FOCUS Report Charles Towne Securities, Llc

X-17A-5 [Paper] - FOCUS Report

Published: 2016-12-07 15:02:25
Submitted: 2016-12-05
Period Ending In: 2016-09-30
scanned.pdf Scanned paper document


                               SEC              IiNITEDSIA►Ga                                                   OMB APPROVAL
                     'Mall    PfOCecSFCURrrIESAtNDEXCHANGFCONIMISSION                                     OMBNumber:        3235-0123
                                             Washington,D.C. 20,549                                       Expires:       May 31,2017
                              ~E?CtIC~                                                                    Estimated average burden
                                                                                                          hours erres onse......12.00
                        tJ~.G Q 6'1,_; ANNU
                                       ,,                    UDITED            E           T
                                                                                                                       SEC FILE NUMBER
                                                               RT
                     uliastiington OC                                III                                               8-69505

                               4Oa             FACING PAGE
                  Information Required of Brokers and Dealers Pursuant to Section 17 of the
                          Securities Exchange Act of 1934 and Rule 17a-5 Thereunder
REPORT FOR THE PERIOD BEGINNING 09/04/15                                           AND END:ING09130/16
                                                             MM/DD.!YY                                          MMIDD/YY


                                      A. REGISTRANT IDENTIFICATION

NAME, OF BROKI R-DF,ALE R: Alchemy Securities, LLC                                                             OFFICIAL USE ONLY

ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.)                                                      FIRM I.D. NO.

234 Seven Farms Dr, Suite 123
                                                         (No and Street)

                   Charleston                                     SC                                      29492
                     (City)                                      (State)                                  (Zip Code)

NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
Scott Louis Ilaric                                                    (704)516-1836
                                                                                                           (Area Code — Telephone Number)

                                     B. ACCOUNTANT IDENTIFICATION

INDGPENDBNT PUBLIC ACCOUNTANT whose opinion is contained in this Report*

Dixon Hughes Goodman LLP
                                              (Name — if individual. store last,first, middle —e)

      2501 Blue Ridge Road, Suite 500 Raleigh                                                       NC                     27607
      (Address)                                     (City)                                      (State)                    (Zip Code)


CH ECK ONE:

              Certified Public Accountant
              Public Accountant
                                                                                                          Securities and Exchange
              Accountant not resident in United States or any of its possessions                                            0
                                                                                                                        DEC ti 5 2096
                                              FOR OFFICIAL USE ONLY

                                                                                                                       RECEIVED
*Claimsfor exemptionfrom the requirement that the annualal repay he covered by the opinion ofan independent public accountant
must he supported bt,a statement gffacts and circumstances relied on as the basisfor the exemption. See Section 240.17a-5(e)(2)



                                Potential persons who are to respond to the collection of
                                information contained In thisform are not required to respond
   SEC 1410 0602)               unlessthe form displays acurrentlyvalid OMB control number.


                                               OATH OR AFFIRMATION

 1, Scott Louis Mario                                                                  swear (or affirm) that, to the best of
 my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of
 Alchemy Securities, LLC                                                                                                  , as
 of September 30                                              3o 16   , are true and correct. I further swear (or affirm) that
 neither the company nos any partner, proprietor, principal officer or director has any proprietary interest in any account
classified solely as that of a customer, except as follows:




                                                                           P1(         ten~clc._.-

                                                                                       Title
   1                                JOSEPH K ERFtERA
       i/t✓11- 4—~PA't--    Notary Public - State of South Carolina
               Nora ublic -   My Commission Expires June 24, 2025

This report"contains (check all applicable boxes):
® (a) Facing Page.
   (b) Statement of Financial Condition.
© (c) Statement of Income (Loss).
® (d) Statement of Changes in Financial Condition.
® (e) Statement of Changes in Stockholders' .Equity or Partners' or Sole Proprietors' Capital.
❑ (f) Statement of Changes in Liabilities Subordinated to Claims of Creditors.
0 (g) Computation of Net Capital.
© (h) Computation for Determination of Reserve Requirements Pursuant to Rule 156-3.
   (i) Information Relating to the Possession or Control Requirements Under Rule 156-3.
❑ (j) A Reconciliation, including appropriate explanation of the Computation of Net Capital Under Rule 150-1 and the
        Computation for Determination of the Reserve Requirements tinder Exhibit A of Rule 15c3-3.
❑ (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of
        consolidation.
® (1) An Oath or Affirmation.
❑ (in) A copy of the SIPC Supplemental Report.
❑ (n) A report describing any material inadequacies found to exist or found to have existed since the date ofthe previous audit.

*'For conditions ofconfidential treatment ofcertain portions ofthisfiling, see section 290.17a-5(e)(3).


                                           Alchemy Securities, LLC
                                            September 30, 2016

Contents                                                                                               Page

Report of Independent Registered Public Accounting Firm                                                1

Financial Statements

Statement of Financial Condition
Statement of Operations
Statement of Changes in Member's Equity
Statement of Cash Flows

Notes to Financial Statements                                                                          6-8



Supplementary Information

Schedule I - Computation of Net Capital Under SEC Rule 156-1                                           9
Schedule II - Computation for Determination of the Reserve Requirements Pursuant to Rule 15c-3-3       10
Schedule III - Information Relating to the Possession or Control Requirements Pursuantto Rule 15c3-3   11



Alchemy Statement of Exemption                                                                         12

Review Report of Independent Registered Public Accounting Firm on Exemption Report                     13


                                                                                         2501 Blue Fudge Road, Salle 507
 i                                                                                       Ri lwgh. NC 27607
         H     l~ U                                                                      0 9119 816,4545
U'X1i; II'.br'~ 5O,`4 i i:,i!                                                            F biS.06.U380
                                                                                         t~J WYJ.IIIIgI It7.C:tliil




                         REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     To the Managing Member
     Of Alchemy Securities, LLC
     Charleston, South Carolina

     We have audited the accompanying financial statements of Alchemy Securities, Inc. (the "Company"),
     which comprise the statement of financial condition as of September 30, 2016, and the related statements
     of operations, changes in member's equity, and cash flows for the period September 4, 2015 through
     September 30, 2016 that are filed pursuant to Rule 17a-5 under the Securities Exchange Act of 1934, and
     the related notes to the financial statements and supplemental information. The Company's management
     is responsible for these financial statements. Our responsibility is to express an opinion on these financial
     statements based on our audit.
     We conducted our audit in accordance with the standards of the Public Company Accounting Oversight
     Board (United States). Those standards require that we plan and perform the audit to obtain reasonable
     assurance about whether the financial statements are free of material misstatement. The company is not
     required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
     Our audit included consideration of internal control over financial reporting as a basis for designing audit
     procedures that are appropriate in the circumstances, 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. An audit also includes examining, on a test basis, evidence supporting the amounts and
     disclosures in the financial statements, assessing the accounting principles used and significant estimates
     made by management, as well as evaluating the overall financial statement presentation. We believe that
     our audit provides a reasonable basis for our opinion.
     In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
     condition of the Company as of September 30, 2016, and the results of its operations and its cash flows
     for the period September 4, 2015 through September 30, 2016 in accordance with accounting principles
     generally accepted in the United States of America.
     The supplementary information contained in Schedules I through III 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 Rule 17a-5 of the Securities Exchange Act of 1934. In our opinion,
     the supplemental information is fairly stated, in all material respects, in relation to the financial statements
     as a whole.




     Raleigh, North Carolina
     November 30, 2016


                                     Alchemy Securities, LLC
                                 Statement of Financial Condition
                                    As of September 30,2016



ASSETS
       Curre nt Assets
                Checking/Savings
                      Cash                                            $    16,893
                Total Checking/Savings                                     16,893

                Other Current Assets
                         Other Receivable - Independent Contractors         3,440
                Total Other Current Assets                                  3,440

       Total Current Assets                                                20,333


TOTALASSETS                                                                20,333


                                                                      $
LIABILITIES MEMBER'S EQUITY
            &
       Liabilities
              Current liabilities
                       Accounts Payable                               $     2,428
                Total Current Liabilities                                   2,428
       Total Liabilities                                                    2,428

       Member's Equity
            Members' Capital                                               69,236
                Accumulated Deficit                                       (51,331)
       Total Member's Equity                                               17,905


TOTAL LIABILITIES        MEMBER'S EQUITY                                   20,333
                     &
                                                                      $
See Notes to Financial Statements




                                                2


                        Alchemy Securities, LLC
                       Statement of Operations
September 4,2015(Date of FINRA Membership)through September 30, 2016


  Income
       Investment Banking Fees                $           225,783
       Other Income                                         4,000
  Total Income                                            229,783

  Expenses
       Overhead                                            63,465
        Bad Debt Expense                                   16,000
       FIN RA Expenses                                      5,390
        Compensation Expense                                3,000
        Other Expenses                                      7,719
  Total Expenses                                           95,574


  Net Income                                              134,209
                                              $
  See Notes to Financial Statements


                        Alchemy Securities, LLC
                Statement of Changes in Member's Equity
September 4, 2015(Date of FINRA Membership) through September 30,2016



Member's Equity at September 4, 2015             $            29,681
Member's Contributions                                        39,015
Net Income                                                   134,209
Member's Withdrawals                                        (185,000)
Member's Equity at September 30, 2016           $             17,905



See Notes to Financial Statements


                              Alchemy Securities, LLC
                             Statement of Cash Flows
     September 4, 2015(Date of FINRA Membership) through September 30,2016


OPERATING ACTIVITIES
Net Income                                                            134,209




                                                          $
Increase in Receivables                                                (3,440)
Increase in Accounts Payable                                            2,428
Non-Cash Operating Expenses                                            39,015
Net Cash Provided by Operating Activities                             172,212

FINANCING ACTIVITIES
Distribution to Alchemy Global Holdings                              (185,000)
Net Cash Used by Financing Activities                                (185,000)

Increase (Decrease)in Cash                                            (12,788)
Cash at Beginning of Period                                            29,682
Cash at End of Period                                                  16,894
                                                          $
See Notes to Financial Statements


                                          Alchemy Securities, LLC
                                       Notes to Financial Statements
                                           September 30, 2016

Notes To Financial Statements

Note 1. Nature of Business And Significant Accounting Policies

Nature of business: Alchemy Securities, LLC(the Company) is a broker-dealer registered with the
Securities and Exchange Commission (SEC)and is a member of the Financial Industry Regulatory
Authority(FINRA). The Company provides private placements and M&A activities for the sports and
entertainment sectors. The Company signed its membership agreement with FINRA on September 4,
2015. The Company is a single-member limited liability company wholly-owned by Alchemy Global
Holdings, LLC (AGH).

A summary of the Company's significant accounting policies follows:

The Company follows accounting standards established by the Financial Accounting Standards Board
(FASB)to ensure consistent reporting of financial condition, results of operations, and cash flows.
References to Generally Accepted Accounting Principles(GAAP) in these footnotes are to the FASB
Accounting Standards Codification'", sometimes referred to as the Codification or ASC.

Basis of presentation: The financial statements include only the accounts of the Company. The
statements of operations, change in member's equity and cash flows are presented only for the period
September 4, 2015 through September 30, 2016.The Company became a FINRA member on September
4, 2015.

Basis of accounting: The Company prepares its financial statements on the accrual basis of accounting.
Under the accrual basis of accounting, revenues are recognized when they are earned and expenses are
recognized when the underlying obligations have been incurred.

Use of estimates: The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect certain 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 reporting period. Actual results could differ
from those estimates.

Revenue recognition: Private placement and retainer fees are recognized when earned in accordance
with the terms of the advisory contract.

Subsequent Events: The Company has evaluated its subsequent events through November 30, 2016, the
date that the accompanying financial statements were available to be issued. The Company had no
material subsequent events requiring an adjustment to or disclosure in the financial statements.

Note 2. Income Tax Status

As a single-member limited liability company,the Company is treated as a "disregarded entity" for
income tax purposes. Thus,for federal income tax purposes,the Company is accounted for as a division


of AGH and does not file separate tax returns. The Company's financial activity is reported in
conjunction with the federal and state income tax filings of AGH. Therefore, no income tax liability nor
provision expense has been recognized. Income taxes have not been provided, as the members of AGH
are individually liable for taxes, if any, on their share of AGH's net income or loss. AGH may recognize
the tax benefit from an uncertain tax position only if it is more-likely-than-not that the tax position will
be sustained on examination by taxing authorities, based on the technical merits of the position. The tax
benefits recognized in the financial statements from such a position are measured based on the largest
benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement. The
guidance on accounting for uncertainty in income taxes also addresses de-recognition, classification,
interest and penalties on income taxes, and accounting in interim periods.

Management evaluated the Company's tax positions and concluded that the Company has taken no
uncertain tax positions that require adjustment or material accrual to the financial statements to comply
with the provisions of this guidance.

AGH files income tax returns in U.S. federal jurisdiction and in South Carolina. AGH is subject to U.S.
federal and state income tax examinations by tax authorities for tax years starting in 2014.

Note 3. Net Capital Requirement

The Company is a broker-dealer subject to the SEC Uniform Net Capital Rule (Rule 156-1), 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 8 to 1 during the 12 months after commencing business
Beginning on September 4, 2016, the Company's aggregate indebtedness ratio shall not exceed 15 to 1.

Rule 15c3-1 also requires that equity capital may not be withdrawn or cash dividends paid if the
resulting net capital ratio would exceed 10 to 1. At September 30, 2016, the Company had net capital of
$14,465, which was $9,465 in excess of its required net capital of $5,000. The Company's ratio of
aggregate indebtedness to net capital was 0.168 to 1.

Note 4. Related Party Transactions

As of September 30, 2016,the Company had no payable due to or receivables due from AGH. The
Company entered into an expense sharing agreement with Alchemy Global Holdings, LLC,the
Company's parent, for certain overhead and administrative expenses. Expenses allocated under this
agreement include rent, office supplies, and utilities. For the period ending September 30, 2016, the
Company recorded an expense of $63,465 under the agreement.

Note S. Commitments and Contingencies

For the period ending September 30,2016 the Company is aware of no commitments, contingencies or
guarantees that might result in a loss or future obligation.

Note 6. Concentration of Credit Risk
cash

The Company maintains principally all cash balances in one financial institution which, at times, may
exceed the amount insured by the Federal Deposit Insurance Corporation. The exposure to the


Company is solely dependent upon daily bank balances and the strength of the financial institution. The
Company has not incurred any losses on this account. At September 30, 2016, the amount in excess of
insured limits was $0.

Note 7. Cash Flow Information

The Company had non-cash financing transactions relating to an expense sharing agreement for
overhead with its parent, AGH. These transactions amounted to $39,015 for the period ending
September 30, 2016.

Note 8. Fair Value of Financial Instruments

The Company's financial instruments consist of cash. The carrying value of this on-balance sheet
financial instrument approximates its fair value. The Company has no off-balance sheet financial
instruments. Under US GAAP,fair value estimates are ranked on a three-tier scale based on the
relative reliability of the inputs used in the valuation. All financial instruments are considered Level 1.


                                 Alchemy Securities, LLC
                                       Schedule I
                     Computation of Net Capital Under SEC Rule 15c3.1
                                  September 30, 2016



Net Capital


Member's Equity                                                        $               17,905
Nonallowable Assets - Receivables                                                       3,440


       Net Capital                                                     $               14,465


Aggregate Indebtedness                                                 $                2,428



Computation of Basic Net Capital Requirements

Minimum net capital requirement                                        $                5,000
 (the greater of $5,000 or 6 2/3% of aggregate indebtedness)

Excess Net Capital                                                     $                9,465


Ratio of Aggregate Indebtedness to Net Capital                                      0.168 to 1



See Report of Independent Registered Public Accounting Firm


Note: The above computations do not differ materially from the firm's computations as shown on
its FOCUS Report form X-17A-5 Part II-A dated September 30, 2016


                                         Alchemy Securities, LLC
                                        Supplemental Schedule II
                                           Other Information
                                          September 30,2016



II - COMPUTATION FOR DETERMINATION OF THE RESERVE REQUIREMENTS PURSUANT TO RULE 15c3-3

The Company is exempt from the provisions of Rule 15c3-3 as of September 30, 2016 under the
Securities Exchange Act of 1934,in that the Companies activities are limited to those set forth in the
condition for exemption appearing in paragraph (k)(2)(i).


See Report ofIndependent Registered Public Accounting Firm.




                                                    10


                                          Alchemy Securities, LLC
                                         Supplemental Schedule III
                                            Other Information
                                           September 30, 2016



III - INFORMATION RELATING TO THE POSSESSION OR CONTROL REQUIREMENTS PURSUANT TORULE
    15c3-3

 The Company is exempt from the provisions of Rule 15c3-3 as of September 30, 2016 under the
 Securities Exchange Act of 1934, in that the Companies activities are limited to those set forth in the
 condition for exemption appearing in paragraph (k)(2)(i). The Company did not maintain possession or
 control of any customer funds or securities at September 30, 2016.


 See Report ofIndependent Registered Public Accounting Firm.




                                                    11


Alchemy Securities, LLC
234 Seven Farms Drive, Suite 123
                                                                                       ALCHEMY
Charleston, SC 29492




                                       Alchemy Securities, LLC
                                      Statement of Exemption
                                       September 30, 2016


Alchemy 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
17C.F.R. § 240.17a-S(d)(1) and (4). To the best of its knowledge and belief, the Company states
the following:

The Company claims an exemption from 17 C.F.R. § 240.156-3(k)(2)(i)(the "exemption
provision") and (2) the Company met the exemption provision throughout the period
September 4, 2015 to September 30, 2016.

These assertions are the responsibility of management. The Company acknowledges it is also
management's responsibility for compliance with the identified exemption provisions
throughout the year ended September 30, 2016.

The Company has made available to the accountants all records and other information relevant
to the Company's assertions, including all communications from regulatory agencies, internal
auditors, others who perform an equivalent function, compliance functions, and other auditors
concerning possible exceptions to the exemption provisions through the date of the review
report.

There were no events, subsequent to the period addressed in the Company's assertions, any
known events or other factors that might significantly affect the broker's or dealer's compliance
with the identified exemption provisions.



Alchemy Securities, LLC

I, Scott ]lario, swear (or affirm) that to the best of my knowledge and belief, this Exemption Report is
true and correct




Date:     11/30/2016




                                                  12

SECURITIES OFFERED ARE THROUGH ALCHEMY SECURITIES, LLC, A REGISTERED BROKER DEALER AND MEMBER
FINRA/SIPC. ALCHEMY SECURITIES, LLC IS A WHOLLY OWNED SUBSIDIARY OF ALCHEMY GLOBAL HOLDINGS, LLC.


                                                                                 2501 Blue Ridge Road, Suitu 500
      I, ~1                                                                      Raluiyh. NC 27607
~J';H `-~ !                                                                      D 919876.7546
                                                                                 F 4",9.376 8680
                                                                                 wiAmu gllpr,ma



                REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


  To the Managing Member
  Of Alchemy Securities, LLC
  Charleston, South Carolina

 We have reviewed management's statements, included in the accompanying Alchemy Securities, LLC.
 Statement of Exemption, in which (1)Alchemy Securities, LLC.(the "Company")a wholly owned subsidiary
 of Alchemy Global Holdings, LLC, identified the following provisions 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)(i)(the "exemption provisions") and
 (2)the Company stated that the Company met the identified exemption provisions from September 4, 2015
 through September 30, 2016 without exception. The Company's management is responsible for
 compliance with the exemption provisions 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 provisions. 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 paragraph (k)(2)(i) of Rule 15c3-3 under the Securities Exchange Act of 1934.




 Raleigh, North Carolina
 November 30, 2016



Document Created: 2016-12-23 16:42:04
Document Modified: 2016-12-23 16:42:04
9999999997-16-027547.paper AUTO-GENERATED PAPER DOCUMENT


ENT> X-17A-5 1 9999999997-16-027547.paper AUTO-GENERATED PAPER DOCUMENT This document was generated as part of a paper submission. Please reference the Document Control Number 16022445 for access to the original document.
Additional Files
FileSequenceDescriptionTypeSize
9999999997-16-027547.txt   Complete submission text file   1290

© 2019 SEC.report
SEC CFR Title 17 of the Code of Federal Regulations.