit, based upon the assessment of risk, prior to the commencement of any trading activities. In addition, the Company issued a warrant to purchase common units to the clearing broker-dealer for the purchase of 50 units (an equity interest of 5%) at the price of \$.01 per share, with vesting over three years. The term of this agreement is five years. If the units remain unexercised at the end of the five year term, the warrant will be automatically deemed exercised on a "cashless" basis. No units had been exercised as of March 31, 2023. The accompanying financial statements have been prepared from the separate records maintained by the Company and, due to certain transactions and an agreement with an affiliated entity, may not necessarily be indicative of the financial condition that would have existed, or the results that would have been obtained from operations, had the Company operated as an unaffiliated entity. {10}------------------------------------------------ # Note 2 - Summary of Significant Accounting Policies # Basis of Presentation The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The statements of operations, cash flows and changes in member's equity are presented for the period September 8, 2022, which is the date the Company's registration was approved by FINRA to operate as a broker dealer, through March 31, 2023. # Revenue Recognition The Company records revenue under the provisions of Accounting Standards Codification ("ASC") Topic 606. Under ASC Topic 606, recognition of revenue occurs when a customer obtains control of promised services or goods in an amount that reflects the consideration to which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount and timing and uncertainty of revenue and cash flows arising from customer contracts. There were no receivables related to revenues from contracts with customers at March 31, 2023 or September 8, 2022. # Income Taxes Assets and liabilities are established for uncertain tax positions taken or positions expected to be taken in income tax returns when such positions are judged to not meet the "more-likely-than-not" threshold, based upon the technical merits of the position. Estimated interest and penalties, if applicable, related to uncertain tax positions are included as a component of income tax expense in its statement of operations. As a single member LLC, the Company is treated as a "disregarded entity" for income tax purposes. Thus, for federal and state income tax purposes, the Company does not file separate tax returns. The Company's operations are reported by the Member and accordingly, no provision has been made for income taxes in the accompanying financial statements. Management has determined that the Company has not taken, nor does it expect to take any uncertain tax positions in any income tax return. ### Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of 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 and those differences could be significant. Significant estimates include allocation of certain expenses with a related party under common control. {11}------------------------------------------------ ## Note 3 - Concentrations The Company maintains cash balances in one financial institution, which is insured by the Federal Deposit Insurance Corporation (FDIC) for up to \$250,000 per institution. From time to time, the Company's balances may exceed this limit. ### Note 4 - Net Capital Requirements The Company is subject to the SEC's Uniform Net Capital Rule (Rule 15c3-1) which requires the maintenance of a minimum net capital, as defined, of the greater of \$5,000 or one-eighth of aggregate indebtedness, as defined. At March 31, 2023, the Company had net capital of \$22,236, which exceeded its requirement of \$5,000 by \$17,236. Additionally, the Company must maintain a ratio of aggregate indebtedness to net capital of 8:1 or less. At March 31, 2023, this ratio was .88 to 1. The one-eighth and 8:1 thresholds will increase to one-fifteenth and 15:1, respectively, after the Company has been operating as a broker-dealer for greater than 12 months. ### Note 5 - Related Party Transactions The Company has an Expense Sharing Agreement ("Agreement") with its affiliate, Invstr Limited. The Agreement covers payroll, equipment, technology and administrative expenses. Direct expenses of the Company are outside the scope of the Agreement. During the period of September 8, 2022 through March 31, 2023, expenses recorded under this Agreement totaled \$484,509 and are included in "Administrative service fee to related party" in the statement of operations. The Member agrees to financially assist the Company and is committed to provide such funds, as needed, to operate the business. During the period of September 8, 2022 through March 31, 2023, the Member made capital contributions to the Company totaling \$209,624. #### Note 6 - Employee Benefit Plan The Company contributed to a qualified 401(k) plan (the "401(k) Plan") for the period of September 8, 2022 through March 31, 2023, for the benefit of eligible employees of the Company. The eligible employees may elect to defer a portion of their compensation and the Company will make matching contributions as described in the 401(k) Plan. Matching contributions charged to expense were \$9,638 for the period of September 8, 2022 through March 31, 2023. {12}------------------------------------------------ #### Note 7 – Leases The Company has an operating lease for office facilities in San Antonio, Texas, which expires on June 30, 2023. Operating lease cost, including variable costs, related to the lease was \$14,256 and cash paid for amounts included in the measurement of the operating lease liability was \$14,256 for the period of September 8, 2022 through March 31, 2023. Leases are classified as operating or finance leases at the lease commencement date. The Company does not have any finance leases. Lease expense for operating leases are recognized on a straight-line basis over the lease term. Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. A lease that, at the commencement date, has a lease term of 12 months or less is considered a short-term lease. The Company has elected to not record right-of-use assets and lease liabilities for short-term leases. The Company did not have any short-term leases for the period of September 8, 2022 through March 31, 2023. The Company uses its incremental borrowing rate at lease commencement to calculate the present value of lease payments when the rate implicit in a lease is not known. The Company's incremental borrowing rate is based on the collateralized cost of capital, adjusted for the lease term and other factors. The discount rate on the Company's operating lease is 4%. The weighted average remaining lease term for the operating lease was .25 years as of March 31, 2023. Maturities of the lease liability under this non cancelable lease as of March 31, 2023 are: | 2023 | \$7,128 | |-----------------------------------|---------| | Total undiscounted lease payments | 7,128 | | Less: imputed interest | 525 | | Total lease liability | \$6,603 | {13}------------------------------------------------ # Note 8 - Commitments and Contingent Liabilities The Company may be involved in legal proceedings in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. As of March 31, 2023, the Company is not involved in any legal proceedings which are not in the ordinary course of business. # Note 9 - Subsequent Events The Company has evaluated all events or transactions that occurred after March 31, 2023 through the date that the financial statements were issued. During this period, there were no material subsequent events requiring recognition or disclosure. {14}------------------------------------------------ # SOCIAL INVSTR LLC SUPPLEMENTARY SCHEDULES MARCH 31, 2023 # Schedule I COMPUTATION OF NET CAPITAL UNDER RULE 15c3-1 OF THE U.S. SECURITIES AND EXCHANGE COMMISSION | NET CAPITAL | | |----------------------------------------------------------------------------------------------------|--------------| | Total Member's equity | \$
40,761 | | DEDUCTIONS AND/OR CHANGES | | | Non-allowable assets | 18,525 | | NET CAPITAL | 22,236 | | Less: Minimum net capital requirements at 12.5% of | | | aggregate indebtedness (\$5,000 if higher) | 5,000 | | EXCESS NET CAPITAL | \$
17,236 | | | | | NET CAPITAL LESS GREATER OF 10% OF AGGREGATE
INDEBTEDNESS OR 120% OF MINIMUM DOLLAR REQUIREMENT | \$
16,236 | | AGGREGATE INDEBTEDNESS | | | Accounts payable and accrued expenses | \$
19,547 | | RATIO OF AGGREGATE INDEBTEDNESS TO NET CAPITAL | .88 to 1 | | | | There were no material differences between the computation of net capital above and the computation of net capital reported in the Company's unaudited Form X-17A-5, Part IIA. # Schedule II and III COMPUTATION FOR DETERMINATION OF RESERVE REQUIREMENTS AND INFORMATION RELATING TO POSSESSION AND CONTROL REQUIREMENTS UNDER RULE 15c3-3 OF THE U.S. SECURITIES AND EXCHANGE COMMISSION The Company claims exemption under the exemptive provisions of Rule 15c3-3 under paragraph (k)(2)(ii) - the Company clears all transactions with and for customers on a fully disclosed basis with a clearing broker-dealer and promptly transmits all customer funds and securities to the clearing brokerdealer which carries all of the accounts of such customers and maintains and preserves such books and records pertaining thereto. The Company has no customers, carries no accounts and does not otherwise hold funds or securities. {15}------------------------------------------------ ![](_page_15_Picture_0.jpeg) #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Member of Social Invstr LLC We have reviewed management's statements, included in the accompanying Exemption Report, in which (1) Social Invstr LLC (the Company) identified the following provision of 17 C.F.R. §15c3-3(k) under which the Company claimed an exemption from 17 C.F.R. §240.15c3-3: (k)(2)(ii) (exemption provision), and (2) the Company stated that the Company met the identified exemption provision for the entire period of September 8, 2022 through March 31, 2023 without exception. The Company's management is responsible for compliance with the exemption provision 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 the exemption provision. 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 provision set forth in paragraph (k)(2)(ii) of Rule 15c3-3 under the Securities Exchange Act of 1934. Waltham, Massachusetts June 20, 2023 {16}------------------------------------------------ # **Social Invstr LLC Exemption Report March 31, 2023** Social Invstr LLC (the "Company") is a registered broker-dealer subject to Rule 17a-5 promulgated by the U.S. 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-5(d)(1) and (4). To the best of its knowledge and belief, the Company states the following: - 1) The Company claimed an exemption from 17 C.F.R. §240.15c3-3 under Section k(2)(ii). - 2) The Company met the identified exemption provisions in 17 C.F.R. §240.15c3-3 (k)(2)(ii) for the entire period of September 8, 2022 through March 31, 2023, without exception. I, Kerim Derhalli, swear (or affirm) that, to the best of my knowledge and belief, this Exemption Report is true and correct. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Kerim Derhalli, CEO Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.