# MARCO POLO SECURITIES INC. X-17A-5/A (2020-04-01) — Broker-dealer annual report - Company: MARCO POLO SECURITIES INC. - Form: X-17A-5/A - Filed: 2020-04-01 - Period: 2019-12-31 - Accession: 0001075916-20-000004 - CIK: 1075916 - File #: 8-51480 - Material weakness: No - Auditor: Lerner and Sipkin CPAs, LLP - Auditor location: New York, NY - Contact: Alexander Mack - Phone: 917-923-1478 - Signed by: Steven Carlson (Chairman and Director) Original filing: https://www.sec.gov/Archives/edgar/data/1075916/000107591620000004/mpssofc2019.pdf --- {0}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 # **ANNUAL AUDITED REPORT FORM X-17A-5 PARTIII** | | 0MB A~PROVAL | |--------------------------|---------------------------| | 0MB Number: | 3235-01 23 | | Expires: | August 31 , 2020 | | Estimated ave~age burden | | | | hours per response 12.00 | | | | | | SEC FILE NUMBER | | | I
&-51480 | | | I | **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 BEGINNINGO1 /O1 /19 | AND ENDING 12/31/19 | | | | | |-------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------|--|-------------------------|----------------|-------------------| | MM/DD/YY | | | -----------
MM/D0/YY | | | | | A. REGISTRANT IDENTIFICATION | | | | | | NAME oF BROKER-DEALER: Marco Polo Securities, Inc.
ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | | | OFFICIAL USE ONLY | | | | | | | FIRM 1.0. NO. | | 144 East 44th Street, 8th Floor | | | | | | | | (No. and Street) | | | | | | New York | NY | | | 10017 | | | (City) | (State) | | | (Zip ode) | | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
Clifford Goldman | | | | (917) 881-7973 | | | | | | | (Area Code | Telephone Number) | | | B. ACCOUNTANT IDENTIFICATION | | | | | | Lerner & Sipkin CPAs, LLP | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report* | | | | | | | (Name - if individual, state last. first. middle name) | | | | | | | 132 Nassau Street, Ste. 1023 New York | | NY | | 10038 | | (Address) | (City) | | (State) | | (Zip Code) | | CHECK ONE: | | | | | | | I ti I
certified Public Accountant | | | | | | | | | | | | | | B Public Accountant | Accountant not resident in United States or any of its possessions. | | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | | | | | | | | | *\*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 unless the form displays a currently valid 0MB control number.** {1}------------------------------------------------ # **OATH OR AFFIRMATION** | 1, Steven Carlson | , swear (or affirm) that, to the best of | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | --
Marco Polo Securities, Inc.
- | my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of
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, as | | of December 31 | are true and correct. I further swear (or affirm) that | | classified solely as that of a customer, except as follows: | neither the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account | | DANIELS. IBARAA
NOTARY PUBLIC-STATE OF NEW YORK | | | No Ol 1B6263158 | | | Qualified in New York County
My CommlHIOR IHt13ires 06-04·2020 | Chairman & Director | | | Title | | Notary Public
This report** contains (check all applicable boxes):
E] (a) Facing Page.
E] (b) Statement of Financial Condition.
§ (d) Statement of Changes in Financial Condition.
§ (g) Computation of Net Capital.
consolidation.
(I) An Oath or Affirmation.
(m) A copy of the SIPC Supplemental Report.
~ | 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).
(e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital.
(f) Statement of Changes in Liabilities Subordinated to Claims of Creditors.
(h) Computation for Determination of Reserve Requirements Pursuant to Rule I 5c3-3.
(i) Information Relating to the Possession or Control Requirements Under Rule I 5c3-3.
D G) A Reconciliation, including appropriate explanation of the Computation of Net Capital Under Rule I 5c3-1 and the
Computation for Determination of the Reserve Requirements Under Exhibit A of Rule I 5c3-3.
0 (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of
(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. 17a-5(e){3). | | | | {2}------------------------------------------------ ![](_page_2_Picture_0.jpeg) 132 Nassau Street, New York. NY 10038 Tel 212.571.0064/Fax 212.571.0074 Jay Lerner, C.P.A. jlerner@lernersipkin.com Joseph G. Sipkin, C.P.A. jsipkin@lernersipkin.com ### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders of Marco Polo Securities, Inc. 144 East 44th Street, 8th floor New York, NY 10017 ### **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of Marco Polo Securities, Inc. as of December 31, 2019, 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 Marco Polo Securities, Inc. as of December 31, 2019 in conformity with accounting principles generally accepted in the United States of America. ### **Basis for Opinion** The financial statement is the responsibility of Marco Polo Securities, Inc.'s management. Our responsibility is to express an opinion on Marco Polo Securities, Inc.'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 Marco Polo 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 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 regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and signlficant 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. ~ *l~ CP.«fa* '-'-" Lerner & Sipkin CPAs, L LP Certified Public Accountants **(NY)** We have served as Marco Polo Securities, Inc. 's auditor since 2017. New York, NY January 27, 2020 {3}------------------------------------------------ # **MARCO POLO SECURITIES, INC. (A Wholly-Owned Subsidiary of Magellan Global Inc.) STATEMENT OF FINANCIAL CONDITION AS OF DECEMBER 31, 2019** #### **Assets** | Cash | \$
712,422 | |----------------------------------------------------------------|---------------| | Commissions receivable (net) | 126,828 | | Prepaid expenses | 11,954 | | Total assets | \$
851,204 | | LIABILITIES AND STOCKHOLDER'S EQUITY | | | Liabilities | | | Accounts payable and accrued liabilities | \$
87,706 | | Total liabilities | 87,706 | | Stockholder's equity | | | Preferred stock - \$1 ,000 par value; 1,000 shares authorized; | | | shares issued and outstanding - none | | | Common stock - no par value; 200 shares authorized; | | | 100 shares issued and outstanding | 80,704 | | Additional paid-in capital | 363,889 | | Retained earnings | 318,905 | | Total stockholder's equity | 763,498 | | Total liabilities and stockholder's equity | \$
851,204 | The accompanying notes are an integral part of these financial statements. {4}------------------------------------------------ ## **MARCO POLO SECURITIES, INC. (A Wholly-Owned Subsidiary of Magellan Global Inc.) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2019** ### **NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** ### **Organization** Marco Polo Securities Inc. (the "Company") is a wholly-owned subsidiary of Magellan Global Inc. (the "Parent"). The Company is a broker-dealer registered with the Securities and Exchange Commission ("SEC"), a member of FINRA, a member of the Securities Investor Protection Corporation ("SIPC"), and a member of the National Futures Association ("NFA") as an introducing broker. The Company does not carry accounts for customers, or perform custodial functions, related to securities. The Company's primary business is offering investment banking and advisory services, and providing private placement services. Accordingly, the Company claims exemption from SEC Rule 15c3-3 under exemptive provision (k)(2)(i). The Company is also engaged in providing "Chaperoning" services under SEC Rule 15a-6. ### **Use of Estimates** The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. ### **Cash** At times, cash may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation ("FDIC") insurance limits. #### 3 {5}------------------------------------------------ # **MARCO POLO SECURITIES, INC. (A Wholly-Owned Subsidiary of Magellan Global Inc.) NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2019** ### **NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)** #### **Allowance for Doubtful Accounts** The Company assesses the financial strength of its customers. Periodically, the Company evaluates its accounts receivable and provides an allowance for doubtful accounts equal to the estimated uncollectible accounts. The Company's estimate is based on a review of the current status of the individual accounts receivable. As a general rule, a 50% allowance is taken on items older than 90 days and a full allowance is taken on items that have aged more than 180 days, however discretion is used based on the circumstances of each account. As of December 31 , 2019, the allowance for doubtful accounts was (\$25,000) in aggregate. #### **Revenue Recognition** Securities transactions and related commission revenue are recorded on a trade-date basis. Technology services revenue is recognized as the service is provided. Investment banking income includes fees earned for financial advisory services, which are recorded as earned in accordance with the underlying agreement. Placement fees are earned at the time the placement is completed. #### **Income Taxes** The Company has elected to be treated as an "S" Corporation under the provisions of the Internal Revenue Code and New York State tax regulations. Under the provisions, the Company does not pay federal or state corporate income taxes on its taxable income. Instead, the stockholder is liable for Individual income taxes on his respective share of the Company's taxable income. The Company continues to pay New York City general corporation taxes. The Company files its tax return on a consolidated basis with the Parent entity, Magellan Global Inc. The income tax obligation to the IRS, if any, belongs to the Parent company Magellan Global Inc. {6}------------------------------------------------ ### **MARCO POLO SECURITIES, INC. (A Wholly-Owned Subsidiary of Magellan Global Inc.) NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2019** ### **NOTE 2 - RELATED PARTY TRANSACTIONS** The Company incurred costs consisting of reimbursable expenses with its sister company, Pi Capital International LLC ("Pi Capital"), a wholly owned subsidiary of Magellan Global Inc. Amounts paid to Pi Capital as of December 31 , 2019 and for the year then ended total \$97,900 for expense reimbursements. ### **NOTE 3** - **OFF-BALANCE SHEET RISK AND CONCENTRATION OF CREDIT RISK** In the normal course of its business, the Company indemnifies and guarantees certain service providers, such as clearing and custody agents, trustees, and administrators, against specified potential losses in connection with them acting as an agent of, or providing services to, the Company. The Company also indemnifies some customers against potential losses incurred in the event specified third-party service providers, including sub-custodians and third-party brokers, improperly execute transactions. The maximum potential amount of future payments that the Company could be required to make under these indemnifications cannot be estimated. However, the Company believes that it is unlikely it will have to make material payments under these arrangements and has not recorded any contingent liability in the financial statement for these indemnifications. ### **NOTE 4 - SIGNIFICANT CUSTOMERS** At December 31 , 2019 and for the year then ended, 43% of gross revenues was derived from three customers. These three customers accounted for 17.2%, 15.3% and 10.2% of gross revenues, respectively. ### **NOTE 5 - NET CAPITAL REQUIREMENTS** The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule ("SEC Rule 15c3-1"), 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. The rule also provides that equity capital may not be withdrawn, or cash dividends paid, if the resulting net capital ratio would exceed 10 to 1. The Company is also subject to the net capital requirements of CFTC Regulation 1.17 and requirements of the National Futures Association. At December 31 , 2019, the Company has regulatory net capital of \$624,716, which exceeds the Company's minimum regulatory net capital requirement of \$250,000 (which is net capital requirement of the SEC Rule 15c3-1) by \$374,716. The Company's percentage of aggregate indebtedness to net capital is 14.04% as of December 31, 2019. ### **NOTE6-SUBSEQUENTEVENTS** The Company has evaluated subsequent events to determine if events or transactions, occurring through the date the financial statement was available to be issued, require adjustment to or disclosure in the financial statement. As of December 31 , 2019, the were no material subsequent events to report. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.