# BENCHMARK INVESTMENTS, INC. X-17A-5 (2020-04-13) — Broker-dealer annual report - Company: BENCHMARK INVESTMENTS, INC. - Form: X-17A-5 - Filed: 2020-04-13 - Period: 2019-12-31 - Accession: 0001103223-20-000005 - CIK: 1103223 - File #: 8-52280 - Material weakness: No - Auditor: Romeo & Chiaverelli, LLC - Auditor location: Bala Cynwyd, PA - Contact: Philip Ciantro - Phone: 6462269300 - Signed by: Michael Nessim (Chief Executive Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1103223/000110322320000005/1PublicBMI2019AnnualAudit.pdf --- {0}------------------------------------------------ l lNITEOSTATES SECllRITIESANOEXCHANGECOMMISSION W ashington, O.C. 20549 OMB APPROVAL OMB Number; 3235·0123 Expires: August 31, 2020 Estimated average burden hours rres nse ...... 1.2.00 SEC FILE NUMBER 8-52280 # **ANNUAL AUDITED REPORT FORM X-17A·5 PART Il l** FACING PAGE Information Required of Brokers and Dealers Pursuant to Section 17 o.f the Secur ities Exchange Act of 1934 and Rule 17a-5 T hereunder | REPORT FOR THE PERIOD BEGINNING 10/01/2018 | | AND ENDING 12/31 /2019
~~~~~~~~~~~ | | | |------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------|---------------------------------------|-------------------------------------|--| | | MM/DDIYY | | MM/0[)/YY | | | | A. REGISTRANT IDENTIFICATION | | | | | NAME OF BROKER-DEALIER: Benchmark Investments Inc. | | | OFFICIAL USE ON l Y | | | ADDRESS OF PRINCIPAL iPLACE OF BUS !NESS: (Do nol use P.O. Box No.) | | | FIRM 1.0. NO. | | | 175 Country Club Drive Bldg 4000 | | | | | | | (No. and Street) | | | | | Stockbridge | GA | | 30281 | | | | (:\tJtC:) | | (l.tp Code) | | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
Ph1hp Coan1ro | | 646-226-9300 | | | | | | | I Arca C:o1k - I eleph.inc Numher l | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in 1his Report•
Romeo & Chiaverelli, LLC | (N:tml? - if 111dMd11al. st ult /us t.Jirst. n11ddle no me) | | | | | One Bala Avenue | Bala Cynwyd | PA | 19004 | | | (Addn:s~) | (("11y) | (S1a1c) | | | | CHECK ON E: | | | | | | l,,tjcertitied Public Accountant
B
Public Accountant | Accountant not resident in Uni1 ed States or any of its possessions. | | | | | | | | | | | | FOR OFFICIAL USE ONLY | | | | •C/uim.v for 1:.n:mp1io11 from f/1e requiremel/f 1/1tn 1he u1111uu/ rc:pon be co1·ered by 1he opi11io11 o.f u11 i11depe11dew public ucco111,,u111 11111s1 be .1 uppor1ed by u s1u1e111e111 q(ft1c1s u11d circums1u11ces rdii:d 011as1 he busis for 1he ~emp1io11. See Sec1io11140./7u-5(ej{1) > Potential persons who are to respond to the collect! on of information contained In this form are not required to respond unless the form displays a currently valid 0 MB control number. SEC 1410 (11-05) {1}------------------------------------------------ #### **OATH OR AFFIRMATION** | J. Michael Nessim | , swear (or affirm) t hal, to the best <>f | |----------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | Benchmark Investments Inc. | my knowledge and belief the accompanying financial statement and Sllpporting schedules pertaining to the firm of
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' as | | of December 31 | ---
, are true and correct. I further swear (or affirm) that
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· | | classified se>lely 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 | | | | | | Signature | | | Chief Executive Officer
DIDIER IRABIZI
Ti tie
NOT ARY PUBLIC, STATE OF NEW YORK
NO. 01IR6374844
Qualified in Su.tTolk County
Term expires May 7, 2022 | | This report 0
contains (check all applicable boxes):
0 (a) Fa9i
ns P11gc.
0
(b) Statement of Financial Condition. | | | ~ (d) Statement of Changes in Financial Condition. | 0 (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). | | 0
0 (f) Statement of Changes in Liabilities Subordinated to Claims of Creditors.
( g) Computation of Net Capital. | (e) Statement of Changes in Stockholders· Equity or Partners· or Sole Proprietors' Capital. | | ¥ | (h) Computation for Determination of Reserve Requirements Pursuant to Rule I 5c3-3. | | | (i) Information Relating, to the Possessi<>n or Control Requirements Under Rule 15c3-3.
0 (j) A Reconciliation, including appropriaite explanation of the Computation of Net Capital Under Rule I 5c3-J and the
Computation for Determination of the Reserve Requirements Under Exhibit A of Rule I 5c3-3. | | consolidation. | 0 (k) A Reconciliation between the audited and unaudited Statements of Financial C()ndition with respect to methods of | | ~ (I)
An Oath or Affirmation.
0 (m) A copy of the SJPC Supplemental Report. | | | | 0 (n) A report describing any material inadequacies found to exist or found to have existed since the date .of the previous audit. | *\*\*For conditions* <~l *co1!fiden1ia/ 1rea1111e/lf of certain portions of 1his* .fl *ling. see sec1in11 240. 17a-j(e)( 3).* {2}------------------------------------------------ # Financial Statements and Report oflndependent Registered Public Accounting Fim1 BENCHMARK INVESTMENTS INC. DECEMBER 31, 2019 {3}------------------------------------------------ #### **ROMEO & CHIAVERELLI CERTIFIED PUBLIC ACCOUNTANTS ONE BALA AVENUE SUITE 234 BALA CYNWYO, PA 19004** #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING Fl RM** To the Board of Directors: Benchmark Investments, Inc. #### **Opinion on the Financial Statements** We audited the accompanying statement of financial condition of Benchmark Investments, Inc. (the "Company") as of December 31 , 2019 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 December 31 , 2019 in conformity with accounting principles generally accepted in the United States of America. #### **Change in Accounting Principle** As discussed in Note 2 to the financial statement, the Company has changed its method of accounting for leases due to the adoption of Accoun~ing Standards Update 2016-02, Leases. #### **Basis of Opinion** This financial statement is the responsibility of the Company' s management Our responsibility is to express an opinion on the Company'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 the Company in accordance with 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. Tlhose 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 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. Romeo & Chiaverelli, LLC Bala Cynwyd, Pennsylvania April 10, 2020 {4}------------------------------------------------ # BENCHMARK INVESTMENTS INC. *Statement of Financial Condition* December 31, 2() 19 | Assets | | |-----------------------------------------------------|-------------------| | Cash | \$
158
269, | | Due from clearing firm | 532,082 | | Restriicted Cash | 50,032 | | Prepaid expenses | 90,296 | | Right of use lease assets | 530,661 | | Deferred Tax Asset | 3,493 | | Other assets | 61 658 | | Total assets | \$
115371380 | | Liabi/it ies and Stockholder Equity | | | Accounts payable and accrued expenses | \$
118,899 | | Commissions payable | 429,889 | | Due to related party | 71,557 | | Lease liability | 539,675 | | Deferred Clearing Incentive Fee | 100,000 | | Total liabilities | l,260,020 | | Stockholder's equity | | | Common stock, 1,000 shares authorized, no par value | | | 100 shares issued and outstanding | 1,000 | | Additional paid-in-capital | 397,155 | | Retained earnings | {120,795) | | Total stockholder's equity | 277,360 | | Total liabilities and stockholder's equity | \$
1,537,380 | *SeeAccompanying Notes toFinandal Statements* {5}------------------------------------------------ # l. Business and Summary of Significant Accounting Policies ### Business Benchmark Invesnnents, Inc. ("the Company") is a registered broker-dealer with the Securities and Exchange Commission ("SEC"). The Company introduces its customers' business on a fully disclosed basis to a clearing broker, who clears and carries the Company's customer accounts. The Company underwent a change in ownership in the current fiscal year. In February 20 l 9, Manhattan Harbor Capital LLC, executed an agreemernt to purchase 90 Shares of Class A Stock of Benchmark Investments, Inc. from its parent company, Financial Concierge Concepts. This constituted a 90% ownership stake in Benchmark Investments with the remaining 10% equity left with Financial Concierge Concepts. In October 2019, Manhattan Harbor CapitaJ LLC entered into an agreement with Financial Concierge Concepts to purchase the remaining 10 shares. # Basis of Presentation The Company's financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). Revenue is recognized w hen earned, while expenses and los.ses are recognized when incurred. ### Cash and Cash Equivalents. The Company maintains it:s bank accounts in high credit qua! ity institutions. Balances at times may exceed federally insured limits. # Receivable from Clearing Broker and Restricted Cash The Company bas an agreement with a clearing broker to execute and clear, on a fully disclosed bas.is, customer accounts of the Company. In accordance with this agreement, the Company is required to maintain a deposit in cash or securities. The Company has a deposit with its clearing broker, which is refundable to the Company should it discontinue its arrangement. Amotmts receivable from its clearing organization consist of commissions receivable. The receivable is considered fully collectible and n-0 allowance is required. ### Consulting Fee Income The Compan y enters into contracts w1th other broker-dealers to provide analysis and guidance on financial transactions and earns fees associated witb these services. {6}------------------------------------------------ ### Accounting Pronouncement - ASC 606 Revenue Recognition Securities transactions (and the recognition of related income and expenses) are recorded on a trade date basis. In May 2014 , the Financial Accounting Standards Board ("FASB") issued Accounting Standards Codification 606, Revenue from Contracts with Customers ("ASC 606"). The new accounting standard, along with its related amendments, replaces the current rulesbased GAAP governing revenue recognition with a princjples-based approach. The Company adopted the new standard on January 1, 2019 using the modified retrospective approach, which requires the Firm to apply the new revenue standard to (i) all new revenue contracts entered into after January 1, 2019 and (ii) all existing revenue contracts as of January **l,** 2019 through a cumulative adjustment to equity. In accordance with this approach, revenues for periods prior to January **l ,** 2019 wi **11** not be revised. The core principle in the new guidance is that a company should recognize revenue in a manner that depicts the transfer of goods or services to customers in amounts that reflect tbe consideration the company expects to receive for those goods or services\_ In order to apply this core principle, the Company will appJy the following five steps in determining the amount of revenues to recognize: (i) identify the contract; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance ob ligations in the contract; and (v) recognize revenue when (or as) the performance obligation is satisfied. Each of these steps involves management's judgment and an analysis of the material terms and conditions of the contract. Although total revenues may not be materially impacted by the new guidance,. management notes changes to the disclosures based on the additional requirements prescribed by ASC 606. These new disclosures include information regarding the judgments used in evaluating when and how revenue is recognized and disclosures related to contract assets and liabilities. ### Income Taxes The Company has a net operating loss carryforward at September 30, 2019 of approximately \$108,000 arising from the year 2006 through 2019 and a deferred tax asset related to the net operating loss carryforward of approximately \$3~500. Realizati<>n of the future tax benefits related to the deferred tax asset is dependent upon many factors, including the Company's ability to generate future taxable income. The Company's federal net operating loss carry forwards expire from 2027 to 2037. ASC Topic 7 40-10, Accounting for uncertainty in income taxes, prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement {7}------------------------------------------------ ### Income Taxes(continued) of a tax position taken or expected to be taken in a tax return. As of September 30, 2019, the Company has no uncertain tax positions. # Use of Estimates The process of preparing financial statements in conformity with US GAAP requires the use of estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Such estimates primarily relate to transactions in process and events as of the date of the financial statements. Accordingly, upon completion, actual results may differ from estimated amounts. # 2. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FAS1B") published Accounting Standards Update No. 2016-02, Leases ("ASC 842"). which requires substantially all leases (with the exception of leases with a term of one year or less) to be recorded on the balance sh eet using a method referred to as tbe right-of-use ("ROU") asset approach. The new standard was adopted on January 1, 2019 usi11g the modified retrospective method described within ASC 842. Under the new standard, the initia I measurement will result in the balance sheet recognition of a ROU asset representing a co111pany's right to use the underlying asset for a specified period of tirne and a corresponding lease liability. The lease liability is recognized at the present value of the future lease payments, and the ROU asset is equal to the lease liability adjusted for any prepaid rent, lease incentives provided by the lessor, and any indirect costs. The subsequent measurement of the lease will result in the recognition of a sing le lease expense amount that is recorded o n a straight-line basis. Subsequent to commencement, we have measured the I.ease l:iabilities at the present value of the unpaid lease payments, discounted using the rate established at commencement. The lease liabilities are included in Lease Liabilities in the accompanying Statement of Financial Condition. We will recognize Lhe following amow1ls in earnings each pe1iod of Lhe lease Lenn: • A single lease cost calculated so that the remaining cost of the lease is allocated over the remaining lease term on a straight-line basis. The remaining lease cost equals the total lease payments for the lease term, plus total initial direct costs incurred, less the periodic lease cost previously recognized. If an operating lease ROU asset has {8}------------------------------------------------ been impaired, for each period from the date of impainnent through the end of the lease term, the single lease cost is calculated as the sum of the accretion of the lease liability and the amortization of the ROU asset. - Any variable lease payments, in the period in which the obligation is incurred, or achievement of the target that triggers the variable payments becomes probable. - Any impairment of the ROU asset. We have included the costs of the operatin g leases in Occupancy Expenses m the accompanying Statement of Loss in the amount of\$138,748. ### Impairment Testing We subject ROU assets to impairment testing in a manner consistent with other long-lived assets. If the ROU asset is jmpaired, we amortize the remaining ROU asset evenly over the remaining lease term, except that in periods after the impairment, we continue to present a single lease cost in earnings. In January 2019, the Company entered into a six-year sublease for office space in New York, NY. At January I, 2019, the effective date of the lease, the Company recorded a ROU asset of \$472,470 and an operating lease liability of \$472,470. Our calculations were based on a six-year non-cancelable term ending December 31 , 2024 assuming a discount rate of 4.5%, our estimated incremental borrowing rate. In December 2019, the Company entered into a five-year sublease for office space in Atlanta, GA. At December 1, 2019, the effective date of the lease, the Company recorded a ROU asset of \$ 139,257 and an operating lease liability of \$139,257. Our calculations were based on a six-year non-cancelable term ending November 30, 2024 assuming a discount rate of 4.5%, our estimated incremental borrowing rate. As a broker-dealer registered with the Securities and Exchange Commission ("SEC") and Financial Industry Regulatory Authority ("FINRA" ), the Company is subject to SEC Rule I 5c3-I, the Net Capital rule, under which the lease asset would be recorded as a nonallowable asset and the associated liability would be recorded as aggregate indebtedness, both of which could have a materially negative effect on Net Capital computed under SEC Rule 15c3-1. On May 31 , 2016, the Securities Industry and Financial Markets Association ("SIFMA") requested relief from the SEC from the net capital impact of the lease capitalization required under ASC 842. On November 8, 201 6, the SEC issued a "no action" letter permitting broker-dealers to add back to Net Capital the operating lease asset to the extent of the associated operating lease liability. If the value o f the operating lease liability exceeds the value of the associated operating lease asset, the amount by which the liability's value exceeds the associated lease asset must be deducted for net capital purposes. The Company believes that the relief provided by the SEC "no action" letter will substantially negate the effect of the application of ASC 842 on the Company's Net Capital position. {9}------------------------------------------------ # 2. Impairment Testing (continued) Tbe new guidance provided by ASC 842 may not materiallly impact tbe Company's presentation of assets and liabilities, and tbe relief provided by the SEC "no action" letter will substantially negate the effect of its application on tbe Company's Net Capita ~ however, management notes changes to the disclosures based on the additional requirements prescribed by ASC 842. These new disclosures include information regarding the judgments used in determining tbe present value of lease payments and the corresponding value of the right-of-use asset. #### 3. Indemnification In the normal course of its business, the Company indemnifies aind guarantees certain service providers against specified potential losses in connection with their acting as ai1 agent of, or providing services to, the Company. The maximum potential amount of future payments that the Company could be required to make under these indemnifications cannot be estimated. However, the Company bel ieves that it is unlikely it will have to make material payments under these arrangements and has not recorded any contingent liability in the financial statements for these indemnifications. The Company provides representations and warranties to counterparties in connection with a variety of commercial transactions and occasionally indemnifies them against potential losses caused by the breach of those representations and warranties. These indemnifications generally are standard contractual terms and are entered into in d1e normal course of business. The maximum potential amount of future payments that the Company could be required to make under tbese 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 statements for these indemnifications. ### 4. Net Capital Requirements The Company is subject to the Securities and Exchange Commission Uniform Net Capital 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. At December 31, 2019, the Company bad net capital of \$ 171,778 which was \$123,154 in excess of its required net capital of \$48,624. The Company's aggregate indebtedness to net capital ratio p1 ercentage was 424.59%. ### 5. Related Party Transactions Manhattan Harbor Capital paid expenses to registered representatives on beba lfBenchmark Investments during the timeframe of January 20 I 9 through April 2019 as the finn was {10}------------------------------------------------ building its operations. The related party payable at December 31, 2019 consists primarily of expenses paid by the parent company on behalf of *its* wholly owned subsidiary Benchmark Investments. # 6. Contingencies and Concentration of Credit Risk Pursuant to a clearing agreement, the Company introduces all of its securities transactions to a clearing broker on a fully disclosed basis. Therefore, **all** of the customer's money balances and long and short securities positions are carried on the books of the clearing broker. Under certain conditions, as defined in the clearing broker agreement, the Company has agreed to jndemnify the clearing broker for losses, if any, which the clearing broker may sustain from carrying securities transactions introduced by the Company. In accordance with industry practice and regulatory requirements, the Company, and the clearing broker, monitor collateral on the securities transactions introduced by tlhe Company. The Company is subject to arbitration and litigation in the normal course of business. The Company has no litigation in progress at December 31,2019. #### 7. Subseguent Events Events of the Company subsequent to December 3 **l ,** 20 19 have been evaluated through April 10, 2020 which is the date the financial statements were available to be issued, for the purpose of identifying events that would require recording or disclosures in the financial statements in the year ended December 31, 2019. No subsequent events were identified that require disclosure. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.