# HAPI SECURITIES LLC X-17A-5 (2024-03-26) — Broker-dealer annual report - Company: HAPI SECURITIES LLC - Form: X-17A-5 - Filed: 2024-03-26 - Period: 2023-12-31 - Accession: 0001837759-24-000002 - CIK: 1837759 - File #: 8-70646 - Type: Broker-dealer - Material weakness: No - Auditor: OHAB AND COMPANY, PA - Auditor location: MAITLAND, FL - Contact: Norman Fuchs - Phone: 8185311310 - Email: norm@imhapi.app - Website: imhapi.app - Signed by: Norman Fuchs (Chief Financial Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1837759/000183775924000002/hapi20231.pdf --- {0}------------------------------------------------ #### **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** OMB APPROVAL OMB Number: ϯϮϯϱͲϬϭϮϯ Expires: KĐƚ͘ϯϭ͕ϮϬϮϯ Estimated average burden hours per response: ## **ANNUAL REPORTS FORM X-17A-5 PART III** SEC FILE NUMBER 8-70646 | | 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 _____________________ AND ENDING ______________________ | January | 1,
2023
MM/DD/YY | | December | 31,
2023
MM/DD/YY | | | | A. REGISTRANT IDENTIFICATION | | | | | Hapi
NAME OF FIRM: _______________________________________________________________________ | Securities | LLC | | | | | 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.) | | | | | | | 65
Freeborn
Road
_____________________________________________________________________________________ | | | | | | | | | (No. and Street) | | | | | Easton
_____________________________________________________________________________________ | | CT | | | 06612 | | (City) | | (State) | | | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | Norman
Fuchs
_____________________________________________________________________________________ | | 818-531-1310 | | | norm@imhapi.app | | (Name) | | (Area Code – Telephone Number) | | (Email Address) | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | | | OHAB
AND
COMPANY,
_____________________________________________________________________________________ | PA | | | | | | 100
E
SYBELIA
AVE, | SUITE
130 | (Name – if individual, state last, first, and middle name)
MAITLAND | | FL | 32751 | | _____________________________________________________________________________________
(Address) | | (City) | | (State) | (Zip Code) | | JULY
28,
2004
_____________________________________________________________________________________ | | | | 1839 | | | (Date of Registration with PCAOB)(if applicable) | | | | | (PCAOB Registration Number, if applicable) | \* Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public 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)(1)(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 OMB control number.** **FOR OFFICIAL USE ONLY** {1}------------------------------------------------ #### **OATH OR AFFIRMATION** | financial report pertaining to the firm of Hapi Securities LLC
as of
2~
is true and correct. I further swear (or affirm) that neither the company nor any
December 31
partner, officer, director, or equivalent person, as the case may be, has any proprietary interest i any account classified solely
as that of a customer.
Title:
Chief Financial Officer | I, Norman Fuchs | swear (or affirm) that, to the best of my knowledge and belief, the | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------|---------------------------------------------------------------------| | | | | | | | | | | | | | | | | | | | | #### **This filing\*\* contains (check all applicable boxes):** - Iii (a) Statement of financial condition. - □ (b) Notes to consolidated statement of financial condition. - Iii (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). - Iii (d) Statement of cash flows. - Iii (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - □ (fl Statement of changes in liabilities subordinated to claims of creditors. - Iii (g) Notes to consolidated financial statements. - Iii (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. - 0 (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. - 0 (I) Computation for Determination of PAB Requirements under Exhibit A to§ 240.15c3-3. - Iii (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - □ (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. - Iii (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-l, 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. - □ (p) Summary offinancial data for subsidiaries not consolidated in the statement offinancial condition. - Iii (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. - Iii (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - □ (t) Independent public accountant's report based on an examination of the statement offinancial condition. - Iii (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. - □ (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. - Iii (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). - 0 (z) Other: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_ - \*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-S(e)(3) or 17 CFR 240.18a-7(d)(2}, as applicable. {2}------------------------------------------------ ## **TABLE OF CONTENTS** | Report of Independent Registered Public Accounting Firm | 1 | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------| | Financial Statements | | | Statement of Financial Condition | 2 | | Statement of Operations | 3 | | Statement of Changes in Member's Equity | 4 | | Statement of Cash Flows | 5 | | Notes to Financial Statements | 6 - 9 | | Supplemental Information | | | Schedule I - Computation and Reconciliation of Net Capital Under Rule 15c3-1
of the Securities and Exchange Commission | 10 | | Schedule II - Computation of Aggregate Indebtedness Under Rule 17a-5
of the Securities and Exchange Commission | 11 | | Schedule III - Compuation and Determination of Reserve Requirements
and Information Relating to the Possession or Control
Requirements Under SEC Rule 15c3-3 | 12 | {3}------------------------------------------------ ![](_page_3_Picture_0.jpeg) {4}------------------------------------------------ #### **FINANCIAL STATEMENTS** {5}------------------------------------------------ ## **HAPI SECURITIES LLC STATEMENT OF FINANCIAL CONDITION AS OF DECEMBER 31, 2023** ## **ASSETS** | Assets | | |---------------------------|-----------| | Cash and cash equivalents | \$444,595 | | Clearing deposit | 125,000 | | Prepaid expenses | 2,720 | | | | | Total assets | \$572,315 | ## **LIABILITIES AND MEMBER'S EQUITY** | Liabilities | | |---------------------------------------|-----------| | Accounts payable | \$10,000 | | Due to clearing | \$15,582 | | Total liabilities | 25,582 | | Member's Equity | | | Member's equity | \$546,733 | | Total liabilities and member's equity | \$572,315 | | | | *The accompanying notes are an integral part of these financial statements* {6}------------------------------------------------ ## **HAPI SECURITIES LLC STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2023** #### **Revenues:** | Interest income | \$15,764 | |-----------------------------|-------------| | Rebates | 125,140 | | Other income | 23 | | Total revenues | 140,927 | | | | | Expenses: | | | Clearing fees | 125,529 | | Customer account fees | 195,837 | | Legal and Professional fees | 232,000 | | Technology fees | 1,769 | | Regulatory fees | 4,425 | | Other | 33,405 | | Total Expenses | 592,965 | | Net Loss | (\$452,038) | *The accompanying notes are an integral part of these financial statements* {7}------------------------------------------------ # **HAPI SECURITIES LLC STATEMENT OF CHANGES IN MEMBER'S EQUITY FOR THE YEAR ENDED DECEMBER 31, 2023** | | | Retained | | |---------------------------|----------------|---------------|-----------| | | Members Equity | Earnings | Total | | Balance December 31, 2022 | \$1,657,775 | (\$909,004) | \$748,771 | | Member Contributions | 250,000 | | 250,000 | | Net Loss for Period | | (452,038) | (452,038) | | Balance December 31, 2023 | \$1,907,775 | (\$1,361,042) | \$546,733 | *The accompanying notes are an integral part of these financial statements* {8}------------------------------------------------ ## **HAPI SECURITIES LLC STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2023** | Cash flows from operating activities | | |---------------------------------------------------|-----------------| | Net Loss | \$
(452,038) | | Adjustments to reconcile net loss to net cash | | | used by operating activities | | | Changes in operating assets and liabilities: | | | Prepaid expenses and other current assets | (991) | | Increase in clearing deposit | (50,000) | | Accounts payable | (30,990) | | A
Accrued liabilities | (20,500) | | Net cash used by operating activities | (554,519) | | Financing Activities | | | | | | Member contributions | 250,000 | | Net cash provided for financing activities | 250,000 | | Net decrease in cash | (304,519) | | Cash and cash equivalents, at beginning of year | 749,114 | | Cash and cash equivalents, at end of year | \$
444,595 | | | | | Supplemental disclosures of cash flow information | | | Cash paid for interest | \$0 | | Cash paid for taxes | \$0 | *The accompanying notes are an integral part of these financial statements* Other non cash items \$0 {9}------------------------------------------------ #### **NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** **Nature of business:** Hapi Securi�es LLC ("the Company") was incorporated May 6, 2022. The Company is registered as a broker-dealer under the Securi�es Exchange Act of 1934 and is a member of the Financial Industry Regulatory Authority (FINRA) and a member of the Securi�es Investor Protec�on Corpora�on (SIPC). The Company is wholly owned by Hapi Corp LLC. The Company is registered in 2 states and provides individuals with a self-directed trading pla�orm to execute brokerage transac�ons in cash accounts only. **Basis of accoun�ng** - The accompanying financial statements of the Company have been prepared on the accrual basis of accoun�ng and accordingly reflect all significant receivables, payables, and other assets and liabili�es in accordance with accoun�ng principles generally accepted in the United States of America. **Cash and cash equivalents** - The Company considers all money market accounts and highly liquid cash investments with a maturity date of three months or less to be cash equivalents. **Cash balances in excess of insured amounts** – The Company maintains its cash in accounts which, at �mes, may exceed federally insured limits. The Company has not experienced any losses due to these limits. **Regulatory deposit** - The Company has on account with FINRA \$2,165, of which \$1,229 was deposited for 2024 licensing fees. This deposit was required by FINRA to be pre-paid in December 2023 to maintain state registra�ons in 2024. The Company will recognize this deposit as an expense on January 1, 2024. **Revenue recogni�on** – Revenue is recognized in accordance with FASB ASC Topic 606 as services are rendered and the contracts iden�fied performance obliga�on has been sa�sfied. The Company provides a pla�orm for execu�ng transac�ons on exchanges and the brokerage commissions, interest, rebates, are recognized as revenue at the point in �me the associated service is fulfilled, and ensuing payment is imminent. Presently, the Company is execu�ng customer transac�ons for zero commissions. There were no unsa�sfied performance obliga�ons at December 31, 2023. **Income taxes** - Income taxes are provided for the tax effect of transac�ons reported in the financial statements and consist of taxes currently due plus deferred tax balances. Deferred taxes are recognized for differences between book and tax �ming of income and expense items. As of December 31, 2023, the Company had no deferred tax assets or liabili�es portrayed on the financial statements. {10}------------------------------------------------ #### **NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Con�nued** **Use of es�mates**-The prepara�on of financial statements in conformity with U.S. generally accepted accoun�ng principles requires management to make es�mates and assump�ons that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those es�mates. #### **NOTE 2 – CREDIT LOSSES** The Company follows ASC Topic 326, Financial Instruments – Credit Losses ("ASC 326"). ASC 326 impacts the impairment model for certain financial assets by requiring a current expected credit loss ("CEL") methodology to es�mate expected credit losses over the en�re life of the financial asset. Under the accoun�ng update, the Company has the ability to determine that there are no expected credit losses in certain circumstances (e.g., based on the credit quality of the customer). The Company had accounts receivable as of December 31, 2022 and 2023 of \$0 and \$0 respec�vely. #### **NOTE 3 - LEASES** The Company has no leases. #### **NOTE 4 – FAIR VALUE MEASUREMENTS** FASB ASC 820, *Fair value Measurements and Disclosures*, defines fair value, establishes a framework for measuring fair value, and establishes a fair value hierarchy which priori�zes the inputs to valua�on techniques. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transac�on between market par�cipants at the measurement date. A fair value measurement assumes that the transac�on to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Valua�on techniques that are consistent with the market, income or cost approach, as specified in ASC 820, are used to measure fair value. The fair value hierarchy priori�zes the inputs to valua�on techniques used to measure fair value into three broad areas: Level 1 – inputs to the valua�on methodology are quoted prices available in ac�ve markets for iden�cal investments as of the repor�ng date. Level 2 – inputs to the valua�on methodology are: - Quoted prices for similar assets or liabili�es in ac�ve markets. - Quoted prices for iden�cal or similar assets or liabili�es in inac�ve markets. - Inputs other than quoted prices that are observable for the asset or liability. {11}------------------------------------------------ #### **NOTE 4 – FAIR VALUE MEASUREMENTS - Con�nued** Level 3 – Inputs to the valua�on methodology are unobservable inputs in situa�ons where there is litle or no market ac�vity for the asset or liability, and the repor�ng en�ty makes es�mates and assump�ons related to the pricing of the asset or liability, including assump�ons regarding risk. There were no transfers in or out of Level 3 during the year ending December 31, 2023. Investments as measured at fair value on a recurring basis by input type consisted of the following at December 31, 2023: | | | Fair Value Measurement | | | |--------------|---------------------|------------------------|---------|-----------| | | Using Input Type___ | | | | | | Level 1 | Level 2 | Level 3 | Total | | Money Market | \$300,001 | | | \$300,001 | | Total | \$300,001 | | | \$300,001 | #### **NOTE 5 - NET CAPITAL REQUIREMENTS** As a registered broker-dealer, the Company is subject to the Securi�es and Exchange Commission Uniform Net Capital Rule 15c3-1. The rule states, in part, that a broker or dealer that does not receive, directly or indirectly, or hold funds or securi�es for, or owe funds or securi�es to, customers and does not carry accounts of, or for, customers is required to maintain a minimum net capital of 6-2/3% of aggregate indebtedness, or \$5,000, whichever is greatest. As of December 31, 2023, the Company has posi�ve net capital of \$538,002 which exceeds its minimum of \$5,000. Pursuant to SEC Rule 17a-5, paragraph (d)(4), the net capital computa�on contained in this annual audit report for the period ending December 31, 2023, does not materially differ from the net capital computa�on contained in the Company's unaudited FOCUS Report IIA for the period ending December 31, 2023. Consequently, a reconcilia�on is not required and is therefore not included herein. #### **NOTE 6 - COMMITMENTS AND CONTINGENCES** There are no commitments or con�ngencies as of year ending December 31, 2023 #### **NOTE 7 – COMPANY CONDITIONS** The Company has a loss of \$452,038 for the year ended December 31, 2023 and has received capital contribu�ons from its stockholder for working capital. The Company' stockholder has represented the inten�on to con�nue making capital contribu�ons, as needed, to ensure the Company's con�nuing opera�ons. The stockholder has the financial wherewithal to con�nue contribu�ng as required. {12}------------------------------------------------ #### **NOTE 7 – COMPANY CONDITIONS - con�nued** Management expects the Company to con�nue as a going concern and the accompanying financial statements have been prepared on a going-concern basis without adjustments for realiza�on in the event the Company ceases to con�nue as a going concern. #### **NOTE 8 - SUBSEQUENT EVENTS** Management has assessed subsequent events through the date the financial statements where available and determined no subsequent events or transac�on occurred during that period required disclosure. {13}------------------------------------------------ **SUPPLEMENTAL INFORMATION** {14}------------------------------------------------ # **HAPI SECURITIES LLC SCHEDULE I FOR THE YEAR ENDED DECEMBER 31, 2023 COMPUTATION AND RECONCILIATION OF NET CAPITAL UNDER RULE 15c3-3 OF THE SECURITIES AND EXCHANGE COMMISSION** | Computation of basic net capital requirements: | | |-------------------------------------------------------------------------|-----------| | Total member's equity | \$546,733 | | Decuctions and/or charges:
Non-allowable assets: | | | Prepaid expenses | 2,720 | | Total non-allowable assets | 2,720 | | Net capital before haircuts and securities positions | 544,013 | | Haircuts | 6,011 | | Net Capital | 538,002 | | | | | Minimum net capital requirements: | | | 6 2/3% of total aggregate indebtedness (\$25,582) | 1,705 | | Minimum dollar net capital requirement for this broker-dealer (\$5,000) | 5,000 | | Net capital requirement (greater of above two requirements) | 5,000 | | Net capital in excess of requirement minimum | \$533,002 | There are no material differences between the proceeding computation and the Company's corresponding unaudited Part II of Form X-17A-5 as of December 31, 2023 {15}------------------------------------------------ # **HAPI SECURITIES LLC SCHEDULE II COMPUTATION OF AGGREGATE INDEBTEDNESS UNDER RULE 17a-5 OF THE SECURITIES AND EXCHANGE COMMISSION AS OF DECEMBER 31, 2023** ## **Total Aggregate Indebtedness** | Accounts payable | \$25,582.00 | |---------------------------------|-------------| | Aggregate indebtedness | \$25,582.00 | | Ratio of aggregate indebtedness | | | to net capital | 0.05 | {16}------------------------------------------------ # **HAPI SECURITIES LLC SCHEDULE III INFORMATION RELATED TO POSSESSION AND CONTROL AS OF DECEMBER 31, 2023 REQUIREMENTS UNDER SEC RULE 15c3-3 COMPUTATION FOR DETERMINATION OF RESERVE REQUIREMENT AND** The Reserve Requirements pursuant to Rule 15c3-3 is not applicable as the Company does not hold customer funds or securities and the Company's activities are limited to those contemplated by Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. §240.17a-5. The Possession or Control Requirements pursuant to Rule 15c3-3 is not applicable as the Company does not hold customer funds or securities and the Company's activities are limited to those contemplated by Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. §240.17a-5. {17}------------------------------------------------ ![](_page_17_Picture_0.jpeg) {18}------------------------------------------------ #### **Exemption Report** Hapi 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-5(d)(l) 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 the following provisions of 17 C.F.R. §240.15c3-3 (k)(2)(ii). - 2) The Company met the identified exemption provisions in 17 C.F.R. §240.15c3-3 (k)(2)(ii) throughout the most recent fiscal year without exception. - 3) The Company is also filing this Exemption Report because the Company's other business activities contemplated by Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.l7a-5 are limited to (1) receiving transaction-based compensation for identifying potential merger and acquisition opportunities for clients; (2) referring securities transactions to other broker-dealers, or providing technology or platform services; 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 (a) 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. Hapi Securities LLC I, Norman Fuchs, swear (or affirm) that, to my best knowledge and belief, this Exemption Report is true and correct. By: Title: Chief Financial Officer March 11th, 2024 Member: FINRA, SIPC Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.