# FBN SECURITIES, INC. X-17A-5 (2021-07-09) — Broker-dealer annual report
- Company: FBN SECURITIES, INC.
- Form: X-17A-5
- Filed: 2021-07-09
- Period: 2021-03-31
- Accession: 0000727293-21-000009
- CIK: 727293
- File #: 8-30461
- Material weakness: No
- Auditor: GR Reid Associates LLP
- Auditor location: Woodbury, NY
- Contact: Richard Guilfoyle
- Phone: 5164228030
- Signed by: Dennis Naso (President)
Original filing: https://www.sec.gov/Archives/edgar/data/727293/000072729321000009/fbnsecur2021.pdf
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**UNITED STATES SECURITIESANDEXCHANGECOMMISSION Washington, D.C. 20549**
0MB APPROVAL 0MB Number: 3235-0123 Expires: August 31, 2020 Estimated average burden hours oer resoonse ...... 12.00
# **ANNUAL AUDITED REPORT FORM X-17A-5 PART Ill**
| SEC FILE NUMBER |
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| 8-30461 |
**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 _ | ___ 0_4_
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| | A. REGISTRANT IDENTIFICATION | | | | |
| NAME OF BROKER-DEALER: FBN Securities, Inc.
ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | OFFICIAL USE ONLY | | |
| | | | FIRM I.D. NO. | | |
| 120 Broadway, 10th Floor | | | | | |
| | (No. arid Street) | | | | |
| New York | NY | | 10271 | | |
| (City) | (Stale) | | (Zip Code) | | |
| NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
Richard Guilfoyle | | | 516-496-7100 | | |
| | | | (Area Code - Telephone Number) | | |
| | B. ACCOUNTANT IDENTIFICATION | | | | |
| INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report• | | | | | |
| G.R. Reid Associates, LLP | | | | | |
| | (Name - 1findividual, state las/, firs/, middle name) | | | | |
| 7600 Jericho Turnpike | Woodbury | NY | 11797 | | |
| (Address) | (City) | (State) | (Zip Code) | | |
| CHECK ONE: | | | | | |
| ✓ !certified Public Accountant | | | | | |
| Public Accountant | | | | | |
| B
Accountant not resident in United States or any of its possessions. | | | | | |
| | FOR OFFICIAL USE ONLY | | | | |
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| | | | | | |
*\*Claims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis for the exemption. See Section 240.17a-5(e)(2)*
> **Potential persons who are to respond to the collection of information contained in this form are not required to respond uni ess the form displays a currently val id 0MB control number.**
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#### **OATH OR AFFIRMATION**
I, Dennis Naso , swear (or affirm) that, to the best of my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of FBN Securities, Inc. ----- - - ------------------ ---- - - ----------- --, as of March 31 20 21 are true and correct. I further swear (or affirm) that
neither the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account classified solely as that of a customer, except as follows:
| BIANCA TORRES
Notary Publ!c - State of New York
NO.01TO6403687
Qualffled in Nassau Coumy
My Comm!ssfon Expires Feb 3, 202"' | President
Title |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Notary Public | |
| This report** contains (check all applicable boxes):
0 (a) Facing Page.
✓ (b) Statement of Financial Condition.
(c) Statement oflncome (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.
(g) Computation of Net Capital.
(h) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3.
(i) Information Relating to the Possession or Control Requirements Under Rule 15c3-3.
0 U)
Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3.
consolidation.
0. ([) An Oath or Affirmation.
D (m) A copy of the SIPC Supplemental Report. | A Reconciliation, including appropriate explanation of the Computation ofNet Capital Under Rule 15c3-l and the
0 (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of
D (n) A report describing any material inadequacies found to exist or found to have existed since the date of the previous audit. |
| ° For conditions of confidential treatment of certain portions of this filing, see section 240. J 7a-5(e){3). | |
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#### STATEMENT OF FINANCIAL CONDITION
#### MARCH 31, 2021
[Filed Pursuant to Rule l 7a-5( e)(3) Under the Securities Exchange Act of 1934 as a PUBLIC DOCUMENT]
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## CONTENTS
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## REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of FBN Securities, Inc.
## **Opinion on the Financial Statement**
We have audited the accompanying statement of financial condition of FBN Securities, Inc. (the Company), as of March 31, 2021, and the related notes (collectively referred to as the "financial statement"). In our Opinion, the statement of financial condition presents fairly, in all material respects, the financial position of FBN Securities, Inc. as of March 31, 2021 in conformity with accounting principles generally accepted in the United States of America.
## **Basis for Opinion**
This financial statement is the responsibility of FBN Securities, lnc.'s management. Our responsibility is to express an opinion on FBN Securities, lnc.'s financial statement 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 FBN Securities, Inc. in accordance with the U.S. Federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform.the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
We have seNed as FBN Securities, lnc.'s auditor since 2021.
Woodbury, New York June 28, 2021
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# FBN SECURITIES, INC. STATEMENT OF FINANCIAL CONDITION MARCH 31, 2021
| ASSETS | | |
|----------------------------------------------------------------|-----------------|-----------------|
| Cash and cash equivalents | \$
2,516,087 | |
| Receivable from clearing organizations | 757,166 | |
| Receivable from customers | 971,998 | |
| Property and equipment, at cost, less accumulated depreciation | | |
| and amortization of \$32,382 | | |
| Prepaid expenses | 28,246 | |
| TOTAL ASSETS | | \$
4,273,497 |
| UABIUTlES AND SHAREHOLDERS' EQUITY | | |
| LIABILITIES | | |
| Accounts payable and accrued expenses | \$
1,650,458 | |
| Officer and employee loans | 8,700 | |
| TOT AL LIABILITIES | | \$
1,659,158 |
| COMMITMENTS AND CONTINGENCIES | | |
| SHAREHOLDERS' EQUITY | | |
| Common stock, no par value, 200 shares | | |
| authorized, 66.67 shares issued and outstanding | 6,000 | |
| Additional paid-in capital | 334,406 | |
| Retained earnings | 2,899,933 | |
| | 3,240,339 | |
| Less: 123 .33 shares of common stock in treasury, at cost | (626,000) | |
| TOTAL SHAREHOLDERS' EQUITY | | 2 614 339 |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUJTY | | \$
4,273,497 |
| | | |
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## NOTES TO FINANCIAL STATEMENTS
## FOR THE YEAR ENDED MARCH 31, 2021
# 1. LINE OF BUSINESS
FBN Securities, Inc. (the "Company") is a broker dealer registered with the Securities and Exchange Commission ("SEC") and the Financial Regulatory Authority ("FlNRA") engaged primarily in the execution of stock transactions for customers. The Company is a non-clearing broker and does not handle any customer funds or securities. The Company derives revenues mainly in the form of commissions from the sale of stocks, bonds and options traded on various stock exchanges and consulting income from research conducted on behalf of its clients. The Company maintains offices in New York and Pennsylvania.
## 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
# USE OF ESTHv1ATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management 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. Actual results could differ from those estimates.
## CASH AND CASH EQUIVALENTS
The Company considers cash and all highly liquid instruments with original maturities of three months or less, that are held in the ordinary course of business to be cash equivalents for cash flow statement purposes. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.
#### FINANCIAL INSTRUMENTS
The Company's financial instruments include cash and cash equivalents, certificate of deposit, receivables from customers and clearing organizations, accounts payable and bank debt for which carrying values approximate fair values due to the short maturities of those instruments.
#### PROPERTY AND EQUIPMENT
Property and equipment are stated at cost and consist of furniture, fixtures, equipment and leasehold improvements. Major expenditures for fixed assets and those which substantially increase useful lives are capitalized. Maintenance, repairs, and minor renewals are expensed as incurred. When assets are retired or otherwise disposed of, their costs and related accumulated depreciation and amortization are removed from the accounts and resulting gains and losses are included in income.
#### RECEIVABLE FROM CLEARING ORGANIZATIONS
The Company maintains brokerage accounts with clearing organizations through which all trading transactions are cleared. The receivables are with these same organizations. The Company is subject to credit risk if these organizations are unable to repay the receivable or return securities in their custody.
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## NOTES TO FINANCTAL ST A TEMENTS
## FOR THE YEAR ENDED MARCH 31, 2021
## 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
## INCOME TAXES
The Company follows the prov1s1ons of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC), as revised, on Uncertainty in Income Taxes. The guidance imposes a threshold for detennining when an income tax benefit can be recognized for financial statement purposes. The threshold now imposed for financial statement reporting generally is higher than the threshold imposed for claiming deductions in income tax returns. Under the revised guidance, the tax benefit from an uncertain tax position can be recognized for financial statement purposes only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities including the resolution of appeals or litigation processes, if any. The revised rules also provide guidance on classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and income tax disclosures. Management believes there were no material uncertain tax positions at either March 31, 2020 or March 31, 2021.
The Company files U.S. federal income tax returns and separate state and local income tax returns in New York, Florida, Georgia, California and Pennsylvania. Returns filed in these jurisdictions for tax years ended on or after March 31, 2018 are subject to examination by the relevant taxing autl1orities.
#### OFF-BALANCE SHEET RISK
In the normal course of business, the Company's customer and correspondent clearance activities involve the execution, settlement, and financing of various customer securities transactions. These activities may expose the Company to off-balance-sheet risk in the event the customer or clearing agent is unable to fulfill its contracted obligations and the Company has to purchase or sell the financial instrument underlying the contract at a loss. As of March 31, 2021, the Company was not exposed to such risk.
#### CONCENTRATION OF CREDIT RISK
The Company is engaged in various trading and brokerage activities whose counterparties primarily include broker-dealers, and other financial institutions. In the event counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty or issuer of the instrument. It is the Company's policy to review, as necessary, the credit standing of each counterparty with which it conducts business. As of March 31, 2021, the Company was not exposed to such risk.
#### SUBSEQUENT EVENTS
The Company has performed an evaluation of events that have occurred subsequent to March 31, 2021, and through June 28, 2021, the date of the filing of this report. There have been no material subsequent events that occurred during such period that would require disclosure in this report or would be required to be recognized in the financial statements as of March 31, 2021.
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# NOTES TO FINANCIAL ST A TEMENTS
# FOR THE YEAR ENDED MARCH 31, 2021
## 3. RECEIVABLES FROM CLEARING ORGANIZATIONS AND CUSTOMERS
The receivable balance from the clearing organization and customers have not historically required any write-offs for credit losses and are stated at the amount management expects to collect from outstanding balances. Based on management's evaluation of collectability, an allowance for doubtful accounts is not required.
# 4. PROPERTY AND EQUIPMENT
Major classes of property and equipment consist of the following:
| Furniture, fixtures and equipment | estimated useful
life-years
5-7 | \$
32,382 |
|-------------------------------------------------------------------------------|---------------------------------------|--------------|
| Less: Accumulated depreciation and amortization
Net property and equipment | | 32,382 |
## 5. LOANPAYABLE
The Company has a revolving line of credit with a bank that calls for principal and interest (at prime plus 1.56%) payments that vary from month to month depending on the outstanding balance. During the fiscal year and at March 31, 2021 there was no balance outstanding on the revolving line of credit.
## 6. COlVlMITMENTS AND CONTINGENCIES
## LEASE OBLJGA TIONS
Effective January 1, 2019 the Company adopted ASU 2016-02 (ASC 842), Leases. The Company had a lease in a non-cancellable operating lease for office space which expired during the current year. The Company determines if an arrangement is a lease, or contains a lease, at inception of a contract and when the terms of an existing contract are changed. The Company recognizes a lease liability and a right of use (ROU) asset at the commencement date of the 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 rate of our lease is not readily determinable and accordingly, we used our incremental borrowing rate based on the infonnation available at the commencement date for the lease. The Company's incremental borrowing rate of 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 and is presently assumed to be 5.25%. The ROU asset is subsequently measured throughout the lease term at the amount of the remeasured 1 ease liability ( i.e., present value of the remaining lease payments), plus unamortized initial direct costs, plus or minus any prepaid or accrued lease payments, less the unamortized balance of lease incentives received, and any impairment recognized. Lease cost for lease payments is recognized on a straight-line basis over the lease term.
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## NOTES TO FINANCIAL STATEMENTS
## FOR THE YEAR ENDED MARCH 31, 2021
## 7. NET CAPITAL REQUIREMENTS
The Company is subject to the SEC Uniform Net Capital Rule (SEC Rule 15c3-l), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital both as defined, shall not exceed 15 to 1 (and the rule of the "applicable" exchange also provides that equity capital may not be withdravm or cash dividends paid if the resulting net capital ratio would exceed 10 to 1 ). At March 31, 2021, the Company had net capital of \$2,545,642, which was \$2,435,031 in excess of its required net capital of \$110,611. The Company's aggregate indebtedness to net capital ratio was .65 to 1.00.
# 8. 40l(K) PROFIT SHARING PLAN
The Company sponsors a 40l(K) profit sharing plan that covers all eligible employees. Under the 401(K) salary reduction provisions of the plan, employees may elect to defer part of their compensation, subject to statutory limitations, and have the deferred amounts contributed to their retirement accounts, which vest immediately.
## 9. RISK OF OPERATIONS
The United States continues to be in the midst of a national health emergency related to a virus, commonly known as novel corona virus ( covid-19). The overall consequences of covid-19 on a national, regional and local level remain unknown, but may have the potential to result in a significant economic impact. The impact of this situation of the Company and its future results and financial position remains undetenninable.
Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.