# FUSION ANALYTICS SECURITIES LLC X-17A-5 (2021-04-02) — Broker-dealer annual report - Company: FUSION ANALYTICS SECURITIES LLC - Form: X-17A-5 - Filed: 2021-04-02 - Period: 2020-12-31 - Accession: 0001205582-21-000003 - CIK: 1205582 - File #: 8-65649 - Material weakness: No - Auditor: LMHS, P.C. - Auditor location: Norwell, MA - Contact: Brian Megenity - Phone: (770) 263-6003 - Signed by: Michael Conte (Chief Executive Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1205582/000120558221000003/fasfinalaudit.pdf --- {0}------------------------------------------------ FUSION ANALYTICS SECURITIES, LLC Report Pursuant to Rule 17a-5(d) Financial Statements For the Year Ended December 31, 2020 {1}------------------------------------------------ | | UNITEDSTATES
SECURITIESA."ID EXCHANGE COMMISSION
Washington, O.C, 20549 | | 0MB APPROVAL
0MB Number:
3235-0123
October 31, 2023
Expires:
Estimated average burden | |---------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------|-----------------------|------------------------------------------------------------------------------------------------------| | | ANNUAL AUDITED REPORT
FORM X-17A-5
PART Ill | | hours n,,rresponse 12.00
SEC FILE NUMBER
ls-65649 | | Information Required of Brokers and Dealers Pursuant to Section 17 of the | FACING PAGE
Securities Exchange Act of 1934 and Rule t7a-5 Thereunder | | | | REPORT FOR THE PERfOD BEGfNN!NG 01/01/2020 | | AND ENDING 12/31/2020 | ----------- | | | MM/DD/YY | | MMIDDIYY | | | A. REGISTRANT IDENTIFICATIO:r-i | | | | NAME OF HROKER-DEALER: Fusion Analytics Securities, LLC | | | OFFICIAL USEONL4 | | ADDRESS OP PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.)
7301 Wiles Rd., Suite 102 | | | FIRM I.D. NO. | | | (::-.lo. and Street) | | | | Coral Springs | FL | | 33067 | | (City) | (State) | | (Zip Code) | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THfS REPORT | | | | | Brian Mege11:1y | | | (770) 263-6003
(Area Code - Telephone Number) | | | B. ACCOUNTANT IDENTIFICATION | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report*
LMHS, P. C. | | | | | | (Name ~ if bidividual, state last, first. middle name) | | | | 80 Washington St, Bldg S | Norwell | MA | 02061 | | (Address.) | fCity) | (State) | (Zip Code) | | CHECK ONE:
✓ )certified Public Accountanr
B
Public Accountant
Accountant not resident in United States or any of its possessions.
______ | ___fl>R OFFICIAL USE ONLY | | | | | | | | *\*Clafo1s for e:...:emplion from the requirement that the annual reporJ he covered by the opi11fo11 q/an indept?ndent public accotmtant must be supported by a statement ojfacts and circumstances relied on a,; thv ba.\•isfOr the exc~mption. See Section 240.l 7a-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 lormdisplaysa currently valid 0MB control number. {2}------------------------------------------------ #### **OATH OR AFFIRMATION** | J Michael Conte | _____________ | _ ___ , swear (or affirm) that, to the best of | |-----------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------| | | my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of
__________________________________ | | | _F_u_s_;o_n_A_n_acly_H_c_s_S_e_c_u_rit_;e_s_,_L_L_C
of December 31 | __ | ~ as | | | , 20_2_0 | , arc true and correct. l 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: ![](_page_2_Figure_3.jpeg) This report•• contains (check all applicable boxes): - 0 (a) Facing Page. - [21 (b) Statement of Financial Condition. - [Z] (c) Statement oflncomc (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). - n (d) Statement of Changes in Financial Condition. - 0 (c) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital. - D (i) 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. - D (j) A Reconciliation, including appropriate explanation of the Computation of Net Capital Under Rule 15c3-I and the Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3. - D (k) A Reconciliation between the audited and unaudited Statements of Financial Conditjon with respect to methods of coni:iolidation. - ✓ (I) An Oath or Affirmation, - 0 (m) A copy of the SJPC Supplemental Report. - D (n) A report describing any mnterial 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).* {3}------------------------------------------------ # **FUSION ANALYTICS SECURITIES, LLC Financial Statements December 31, 2020** | Contents
As of and for the Year Ended December 31, 2020 | | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------| | Report of Independent Registered Public Accounting Firm | 1 | | Financial Statements | | | Statement of Financial Condition | 2 | | Statement oflncome | 3 | | Statement of Changes in Member's Equity | 4 | | Statement of Cash Flows | 5 | | Notes to Financial Statements | 6-12 | | Computation of Net Capital Requirements
Schedule I - | 13 | | Computation for Determination of the Reserve Requirements and
Schedule II and III -
Information Relating to Possession or Control Requirements For Brokers and Dealers
Pursuant to SEC Rule l 5c3-3 | 14 | | Report oflndependent Registered Public Accounting Firm
Exemption Report -
SEC Rule 17 A-5(D)(4) | 15
16 | | Independent Registered Public Accounting Firm Rep01i on SIPC-7 Required by SEC
Rule l 7a-5(e)(4)
SIPC-7 Report | 17
18-19 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) #### *Report of /11depende11t Registered Public Acco1111ti11g Firm* To the Member Fusion Ana ly tics Securities, LLC Coral Springs, Florida #### *Opi11io11 011 the Fi11a11cia/ Statements* We have audited the accompany ing statement of financial condition of Fusion Analytics Securities, LLC, as of December 3 1, 2020, and the re lated statements of Income, changes in members' equity and cash flows for the year then ended, and the related notes ( collectively referred to as the " financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Fusion Analytics Securities, LLC as of December 3 1, 2020, and the results of its operations and its cash flows for the year then ended December 31, 2020, in confonnity with accounting principles generally accepted in the United States of America. #### *Basis for Opi11io11* These financial statements are the responsibility of the entity's management. Our responsibility is to express an opinion on these financial statements based on our audit. \Ve are a public accounting firm reg istered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to Fusion Analytics Securities, LLC 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 stanclarcls require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements arc free of materia l misstatement, whe ther clue to error or fraud. Our audit incluclccl performing procedures to assess the risks of mate rial misstatement of the financial statements, whether clue to error or fraud, and performing procedures that respond to those risks. Such procedures incluclecl examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also incluclecl evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overa ll presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. #### *S11ppleme11tal /11formatio11* The supplemental information appearing on pages 13 through 14 has been subjected to audit procedures performed in conjunction with the audit of Fusion Analytics Securities, LLC's financial statements. The supplemental information is the responsibility of Fusion Analytics Securities, LLC management. Our audit procedures included determining whether the supplemental information reconc iles to the financial statements or the unde rly ing 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 *C.F. R. §240. / 7a-5.* In our opinion, the supplemental information is fairly slated, in all material respects, in relation to the financial statements as a whole. LMHS, P.C. We have served as the Company's auditor since 2020. Norwell, Massachusetts April 2, 2021 ![](_page_4_Picture_13.jpeg) {5}------------------------------------------------ ## FUSION ANALYTICS SECURITIES, LLC STATEMENT OF FINANCIAL CONDITION As of December 31, 2020 #### ASSETS | Current Assets | | |--------------------------------------|---------------| | Cash | \$
15,050 | | Deposit with Clearing Broker | 76,538 | | Accounts Receivable | 115,301 | | Total Current Assets | 206,889 | | Other Assets | | | Equities (At Fair Market Value) | 107,027 | | Total Other Assets | 107,027 | | TOTAL ASSETS | \$
313,916 | | LIABILITIES & MEMBER'S EQUITY | | | Liabilities | | | Accrued Expenses | \$
60,522 | | Contingent Liability | 2,634 | | PPP Loan | 90,823 | | Due to FINRA | 18,750 | | Payroll Liabilities | 11,354 | | Total Liabilities | 184,083 | | Equity | | | Member Equity | 129,833 | | TOT AL LIABILITIES & MEMBER'S EQUITY | \$
313,916 | *The accompanying notes are an integral part of these financial statements.* {6}------------------------------------------------ # FUSION ANALYTICS SECURITIES, LLC ST A TEMENT OF INCOME For the Year Ended December 31, 2020 | Revenues | | |--------------------------|---------------| | Commission Income | \$ 1,053,298 | | Interest Sharing Revenue | 11 | | Options Revenue | 166,409 | | Gains in Investments | 41,337 | | Other Income | 23,356 | | Total Revenue | 1,284,411 | | Expenses | | | | | | Clearing Broker Fees | 75,330 | | Commissions Expense | 126,270 | | Dues and Subscriptions | 5,220 | | Insurance | 8,374 | | Payroll Taxes | 10,940 | | Professional Fees | 436,552 | | Regulatory Fees | 30,408 | | Rent | 5,187 | | Salaries | 36,000 | | Other Operating Expenses | 5,825 | | Total Expenses | 740,106 | | Net Income | \$
544,305 | {7}------------------------------------------------ # FUSION ANALYTICS SECURITIES, LLC ST A TEMENT OF CHANGES IN MEMBER'S EQUITY For the Year Ended December 31, 2020 | Equity Balance at beginning of year | \$
350,601 | |-------------------------------------|---------------| | Net income | 544,305 | | Net Capital Contributions | 10,277 | | Net Capital Distributions | (775,350) | | Equity Balance at end of year | \$
129,833 | *The accompanying notes are an integral part of these financial statements.* {8}------------------------------------------------ # FUSION ANALYTICS SECURITIES, LLC STATEMENT OF CASH FLOWS For the Year Ended December 31, 2020 #### **OPERATING ACTIVITIES:** | Net Income | | \$
544,305 | |----------------------------------------------------------------------|-----------|---------------| | Adjustments to reconcile net income | | | | to net cash provided by operations: | | | | Reclassification of intercompany payable to capital distributions | (775,350) | | | Reclassification of intercompany receivable to capital contributions | 10,277 | | | Net losses on investments, at fair value | (43,251) | | | (Increase) decrease in: | | | | Receivable from clearing organization | 23,012 | | | Deposit with clearing organization | (1,506) | | | (Decrease) increase in: | | | | Accrned Expenses | (5,554) | | | Payroll Liabilities | 9,200 | | | Due to FINRA | 18,750 | | | Due to Affiliates | (2,165) | | | Total adjustments | | (766,587) | | Net cash provided by (used) in operating activities | | (222,282) | | INVESTING ACTIVITIES: | | | | Proceeds from sale of investments, at fair value | 85,500 | | | Net cash provided by (used in) investing activities | | 85,500 | | FINANCING ACTIVITIES: | | | | Net cash provided by (used in) financing activities | | 90,823 | | Net decrease in cash | | (45,959) | | Cash at December 31, 2019 | | 61,009 | | Cash at December 31, 2020 | | \$
15,050 | | | | | | Supplemental disclosure of cash flow information: | | | | Interest paid | | | | Interest paid -
Accrual | | \$
810 | | Interest paid -
Cash | | \$
810 | *5* *The accompanying notes are an integral part of these financial statements* . {9}------------------------------------------------ # **Note 1: GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** *General* Fusion Analytics Securities, LLC (the "Company") was organized in the State of Delaware on June 26, 1985. The Company is a registered broker-dealer in securities under the Securities and Exchange Act of 1934, a member of the Financial Industry Regulatory Authority ("FINRA"), and the Securities Investor Protection Corporation ("SIPC"). The Company is a wholly-owned subsidiary of Fusion Analytics Holdings, LLC (the "Parent"). The majority owners of the Parent are also majority owners ofa Registered Investment Advisory, Fusion Analytics Investment Partners, LLC ("F AIP"). The Company is engaged in business as a securities broker-dealer that provides several classes of services, including providing brokerage and research services to institutional investors in corporate equity and debt securities. Commission income is derived primarily from selling corporate equity and debt securities, and arranging for transactions in listed securities. Under its membership agreement with FlNRA and pursuant to Rule l 5c3-3(k)(2)(ii), the Company conducts business on a fully disclosed basis and does not execute or clear securities transactions for customers. Accordingly, the Company is exempt from the requirement of Rule l 5c3-3 under the Securities Exchange Act of 1934 pertaining to the possession or control of customer assets and reserve requirements. # *Summmy of Significant Accounting Policies* The presentation 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 disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts ofrevenue and expenses during the reporting period. Actual results could differ from those estimates. For purposes relating to the Statement of Cash Flows, the Company has defined cash equivalents as highly liquid investments, with original maturities of less than three months, that are not held for sale in the ordinary course of business. The Company has adopted a policy of clearing intercompany balances on an annual basis. Management believes this more accurately reflects the general nature and reporting of such transactions. {10}------------------------------------------------ # **Note 1: GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)** Receivables from clearing broker organizations represent comm1ss10ns earned on secunttes transactions. An allowance for doubtful accounts is not considered necessary because probable uncollectable accounts are immaterial. Securities transactions and interest sharing revenues are recorded on a trade date basis with related commission income and expenses also recorded on a trade date basis. All investments in securities are recorded at fair value in accordance with F ASB ASC 820, Fair Value Measurement, as described in Note 4. Net realized gains or losses from the sale of these securities are computed based on specific identification of historical cost. Net unrealized gains or losses arises from changes in fair value of these securities during the period and are included in the income statement. The Company, with the consent of its Member, has elected to be a Delaware Limited Liability Company. For tax purposes the Company is treated like a partnership, therefore in lieu of business income taxes, the Member is taxed on the Company's taxable income. Accordingly, no provision or liability for Federal Income Taxes is included in these financial statements. The Financial Accounting Standards Board and International Accounting Standards Board issued a new standard ASC 606 on revenue recognition in May 2014, which is effective January I, 2018. The standard provides a comprehensive, industry-neutral revenue recognition model intended to increase financial statement comparability across various companies, aiming at recognizing revenue when the entity satisfied a certain performance obligation. In relation to financial broker dealers, trading commission revenue is deemed to be recognized as an ongoing obligation as of the trade date, which is the single performance obligation for both, trade execution and clearing services. Management of the Company has assessed the impact of the adoption of the new standard and can reasonably assure that the new standard has no effect on financial statements for past or any future reporting periods. The Company was already following a policy to recognize all earned commission income as of a trade date to satisfy performance obligation criteria. In February 2016, the FASB issued ASU No.2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting. ASU 2016-02 requires lessees to recognize leases with terms longer than 12 months on their balance sheets. It requires different patterns of recording lease expense for finance and operating leases. It also requires expanded lease agreement disclosures. Lessor accounting is largely unchanged. ASU 2016-02 is effective for the Company as of its year ending December 31, 2020. Management has reviewed and determined that ASU 2016-02 will not have a material impact on the Company's financial statements. {11}------------------------------------------------ ### **Note 2: RECEIVABLE FROM CLEARING BROKER ORGANIZATION** Pursuant to the clearing agreements, the Company introduces all of its securities transactions to clearing brokers on a fully disclosed basis. Customers' money balances and security positions are carried on the books of the clearing broker. In accordance with industry practice and regulatory requirements, the Company and the clearing brokers monitor collateral on the customers' accounts. As of December 31, 2020, the receivable from the clearing broker of\$1,447 was pursuant to these clearance agreements. ### **Note 3: DEPOSIT WITH CLEARING ORGANIZATION** The Company has a brokerage agreement with Wedbush Morgan Securities ("Clearing Broker") to carry its account and the accounts of its clients as customers of the Clearing Broker. The Clearing Broker has custody of the Company's cash balances which serve as collateral for any amounts due to the Clearing Broker as well as collateral for securities sold short or securities purchased on margin. Interest is paid monthly on these cash deposits at the average overnight repurchase rate. The balance at December 31, 2020 was \$76,538. ### **Note 4: INVESTMENTS AT FAIR VALUE** Investments at fair market value consist of securities traded on a national securities exchange which are stated at the last reported price on the day of valuation. To the extent that these securities are actively traded and valuation adjustments are not applied, they are categorized in level I of the fair value hierarchy. As of December 31, 2020, these securities are reported at their fair market value of\$107,027. F ASB ASC 820 defines fair value, establishes a frame work for measuring fair value, and establishes a fair value hierarchy which prioritizes the inputs to valuation techniques. 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 assets 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. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: {12}------------------------------------------------ ### **Note 4: INVESTMENTS AT FAIR VALUE (Continued)** Level 1 - Quoted prices in active markets for identical securities. - Level 2 Observable inputs other than quoted prices included in Level I such as quoted prices for similar securities in active markets; quoted prices for identical or similar securities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). - Level 3 Pricing inputs are unobservable that are significant to the fair value measurement and include situations where there is little if any market activity for the investment. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. The following table presents the Company's fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2020: | ASSETS | Level 1 | Level 2 | Level 3 | Total | |-----------------|---------------|---------|---------|---------------| | Investments, at | \$
107,027 | | | \$
107,027 | | Fair Value | | | | | | TOTALS | \$
107,027 | | | \$
107,027 | #### **Note 5: INCOME TAXES** As discussed in the Summary of Significant Accounting Policies (Note 1), the Company is treated as a disregarded entity for federal income tax purposes; therefore, no provision for federal, state, and local taxes are included in these financial statements. The Company is not taxed on its income; instead, the member is responsible for the Company's taxable income. The Company is required to file income tax returns in federal and states tax jurisdictions. The Company's tax returns are subject to examination by taxing authorities in the jurisdictions in which it operates in accordance with the normal statutes of limitations in the applicable jurisdiction. The statute of limitations for state purposes is generally three years, but may exceed this limitation depending upon the jurisdiction involved. Returns that were filed within the applicable statute remain subject to examination. As of December 31, 2020, the state tax authority has not proposed any adjustment to the Company's tax position. {13}------------------------------------------------ ## **Note 6: SBA PAYROLL LOAN PROGRAM** In April of 2020 the Company received \$90,823 from the SBA Payroll Loan Program. In accordance with the PPP Loan Program, this loan may be forgiven if it is used for approved payroll and overhead expenditures. As of December 31, 2020, the Company has submitted for loan forgiveness, and in accordance with FINRA guidance, has included the entire amount as allowable for net capital computation up the amount of Qualified Expenditures totaling \$90,823. Management is of the opinion that this entire loan amount will be utilized on qualified PPP loan expenditures; and therefore, expects the entire loan amount to be forgiven. ### **Note** 7: **40l(k) RETIREMENT PLAN** The Company maintains a retirement plan for its employees under Section 401K of the Internal Revenue Code. Full time employees are eligible for participation after 90 days of service with the Company. The plan does not provide for any matching or mandatory contributions. During the year ended December 31, 2020, the Company did not make any contribution to the Plan. ### **Note 8: RELATED PARTY TRANSACTIONS** As discussed in the General and Summary of Significant Accounting Policies (Note I), the Company is affiliated with F AIP through common ownership. The Company has entered into an expense sharing agreement with the Parent and "F AIP" effective October I, 2014. The terms of this agreement provide that all overhead expenses incurred are paid by the Parent and reimbursed by the Company. Overhead expenses, as defined by the agreement, shall include rent, accounting services, client research services, and various other operating costs inctmed in the ordinary course of the business. During the year ended December 31, 2020, total expenses allocated to the Company from the Parent and Affiliate were \$24,296. Included in the allocated expenses were \$5,187 of allocated rent and office overhead for the Coral Springs, FL office. It is possible that the terms of cetiain of the related patty transactions are not the same as those that would result for transactions among wholly unrelated parties. During 2020, in a special resolution, the management of the Company declared a distribution to the Parent of \$775,350 effective December 3 I, 2020. In addition, the Parent, in separate resolutions, made a capital contribution of \$10,277 effective December 31, 2020. Also, a related entity affiliated through common ownership, in a separate resolution, forgave \$6,639 due from the Company effective December 31, 2020. {14}------------------------------------------------ ### **Note 9: CONCENTRATIONS OF CREDIT RISK** The Company is engaged in various trading and brokerage activities in which counter-parties primarily include broker-dealers, banks, 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 counter-party or issuer of the instrument. It is the Company's policy to review, as necessary, the credit standing of each counter-party. ### **Note 10: COMMITMENTS AND CONTINGENCIES** #### *Contingencies* During 2019, the Company was notified that it had outstanding payroll tax liabilities of \$71,523 to the Internal Revenue Service (IRS) and the State of New Jersey (NJ). These liabilities resulted from an incorrect tax identification number being used in making the payments. The IRS has released the liens against the Company. The Company is awaiting NJ to formally release its lien of\$2,634. On December 23, 2020, the Company was notified by FINRA that it was a patty to an arbitration in the amount of \$360,000, along with a former broker of the Company. The Company maintains that the broker deliberately and knowingly acted outside of his capacity as a Company broker. #### **Note 11: GUARANTEES** F ASB ASC 460, Guarantees, requires the Company to disclose information about its obligations under certain guarantee arrangements. F ASB ASC 460 defines guarantees as contracts and indemnification agreements that contingently require a guarantor to make payments to the to the guaranteed party based on changes in an underlying factor (such as an interest or foreign exchange rate, security or commodity price, an index or the occurrence or nonoccurrence of a specified event related to an asset, liability, or equity security of a guaranteed party. This guidance also defines guarantees as contracts that contingently require the guarantor to make payments to the guaranteed party based on another entity's failure to perform under an agreement as well as indirect guarantees of indebtedness of others. The Company has issued no guarantees at December 31, 2020 or during the year then ended. {15}------------------------------------------------ # **Note 12: NET CAPITAL REQUIREMENTS** The Company is subject to the Securities and Exchange Commission 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 I. Rule l 5c3-l also provides that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed IO to I. Net capital and aggregate change day to day, but on December 31, 2020, the Company had net capital of \$94,680 which was \$64,463 in excess of its required net capital of \$30,217, and the Company's ratio of aggregate indebtedness (\$93,260) to net capital was .9850 to I, which is less than the 15 to I maximum allowed. # **Note 13: SUBSEQUENT EVENTS** The Company has evaluated events subsequent to the balance sheet date for items requiring recording or disclosure in the financial statements. The evaluation was performed through the date the financial statements were available to be issued on April 2, 2021. On January 25, 2021, the Company received notice that the SBA Payroll Protection Loan had been forgiven. {16}------------------------------------------------ # FUSION ANALYTICS SECURITIES, LLC SCHEDULE I- COMPUTATION OF NET CAPITAL REQUIREMENTS PURSUANT TO RULE 15c3-l AS OF DECEMBER 31, 2020 | Member's Equity | | \$
129,833 | |------------------------------------------------|----------------|---------------| | Non-allowable Items: | | | | Other assets | (95,742) | | | Other liabilities (PPP Loan) | 90,823 | (4,919) | | Less:
Haircut and Undue Concentration | | (30,234) | | Net capital | | 94,680 | | Computation of net capital requirements | | | | Minimum net capital requirements | | | | Total Aggregate Indebtedness on Balance Sheet | \$
184,083 | | | Contingent Liability Claim | 360,000 | | | Less: Excludable Liabilities (PPP Loan) | (90,823) | | | Net Aggregate Indebtedness | \$
453,260 | | | 6 2/3 percent of net aggregate indebtedness | \$
(30,217) | | | Minimum dollar net capital required | \$
(5,000) | | | Net capital required (greater of above) | | (30,217) | | Excess net capital | | \$
64,463 | | Ratio of aggregate indebtedness to net capital | .9850 : 1 | | | Net capital per unaudited FOCUS Report | | \$94,680 | | Net capital per audited financial statements | | \$94,680 | *See report of independent registered public accounting firm* {17}------------------------------------------------ # FUSION ANALYTICS SECURITIES, LLC SCHEDULE II & III - COMPUTATION FOR DETERMINING OF RESERVES FOR BROKERS AND DEALERS PURSUANT TO SEC RULE l 5c3-3 AS OF DECEMBER 31, 2020 The Company is exempt from the provision of Rule l 5c3-3 under paragraph (k)(2)(ii) in that the Company carries no accounts, does not hold funds or securities for, or owe money or securities to customers. The Company will effectuate all financial transactions on behalf of its customers on a fully disclosed basis. Accordingly, there are no items to report under the requirements of this rule. *See report of independent registered public accounting firm* {18}------------------------------------------------ ### **EXEMPTION REPORT** ---------------------------------------------------------------------- We confirm, to the best of our knowledge and belief, that: 1. Fusion Analytics Securities, LLC claimed an exemption from SEC Rule 15c3-3 under the provisions in paragraph (k)(2)(ii) throughout the fiscal year January 1, 2020 to December 31, 2020. 2. Fusion Analytics Securities, LLC met the identified exemption provisions in SEC Rule 15c3- 3(k)(2)(ii) throughout the fiscal year January 1, 2020 to December 31, 2020 without exception. 1~e,CEO 4/2/2021 {19}------------------------------------------------ ![](_page_19_Picture_0.jpeg) # **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** Michael Conte, CEO Fusion Analytics Securities, LLC We have reviewed management's statements, included **in** the accompanying Fusion Analytics Securities, LLC Exemption Report in which (1) Fusion Analytics Securities, LLC, identified the following provisions of 17 C.F.R. § **l** 5c3-3(k) under which Fusion Analytics Securities, LLC claimed an exemption from 17 C.F.R. §240. **l** 5c3-3: (k)(2)(ii) (the "exemption provision") and (2) Company, stated that Fusion Analytics Securities, LLC met the identified exemption provision throughout the most recent fiscal year of 2020, without exception. Fusion Analytics Securities, LLC management is responsible for compliance with the exemption provision 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 the Company's compliance with the exemption provision. 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. *ll'1/IJl~e.* LMH, P.C. We have served as the Company's auditor since 2020. Norwell, Massachusetts April2, 2021 ![](_page_19_Picture_8.jpeg) {20}------------------------------------------------ ![](_page_20_Picture_0.jpeg) #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON APPLYING AGREED UPON PROCEDURES** To the Members of Fusion Analytics Securities, LLC We have perfonned the procedures included in Rule I 7a-5(e)(4) under the Securities Exchange Act of 1934 and in the Securities Investor Protection Corporation (SIPC) Series 600 Rules, which are enumerated below, and were agreed to by Fusion Analytics Securities, LLC. (Company) and the SIPC, sole ly to assist you and the SIPC in evaluating the Company's compliance with the applicable instructions of the General Assessment Reconciliation (Fonn SIPC-7) for the year ended December 31, 2020. Management of the Company is responsible for its Fonn SIPC-7 and for its compliance with those requirements. This agreed-upon procedures engagement was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this repo11. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures we performed, and our fmdings are as follows: - I. Compared the listed assessment payments in Fonn SIPC-7 with respective cash disbursement records entries noting no differences; - 2. Compared the Total Revenue amounts reported on the Annual Audited Report Form X-17 A-5 Part III for the year ended December 31, 2020, with the Total Revenue amounts reported in Form SIPC-7 for the year ended December 31, 2020 noting no differences; - 3. Compared any adjustments reported in Form SIPC-7 with supporting schedules and working papers noting no differences; - 4. Recalculated the arithmetical accuracy of the calculations reflected in Form SIPC-7 and in the related schedules and working papers supp01ting the adjustments noting no differences; and - 5. Compared the amount of any overpayment applied to the current assessment with the Form SlPC-7 on which it was originally computed noting no differences. We were not engaged to, and did not conduct an examination or a review, the objective of which would be the expression of an opinion or conclusion, respectively, on the Company's compliance with the applicable instructions of the Form SIPC-7 for the year ended December 31, 2020. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the information and use of the Company and the SIPC and is not intended to be and should not be used by anyone other than these specified parties. *Lt1IIS~A~,* LMHS, P.C. We have served as the Company's auditor since 2020. Norwell, Massachusetts April2, 202 1 ![](_page_20_Picture_14.jpeg) {21}------------------------------------------------ | SIPC-7
(35-REV 6/17) | | SECURITIES INVESTOR PROTECTION CORPORATION
P.O. Box 92185 Washington, D.G. 20090-2185
202-371-8300
General Assessment Reconciliation | | SIPC-7
(35-REV 6/17) | |---------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------| | | 1. Name of Member, address, Designated Examining Authority, 1934 Act registration no. and month in which fiscal year ends for
purposes of the audit requirement of SEC Rule 17a-5: | For the fiscal year ended December 31, 2020
(Read carefully the instructions in your Working Copy before completing this Form)
TO BE FILED BY ALL SIPC MEMBERS WITH FISCAL YEAR ENDINGS | | >-
CL. | | I
I | Fusion Analytic Securities, LLC
7301 Wiles Road Suite 102
Coral Springs, FL 33067
FINRA CRD #124245
SEC #8-65649
December | 7
_J | Note: If any of the information shown on the
mailing label requires correction, please e-mail
any corrections to form@sipc.org and so
indicate on the form filed.
Name and telephone number of person to
contact respecting this form.
Joseph Conte (954) 344-9273 | 0
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== | | 2. A.
B. | General Assessment (item 2e from page 2)
Less payment made with SIPC-6 filed (exclude interest) | | \$ 1,717
(
1,237 | | | C. | 7/31/2020
Date Paid
Less prior overpayment applied | | | | | D. | Assessment balance due or (overpayment) | | 480 | | | E. | Interest computed on late payment (see instruction E) for ______ days at 20% per annum | | | | | F. | Total assessment balance and interest due (or overpayment carried forward) | | 480
\$. | _________
_ | | PAYMENT:
G. | g
✓ the box
Check mailed to P.O. Box
Funds Wired
Total (must be same as F a ove) | □
480
__________
\$. | _ | | | H. | Overpayment carried forward | ---------
-0-
\$( | | | | | 3. Subsidiaries (S) and predecessors (P) included in this form (give name and 1934 Act registration number): | | | | | and complete. | The SI PC member submitting this form and the
person by whom it is executed represent thereby
that all information contained herein is true, correct | Fusion Analytic Securities, LLC
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(ljarn of Corpo aliof!,. Par_\nershlp or other organization)
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;( | | | | Dated the 14th day of_M_a_r_c_h ____ , 20~. | V /
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Operations Officer | (Autholized-Signature) | | | cc: Dates: | This form and the assessment payment is due 60 days after the end of the fiscal year. Retain the Working Copy of this form
for a period of not less than 6 years, the latest 2 years in an easily accessible place. | | (Title) | | | LIJ
;;;:: | Postmarked
Received | Reviewed | | | | LIJ
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Calculations
LIJ | | Documentation | | Forward Copy | | cc:
c.:, Exceptions:
CL. | | | | | | 2a. Total revenue (FOCUS Line 12/Part IIA Line 9, Code 4030) | Eliminate cents
\$ 1,284,411 | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------| | 2b. Additions:
(1) Total revenues from the securities business of subsidiaries (except foreign subsidiaries) and | | | predecessors not included above. | | | (2) Net loss from principal transactions in securities in trading accounts. | | | (3) Net loss from principal transactions in commodities in trading accounts. | | | (4) Interest and dividend expense deducted in determining item 2a. | | | (5) Net loss from management of or participation in the underwriting or distribution of securities. | | | (6) Expenses other than advertising, printing, registration lees and legal lees deducted in determining net
profit from management of or participation in underwriting or distribution of securities. | | | (7) Net loss from securities in investment accounts. | | | Total additions | | | 2c. Deductions:
(1) Revenues from the distribution of shares of a registered open end investment company or unit
investment trust, from the sale of variable annuities, from the business of insurance, from investment
advisory services rendered to registered investment companies or insurance company separate
accounts, and from transactions in security futures products. | | | (2) Revenues from commodity transactions. | | | (3) Commissions, floor brokerage and clearance paid to other SIPC members in connection with
securities transactions. | 75,329 | | (4) Reimbursements for postage in connection with proxy solicitation. | | | (5) Net gain from securities in investment accounts. | 41,337 | | (6) 100% of commissions and markups earned from transactions in (i) certificates of deposit and
(ii) Treasury bills, bankers acceptances or commercial paper that mature nine months or less
from issuance date. | | | (7) Direct expenses of printing advertising and legal lees incurred in connection with other revenue
related to the securities business (revenue defined by Section 16(9)(L) of the Act). | | | (8) Other revenue not related either directly or indirectly to the securities business.
(See Instruction C): | | | Other Income -
Debt Forgiveness | 23,296 | | (Deductions in excess of \$100,000 require documentation) | | | (9) (i) Total interest and dividend expense (FOCUS Line 22/PART IIA Line 13,
59
Code 4075 plus line 2b(4) above) but not in excess
__________
of total interest and dividend income.
_
\$. | | | ________
{ii) 40% of margin interest earned on customers securities
24
_
\$.
accounts (40% of FOCUS line 5, Code 3960). | | | Enter the greater of line (i) or (ii) | 59 | | Total deductions | 140,021 | | 2d. SIPC Net Operating Revenues | \$1,144,390 | | 2e. General Assessment@ .0015 | | | | (to page 1, line 2.A.) | Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.