# FARINA & ASSOCIATES, INC. X-17A-5 (2023-05-30) — Broker-dealer annual report

- Company: FARINA & ASSOCIATES, INC.
- Form: X-17A-5
- Filed: 2023-05-30
- Period: 2023-03-31
- Accession: 0000857504-23-000001
- CIK: 857504
- File #: 8-41953
- Type: Broker-dealer
- Material weakness: Yes
- Auditor: Raines and Fischer LLP
- Auditor location: New York, NY
- Contact: Alan Mitchell Krim
- Phone: 5165261586
- Signed by: Joseph W Stevens (President/CEO)

Original filing: https://www.sec.gov/Archives/edgar/data/857504/000085750423000001/farinapublic23.pdf

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

# **ANNUAL REPORTS FORM X-17A-5 PART** Ill

SEC FILE NUMBER 8-41953

OMB APPROVAL OMB Number: 3235-0123 Expires: Oct. 31, 2023 Estimated average burden hours per response : 12

FACING PAGE

Information Required Pursuant to Rules 17a-S, 17a-12, and 18a-7 under the Securities Exchange Act of 1934

FILING FOR THE PERIOD BEGINNING 04/01/22

MM/DD/YY

MM/DD/YY

A. REGISTRANT IDENTIFICATION

# NAME OF FIRM: FARINA AND ASSOCIATES INC.

TYPE OF REGISTRANT {check all applicable boxes):

0 Broker-dealer D Security-based swap dealer D Major security-based swap participant 0 Check here if respondent is also an OTC derivatives dealer

AND ENDING 03/31/23

ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.)

| C/0 BAYAT CONSULTING, 14 WALL STREET, 20TH FLOOR                                                        |                               |                 |                                |  |  |  |  |
|---------------------------------------------------------------------------------------------------------|-------------------------------|-----------------|--------------------------------|--|--|--|--|
| (No. and Street)                                                                                        |                               |                 |                                |  |  |  |  |
| NEW YORK                                                                                                | NY                            |                 | 10005                          |  |  |  |  |
| (City)                                                                                                  | (State)                       |                 | (Zip Code)                     |  |  |  |  |
| PERSON TO CONTACT WITH REGARD TO THIS FILING                                                            |                               |                 |                                |  |  |  |  |
| ALAN KRIM                                                                                               | 516-526-1586                  |                 | akrim@farinaand associates.com |  |  |  |  |
| (Name)                                                                                                  | (Area Code- Telephone Number) | (Email Address) |                                |  |  |  |  |
| B. ACCOUNTANT IDENTIFICATION                                                                            |                               |                 |                                |  |  |  |  |
| INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*<br>RAINES AND FISCHER LLP     |                               |                 |                                |  |  |  |  |
| (Name- if individual, state last, first, and middle name)                                               |                               |                 |                                |  |  |  |  |
| 555 FIFTH AVE-STE 901                                                                                   | NEW YORK                      | NY              | 10017                          |  |  |  |  |
| (Address)                                                                                               | (City)                        | (State)         | (Zip Code)                     |  |  |  |  |
| NOV 5 2009                                                                                              |                               | 3760            |                                |  |  |  |  |
|                                                                                                         |                               |                 |                                |  |  |  |  |
| ~~(P<br>)0 fa~p p~Uc bl )~<br>ti oo No~booOopp,ooblo)<br>PC<br>te<br>IC<br>e~g~~~tr~a io<br>~~<br>gi st |                               |                 |                                |  |  |  |  |

\* 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-S(e)(l)(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.

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# OATH OR AFFIRMATION

|  | JOSEPH W STEVENS |  |  |
|--|------------------|--|--|
|  |                  |  |  |

1, JOSEPH w STEVENS swear (or affirm) that, to the best of my knowledge and belief, the

financial report pertaining to the firm of FARINA AND ASSOCIATES INC. as of 3/31 2~ 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 that of a customer.

L'\r-1 G DOUGLAS Notary Pul>ftc, Stirul of New'rbrt Reg No 01~95 QuaJii'Jed in NaS\$au C<lunty Commission Expires 4/25/2024

# This filing\*\* contains (check all applicable boxes):

- li!!il (a) Statement of financial condition.
- Ml (b) Notes to consolidated statement of financial condition.
- D (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).
- D (d) Statement of cash flows.
- 0 (e) Statement of changes in stockholders' or partners' or sole proprietor's equity.
- 0 (f) Statement of changes in liabilities subordinated to claims of creditors.
- 0 (g) Notes to consolidated financial statements.
- 0 (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable.
- 0 (i) Computation of tangible net worth under 17 CFR 240.18a-2.
- 0 (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.
- 0 (m) Informat ion relating to possession or control requirements for customers under 17 CFR 240.15c3-3.
- 0 (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.
- 0 (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-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 exist.
- 0 (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition.
- ~ (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.
- D (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as appl icable.
- 0 (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- 0 (t) Independent public accountant' s report based on an examination of the statement of financia l condition .
- 0 (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.
- 0 (v) Independent public accountant's report based on an examination of certain statements in the compl iance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- 0 (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.
- 0 (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-le or 17 CFR 240.17a-12, as applicable.
- 0 (y) Report describing any material inadequacies found to exist or found t o have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). <sup>0</sup>(z) Other:---- - - - ----- - - - ---- - ----- - ---- ------- -
- 
- *\*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5{e)(3)* or *17 CFR 240.18a-7(d)(2), as applicable.*

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# FARINA & ASSOCIATES, INC.

Statement of Financial Condition For the Year Ended March 31, 2023

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# FARINA & ASSOCIATES, INC.

## MARCH 31,2023

# Table ofContents

| Report of Independent Registered Public Accounting Firm |     |
|---------------------------------------------------------|-----|
| Statement of Financial Condition                        |     |
| Notes of Financial Statement                            | 3-5 |

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# **RAINES AND FISCHER LLP** CERTiFIED PUBLIC ACCOUNTANTS

555 FIFTH VEN E. 91;., FLOOR NE\fJYORK, I'J Y ·;Q01'7

# REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders of Farina & Associates, Inc.:

## Opinion on the Financial Statement

We have audited the accompanying statement of financial condition of Farina & Associates, Inc (the ·'Company"), as of March 31 , 2023 , and the related notes (collectively referred to as the financial statement). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of March 31 , 2023, in conformity with accounting principles generally accepted in the United States of America.

## Basis fot· Opinion

This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's fin ancial 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 the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or ti·aud. Our audit included performing procedures to assess the risks of material misstatement of the financi al statement, whether due to error or ti·aud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. 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 statement. We believe that our audit provides a reasonable basis for our opinion.

We have served as the Company's auditor since 2020.

New York, New York May 30, 2023

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**FARINA & ASSOCIATES INC.** 

# **STATEMENT OF FINANCIAL CONDITION MARCH 31 , 2023**

| ASSETS                                       |               |
|----------------------------------------------|---------------|
| Cash                                         | \$<br>41 ,814 |
| Due From Clearing Broker                     | 93,124        |
| Commissions recievable                       | 120,691       |
| Other Assets                                 | 1 '184        |
| Total assets                                 | \$<br>256,813 |
|                                              |               |
|                                              |               |
|                                              |               |
| LIABILITIES AND STOCKHOLDERS' EQUITY         |               |
| Liabilities:                                 |               |
| Accounts payable and accrued expenses        | 57,946        |
| Total liabilities                            | 57,946        |
| Commitments and Contingencies                |               |
| STOCKHOLDERS' EQUITY:                        |               |
| Common Stock, no par value, 200 shares       |               |
| authorized, 10 shares issued and outstanding | 30,000        |
| Additional paid-in capital                   | 264,366       |
| Retained earnings                            | (95,499)      |
|                                              |               |
| TOTAL STOCKHOLDERS' EQUITY:                  | 198,867       |
| TOTAL LIABILITIES STOCKHOLDERS' EQUITY:      | \$<br>256,813 |

See accompanying notes to financial statements

2

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## FARINA & ASSOCIATES, INC.

### NOTES TO FINANCIAL STATEMENT

#### MARCH 31, 2023

#### NOTE 1-ORGANIZATION AND DESCRIPTION OF BUSINESS:

Farina & Associates, Inc. (The "Company") is a New York corporation formed in 1989, for the purpose of conducting business on the floor of the New York Stock Exchange ("NYSE"). The Company is registered as a broker-dealer with the Securities and Exchange Commission ("SEC") and is a member of both the Financial Industry Authority, Inc. ("FINRA") and the Securities Investors Protection Corporation ("SIPC").

The Company earns commissions as an introducing broker of securities transactions. The clearing broker carries all of the accounts of the customers and preserves all related books and records as are customarily kept by a clearing broker/dealer.

#### NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

#### Basis of Presentation

The accompanying financial statements have been prepared on the accounting in accordance with accounting principles generally accepted in the United States of America ("GAAP ").

#### Accounts Receivable

The Company carries its accounts receivable at cost less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts based on history of past write-offs and collections and current credit conditions. No allowance for doubtful accounts was required at March 31, 2023.

#### Revenue Recognition

Securities transactions (and the recognition of related income and expenses) are recorded on a trade date basis. During May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09. "Revenue from Contracts with Customers (Topic 606)." ASU No. 2014-09 establishes principles for recense upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. During 2015 and 2016, the FASB also issued ASU No. 2015-14, which defers the effective date of ASU No. 2014-09; ASU No. 2016-08, " Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifies the implementation guidance on principal versus agent considerations in Topic 606; ASU No. 2016-10. "Identifying Performance Obligations and Licensing", which clarification of performance obligations and the licensing implementation guidance; ASU No. 2016- 12, "Narrow - Scope Improvements and Practical Expedients" and ASU No. 2016-20, "Technical Corrections and Improvements to Topic 606", which both affect narrow aspects of Topic 606. Topic 606 (as amended) is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The company may elect to apply the guidance earlier than fiscal years beginning after December 15, 2016. The amendments may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. The Company has assessed the effect that Topic 600 (as on its results of operations, financial position and has determined that all revenues have been fully earned as of March 31, 2023. The Company's execution transactions generally settle T+2, upon which no performance obligations remain to fuffilt the Company's obligations to its customers.

### During the twelve months ended March 31, 2023, three customers accounted for 20.57%, respectively for a total of 50.21% of total revenue.

#### Income Taxes

The Company has elected to be treated as an "S" Corporation under the Internal Revenue Code and New York State tax regulations. I nder the provisions, the Company does not pay federal or state corporate income taxes on its taxable income. Instead the stockholders are liable for individual income taxes on their respective shares of the Company's taxable ineome. The Company continues to pay New York City general corporation taxes.

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## NOTES TO FINANCIAL STATEMENT MARCH 31, 2023

## NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

### Use of Estimates

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported anounts of assets and the diselosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Accordingly, actual results could differ from those estimates and such differences could be material.

#### NOTE 3 - CONCENTRATIONS 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 Company is solely dependent upon daily bank balances and the strength of the financial institution. The Company has not incurred any losses on these acounts. At March 31, 2023, the amount in excess of insured limits was \$0.

### NOTE 4 - FINANCIAL STATEMENTS WITH OFF BALANCE SHEET CREDIT RISK:

As a securities broker, the Company is engaged in buying and selling securities for a diverse group of institutional and individual investors. The Company introduces these transactions for clearance to another broker-dealer on a fully disclosed basis.

The Company's exposure to credit risk associated with non-performance of customers in fulfilling their contractual obligations pursuant to securities transactions can be directly impacted by volatile trading markets which may impair customers' ability lo their obligations to the Company and the Company's ability to liguidate the collateral at an amount equal to the original contracted amount. The agreen the Company and its clearing broker provides that the Company is obligated to assume any exposure related to such non-performance by its customers.

The Company seeks to control the aforementioned risks by requiring customers to maintain margin collateral in compliance with various regulatory requirements and the clearing broker's internal guidelines. The Company monitors its customer activity by reviewing information it receives from its clearing broker on a daily basis, and requiring customers to deposit additional collateral, or reduce positions, when necessary.

#### NOTE 5 - NET CAP ITAL REQUIREMENTS:

The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (SEC Rule 15c2-1), 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 15 to 1. Rule 15c3-1 also provides that equity capital may not be withdrawn paid if the resulting net capital ratio would exceed 10 to 1. At March 31, 2023, the Company had net capital of \$163,059, which was S158,059 in excess of its required of 55,000. The Company's percentage of aggregate indebtedness to net capital was 35 440/6

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### FARINA & ASSOCIATES. INC.

## NOTES TO FINANCIAL STATEMENT MARCH 31, 2023

## NOTE 6 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS:

The Financial Accounting Standards Board (the "FASB") has established the Accounting Standards Codification" or "ASC") as the authoritative source of generally accepted accounting principles ("GAAP") recognized by the FASB. The principles embodied in the Codification are to be applied by non governmental of financial statements in accordance with GAAP in the United States. New accounting pronomeed into the ASC through the issuance of Accounting Standards Updates ("ASUs").

For the year ending March 31, 2023, various ASUs issued by the FASB were either newly issued or had effective implementation dates that would require their provisions to be reflected in the fear the year that ended. The Company has either evaluated or is currently evaluating the implications, if any, of each of these pronouncements and they may have on the Company's financial statements. In most cases, management has determined that the pronouncement has either limited or no application to the Company and, in all cases, implementation would not have a material impact on the financial statements taken as a whole.

#### NOTE 7 - SUBSEQUENT EVENTS:

The company has evaluated events and transactions that occurred through May 30, 2023, which is the date the financial statements were available to be issued, for possible disclosure and recognition in the financial statements


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