# U.S. SECURITIES, INTL. CORP. X-17A-5 (2023-12-28) — Broker-dealer annual report - Company: U.S. SECURITIES, INTL. CORP. - Form: X-17A-5 - Filed: 2023-12-28 - Period: 2023-09-30 - Accession: 0000100505-23-000001 - CIK: 100505 - File #: 8-18118 - Type: Broker-dealer - Material weakness: No - Auditor: WWC, P.C. - Auditor location: San Mateo, CA - Contact: William Coppa - Phone: 212 227 0800 - Signed by: William Coppa (Secretary/Treasurer) Original filing: https://www.sec.gov/Archives/edgar/data/100505/000010050523000001/ussecaudit.pdf --- {0}------------------------------------------------ U.S. SECURITIES INTERNATIONAL CORP. FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION AS OF AND FOR THE YEAR ENDED SEPTEMBER 30, 2023 {1}------------------------------------------------ #### TABLE OF CONTENTS | | Page | |----------------------------------------------------------------------------------------------------------------|----------| | Report oflndependent Registered Public Accounting Firm | | | Financial Statements: | | | Statement of Financial Condition | 2 | | Statements of Operations and Comprehensive Income | 3 | | Statements of Changes in Stockholders' Equity | 4 | | Statements of Cash Flows | 5 | | Notes to Financial Statements | 6 - 10 | | Supplementary Information: | | | Schedule I - Computation ofNet Capital
Under SEC Rule l 5c3-1 | | | Computation of Basic Net Capital Requirement | 11
11 | | Computation of Aggregate Indebtedness | 11 | | Reconciliation of Net Capital | 12 | | Schedule II - Computation for Determination of the Reserve Requirements
Under SEC Rule 15c3-3 (exemption) | 13 | | Schedule III - Information Relating to Possession or Control Requirements
Under SEC Rule 15c3-3 (exemption) | 13 | | Report oflndependent Registered Public Accounting Firm | 14 | | Exemption Report | 15 | {2}------------------------------------------------ | | UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D C. 20S49 | | OM! APPROV•t
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11 | | | |----------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------|------------------------------------------------------------------------------------------------------------------|--|--| | | ANNUAL REPORTS | | | | | | | FORM X-17A-5 | | L f 'N\/MllR | | | | | PART Ill | | 8-18118 | | | | FILING FOR THE PERIOD BEGINNING | FACING PAGE
Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exch,1nge Act of 1934
10/01/2022 | AND ENDING 09/30/2023 | | | | | | MM,OO/YY | | Mr.- OO(YY | | | | | A. REGISTRANT IDENTIFICATION | | | | | | NAME oF FIRM | __ U_S_S_e_c_u_r_it_ie_s_ln_t_e_rn_a_ito__n_a_l _c_o | ; | rp'--. ____
_ | | | | TYPE OF REGISTRANT (c.heck all applicable boxes)
G Broker-dealer
Check here 1f respondent Is also an OTC der valM'S dealer | n Security based swap dealer
D M | aier security based swap part1cIpant | | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS (Do not use a PO box no ) | | | | | | | 120 Broadway, Suite 1017 | | | | | | | ('lo and Street) | | | | | | New York | NY | | 10271 | | | | (City) | | | (Zip Code) | | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | William Coppa | (212) 227-0800 | bcoppa@ussecunt1es nu com | | | | | (Name) | Telephone Number)
(Area Code | | (Ema, Add•ess) | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing•
WWC, P.C. | | | | | | 2010 Pioner Court | (Name - 11 tnd1v1tJual state last first, and middle name)
San Mateo | CA | 94403 | | | | | (City) | (State) | (Zip Code | | | | 03/1
6/2004 | | 1171 | | | | | | | | | | | | -----
(OJ!!' of Rpg,strat on ,.,,th PCAOB)(1f app1tcab1e)
I | | | | | | {3}------------------------------------------------ #### OATH OR AFFIRMATION | | swear (or affirm) that, to the best of my knowledge and belief, the
I, William Coppa | |-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | 2~
financial report pertaining to the firm of us SecunI,es 1n1111na11onal COfP
, as of | | 9/30 | is true and correct I further swear (or affirm) that neither the company nor any
partner, officer. director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely | | | as thihtof~Before Me Thi! | | | Srgnat~ | | | Title: | | | --
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• Ul'S<;r,., 0 82NUHu 212406Q0J0 | | | This filing•• contains (check all applicable boxes):
• | | | ii! (a) Statement of financial condition | | | D (b) Notes to consolidated statement of financial condition. | | | ~ (c) Statement of income (loss) or, if there Is other comprehensive income In the period(s) presented, a statement of | | | comprehensive income (as defined in § 210.1-02 of Regulation S-X). | | jjiij | (d) Statement of cash flows. | | | !!i (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. | | 0 | (f) Statement of changes in l1abllitles subordinated to claims of creditors. | | | !!i (g) Notes to consolidated financial statements. | | | ~ (h) Computation of net capital under 17 CFR 240.15c3-l or 17 CFR 240.18a-1, as applicable. | | | D (1) Computation of tangible net worth under 17 CFR 240.lSa-2. | | | ~ U) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. | | D | (kl Computation for determination of security-based swap reserve requirements pursuant to Exh1b1t 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. | | | ~ (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3 | | | D (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR | | | 240.15c3·3(p)(2) or 17 CFR 240.18a-4, as applicable. | | | ~ (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net | | | worth under 17 CFR 240.15c3-1, 17 CFR 240.lSa-1, or 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17 | | | CFR 240 15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences | | 0 | exist.
(p) Summary of financial data for subsidiaries not consolidated in the statement of financial cond1t1on. | | | ~ (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240 17a-12, or 17 CFR 240.l Sa-7, as applicable | | 0 | | | | {r) Compliance report in accordance with 17 CFR 240.17a-S or 17 CFR 240.18a-7, as applicable
e (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable | | | O (t) Independent public accountant's report based on an examination of the statement of financial cond1t1on. | | | O (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. | | | O (v) Independent public accountant's report based on an examination of certain statements In the compliance report under 17 | | | CFR 240 17a-5 or 17 CFR 240.18a-7, as applicable. | | | !! (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 | | | CFR 240.18a-7, as applicable | | | ~ (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 24015c3-le or 17 CFR 240 17a-12, | | | as applicable | | C | {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· | app/,cable. {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Board of Directors and Stockholders of U.S. Securities International Corp. #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition ofU.S. Securities International Corp. as of September 30, 2023, and the related statements of operations and comprehensive income, changes in stockholders' equity, and cash flows for the year then ended, and the related notes and schedules ( collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of U.S. Securities International Corp. as of September 30, 2023, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** These financial statements are the responsibility of U.S. Securities International Corp.'s management. Our responsibility is to express an opinion on U.S. Securities International Corp'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 U.S. Securities International Corp. in accordance with the U.S. federal securities laws and the applicable rules and regulations of the U.S. Securities and Exchange Commission (SEC) 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 fmancial 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 fmancial 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 fmancial statements. We believe that our audit provides a reasonable basis for our opinion. #### **Auditor's Report on Supplemental Information** The Schedule I - Computation ofNet Capital Under Rule 15c3-l, Schedule II - Computation for Determination of Reserve Requirements Under SEC Rule 15c3-3 (exemption) and Schedule III - Information Relating to Possession or Control Requirements Under SEC Rule 15c3-3 (exemption) has been subjected to audit procedures performed in conjunction with the audit of U.S. Securities International Corp. 's financial statements. The supplemental information is the responsibility of U.S. Securities International Corp.'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. l 7a-5. In our opinion, the Schedule I - Computation of Net Capital Under Rule 15c3-l, Schedule II - Computation for Determination of Reserve Requirements Under SEC Rule 15c3-3 (exemption) and Schedule III - Information Relating to Possession or Control Requirements Under SEC Rule 15c3- 3 (exemption), is fairly stated in all material respects, in relation to the financial statements as a whole. **WwL) ().c .** WWC,P.C. PCAOB ID: 1171 We have served as the Company's auditor since 2021. San Mateo, CA December 14, 2023 {5}------------------------------------------------ #### U.S. SECURITIES INTERNATIONAL CORP. STATEMENT OF FINANCIAL CONDITION AS OF SEPTEMBER 30, 2023 Current Assets: | Cash and cash equivalents
Commissions receivable due from clearing broker
Trading securities
Prepaid taxes | \$
54,639
29,580
2,330,997
1,308 | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------| | Right of use assets, net | 171,258 | | Non-current Assets: | | | Restricted cash - deposit held at clearing broker | 50,000 | | Total Assets | \$
2,637,782 | | Current Liabilities: | | | Accounts payable and accrued liabilities
Lease obligations | \$
129,016
171,258 | | Total Liabilities | \$
300,274 | | Commitments and Contingencies | | | Stockholders' Equity: | | | Common stock with \$1.00 par value: authorized 10,000 shares
Designated non-voting: issued and outstanding 36 shares as of September 30, 2023
Designated voting; issued and outstanding 4 shares as of September 30, 2023
Retained earnings | \$
36
4
2,337,468 | | Total Stockholders' Equity | \$
2,337,508 | | Total Liabilities and Stockholders' Equity | \$
2,637,782 | {6}------------------------------------------------ #### U.S. SECURITIES INTERNATIONAL CORP. STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE YEAR ENDED SEPTEMBER 30, 2023 | Revenue: | | |-------------------------------------|-----------------| | Commissions | \$
364,113 | | Interest and dividends | 34,796 | | Trading income | 635,836 | | Other income | 3,673 | | Total revenue | \$
1,038,418 | | Expenses: | | | Compensation expense | 206,806 | | Clearing and execution expense | 141,713 | | Miscellaneous operating expense | 122,901 | | Professional fees | 31,388 | | Occupancy | 86,897 | | Insurance | 18,422 | | Regulatory fees | 9,210 | | Communication and market data | 5,920 | | | 623,257 | | Income before taxes | 415,161 | | Provision for federal income tax | | | Provision for state and local taxes | | | | | | Net income | 415,161 | | Comprehensive income | 415,161 | {7}------------------------------------------------ #### U.S. SECURITIES INTERNATIONAL CORP. STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE YEAR ENDED SEPTEMBER 30, 2023 | | Common Stock
- Non-Voting | | Common Stock
-Voting | | | | | |----------------------------------|------------------------------|---------------|-------------------------|---------------|-------------------|--------------|--| | | | Shares Amount | | Shares Amount | Retained Earnings | Total Equity | | | Balance as of October 1, 2022 | 36 | \$ 36 | 4 | \$4 | \$1,922,307 | \$1,922,347 | | | Net income | | | | | 415,161 | 415,161 | | | Balance as of September 30, 2023 | 36 | \$ 36 | 4 | \$4 | \$2,337,468 | \$2,337,508 | | {8}------------------------------------------------ #### U.S. SECURITIES INTERNATIONAL CORP. STATEMENT OF CASH FLOWS FOR THE YEAR ENDED SEPTEMBER 30, 2023 | CASH FLOWS FROM OPERA TING ACTIVITIES:
Net income | \$
415,161 | |----------------------------------------------------------------------------------|---------------| | Net unrealized gain on marketable securities | (386,734) | | Adjustments to reconcile net income to
net cash used in operating activities: | | | Increase in commission receivable due from clearing broker | (23,219) | | Increase in accounts payable and accrued expenses | 2,498 | | Net decrease in lease obligations | (6,565) | | Net cash used in operating activities | (414,020) | | NET CHANGE IN CASH AND CASH EQUIVALENTS | 1,141 | | CASH AND CASH EQUIVALENTS, beginning of year | 53,498 | | CASH AND CASH EQUIVALENTS, end of year | \$
54,639 | | Supplemental disclosure of non-cash activities: | | | Initial recognition of right of use asset | 171,258 | | Initial recognition of lease obligation | 171,258 | | Supplemental disclosure of cash flow information: | | | Cash paid for interest | \$ | | Cash paid for income taxes | \$ | | | | {9}------------------------------------------------ ## **Note 1- Nature of Business** #### **Organization** U.S. Securities International Corp. (the "Company') incorporated in the State of New York on June 24, 1974. The Company was purchased from Fidelity Management and Research Co. in 1974 by the operating personnel who have owned and operated the Company since that date. The Company is a registered broker-dealer with the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA), and the Chicago Board Options Exchange (CBOE). The Company is also a member of the (Securities Investor Protection Corporation (SIPC). All of the Company's executable trades are cleared through its clearing broker on a fully disclosed basis. The Company does not carry customer accounts. The Company is classified by its Designated Regulatory Authority (DRA) FINRA, as an Introducing non-clearing broker-dealer. The Company claims an exemption from Securities and Exchange Commission Rule 15c3-3 based on paragraph k(2)(ii). #### **Note 2 - Summary of Significant Accounting Policies** ## *Basis of Presentation* The accompanying financial statements are prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). ## *Use of Estimates* The preparation of financial statements in conformity with GAAP requires management of the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. #### *Cash and Cash Equivalents* All unrestricted highly liquid investments with initial or remaining maturities ofless than 90 days at the time of purchase are considered cash and cash equivalents. The Company's cash is held by major financial institutions. At times, such amount may exceed the Federal Deposit Insurance Corporation ("FDIC") limit. On September 30, 2023, the Company's cash did not exceed the limit; therefore, there was no concentration of risk for Company's deposits. #### *Commission Receivable Due from Clearing Broker* Commission receivables due from clearing broker on the statement of financial condition consist of commissions earned by the Company that are held with the clearing broker. These receivables are typically settled within thirty days. The clearing broker is a sufficiently capitalized financial institution. Management has determined that the risk of loss is unlikely, accordingly, an allowance for bad debt has not been assessed. Should the clearing broker's financial condition deteriorate, the management will reassess. #### *Restricted Cash* Restricted cash represents good faith deposits held at clearing broker as set forth by the clearing agreement enter into by the Company and its clearing broker. The Company has assessed the financial viability of the clearing broker and believes that the deposit is fairly stated and the risk ofloss on the deposit is not significant. Refer to Note 4. {10}------------------------------------------------ #### **Note 2- Summary of Significant Accounting Policies (cont.)** #### *Revenue Recognition* In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014- 09, Revenue from Contracts with Customers (Revenue Recognition), which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The core principle of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU defines the promised good or service as the performance obligation under the contract. In accordance with the new revenue recognition standard, the Company has identified the specific performance obligation (promised services) associated with the contract with the customer and has determined when that specific performance obligation has been satisfied, which may be at a point in time or over time depending on how the performance obligation is defined. The contracts with customers also contain the transaction price, which consists of fixed consideration and/or consideration that may vary (variable consideration) and is defined as the amount of consideration an entity expects to be entitled to when or as the performance obligation is satisfied. The new revenue recognition standard further clarified the guidance related to reporting revenue gross as principal versus net as an agent. The Company acts as an agent in the majority of the revenue generating transactions with its customers. #### Commissions Commission income is recognized when the customer has agreed with the Company on the security to be transacted and the amount of commission to be charged, the service has been rendered, at which point there are no outstanding performance obligations due to the customer, and the Company is assured that its commission fee will be received. Brokerage commissions are derived from executing transactions for clients on exchanges and over-the-counter markets, providing brokerage services and other such activities. Transactions in securities, including the related commission revenues and expenses, are recorded on a trade-date basis as securities transactions occur. #### Trading Income The Company's trading income consists of realized and unrealized gains and losses from trading equity securities. #### *Income Taxes* Income taxes are accounted for under Accounting Standards Codification ("ASC") 740, Income Taxes, ("ASC 740'). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. To the extent that it is more likely than not that deferred tax assets will not be recognized, a valuation allowance would be established to offset their benefit. The Company adopted this policy for the current year. {11}------------------------------------------------ #### *Fair Value Measurements* The Company follows the guidance in FASB ASC 820, Fair Value Measurement. Using that guidance, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction 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. Valuation techniques that are consistent with the market, income or cost approach, as specified by F ASB ASC 820, are used to measure fair value. Using the provisions within F ASB ASC 820, the Company has characterized its investments in securities, based on the order ofliquidity of the inputs used to value the investments, into a three-level fair value hierarchy. The fair value hierarchy gives the highest order ofliquidity to quoted prices in active markets for identical assets or liabilities (Level 1), and the lowest order ofliquidity to unobservable inputs (Level 3). 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. The Company's fair value measurements are classified into one of three categories as follows based on the measurement inputs: Level 1. These are investments where values are based on unadjusted quoted prices for identical assets in an active market the Company has the ability to access. The investments are exchange-traded equity and over-the-counter securities. Level 2. These are investments where values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the investments. These investments would be comprised of less liquid restricted securities and warrants that trade less frequently. 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. These are investments where values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect assumptions of management about the assumptions that market participants would use in pricing the investments. #### **Note 3** - **Fair Value of Financial instruments** The Company estimates that the fair value of financial instruments recognized on the statement of financial condition approximates their carrying value, using level 1 value measurement. Other assets and liabilities with short and intermediate-term maturities and defined settlement amounts, including receivables, payables, and accrued expenses are reported at their contractual amounts, which approximate fair value. The Company accounted for these investments as trading securities. | Short-term T-bills | 22,380 | |--------------------|-------------| | Equities | 2,308,617 | | | \$2,330,997 | #### **Note 4** - **Restricted Cash** - **Deposit Held at Clearing Broker** The Company maintains cash deposited with its clearing firm pursuant to a fully disclosed clearing agreement ("Clearing Agreement") entered into on October 9, 2003 with additional amendments added through January 23, 2008, which is meant to assure the Company's performance, including but not limited to the indemnification obligations specified in the Clearing Agreement. As of September 30, 2023, the Company had \$50,000 deposited with its clearing firm. This deposit has been accounted for as restricted cash. {12}------------------------------------------------ #### **Note 5- Concentration of Risk** The Company maintains its cash with major financial institutions, which may from time to time, exceed the FDIC limit. The Company has not experienced any losses in such accounts. The Company is also exposed to credit risk as it relates to its securities business. The responsibility for processing customer activity rests with its clearing broker. The Company's clearing agreement provides that credit losses relating to unsecured debits or unsecured short positions of the Company's customers are charged back to the Company. In accordance with industry practice, the clearing broker records customer transactions on a settlement date basis, which is generally two business days after the trade date. The clearing broker is therefore, exposed to the risk ofloss on these transactions in the event of the customer's inability to meet the terms of its contracts, in which case it may have to purchase or sell the underlying financial instruments at prevailing market prices in order to satisfy its customer-related obligations. Any loss by the clearing broker is charged back to the Company. ## **Note 6- Right of Use Asset and Lease Obligations** The Company recognizes and measures its leases in accordance with F ASB ASC 842, Leases. The Company is a lessee in a non-cancellable operating lease for office space. The Company recognized a lease liability and a right of use ("ROU") asset as of December 1, 2019, the effective date of the current lease. The lease liability is initially and subsequently recognized based on the present value of its future lease payments. The discount rate is the implicit rate if it is readily determinable or otherwise the Company uses its incremental borrowing rate. The implicit rates of the leases are not readily determinable and accordingly, the Company used its incremental borrowing rate based on the information available at the commencement date for all leases. The Company's incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms and in a similar economic environment. The ROU asset is subsequently measured throughout the lease term at the amount of the remeasured lease liability (i.e., present value of the remaining lease payments), plus unamortized initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received, and any impairment recognized. Lease cost for lease payments is recognized on a straightline basis over the lease term. The Company has elected, for all underlying classes of assets, to not recognize ROU assets and lease liabilities for short- term leases that have a lease term of 12 months or less at lease commencement, and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. The Company recognizes the lease cost associated with its short-term leases on a straight-line basis over the lease term. #### **Operating Lease** The Company has obligations as a lessee for office space, with initial non-cancellable terms of more than one year and does not include termination options for either party to the lease or restrictive financial or other covenants. The Company has classified this lease as an operating lease. On the Statement of Financial Condition as of September 30, 2023, the Company has recognized an operating lease as a right of use asset in the amount of \$ 171,258 and a corresponding operating lease obligation of \$171,258. Management applied a discount rate of 6.0% to calculate the present value of the lease payments to determine the capitalized value of the lease at initial recognition. The Company has been leasing the same office space under an operating lease since 2003. The most recent renewal was entered into on September 30, 2023, and the lease ends on September 30, 2025. In addition, the company rents space from a related party at the amount of \$1,500 per month as an alternate location for {13}------------------------------------------------ record safekeeping. This lease is cancelable at the owner's discretion. Accordingly, the Company has not capitalized a right of use asset for this lease. During the year ended September 30, 2023, occupancy costs were \$86,897. The following table details the Company's future lease obligations: | Future Minimum Lease | | | |----------------------|------------|--------| | Obligations | | | | Within l year | | 82,602 | | Within 2 years | | 88,656 | | | \$ 171,258 | | #### **Note** 7 - **Pension Plan** The Company has a qualified, self-directed, defined contribution pension plan covering employees. For the year ended September 30, 2023, the Company contributed \$18,451 to the plan, an amount equal to 25% of each participant's compensation for the period October 1, 2022, through September 30, 2023. In addition, the company reimburses its staff for medical expenses as bills are submitted. There is no written plan for this reimbursement. #### **Note 8** - **Regulatory Requirements** The Company is subject to SEC Net Capital Rule (the Rule or Rule 15c3-l), which requires broker dealers to minimum maintain net capital. The ratio of aggregate indebtedness to net capital shall not exceed 15 to 1 for ongoing concerns. The Rule requires that the Company maintain "net capital" equal to the greater of \$5,000 or 6 2/3% of "aggregate indebtedness", as those terms are defmed in the Rule. As of September 30, 2023, the Company had a net capital of \$1,681,071 which was \$1,672,479 in excess of its required net capital of \$8,601. The Company's total aggregated indebtedness to net capital ratio was 0.076746 to 1. The Company's management claims it is exempt from the provision of Rule 15c3-3 under the Securities Exchange Act of 1934 pursuant to Paragraph (k)(2)(ii). As an introducing broker, the Company clears customer transactions on a fully disclosed basis and promptly transmits all customer funds and securities to the clearing broker. The clearing broker carries all of the accounts of such customers and maintains and preserves such books and records. #### **Note 9** - **Related Party Transactions** The Company rents property from year to year from a firm owned by an executive officer and shareholder of the Company, for the purpose ofrecord retention and data security. For the year ended September 30, 2023, such rental payments aggregated \$18,000 and are included in operations. #### **Note 10** - **Subsequent Events** The Company evaluates subsequent events that have occurred after the balance sheet date but before the financial statements are issued which is up to and through December 14, 2023. There are two types of subsequent events: (i) recognized, or those that provide additional evidence with respect to conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements, and (ii) non-recognized, or those that provide evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date. Other than material events disclose below, if any, management is unaware of material subsequent events that require disclosure. {14}------------------------------------------------ # SUPPLEMENTARY INFORMATION {15}------------------------------------------------ #### U.S. SECURITIES INTERNATIONAL CORP. SCHEDULE I - COMPUTATION OF NET CAPITAL AS OF SEPTEMBER 30, 2023 #### Computation of Net Capital: | Total Ownership Equity | \$2,337,508 | |-----------------------------------------------------------------------------------------------------------|------------------| | Add: Other Allowable Credits | | | | 2.337,508 | | Less: Non-Allowable Assets | 1,308 | | Tentative Net Capital | 2,336,200 | | Less: Haircuts on Securities | 348,072 | | Less: Undue Concentration on Securities | 307,057 | | | 655,129 | | Net Capital | \$ 1,681,071 | | Computation ofBasic Net Capital Requirement
Minimum Net Capital Required - | | | (6 2/3% Aggregate Indebtedness) | \$8,601 | | Minimum Dollar Net Capital | 5,000 | | Net Capital Requirement | 8,601 | | Net Capital | \$1,681,071 | | Excess Net Capital | \$ 1,672,470 | | Computation of Aggregate Indebtedness | | | Aggregate Indebtedness | | | -
Accounts payable and accrued liabilities | \$ 129,016 | | -
Lease obligation in excess of right of use asset | | | | 129,016 | | Liabilities Excluded from Aggregate Indebtedness:
Lease Obligation to the Extent of Right of Use Asset | | | Total Liabilities | \$ 129,016 | | Ratio of Aggregate Indebtedness to Net Capital | \$ 0.076746 to 1 | See Accompanying Notes and Accountants' Report {16}------------------------------------------------ #### U.S. SECURITIES INTERNATIONAL CORP. RECONCILIATION OF NET CAPITAL AS OF SEPTEMBER 30, 2023 #### **Statement pursuant to Rule 17a-5( d)( 4)** The Company amended its computation ofnet capital included in Part IIA of Form X-l 7A-5 as of September 30, 2023, as follows: | Net Capital per original FOCUS report | \$ 1,585,911 | |---------------------------------------------------------|--------------| | Adjustment for allowable assets | (32,342) | | Adjustment to right of use assets and lease obligations | 87,770 | | Adjustment to haircuts | 4,688 | | Adjustment to undue concentration on securities | 35,043 | | | | | Net Capital per Amended Focus | \$ 1,681.070 | {17}------------------------------------------------ ## U.S. SECURITIES INTERNATIONAL CORP. SCHEDULE II-COMPUTATION FOR DETERMINING OF THE RESERVE REQUIREMENT AND SCHEDULE II - INFOMRA TION RELATING TO POSSESSION OR CONTROL REQUIREMENTS AS OF AND FOR THE YEAR ENDED SEPTEMBER 30, 2023 ## Computation for Determination of the Reserve Requirements: The Company claims that it operates under the exemptive provisions of paragraph (k)(2)(ii) of SEC Rule 15M-3. #### Information Relating to Possession or Control Requirements: The Company c I aims that it operates under the exemptive provisions of paragraph (k)(2)(i) of SEC Rule 15c3-3 and did not maintain possession or control of any customer funds or securities as of September 30, 2023. {18}------------------------------------------------ ![](_page_18_Picture_1.jpeg) #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Board of Directors and Shareholder of U.S. Securities International Corp. We have reviewed management's statements, included in the accompanying SEC Rule 15c3-3(k) Exemption Report, in which (1) U.S. Securities International Corp. identified the following provisions of 17 C.F.R. §15c3-3(k) under which U.S. Securities International Corp. claimed an exemption from 17 C.F.R. §240.15c3-3: (k)(2)(ii) (exemption provisions) and (2) U.S. Securities International Corp. stated that U.S. Securities International Corp. met the identified exemption provisions throughout the most recent fiscal year without exception. U.S. Securities International Corp.'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 U.S. Securities International Corp. '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)(ii) of Rule 15c3-3 under the Securities Exchange Act of 1934. WWC,P.C. PCAOB ID: 1171 We have served as U.S. Securities International Corp.'s auditor since 2021. San Mateo, CA December 14, 2023 {19}------------------------------------------------ ## **U.S. SECURITIES, lNT'L. CORP.** **120 BROADWAY,** SUITE 1017 **NEW YORK, NEW YORK** 10271 **(2** l **2) 227-0800** SEC Rule 1Sc3-3(k) Exemption Report For the year ended September 30, 2023 U.S. Securities International Corp. (the "Company") is a registered broker-dealer subject to Rule 17a-S promulgated by the Securities and Exchange Commission (17 C.F.R §240.17a-5, "Reports to be made by certain brokers and dealers") This Exemption Report was prepared as required by 17 C.F.R. §240.17a-S(d)(l) and (4). To the best of its knowledge and belief, the Company states the following: 1. The Company claimed an exemption from 17 C.F.R. § 240.15c3-3 under the provisions of subsection (k)(2)(ii). 2. The Company met the requirements of this exemption provision throughout the most recent fiscal year end from October 1, 2022 through September 30, 2023 without exception. US. Securities International Corp. I, William Coppa, affirm that, to the best of my knowledge and belief, that this Exemption Report is true and correct. **By ~2!:!j\_-** ~ Titl Will e: iamCppa Secretary - Treasurer Dated: December 14, 2023 Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.